Bryan Caplan and David Henderson

December 2005

A Monthly Archive (48 entries)

Econbot?

Information Goods, Intellectual Property
Arnold Kling
"New Economist" writes, The latest issue of First Monday carries an article by Daniel J. Cohen and Roy Rosenzweig which shows that on at least basic historical facts, the internet can provide a surprisingly accurate indication of the historical consensus...... MORE

Inefficient Subsidies

Economics of Education
Arnold Kling
James C. Garland writes, state higher-education budgets are not targeted efficiently. By way of comparison, consider the food stamp program, which in 2004 paid out $27 billion directly to 24 million low-income Americans. Imagine if there were, in its place,... MORE

Even Bigger Than Arnold Thinks

Macroeconomics
Bryan Caplan
Arnold's right that high labor productivity growth over the past five years is a big story. But this fact is even more impressive because labor productivity is normally procyclical. That means that during recessions, labor productivity typically falls (or at... MORE

Story of the Year

Growth: Consequences
Arnold Kling
I have an essay on what I call the Most Important Economic Story of the Year. The average productivity growth rate in the last five years is the highest over the past half century. For Discussion. What do you think... MORE

Economic News for the New Year

Growth: Consequences
Arnold Kling
As an end-of-year type post, here is a list of economic stories that I think will be worth following next year. Note that all of them are long-term stories, which won't be resolved in 2006 alone.... MORE

How Bad is Life in North Korea?

Cross-country Comparisons
Bryan Caplan
When a country forbids foreigners to freely wander around and talk to people, smart money says that something monstrous is going on. North Korea is probably now the world's clearest example. It's hard to confirm that the alleged horrors are... MORE

Tackling Tetlock

Books: Reviews and Suggested Readings
Bryan Caplan
Philip Tetlock, one of my favorite social scientists, is making waves with his new book, Expert Political Judgment. Tetlock spent two decades asking hundreds of political experts to make predictions about hundreds of issues. With all this data under his... MORE

College Illiteracy

Economics of Education
Arnold Kling
The Washington Post reports Literacy experts and educators say they are stunned by the results of a recent adult literacy assessment, which shows that the reading proficiency of college graduates has declined in the past decade, with no obvious explanation.... MORE

Health Care Rationing

Economics of Health Care
Arnold Kling
Mark Thoma reports that Paul Krugman writes, the rise of medical technology ... makes ... medicine ... in which doctors call for every procedure that might be of medical benefit, increasingly expensive. This is the position that I arrived at... MORE

Your Zip Code or Yourself

Information Goods, Intellectual Property
Bryan Caplan
Auto insurance regulations in California are going to change. At first glance, the changes look completely reasonable: Insurers will have to base rates on the driving records of the people insured. From the Daily News: Moving to end years of... MORE

Sociologists' Self-Criticism

Economics of Education
Bryan Caplan
I've heard a lot of people complain about extreme left-wing bias in sociology, but I had no idea that sociologists themselves were complaining about it. A forthcoming paper by Dan Klein and Charlotta Stern provides the inside scoop. One highlight:... MORE

Confusion in Political Theory

Institutional Economics
Arnold Kling
Now Bryan writes, statements like "To break a warlord equilibrium, you need government" only confuse us. I agree. I cannot think of any examples of societies that were stuck in a warlord equilibrium and then suddenly said, "Let's sit down... MORE

Digging Out the Fundamental Difference

Politics and Economics
Bryan Caplan
Arnold writes: I think it's fair to say that one has to believe either one of the following statements: 1. The U.S. political system is fundamentally different from the Soviet system; or 2. The U.S. political system is only superficially... MORE

Intangible Wealth and Institutional Economics

Growth: Causal Factors
Arnold Kling
In a new book, a team of World Bank economists writes, most of a country's wealth is captured by what we term intangible capital...Intangible assets include the skills and know-how embodied in the labor force. The category also includes social... MORE

The Fear Factor

Institutional Economics
Arnold Kling
In the latest issue of The Independent Review, Robert Higgs writes, in the late nineteenth century the so-called welfare state began to take shape. From that time forward, people were told that the government can and should protect them from... MORE

Krugman and Wal-Mart

Labor Market
Arnold Kling
According to George Reisman, Paul Krugman is now accusing Wal-Mart of destroying jobs. Krugman notes that Walmart’s competition against other retailers also destroys the jobs its competitors had offered before being put out of business by its competition. He attempts... MORE

