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July 2014

A Monthly Archive (88 entries)

What Do Constitutions Do? Star Trek Edition

Behavioral Economics and Rationality
Bryan Caplan
Political scientist and game designer Chris McGlothlin has a neat Facebook post on Star Trek and the Constitution, building off the classic episode "The Omega Glory."  Here's Chris, reprinted with his permission:As both a political science professor and a Trekkie,... MORE

As I tweeted yesterday, a quick review of the battle over ride-sharing regulation in cities around the world convinces me we're building a bridge to the eighteenth century. Mercantilism is alive and well, and cities (like Birmingham) are missing a... MORE

Immigrants as Defenders of Freedom

Labor Mobility, Immigration, Outsourcing
David Henderson
One issue that has come up a lot in the discussion of expanding immigration is many people's worry (at times, I have been one of the worriers) about immigrants coming in and voting, more than existing Americans do, for statist... MORE

Wolfers on the fiscal consensus

Monetary Policy
Scott Sumner
Justin Wolfers points to a survey showing overwhelming support for the notion of a positive fiscal multiplier in early 2009: The Initiative on Global Markets at the University of Chicago -- hardly a hotbed of liberal or Keynesian thought... MORE

Bruce Benson on the Holdout Problem

Business Economics
David Henderson
My bleg about eminent domain yesterday led to a useful discussion in the comments. Dan Klein recommended that I read Bruce Benson's article, "The Mythology of Holdout as a Justification for Eminent Domain and Public Provision of Roads." I've done... MORE

Is the French public debate evolving?

Eurozone crisis
Alberto Mingardi
A few weeks ago I participated in the "Economic Ideas Forum" in Nancy, France. It is a fascinating event, organised by the local Chamber of Commerce, in synergy with other organisations, including the Institut Economique Molinari, the French think tank... MORE

Huemer's Moderation

Economic Philosophy
Bryan Caplan
Mike Huemer, to repeat, is my favorite philosopher.  Here are some highlights from his recent working paper, "Is Wealth Redistribution a Rights Violation?" [footnotes omitted]There are at least three broad views one might take concerning the foundation ofproperty rights:a. The... MORE

"Helicopter drops" are a bad idea at any time

Monetary Policy
Scott Sumner
Market monetarists tend to prefer using monetary policy to stabilize the path of NGDP, not fiscal policy. We are skeptical of the efficacy of fiscal policy, and also view it as being inefficient. Now David Beckworth has suggested that a... MORE

Eminent Domain Bleg

Business Economics
David Henderson
In a comment on my earlier post today, Tom West writes: I'm fairly certain that most infrastructure projects like pipelines or electrical transmission corridors would *never* get built without the government power of eminent domain. That's a reasonable view, and... MORE

Why Don't We Observe Time-Traveling Arbitrageurs?

International Macroeconomics: Exchange Rates, International Debt, etc.
Art Carden
Here's one reason to think time travel a la Back to the Future or one of the truly great but definitely most NSFW episodes of South Park will never work: we don't have contemporary or historical reports of time-traveling arbitrageurs.... MORE

Intervention Leads to More Intervention

Regulation
David Henderson
The late Ludwig von Mises famously argued that when governments intervene in the economy, they often create new problems. Then, to address these problems, they impose new regulations that themselves to new problems, etc. I thought of that when reading... MORE

A Non-Conformist's Guide to Success in a Conformist World

Behavioral Economics and Rationality
Bryan Caplan
I've been a non-conformist for as long as I can remember.  "All the other kids love sports" never seemed like a good reason why I should feel - or pretend to feel - the same way.  "None of the other... MORE

I feel pain therefore I am (a utilitarian)

moral reasoning
Scott Sumner
Bryan Caplan asks me for a defense of utilitarianism, and specifically a reason for rejecting other strongly held moral intuitions. Like many poorly educated people, I know little about philosophy other than that Descartes said "I think therefore I am."... MORE

