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February 2015

A Monthly Archive (62 entries)

William McGurn's Analogy

Liberty
David Henderson
In a piece titled "Snow(den) blind: Libertarians' telling 'hero'," William McGurn, a former George W. Bush speechwriter and Wall Street Journal columnist, and currently editorial page editor of the New York Post, writes: The libertarians who champion Snowden will claim... MORE

Ebeling on Mises, the Applied Economist

Austrian Economics
Alberto Mingardi
The Liberty Fund has recently made available on line the introductions, written by Richard Ebeling, to the three volumes of "Selected Essays" by Ludwig von Mises that he edited some ten years ago. That project developed out of the discovery,... MORE

Bryan Caplan offers conventional views on a wide range of issues. Instead of offering my own, I'll comment on his: 1. Most academics are out of touch with the real world and have little useful to say about it. The... MORE

Various friends on Facebook have been venting, quite justifiably, about the Federal Communications Commission's vote to regulate the Internet as a public utility. Some of the more extreme venters have claimed that it will slow down communication and reverse much... MORE

Totally Conventional Views Which I Hold

Economics and Culture
Bryan Caplan
As soon as Tyler posted his "Totally Conventional Views Which I Hold," I felt the urge to do the same.  In no particular order:1. Most academics are out of touch with the real world and have little useful to say... MORE

Mission creep

Macroeconomics
Scott Sumner
During periods where there is an enormous demand shortfall, such as the 1930s and the period after 2008, there is a resurgence of interest in demand-side models. This is good. But it also produces an unfortunate side effect---mission creep. Demand... MORE

The once-true stereotype that illegal immigrants get deported, not imprisoned, is fast becoming obsolete.  But there is a glimmer of hope.  Open borders activists aren't the only people who care about this issue.  The ACLU in particular is taking a... MORE

McCloskey on Piketty

Books: Reviews and Suggested Readings
David Henderson
I'm starting to work on a paper that I'll give at the APEE (Association for Private Enterprise Education) meetings in Cancun in April. The working title for the paper, although I might change it when it comes time to submit... MORE

Power is a residual

Economic Methods
Scott Sumner
When economists use regression analysis to estimate the relationships between variables, part of the dependent variable is unexplained. Thus even after you put land, labor, and capital into the model, you may not be able to fully explain economic growth.... MORE

Purges and Schisms

Behavioral Economics and Rationality
Bryan Caplan
I wrote this in 1993.  Still seems correct to me, and unfortunately it's as relevant as ever.Purges and SchismsWhen I was working this summer at the Institute for Humane Studies, I spent many hours reading old libertarian periodicals -- especially... MORE

The Minimum Wage and Monopsony

Labor Market
David Henderson
I promised a few weeks ago to "write a further note explaining a more-sophisticated way of understanding the harmful effects of the minimum wage." This isn't it. The reason is that three issues came up in the comments and e-mails... MORE

Who Cares About Park Yeon-mi

Politics and Economics
Bryan Caplan
At the 2015 Students for Liberty conference, my sons and I were privileged to hear North Korean defector Park Yeon-mi share her story of self-liberation from totalitarian oppression.  But her talk got me thinking.  On the surface, there is nothing... MORE

Prison Sentences Much Longer than Juries Would Like

Economics of Crime
David Henderson
Jacob Sullum, over at Reason's Hit and Run blog, has a very interesting post about a federal judge in Cleveland who, after a jury found a man guilty of receiving, possessing, and distributing child pornography, polled the jury for the... MORE

Why Pack for the Same Trip Twice?

Family Economics
Bryan Caplan
Travelers often repeatedly visit the same family members, the same friends.  Each visit normally requires two packing sessions: You pack the stuff you'll need, then repack the stuff you brought.  Each leg takes time and energy, and possibly - depending... MORE

The New York Times has a new piece discussing the importance of foreign buyers at the top end of the NYC real estate market: The foreign owners have included government officials and close associates of officials from Russia, Colombia, Malaysia,... MORE

How much for a book dedication...?

Business Economics
Alberto Mingardi
Peter Jaworski and Jason Brennan are conducting an interesting experiment. They wrote a book, to be published by Routledge, on "commodification"--one of the evils of capitalist societies, according to anti-market intellectuals at least since Marx. But even non-Marxists frequently argue... MORE

From 2007 to 2012-13, The Income Share of Top 1% Fell

Income Distribution
David Henderson
The share of income (including capital gains) held by the top 1 percent grew from 10 percent in both 1960 and 1980 to 21.5 percent in 2000. Since then, it fell to under 17 percent in 2002 before rising to... MORE

The housing bubble: Perceptions and reality

Macroeconomics
Scott Sumner
Kevin Erdmann has an excellent post that discusses what really happened in the famous housing bubble and bust. It's fairly long, so I'll just excerpt a few highlights--but read the whole thing: As far as I can tell, just about... MORE

