Bryan Caplan and David Henderson

March 2007

A Monthly Archive (72 entries)

Libertyman

Economics and Culture
Bryan Caplan
I just came across a surprising bit of libertarian trivia that didn't appear in Brian Doherty's magnum opus. Steve Ditko, the co-creator of Spiderman, was a self-identified Objectivist. He even created two explicitly ideological superheroes. The first, the Question, inspired... MORE

Technological Determinishm

Institutional Economics
Arnold Kling
Tyler Cowen writes, Once private corporations had the organizational wherewithal to get large in the late 19th century, governments got big too. There is an important lesson there. Technology, and to a lesser extent slavery, are why earlier American governments... MORE

Offshorable Jobs

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Today's Wall Street Journal reports on Alan Blinder's estimates of jobs that might go offshore. he has been refining those estimates, by painstakingly ranking 817 occupations, as described by the Bureau of Labor Statistics, to identify how likely each is... MORE

Here is Wisdom

Behavioral Economics and Rationality
Bryan Caplan
From Eliezer at Overcoming Bias: There is an old Jewish joke: During Yom Kippur, the rabbi is seized by a sudden wave of guilt, and prostrates himself and cries, "God, I am nothing before you!" The cantor is likewise seized... MORE

Defending Freakonomics

Economic Methods
Arnold Kling
Alex Tabarrok defends Steven Levitt from an attack by Noam Schieber. I think Scheiber is off in a few ways. First, he conflates methods and questions. It's true that clean identification is often found with quirky experiments but a quirky... MORE

Lawrence Katz on Inequality

Income Distribution
Arnold Kling
Katz provides Greg Mankiw with some context for remarks quoted in a Wall Street Journal article. I substantially agreed with Eddie Lazear's view that a major part of the growth of U.S. earnings inequality is driven by rising returns to... MORE

Austrian Economics in Business

Books: Reviews and Suggested Readings
Arnold Kling
The Science of Success, by Charles G. Koch, takes an "Austrian" approach to business. Nick Schulz liked it. Koch has published a new book that provides people who care deeply about business and politics something important to think about -... MORE

The Presumption of Elasticity

Microeconomics
Bryan Caplan
Did tax cuts in the '80's spur Internet entrepreneurship twenty years later? I can't prove it. But it seems very plausible, and no one's proven otherwise. After all, when marginal tax rates are 70%, the dream of striking it rich... MORE

Poor Choices

Behavioral Economics and Rationality
Bryan Caplan
Robin Hanson advised me to read Banerjee and Duflo's "The Economic Lives of the Poor" in the latest issue of the Journal of Economic Perspectives, and I wasn't disappointed. Long story short: People who live on $1 a day spend... MORE

State of Fear

Political Economy
Arnold Kling
Megan McArdle participated in a panel discussion on fear with Chris somebody and Frank Furedi. The topic was fear, which I discussed here. Furedi, a sociologist, complained that people are starting to have their identities wrapped up in what they... MORE

Doctors, Pharmaceuticals, and Statisticians

Economics of Health Care
Arnold Kling
The Los Angeles Times reports, The study, called the Courage Trial, enrolled 2,287 patients at 15 VA medical centers and another 35 hospitals in the United States and Canada. It was sponsored primarily by the VA and the Canadian Institutes... MORE

Show Me the Way

Economics of Education
Bryan Caplan
My goal: Get a reasonably large number of college (or even high school) graduates to go over their transcripts, and state, course-by-course, how often they take what they learned in school and apply it on the job. Respondents should have... MORE

Inside the Revolutionary Mind

Behavioral Economics and Rationality
Bryan Caplan
I just had the pleasure of reading Tolstoy's "God's Way and Man's." It's one of the most compelling portraits of revolutionary psychology I've ever read. "God's Way and Man's" is a complex tale, but the last half focuses on imprisoned... MORE

Patriotic Bias

Behavioral Economics and Rationality
Bryan Caplan
As a rule, I don't like movies "based on true stories," but I'll make an exception for Joyeux Noël. It's a trilingual tale of fraternization on World War I's Western front, and nicely shows the contrast between individual decency and... MORE