In a powerful post 2.5 years ago, "Eureka! Economic Illiteracy as Mental Substitution," co-blogger Bryan Caplan takes one of Daniel Kahneman's most-powerful insights in his Thinking, Fast and Slow and applies it to the economic illiteracy that we see in... MORE

Mark Thoma's Selective Edits

Public Choice Theory
David Henderson
In a post titled, "Are the Rich Coldhearted?," Mark Thoma writes: Why are so many of the rich and powerful so callous and indifferent to the struggles of those who aren't so fortunate? He then goes on to quote from... MORE

Bad Faith and Court Decisions

Economic Methods
David Henderson
I wrote my earlier post this morning when I woke up in the middle of the night. I finally got back to sleep and woke up with another thought. Here would be a test of Scott Sumner's claim. You would... MORE

Does Predictability Imply Bad Faith?

Economic Methods
David Henderson
Co-blogger Scott Sumner, on his own blog, has written a stinging critique of intellectuals. You can read it for yourself, but here's the part I want to highlight and respond to: It's an embarrassment that the two sides of the... MORE

Red Mountain Theatre Company here in Birmingham is running Les Miserables through August 3. We saw it last night. It's the fourth time I've seen Les Mis, and it was worth every bit of what we paid for the tickets.... MORE

The Economist on Overparenting

Family Economics
Bryan Caplan
Though I'm no fan of The Economist's editorials, their science coverage remains outstanding.  Check out their latest piece on overparenting.  You could say I'm biased because the piece draws so heavily on my work, but as a pedantic professor, you'd... MORE

Keynesians often say that it's "obvious" that more government spending will boost GDP. I love this reply by Nick Rowe: The average reader of the New York Times probably thinks he knows about fiscal policy. "We know that Y=C+I+G+NX, so... MORE

The Rhetoric of Rights and Permission

Political Economy
Art Carden
Earlier today, I blogged about Adam Thierer's Permissionless Innovation. Over the last few months, I've been struck by how frequently I hear public policy questions expressed in terms of granting permission: should we allow people to earn such high incomes,... MORE

This morning, I read Adam Thierer's Permissionless Innovation, which you can get as a $0 PDF. From a few discussions in which I've been involved regarding Uber's attempt to enter the Birmingham market, it's clear that the idea of a... MORE

Evolution and Moral Intuition

Behavioral Economics and Rationality
Bryan Caplan
When backed into a corner, most hard-line utilitarians concede that the standard counter-examples seem extremely persuasive.  They know they're supposed to think that pushing one fat man in front of a trolley to save five skinny kids is morally obligatory. ... MORE

Good bye to the book as we know it?

Economics and Culture
Alberto Mingardi
Amazon selling $9.99 monthly subscriptions for "all-you-can-read" on Kindle is exciting news. Some have argued that this will change completely our relationship with the book as an object. Indeed, many people who invest lots of their time in reading tend... MORE

John Blundell, RIP

Obituaries
David Henderson
Last night, I saw on Facebook that John Blundell died yesterday. He was only 61 years old. Less than two months ago, I had posted on his personal reminiscences of the three Austrian economics conferences in the mid-1970s, two of... MORE

There has been an explosion of commentary on regulations in Birmingham regarding Uber and its services; I streamed part of yesterday's City Council meeting at which they voted to delay a decision until next week. I wrote an open letter... MORE

Beyond left and right

Cross-country Comparisons
Scott Sumner
Is British public policy more left wing or right wing, compared to Scandinavian countries like Sweden and Denmark? The Heritage rankings suggest they are about the same, with Denmark coming in at number 10 in the world (at 76.1),... MORE

What to Learn from The Catcher in the Rye

Books: Reviews and Suggested Readings
Bryan Caplan
I recently re-read J.D.Salinger's 1951 classic, The Catcher in the Rye, prompting Tyler to do the same.  My top reactions:1. Other than losing his brother Allie, Holden has no external problems.  He is a rich kid living in the most... MORE

This is HUGE!