Both Men and Women Overstate Sexual Frequency

Economic Methods
Bryan Caplan
Many readers were incredulous when I pointed out that in the General Social Survey, the modal number of self-reported lifetime sexual partners equals 1.  Given the stereotype that men overstate and women understate on these matters, the pattern is solid:... MORE

The Fatal Conceit in Foreign Policy

Central Planning vs. Local Knowledge
David Henderson
A fellow free-market-oriented economics blogger, whom I respect but whom I won't name because I also respect Facebook privacy, wrote the following on Facebook: I guess I disagree with standard libertarian view on this [ISIS]. Libertarians, like progressives, do not... MORE

Signaling in K-12

Behavioral Economics and Rationality
Bryan Caplan
Whenever I write, "Education is mostly signaling," many readers hear "Higher education is mostly signaling."  I'm sincerely puzzled by this subliminal defanging of The Case Against Education.  My K-12 memories include thousands of hours studying material I knew I'd never... MORE

Inconvenient truths

Energy, Environment, Resources
Scott Sumner
Arnold Kling has a post pointing out that anti-science attitudes are not confined to the right. He starts by quoting Jonah Goldberg: Why does the Left get to pick which issues are the benchmarks for "science"? Why can't the measure... MORE

Major Improvements in Our Lives

Economic History
David Henderson
Michael D. Thomas, an economics professor at the Heider College of Business at Creighton University in Omaha, Nebraska, reported on Facebook an interesting conversation he had with a student this week. It led to a more interesting set of comments... MORE

Mr Nutella and consumer sovereignty

Obituaries
Alberto Mingardi
Italian industrialist Michele Ferrero passed away last week, at age 89. See his obituary on the New York Times. Though Italians are not very friendly either to entrepreneurship or to businesses generally, the country is home to many great entrepreneurs.... MORE

Signaling Tension

Economics of Education
Bryan Caplan
Josh Barro shined his spotlight on signaling last week:How many of the people talking down college as "mostly signaling" learned about signaling in a college economics class?-- Josh Barro (@jbarro) February 13, 2015I could be wrong about Barro's intent,... MORE

Is Inequality Bad for Babies?

Income Distribution
David Henderson
Here is where inequality comes in--if when Chen and co-authors look at children born to advantaged individuals (meaning married, college-educated and white) in the US, they survive at the same rates as their counterparts in Austria and Finland. But the... MORE

Always Keep Your Eye on Production: A Wartime Priority

Cost-benefit Analysis
Bryan Caplan
When they're in major wars, governments often seem to suddenly discover my "Always keep your eye on production" principle.  Case in point: During the New Deal, Team Roosevelt eagerly pushed militant unionization, using now-standard arguments about the hidden economic benefits. ... MORE

Always Keep Your Eye on Production

Cost-benefit Analysis
Bryan Caplan
As a child, I was a bad baseball player because my mind wandered.  Adults and teammates tried to improve my performance with a classic adage: "Always keep your eye on the ball."  I didn't change, but their advice was excellent... MORE

Happy Presidents Day

Economics and Culture
Bryan Caplan
My former student Daniel Lin, professor at American University, is easily the funniest economist I know.  If you're not following him on Twitter, you should be.  The latest example of his hilarious insightfulness:  In honor of Presidents Day, I'm going... MORE

Reasoning from a price change, example #341

Macroeconomics
Scott Sumner
In EC101 we constantly emphasize that students should not reason from a price change. Higher gasoline prices are not expected to be associated with lower consumption, it depends entirely on whether the price increase was due to less supply (1974)... MORE

There's no point in arguing over definitions

Macroeconomics
Scott Sumner
Economics textbooks define savings as being equal to investment: S = I This means savings is defined as the funds used for investment. It's derived from another identity, which says that in a closed economy with no government, gross domestic... MORE

Answering Paul Krugman's Challenge on Inequality

Income Distribution
David Henderson
And challenging Paul to step up. Paul Krugman writes: So, can anyone show me an example of a prominent Republican politician proposing anything that would reduce after-tax-and-transfer inequality? Bank shots don't count -- saying that slashing food stamps will help... MORE

Eric Posner's Tin Ear

Labor Market
David Henderson
Legal scholar Eric Posner has written a piece on Slate defending various restrictions on students' speech. Robby Soave, at Reason's Hit and Run blog, has a good critique of much of Posner's article. But I want to point out a... MORE

Here's Paul Krugman: In his incredible essay "The Great Slump of 1930" - an essay that reads remarkably well to this day, as an analysis of our crisis as well as his - Keynes briefly vents a bit of frustration.... MORE