War, Peace, and the Economic Gap

Growth: Consequences
Arnold Kling
This essay by James McCormick is difficult to summarize. Here is a taste: To summarize my argument then, (1) our prosperity and peace is far ahead of most of the world and increasing, (2) we don’t appear to have enough... MORE

An Alternative to Single-Payer Health Care

Economics of Health Care
Arnold Kling
Senator Tom Coburn offers a market-oriented alternative. Under the Act, Americans would be eligible for a tax rebate to purchase health insurance. The “Medi-Choice” rebate would be made directly to a patient’s health insurer and would be worth $2,000. Families... MORE

Single-Payer Health Care

Economics of Health Care
Arnold Kling
Here is single-payer health care in a nutshell: 1. People are forced to buy something that they don't seem to want 2. Provided by a monopoly 3. Paid for by higher taxes If you need a more nuanced discussion, follow... MORE

How to Increase Support for Free Markets

Behavioral Economics and Rationality
Arnold Kling
In the New York Times, Benedict Carey writes, Those with ventromedial injuries were about twice as likely as the other participants to say they would...poison someone with AIDS who was bent on infecting others, or suffocate a baby whose crying... MORE

A Theory of Government

Political Economy
Arnold Kling
My latest essay is something that, if I were so inclined, I could try to dress up in academic jargon and send to a professional journal. But having to dress thoughts up that way is one of the things that... MORE

Mission Crisis?

Politics and Economics
Bryan Caplan
Arnold writes: Starting with the Carter Administration, deregulation reigned in transportation, communications, and--eventually--energy. These victories for market-oriented policies stimulated growth and allowed us to have the luxury of an enlarged welfare state without crippling the economy. "Crippled"? By historical standards,... MORE

Libertarianism's Crisis

Political Economy
Arnold Kling
I am going to disagree with Bryan's criticism of Tyler. What I would say (and Tyler seems to be saying) is that libertarians currently lack a rallying point. From the 1930's through the Nixon Administration price controls, the forces of... MORE

Tyler's Crisis Mentality

Behavioral Economics and Rationality
Bryan Caplan
Tyler has a podcast about what he calls "the intellectual crisis in libertarianism." Again, I'm baffled. To say we're in a crisis strongly suggests that things used to be better for us. But as far as I can tell, as... MORE

Education: Practicality vs. Rate of Return

Economics of Education
Bryan Caplan
I'm fortunate to have Prof. Karl Smith of Modeled Behavior reading my posts on education. In response to my claim that educators overestimate the practicality of education, Smith writes: I think those who spend their lives in academia will tend... MORE

Empiricism and Dogma

Economic Philosophy
Arnold Kling
Virginia Postrel writes, For decades, the deductive tradition has defined libertarian identity and dogma, while the empiricist tradition has achieved libertarian goals. For parallelism, we can call this second intellectual strand the Hayek-Friedman tradition, though that unnecessarily truncates the list... MORE

Winston on Advertising Regs

Regulation and Subsidies
Bryan Caplan
Here's a neat passage from Clifford Winston's Government Failure versus Market Failure (complete book available for free downloading): Calfee and Ringold (1994) focused on surveys of consumers’ attitudes toward advertising. Analyzing six decades of data that began in the 1930s,... MORE

Radicals for Capitalism Comes to GMU

Economic Philosophy
Bryan Caplan
Here at GMU, there are always radicals for capitalism. But it is only on 4 PM Wednesday, March 21, that we will have Radicals for Capitalism, and its learned and witty author, Brian Doherty. See here for more info.... MORE

Ethiopia Bleg

Cross-country Comparisons
Bryan Caplan
Does anyone know anything about economic freedom in Ethiopia? I'm going to be on a panel where this would be useful knowledge to have - and unfortunately, Ethiopia does not yet seem to be included in the Economic Freedom of... MORE

David Friedman on Taxis and Tipping

Political Economy
Arnold Kling
In the book that everyone is reading but I'm still only 2/3 through, Brian Doherty writes, [David] Friedman points out the intriguing datum that tipping in taxi cabs--almost purely a situation of paying for a public good because of social... MORE

