Arnold Kling  

GMU vs. Chicago

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Gary Becker and James Heckman argue for more government support for economic research. In the other corner are Don Boudreaux and Tyler Cowen. Indeed, Tyler was in really good form in writing his post. There is not much left of the Nobel Laureates' case when he is finished with it. Read the whole thing.

Changing the subject, but sticking with Tyler, he points to a piece by Izabella Kaminska that winds up


Low-cost production techniques could soon become so advanced and so low cost -- thanks to developments like 3D printing -- that even the tiniest salaries in Africa will not make it worthwhile to employ human beings at all.

Talk about ZMP! But there is still the point that there is always comparative advantage. So, you don't want to pay people to make things. You still might pay them for doing something for you.

[UPDATE: Reading John Cochrane, it is evident that Becker and Heckman do not necessarily speak for the entire Chicago school.]


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CATEGORIES: Economic Methods



COMMENTS (4 to date)
Thomas DeMeo writes:

Technically, there may always be comparative advantage, but there are significant costs and risks in dealing with human beings, so cost cannot approach zero, even if wages do.

R Richard Schweitzer writes:

Still available from Liberty Fund:

The Logic of Liberty by Michael Polanyi

These kinds of ideas raise again:
What are the functions of governments?

Is "Economics" a "science?" If so, what makes it so? Or, are we simply viewing human conduct from a particular perspective?

Even in Medicine, which is the Art of applying "science," we have objective norms for investigations, research, and testing conclusions and conjectures. Where is that to be found in the field of "Economics?"

Besides, there is no government money; there are only levies (taxes) that reduce the funds left to those who produce or serve.

Arthur_500 writes:

I have a business in a young country. Everyone has a job. The US Politicians would be happy to see busy voters and lack of unemployment.

the employees are mostly useless. they show up and stand around to eat food. In a few hours most employees are gone. Eventually they straddle back in. After a while you quit asking for the stories.

The idea is all about full employment. Everyone has a job. No one asks how a government minister with a $30,000 paycheck can live in a $300,000 home.

Busy people can be happy even if the money means nothing. Only time will tell when they get impatient for something better.

Peter St. Onge writes:

The whole 'humans will be obsolete' thing strikes me as absurd. I think it comes from the lump-of-labor fallacy, where jobs are resources. Jobs become exogenous demand, so machines' productivity crowds out humans.

Of course, if you consider people as resources, it's inconceivable that they will go bidless, becoming useless resources. So, no, humans will never be superfluous.

As for the tiny wages argument, if machines are doing all the other jobs, then productivity rises so high that even underpaid humans live incomparably rich. Sound optimistic? Ask the humans out-competed by the superior productivity of farm-horses.

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