Strange Comment on Social Security

Social Security
Arnold Kling
Calculated Risk writes As a mental exercise, imagine if we eliminate SS spending and the SS payroll tax - what happens? The General Fund deficit stays exactly the same and we would need to address the significant General Fund shortfall.... MORE

The U.S. vs. Communist Dictatorship

Institutional Economics
Arnold Kling
Now Bryan writes, For example, the Soviet Union from 1956 on was clearly an institutional arrangement, run by many individuals with competing interests, which were resolved using rules that were viewed as more important than any one individual. Khrushchev was... MORE

A Failure of Introspection

Microeconomics
Bryan Caplan
I've learned a lot more about the economy from introspection than I have from statistics. If someone shows me statistical evidence that people buy more chocolate when its price goes up, my reaction will be "I've bought lots of chocolate,... MORE

Unbundling the Warlord

Politics and Economics
Bryan Caplan
Arnold (see here and here) bundles together several distinct claims about government. 1. Society is better off if somebody - anybody - stops the "war of all against all": Once one warlord becomes successful, then it is easy for a... MORE

EconLog Production Today

Econlog Administrative Issues
Lauren Landsburg
EconLog is undergoing a minor design change this weekend, coupled with some improvements to function. Service should not be disrupted, but we request your patience if there are minor delays or reformats while the crossover is in process. We hope... MORE

Calculated Risk writes, The debate should be focused on the two major issues: Health Care and the General Fund deficit. Without addressing those issues first, reforming Social Security is irrelevant. Even if one were to accept the premise that the... MORE

Anarchists Anthropomorphizing Government

Institutional Economics
Arnold Kling
Bryan writes, I fail to see how getting a [government] counts as "breaking" a warlord equilibrium. Why shouldn't it simply be described as "accepting" a warlord equilibrium - you quit resisting the rule of the most powerful warlord, and let... MORE

Descent into Warlordism

Politics and Economics
Bryan Caplan
Arnold writes: Warlordism means a situation in which there is no rule of law. A warlord rules by rewarding his friends and punishing his enemies. and To break a warlord equilibrium, you need government. That is the Hobbesian solution--a Leviathan... MORE

The Real Cause of Market Failure in Health Insurance

Economics of Health Care
Arnold Kling
I write, What we are left with, then, is that people do not want real health insurance. I would gladly take a health insurance policy with a $10,000 deductible per individual, and I suspect that many of my wise, risk-averse... MORE

Two-person Sudoku

Game Theory
Arnold Kling
Here's an idea for an entrepeneur.... MORE

Centrist Social Security Plan

Social Security
Arnold Kling
Andrew Samwick writes The plan contains four primary elements: a gradual reduction in future benefits; an increase in the payroll tax cap; an increase in the retirement age; and the establishment of personal retirement accounts. The plan puts great emphasis... MORE

Old News

Information Goods, Intellectual Property
Arnold Kling
Tyler Cowen points to this essay suggesting that newspapers convert to nonprofit status. Over three years ago, I wrote The newspaper business is going to die within the next twenty years. Newspaper publishing will continue, but only as a philanthropic... MORE

A common objection to hereditarian theories of intelligence is that "Intelligence is SO important, evolution would have eliminated genetic variation." A simple fruit fly experiment (discussed in newscientist.com) shows how wrong this is: The team first bred a group of... MORE

Free Responsibility, Con't

Finance: stocks, options, etc.
Arnold Kling
In response to Jane Galt's post on personal finance, let me add a few words. 1. Living within your means is the key, and it can be done at a fairly low income level. You have to be willing to... MORE

Why Peaceful Anarchy Fails

Institutional Economics
Arnold Kling
Bryan writes, As economic growth progressed, of course, the market for defense services got bigger, making room for more and more firms. The problem, however, is that if you've got government in an area, it has the power and the... MORE

Free Responsibility

Finance: stocks, options, etc.
Bryan Caplan
Jane Galt is giving free lessons in financial responsibility. Will you accept the charges? Personally, I'd rather work a little harder and live more luxuriously. But that's probably because I love my work. If I had a boring job, I... MORE

Anarcho-Capitalism and Statist Lock-In

Politics and Economics
Bryan Caplan
When I teach undergraduate industrial organization and graduate public finance, I finish with the economics of anarchy - or, more specifically, of anarcho-capitalism. To call anarcho-capitalism a controversial proposal is gross understatement. But the most common objection voiced by the... MORE

The Marginal Tooth

Microeconomics
Bryan Caplan
Keynes famously wished that economists would one day become as useful as dentists. But every time I go to the dentist, it's clear that knowledge of economics would be useful to to dentists. The whole idea of cost-benefit analysis seems... MORE

Models of the Model Minority

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Asians have often been called the "model minority" - non-whites who by most measures are better-off and more successful than whites. But if you imagine that no one would complain about a positive stereotype of a minority, you don't know... MORE

Is a Bad Marriage Better than None at All?