Bryan on Education

Economics of Education
Arnold Kling
I like his first post on this new book idea better than his second. I agree that the demand for education is artificially high. However, I disagree that the main reason for this is that education primarily performs a signaling... MORE

The Education of Educators

Economics of Education
Bryan Caplan
I've often blogged about the dangers of selection bias (see here and here). So in writing a book about education, I have to wonder: To what extent is my personal experience atypical? My main answer: My personal experience exaggerates the... MORE

Page One of My Next Book

Economics of Education
Bryan Caplan
I've started writing my next book, tentatively entitled The Case Against Education: A Professional Student Explains Why Our Education System is a Big Waste of Time and Money. Here's page one: I have been in school continuously for the last... MORE

Borjas, Wages, and Immigration: The Complete Story

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
George Borjas is the source of the widely-quoted factoid that immigration has reduced the wages of low-skilled natives by 8%. So I was quite surprised to discover the following table when I was flipping through Borjas' labor textbook:Short Run Long... MORE

Atlas Left a Big Tip

Income Distribution
Arnold Kling
The IRS reports, For tax year 2004...Taxpayers with an AGI of at least $328,049, the top 1 percent of taxpayers, accounted for 19 percent of total AGI, representing an increase in income share of 2.2 percentage points from the previous... MORE

300 and Freedom

Economic History
Bryan Caplan
While watching 300 for the second time today, I kept remembering David Stannard's description of America's Founding Fathers as "slaveholding philosophers of freedom." There's a lot of high-minded talk in 300 about free Greeks standing against Persian tyranny (not to... MORE

Great Quip

Politics and Economics
Bryan Caplan
Quoth Patri Friedman: Old definitions: Liberals: Favor social freedoms, but not economic freedoms. Conservatives: Favor economic freedoms, but not social freedoms. New definitions: Liberals: Believe in evolution, but not biology. Conservatives: Believe in biology, but not evolution.... MORE

Against Statistics

Economics of Health Care
Arnold Kling
Marc Siegel writes, By the time a lung cancer is seen on an X-ray it is almost always too widespread to be operated on. Hence, the only chance for a cure is finding it before it has spread via a... MORE

Viacom vs. Google/YouTube

Information Goods, Intellectual Property
Arnold Kling
Paul Kedrosky writes, if Viacom wins this suit and busts YouTube--and there is a very good chance it will win; it is, after all, uncontested that this is Viacom's media property we are talking about--that won't change what consumers want... MORE

Taxes and Tipping

Political Economy
Arnold Kling
In an essay called Foundations of the Kling School, I write, Economics should be subsumed under the general study of human behavior, not the other way around. ...The conceptual differences between leaving a tip and paying income taxes are not... MORE

Worst Advice to Libertarians Ever?

Politics and Economics
Bryan Caplan
I'm not sure if Tyler Cowen's advice to libertarians is the worst any serious thinker has ever given us. But it's up there. I'd like to give my dear friend and benefactor a charitable reading, but I just can't. Stripped... MORE

A Relic of Prohibition

Economic History
Bryan Caplan
An enthusiast on the Pulp Hero discussion board provides some authentic flavor of the Prohibition Era: An official Medicinal Liquor prescription form. It's funny to think that alcohol was once treated like medical marijuana.... MORE

Rent-seeking and CO2 Emissions

Energy, Environment, Resources
Arnold Kling
Which do you think has higher priority? The Financial Times reports, A European summit agreed to toughen regulations against old-fashioned incandescent bulbs by 2009 as part of a bid to cut greenhouse gas emissions. But earlier in the week officials... MORE

Democracy,Education, and Growth

Growth: Causal Factors
Arnold Kling
Two superstars, MIT's Daron Acemoglu and Harvard's Ed Glaeser, discuss the relationship on a Wall Street Journal feature. Ed says, While I yield to no one in my passion for liberty, the view that democracy is a critical ingredient for... MORE

Kidney bleg follow-up

Econlog Administrative Issues
Arnold Kling
My friend who needed a kidney found a donor and had her surgery today. The donor said, "Compared with my C-section, this was easy." Probably fewer long-term complications, as well.... MORE