Economics of Health Care
David Henderson
We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up Exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health... MORE

The Brilliance Of The Onion on Immigrant Fruit

International Trade
Art Carden
" Original.... MORE

Some Empirics of Moral Philosophy

Behavioral Economics and Rationality
Bryan Caplan
From the noble Jason Brennan:This reminds me further of a talk I saw at a recent free market conference. The presenter was talking about how most philosophers are nihilists who believe that morality is bogus nonsense. I said, "You'll be... MORE

Scott's Utilitarian Leniency

Economic Philosophy
Bryan Caplan
Scott's recent posts on utilitarianism sent me digging for his doubts about open borders.  But if you read him literally, Scott never falters.My views on this are kind of hard to explain.  I am convinced by Bryan Caplan's arguments on... MORE

A few notes on utilitarianism

Income Distribution
Scott Sumner
As I expected, my post on utilitarianism generated a bit of controversy. In the comment section, konshtok wondered: what am I missing? from a utilitarian pov killing one person and using the organs to save the lives of others... MORE

McArdle on 15-Year Mortgages

Finance
David Henderson
Megan McArdle has a good post on why it can make sense to switch from a 30-year to a 15-year mortgage. I agree with most of her reasoning. Her point that I think is most important for most people, based... MORE

Should firms pay a premium for products that are "made in America"? The obvious answer is "yes" if consumers are willing to pay a premium for a "made in America" label, but the benefit to Americans isn't so clear. Last... MORE

The Argument from Conscience

Economic Philosophy
Bryan Caplan
The Argument from Hypocrisy (a close cousin of the "demandingness objection") is one of the strongest objections to utilitarianism.  (Strangely omitted from Scott's inventory).  The argument has two steps.Step 1. Note that utilitarianism implies extreme moral demands.  For example, maximizing... MORE

Happy "Almost Assassinate Hitler Day"

Public Choice Theory
David Henderson
Today is the 70th anniversary of the failed attempt to assassinate Hitler. That the death of Hitler on July 20, 1944 would have been a Good Thing [those who studied British history and read 1066 and All That will get... MORE

Endogenous Sexism Explained

Behavioral Economics and Rationality
Bryan Caplan
Several people in the comments got the point of my endogenous sexism scenario.  Namely: Friends pass a stricter selection filter than spouses of friends.  If you think poorly of someone, you won't be their friend.  But if you think poorly... MORE

An Internet secession so far

Eurozone crisis
Alberto Mingardi
The Scottish referendum is scheduled for September 18. Its implications are wide ranging. Most people are convinced that the Scots will ultimately vote 'no,' thus preserving their Union with England. But if the unlikely scenario of Scotland going for independence... MORE

The wisdom of Cass Sunstein

moral reasoning
Scott Sumner
I've never found critiques of utilitarianism to be persuasive. Here are a few I've run across: 1. The critic describes a horrible scenario, and then asks the reader to assume that it results in greater total utility. The scenario might... MORE

Free Market Virtues

Economics and Culture
David Henderson
After finishing the game, the players had to fill in a form that asked their age and the part of Germany where they had lived in different decades. The authors found that, on average, those who had East German roots... MORE

Economics is all about consumption

Wealth distribution
Scott Sumner
Or at least it should be. And it was when I studied economics in grad school. In recent posts I've complained that the Piketty debate has focused on the wrong variables, income and wealth. These variables do not measure what... MORE

Carlos Ball, RIP

Obituaries
David Henderson
Ian Vasquez of the Cato Institute reports: Venezuelan journalist and Cato adjunct scholar Carlos Ball passed away last week. He was 75. Carlos was a champion of liberty and a long-time friend to so many of us in the freedom... MORE

Endogenous Sexism

Economics and Culture
Bryan Caplan
Suppose men and women are equally praiseworthy in every way.  Both genders are equally honest, fair, peaceful, hard-working, fun-loving, and so on.  With one key exception, both genders share the same trait preferences: The average man places as much weight... MORE

Good News on Australia's Economic Policies

International Trade
David Henderson
The Australian Parliament voted yesterday to end the government's tax on carbon. The reporting in the link is pretty good except for this statement: "Australia on Thursday became the first country in the world to abolish a price on carbon."... MORE

Where Will We Put All These Immigrants?