Behavioral Economics and Rationality
Bryan Caplan
Will Willkinson reports that it is. But this conclusion doesn't check out in the General Social Survey. In this data set, the average married person is indeed happier than the average never married person. But people who are only "pretty... MORE

Iraq and the Corruption Trap

Public Choice Theory
Arnold Kling
Rushing in where angels fear to tread, I thought I would apply the theory of the Corruption Trap to Iraq. Bribing an official to get something done is like paying ransom to a kidnapper -- what looks like a good... MORE

Hamilton's 20/20 Vision

Regulation and Subsidies
Bryan Caplan
There's more to James Hamilton's blog than high-quality energy economics. His latest is an incisive analysis of an Americans with Disabilities related lawsuit: If Boone was indeed fired because she was blind, is it a relevant fact that her replacement,... MORE

Prove Me Wrong: Vote Econlog!

Econlog Administrative Issues
Bryan Caplan
If you want to infinitesimally reduce my pessimism about voting, the Liberty and Power blog is handing out prizes, and Econlog has been nominated for Best New Libertarian/Classical Liberal Group Academic Blog. Cast your vote here. P.S. Econlog counts as... MORE

Friedman and Sowell Dialogue on Bauer

Growth: Causal Factors
Bryan Caplan
The latest issue of the Cato Journal features a transcript from a chat Milton Friedman and Thomas Sowell had about the late great Peter Bauer. Highlights: Sowell: One of the things that [Bauer] mentioned in one of his later books... MORE

Who's More Irresponsible?

Economic Philosophy
Bryan Caplan
One of the main rationales behind welfare reform was the view that teenage single moms are irresponsible. Since their predicament is in large part the result of their own high-risk behavior, they're less deserving of help than, say, the congenitally... MORE

Constitution of Surveillance?

Public Choice Theory
Arnold Kling
James Buchanan discusses three ideas for Constitutional amendments. He proposes an amendment to require balancing the Budget, and amendment forcing laws to be nondiscriminatory, and an amendment against regulating voluntary market transactions. On the nondiscrimination issue, he writes, The American... MORE

Reviewing the undercover economist

Books: Reviews and Suggested Readings
Arnold Kling
About Tim Harford's book, The Undercover Economist, I write, I am tempted to review it as if it were a textbook. Not because it resembles the freshman textbooks that are commonly used today, but because it resembles what I believe... MORE

The Humanity of the Economist

Economic Philosophy
Bryan Caplan
A sad, true story: One of my parents' neighbors (allegedly) murdered a transvestite prostitute on Sunday. NORTHRIDGE - A 50-year-old man who was living in his mother's home in a quiet middle-class neighborhood killed a transvestite prostitute earlier this week... MORE

The Führer of Anti-Market Bias

International Trade
Bryan Caplan
Economic historians have long known that a key plank of Nazi economic policy was autarky. They took the usual nonsense about the dangers of foreign trade seriously, and tried very hard to eliminate Germany's "dependence" on the rest of the... MORE

School Choice

Economics of Education
Arnold Kling
A Symposium in Reason Magazine: We asked a dozen experts what reforms they think are most necessary and promising to improve American education. We also asked them to identify the biggest obstacles to positive change. Some folks give predictable answers... MORE

Seven Hypotheses About Environmental Bias

Behavioral Economics and Rationality
Bryan Caplan
My impression is that most people suffer from "environmental bias." At least when they are talking about human beings, they overrate the importance of environmental factors, and underrate the importance of genetic factors. Why would they do this? Joseph Buckhalt... MORE

Robert Fogel Interview

Growth: Consequences
Arnold Kling
An Excerpt: ultimately, what the government can pay [in future Social Security benefits] depends on how the economy performs. If we continue to grow as we have in the neighborhood of 2 percent per annum per capita over the past... MORE

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