Tyler on the Problems of Libertarians

Political Economy
Arnold Kling
Tyler Cowen writes, Overall libertarians should embrace these developments. We should embrace a world with growing wealth, growing positive liberty, and yes, growing government. We don’t have to favor the growth in government per se, but we do need to... MORE

Regulation-exempt

Public Choice Theory
Arnold Kling
John Fund writes, In their favor-seeking, all of the lobbyists visiting Capitol Hill are bound by House and Senate ethics rules that cap most individual gifts at $50 per elected official or staffer, with an annual limit of $100 per... MORE

Subprime Mortgage Loans

Finance: stocks, options, etc.
Arnold Kling
Megan McArdle passes along a question from Dave Schuler. My intuition is that the phenomenon of the subprime loan is related to the rapid rise in housing prices that haven't been matched by comparable rises in money wages. The implication... MORE

Bayesian Analysis of Hypocrisy

Behavioral Economics and Rationality
Bryan Caplan
Hanson and Balan aren't the only sharp tacks at Overcoming Bias: Politicians want voters to have a positively-biased view of themselves. Consequently, voters learn more about politicians from their failings than from their good deeds. Barack Obama, for example, smokes.... MORE

Two Cowenian Tenure Claims

Economics of Education
Bryan Caplan
Tyler has chimed in on tenure with a bizarre dadaism and a serious challenge: Bizarre Dadaism: To put it bluntly, the tenure system works because for many people their "output" doesn't matter in the first place; tenure is however wonderful... MORE

Indian Economy Bleg

Business Economics
Arnold Kling
The Indian Economy is a blog about, well, you can guess. If you are an economist/writer/blogger who’s written about India and/or economics, they would like a few more contributors. You don't need to be a resident of India, but you... MORE

Tenure and Non-Profits

Cost-benefit Analysis
Bryan Caplan
Steve Levitt has come out against tenure, and Greg Mankiw is standing up for it on grounds I'd normally accept: [U]niversities may well be better off by paying lower salaries to tenured faculty, despite the adverse incentive effects, than paying... MORE

Puzzled by Brad's Puzzlement

Behavioral Economics and Rationality
Bryan Caplan
Brad DeLong is deeply puzzled by a sensible observation over at Free Exchange: The Economist's Free Exchange: Trailing the truth | Free exchange | Economist.com: [P]undits are almost never punished for being wildly wrong about something. Nor are they rewarded... MORE

And Bring on the Mexicans

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Bryan lauds high-skilled immigrants. Matthew Quirk talks about Mexican immigrants. By 2003, ...the roughly 20 million Mexican-origin workers in America create a larger gross product than Mexico itself. ...Five predominantly rural Mexican states—Guanajuato, Jalisco, Michoacán, San Luis Potosí, and Zacatecas—send... MORE

Ponzi Schemes: What's the Big Deal?

Finance: stocks, options, etc.
Bryan Caplan
At last night's paternalism debate, David Balan repeatedly returned to the example of the Ponzi scheme. Later, I found myself reflecting: What's so bad about Ponzi schemes? By definition, Ponzi schemes have an expected rate of return of 0% minus... MORE

Cream of the Crop

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
The most elite man alive has sensibly radical views on immigration. And he's suggested a great nerdy slogan, too: infinite visas. Perhaps he should found the Brains Against Brain Drain Club? I can't help but recall the lead quote to... MORE

Are Elites "Anti-Democratic"?

Politics and Economics
Bryan Caplan
Acemoglu and Robinson have recently done much to academically revive the view that democratization is a struggle between pro-democratic masses and anti-democratic elites. If elites accept democracy, they do so to forestall even worse outcomes like revolution. (Here's a readable... MORE

Make That Maternalism

Behavioral Economics and Rationality
Bryan Caplan
A fun time was had by most at the Balan-Hanson debate on paternalism. In the post-debate discussion, someone raised the question of whether men or women are more "paternalistic." Given my earlier work (not to mention casual comparison of lenient... MORE

More Dollar Bills on the Sidewalk

Economic Education
Bryan Caplan
Enter the Garvey Fellowship Contest by writing an essay on foreign aid. They gave me first prize when I was in grad school; the next winner could be you!... MORE