Labor Mobility, Immigration, Outsourcing
Art Carden
Urban renewal in one step: allow homesteaders to take possession of abandoned properties. Settlers obtain legal title to the property after paying property taxes for five years (or whatever is customary in common law). What are the political obstacles to... MORE

A(nother) Colbertian in Brussels

Eurozone crisis
Alberto Mingardi
Jean-Claude Juncker has been elected President of the European Commission with 422 out of 729 votes in the European Parliament (he needed 376). Juncker was one of the "Spitzenkandidaten" for the European elections, namely the one chosen by the Popular... MORE

AD: Eleven stages of enlightenment

Monetary Policy
Scott Sumner
Over at TheMoneyIllusion I've been having a discussion of aggregate demand. What does the term actually mean? In the comment section I see lots of average people giving common sense explanations, and also experts like Nick Rowe making high-level arguments.... MORE

Note on Borjas: Non-Binding Constraints Are Not Necessary

Labor Mobility, Immigration, Outsourcing
David Henderson
One of the most articulate critics of expanded immigration into the United States is Harvard economics professor--and immigrant--George J. Borjas. Because I wanted someone who knew the facts about immigration to the United States and could present a balanced view... MORE

George Borjas' new Immigration Economics contains the first intellectually serious critique of the increasingly mainstream view that open borders is a big stack of "trillion dollar bills on the sidewalk."  Borjas begins by clearly explaining what's at stake.[W]hat types of... MORE

Yes, I'm being sarcastic. I associate this view with American liberals. It often seems that when there is a problem such as the 2008 financial crisis, they immediately assume "the market" is to blame, and "more regulation" is the answer.... MORE

Mind Your Own Beesness

Business Economics
David Henderson
Rucker and Thurman point out that outbreaks of bee disease are not new: reading their article is your chance to get up to speed on varroa mites, tracheal mites, the bacterial infection called American foulbrood, and the nosema and chalkbrood... MORE

Your Big Doubts About the 10,000 Hour Rule Are Well-Founded

Behavioral Economics and Rationality
Bryan Caplan
Ericsson, Krampe, and Tesch-Romer's "The Role of Deliberate Practice in the Acquisition of Expert Performance" (Psychological Review 1993) isn't just one of the most famous articles in the history of academic psychology.  Thanks to Malcolm Gladwell's Outliers, the article's bullet... MORE

Philip Booth on Thomas Piketty

Wealth distribution
Scott Sumner
I recently did a post where I expressed skepticism about this claim by Thomas Piketty: In my view, there is absolutely no doubt that the increase of inequality in United States contributed to the nation's financial instability. The reason... MORE

This post is a modified version of a comment from the Libertarian Homeschooler Facebook page. Via The Libertarian Homeschooler, I just saw Radley Balko's new post on "The Criminalization of Parenthood." My wife and I are big fans of Lenore... MORE

Intolerant Socialism

Economic Philosophy
Art Carden
Like Bryan, I really enjoyed Jason Brennan's discussion of "Why Utopia is Capitalist." Bryan is correct to note that one of the main problems with G.A. Cohen's camping trip example is that it assumes (albeit implicitly, if I remember correctly)... MORE

Voluntary-but Bossy-Socialism

Economic Philosophy
Bryan Caplan
Voluntary-and-laid-back socialism sounds good to most people; that's why Cohen's camping trip thought experiment works.  Involuntary socialism, in contrast, sounds terrible to almost everyone; that's why Cohen's thought experiment fails to advance what most avowed socialists have in mind.  The... MORE

Among the hats I'm wearing these days, I'm writing semi-monthly columns for a Birmingham-based website called DepositAccounts.com. Recent columns have considered population growth, inflation, and the origins of money. My archive is here. In addition, EconLog friend Sam Wilson and... MORE

Saturday Morning Video

Economics of Health Care
David Henderson
I was busy all Friday with my conference and forgot to post my latest Friday night video. So this is a Saturday morning video. It was my debate on health care with Ted Marmor. If you think I was too... MORE

Co-blogger Bryan Caplan opened the month with a post on "Liberal Authoritarianism." he left "the writing of the companion post on "Conservative Authoritarianism" as an exercise for the reader." I accepted his challenge, so here we go. In Bryan's way... MORE

What Is Tyler Smoking?

