Bryan Caplan  

Word Inflation: Disappointment Is Not Collapse

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Norms and Institutions... Ice Cream Demand...

Arnold's surprise surprises me. 0% growth for one decade during the next four in countries with plenty to eat counts as a "collapse"?

I think both Arnold and I would scoff if, say, Krugman claimed that the incomes of the poorest decile had "collapsed" because they were stagnant during one decade out of the last four. To say that it "seems like a collapse" to the poor because the income of the richest decile grew rapidly is scarcely more defensible. Whether you're talking about individuals, deciles, or countries, no improvement over a situation where you've got enough to eat and a life expectancy of 65 isn't in the same ballpark as a "collapse."

This reminds me of Austrians who say that the lack of economic calculation makes socialism "impossible," when they really mean that the lack of economic calculation makes socialism "somewhat more difficult." Free-market economists of all people should recognize the dangers of word inflation.


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michael writes:

Lack of economic calculation does make socialism 'unworkable' over time as the economy heaps distortion over distortion on itself. It is impossible in the longterm, and if socialistic policies are not withdrawn, or if a vibrant black market doesn't form to help counter the effects, then the only possibility is collapse.

To say that 'lack of economic calculation makes socialism somewhat more difficult' implies that it can be a self-sustaining entity as long as those doing the calculations are 'good at their job' or something - this is flat out false. The socialist 'Ministry of Economics' is an institution that cannot help but fail, just as would be a "Ministry to Find God" or some such. There is no 'secret formula'.

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