The Distribution of Tax Burdens

Income Distribution
Arnold Kling
How progressive is the current U.S. tax system? Not very, if you read the new paper in the Journal of Economic Perspectives by Thomas Piketty and Emmanuel Saez. As Mark Thoma reported, they say that The progressivity of the U.S.... MORE

Tim Noah writes, Suppose the national defense of the United States were relegated to the private sector. Instead of the publicly funded Army, Navy, Air Force, and Marines, the country would be defended by private militias funded mainly by insurance... MORE

Energy Fallacy

Energy, Environment, Resources
Arnold Kling
A blogger writes If consuming less bad energy is a goal, then moving more citizens over to good energy is a viable part of that goal. To move more people over to good energy, there has to be more readily... MORE

$125 K of premium medicine

Economics of Health Care
Arnold Kling
Wall Street Journal technology reporter Lee Gomes describes his treatment for pneumonia. Abbott's Harold C. Flynn says it takes the Cell-Dyn 34 seconds to do an analysis. During that time, it counts an average of 325,000 cells, and then goes... MORE

Economics in Candyland

Microeconomics
Bryan Caplan
True story: Last night, I was playing Candyland with my four-year-old sons. The green gingerbread man token is always in excess demand, so the house rule is that the boy who plays green goes second. (It's never too soon to... MORE

Teaching Un-Normal Economics

Economic Education
Arnold Kling
Greg Mankiw writes, Having observed many failed textbook projects over the years (I won't mention names), I notice several predictable pitfalls. They include: ...The author has views of the field that are too idiosyncratic to appeal to the vast majority... MORE

Alternative Energy and Rent-Seeking

Energy, Environment, Resources
Arnold Kling
In this essay, I put together some recent ideas. Subsidizing "good" energy in order to justify using "bad" energy is like eating salad in order to justify eating dessert. It is an exercise in self-deception. ...The most important, inconvenient truth... MORE

Should There Be Compulsory Attendance for the Balan-Hanson Debate?

Behavioral Economics and Rationality
Bryan Caplan
David Balan and Robin Hanson, two of the smartest voices on Overcoming Bias, are having a debate on Paternalism this Wednesday evening at GMU. The title: "Paternalistic Policy: Altruism or Arrogance?" Given that this debate will resolve this important question... MORE

The Sociology of the V.R.W.C.

Microeconomics
Bryan Caplan
Sociologist Fabio Rojas just introduced GMU economists to diagrams of social networks. These diagrams provide a neat way to quickly show who knows who, who knows people who know people, and who knows everybody. Rojas presented new data on networks... MORE

Online Content Bundling

Information Goods, Intellectual Property
Arnold Kling
Steve Levitt asks In general, it doesn't seem like a good idea to give your product away if you are a company, but given that most newspapers do, why doesn't the WSJ? ...Either the WSJ is making a mistake or... MORE

Marriage, Income, Cause, and Effect

Income Distribution
Arnold Kling
The Washington Post reports, As marriage with children becomes an exception rather than the norm, social scientists say it is also becoming the self-selected province of the college-educated and the affluent. The working class and the poor, meanwhile, increasingly steer... MORE

Rent-Seeking and Global Warming

Energy, Environment, Resources
Arnold Kling
The Wall Street Journal writes, The emerging alliance of business and environmental special interests may well prove powerful enough to give us cap-and-trade in CO2. It would make Hollywood elites feel virtuous, and it would make money for some very... MORE

Shimer on Acemoglu

Political Economy
Arnold Kling
Robert Shimer tries to summarize the research of Clark Medalist Daron Acemoglu. One example. Daron and James [Robinson] explore the transition from autocracy to democracy. What makes the political elites allow the poor to vote? Daron and James argue that... MORE

Data Molesters

Books: Reviews and Suggested Readings
Arnold Kling
In my opinion, the authors of The Logic of Political Survival should not be criticized for mishandling data. They should be arrested. Imprisoned. Only released back into the community with warnings to neighbors to protect your children.... MORE

Internet Bubble 2.0

Business Economics
Arnold Kling
My essay on the YouBubble says, If you are a founder or an investor in a new business, then I would advise you to read the Business 2.0 article on 25 hot start-ups. Figure out what these enterprises have in... MORE

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