Political Economy
Bryan Caplan
Am I the only person who's noticed that Tyler has gone straight from predicting that marijuana legalization would never happen to Straussian fretting about the large effect of legalization on use?  Tyler's original prediction was based on a strange voting... MORE

There are two kinds of people . . .

Macroeconomics
Scott Sumner
Ideology is perhaps the most common way of dividing economists into groups. You have Allan Meltzer on the right, and Paul Krugman and Joe Stiglitz on the left. Today I'd like to argue that in one very important way it... MORE

Or, you could call this post "Adam Smith on the Tragedy of the Commons" I'm reading a section of Adam Smith's The Wealth of Nations for a conference on The East India Company. I've never read Smith's book all the... MORE

Ownership for Cartoonishly Nice People

Economic Philosophy
Bryan Caplan
The noble and prolific Jason Brennan has just released Why Not Capitalism?, a short book replying to Gerald Cohen's Why Not Socialism?  Outstanding work, as usual.  For me, the highlight is Brennan's explanation for why even cartoonishly nice people would... MORE

Do Credential Scandals Support the Signaling Model?

Economics of Education
Bryan Caplan
Every now and then, the world suddenly learns that a perfectly competent worker faked his credentials.  Consider the case of MIT's former head of admissions:Marilee Jones, the dean of admissions at the Massachusetts Institute of Technology... admitted that she had... MORE

In yesterday's Wall Street Journal, David Neumark argued that even though "modest increases" in the minimum wage won't have large disemployment effects, the minimum wage is a poorly-targeted anti-poverty measure: "Minimum wages are ineffective at helping poor families because such... MORE

Boudreaux on McCloskey

Books: Reviews and Suggested Readings
Alberto Mingardi
LibertyMatters is hosting a discussion on Deirdre McCloskey, namely her notion that "economics can't explain the modern world": that is, that mass flourishing, the tremendous progress that was originated with the Industrial Revolution, is something we owe primarily to culture.... MORE

Free Intentions

Behavioral Economics and Rationality
Bryan Caplan
I quite enjoyed Alfred Mele's Free: Why Science Hasn't Disproven Free Will (available for pre-order now).  It's a great exercise in the debunking of debunking.  My favorite case: Many psychologists (and laymen) argue that consciousness is epiphenomenal.  In layman's terms,... MORE

Why no Kansas miracle?

Macroeconomics
Scott Sumner
The past two years Kansas reduced its state income tax rates. As a result, the top rate of income tax faced by Kansas residents (combined state and federal) rose from 41.45% in 2012 to 48.3% in 2013 and then fell... MORE

Piketty Bleg

Books: Reviews and Suggested Readings
David Henderson
I'm putting the finishing touches on my review of Piketty in the next few days and he makes reference to something that I don't think exists. I'm wondering if that's just because I don't know how to make my way... MORE

Landfills as Inventories

Energy, Environment, Resources
Art Carden
In honor of of the estimable Mike Munger's 25th appearance (!!) on EconTalk, I thought I'd offer a couple of words about what's probably my favorite Munger EconTalk podcast: "Munger on Recycling," from July 2, 2007. Here's his accompanying article... MORE

Robert Murphy on Capital and Income

Wealth distribution
David Henderson
Our three examples highlight the importance of understanding both the theory and the practice of capital and income measurement. Analysts have often used statistics to make statements about U.S. savings behavior and inequality, without understanding some important causes of the... MORE

The Weak-Willed Do-Gooder

Behavioral Economics and Rationality
Bryan Caplan
Imagine Smith sees a problem in the world.  He knows how to fix the problem.  He's got the resources to implement this remedy.  He sincerely wants to do good.  If he decides to fix the problem, is there any reason... MORE

In my fire in 2007, I lost almost all my files, including the ones under the letter "R." For that reason, I thought I had lost my correspondence with Murray Rothbard. But I came across some files in my home... MORE

More on Schuck and Government Failure

Books: Reviews and Suggested Readings
David Henderson
Yesterday I posted on Peter Schuck's book, Why Government Fails So Much. Here's another section of my review of his book in Regulation: Although the whole book is interesting, it becomes a page-turner with Chapter Five, "Incentives and Collective Irrationality."... MORE

Schuck on Why Government Fails

Books: Reviews and Suggested Readings
David Henderson
Peter Schuck's Why Government Fails So Often is one of the most important books of the year and may be one of the most important books of the decade. Although I have seen this prolific author's name over the years,... MORE

Clarabelle Cow, Capitalist

Book Club
Alberto Mingardi
Art Carden has already blogged on Jason Brennan's insightful "Why not Capitalism?", a most needed response to G.A. Cohen's "Why not Socialism?" Like Art, I enjoyed the book. It is a very good example of how political philosophy can be... MORE

Kant just went up a full notch in my eyes.  From The Critique of Pure Reason, via David Gordon, via Wlodek Rabinowicz.The usual touchstone, whether that which someone asserts is merely his persuasion -- or at least his subjective conviction,... MORE

What about Asia?

Growth: Causal Factors
Scott Sumner
Thomas Piketty's book is focused on wealth inequality, but he offers opinions on a wide variety of topics. The vast majority of those opinions are left wing, and in my view most are wrong. Here's one example (p. 481): Modern... MORE

I, Crayon

Growth: Causal Factors
Art Carden
Here's a Sesame Street classic. I remember this from when I was a kid; we watched it a few times with our kids Monday morning. The sheer amount of knowledge embodied in this whole process is mesmerizing. And of course,... MORE

How I Teach When I Really Want My Students to Learn

Behavioral Economics and Rationality
Bryan Caplan
A month ago, my eleven-year-old sons still didn't know how to tie their shoes.  I volunteered to teach them.  As a professional educator, I was tempted to teach shoe-tying the same way I teach econ: With a scintillating lecture.  Since... MORE

You Nasty Creators of Consumer Surplus

Business Economics
David Henderson
Longtime partners Alaska Air Group Inc. and Delta Air Lines Inc. are slugging it out in a battle for Seattle that is turning into one of the U.S. airline industry's nastiest turf wars in years. So reads the opening paragraph... MORE

Mr. Krugman's peculiar post

Macroeconomics
Scott Sumner
Paul Krugman seems annoyed by the recent modest success of market monetarism, at least in terms of becoming part of the discussion. But the post contains only one tiny critique of our actual policies: I don't buy this on the... MORE

I wear a hat as a Senior Research Fellow for the Institute for Faith, Work, and Economics. In the last several days, IFWE has run a few pieces on their blog that have really stood out to me in light... MORE

21 Short Claims About Political Motivation

Behavioral Economics and Rationality
Bryan Caplan
Yesterday I wrote:If you want lots of X, but are too ignorant to evaluate X's indirect effects, you probably just really love X.  If you want lots of ice cream, but are too ignorant to evaluate ice cream's effect on... MORE

While procrastinating earlier (yes, I admit it), I came across a question from LearnLiberty: If you could change the outcome of one major world event, what would it be and why? I had just been thinking about this in light... MORE

Reinham Salam has an excellent article on Slate. I don't like the title, "Selfish, Selfish San Francisco." No, it's not the objection you might expect from an Ayn Rand admirer: my objection to Slate's use of the word "selfish." My... MORE

Liberal Authoritarianism

Economic Philosophy
Bryan Caplan
Critics often view liberals as deeply authoritarian.  Most liberals naturally object to this unflattering claim.  Critics notwithstanding, liberals don't relish using the power of government.  They don't have a raw preference for forcing everyone live their way.  Instead, liberals maintain,... MORE

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