The Basics: A Socratic Dialogue

Economic Philosophy
Bryan Caplan
Glaucon: Guess what?  I'm writing a book about moral philosophy!Socrates: Cool.  What do you say? Glaucon: I'm a pragmatist. We should do whatever maximizes human welfare.Socrates: So the main point of the book is to advocate open borders? Glaucon: No,... MORE

The Hansonian Moralist

Economic Philosophy
Bryan Caplan
I've repeatedly criticized my dear friend Robin Hanson's subordination of morality to the view he calls "dealism."  Not only is the doctrine absurd.  It also fails on its own terms because Robin's proposed deals consistently fail the market test.  Indeed,... MORE

The Iron Law of You

Behavioral Economics and Rationality
David Henderson
How Russ Roberts Can Change Your Life I recently sent off my review of Russ Roberts' book How Adam Smith Can Change Your Life. The publication I sent the review to is a quarterly and so it should run in... MORE

The Wittgenstein test

Macroeconomics
Scott Sumner
I usually start off my PowerPoint presentations as follows: "Tell me," the great twentieth-century philosopher Ludwig Wittgenstein once asked a friend, "why do people always say it was natural for man to assume that the sun went around the Earth... MORE

Tim Montgomerie, a British blogger and the founder of the successful website ConservativeHome, has an article on CapX which anticipates a new project he'll be running for the Legatum Institute. Montgomerie argues that capitalism, to work properly, needs "vigorous virtues",... MORE

Revolution: Two Minimal Conditions

Cost-benefit Analysis
Bryan Caplan
Here's an extremely tempting argument for violent revolution:1. The existing government is tyrannical, as evidenced by a giant list of specific, well-documented, horrifying crimes against humanity.2. It is our right, if not our sacred duty, to overthrow tyranny.3. Tyrannies usually... MORE

Allen Wallis vs. David Henderson on Amnesty

Labor Market
David Henderson
I was talking to a fellow academic economist today who is also a strong critic of military conscription. He had read my post in which I discussed my disagreement with the late W. Allen Wallis about amnesty for draft dodgers.... MORE

The Incredible Chinese Contract Manufacturers

International Trade
David Henderson
Contract manufacturers make products for other companies that prefer to focus on product design and marketing. In China, "you can find a specialist in any product," said Stephen Maurer, a Shanghai-based managing director at consulting firm AlixPartners. "You want a... MORE

"Canadians have told us loud and clear: advertising is part of the spectacle" associated with the [Super Bowl] game, Jean-Pierre Blais, chairman of the Canadian Radio-television and Telecommunications Commission, said Thursday [January 29, 2015]. This is from Paul Vieira,... MORE

Hell Nyet, We Won't Go

Labor Market
David Henderson
The late Milton Friedman was the one of the strongest and most eloquent opponents of military conscription. In all my conversations with him, though, and in all of his writing on the draft, I don't recall whether he took a... MORE

Experiments in a Guaranteed Annual Income

Labor Market
Scott Sumner
Ever since the 1970s, I've favored wage subsidies for low wage jobs, and I've opposed the minimum wage and the guaranteed annual income (GAI.) It seems to me that this article in The Economist has some bearing on the debate... MORE

ISIS and Reproach

Behavioral Economics and Rationality
Bryan Caplan
When historians write the history of ISIS, they will probably treat it as part of the aftermath of the overthrow of Saddam Hussein.  But they should also closely connect it to the Arab Spring.  Without the Arab Spring, an internecine... MORE

Jonathan Gruber on Sin Taxes

Behavioral Economics and Rationality
David Henderson
I found an interesting article on sin taxes written by MIT economist Jonathan Gruber. It's titled "Taxing Sin to Modify Behavior and Raise Revenue." When I want an article for my class on Cost/Benefit Analysis that is written by someone... MORE

Statist policies in China

Central Planning vs. Local Knowledge
Scott Sumner
I frequently read commentary on the Chinese economy. Often we are informed that the Chinese growth "miracle" was produced by a wise policy of rejecting laissez-faire and having the government direct much of the economy. The logic seems to run... MORE

The new jobs figures and macro theory

Macroeconomics
Scott Sumner
Each January the government revises its payroll jobs estimates, to provide more accurate figures. The recent revisions are not dramatic, but do slightly strengthen two arguments that I've been making over the past few years. Let's look at the previous... MORE

A Local's Defense of Property Rights

Property Rights
David Henderson
I live in coastal California, where defenses of property rights are few and far between. That's why I was heartened by this cover story in our local left-wing newspaper, the Monterey County Weekly. It's titled "A longtime Carmel Valley activist... MORE

Environmental Econ Textbook Bleg

Books: Reviews and Suggested Readings
Bryan Caplan
What's the best undergraduate environmental econ textbook?  Constraints:1. It has to be engaging enough to hold the attention of someone who isn't taking an environmental econ course.2. It should have decent empirics on the cost-savings of taxes and tradable permits... MORE

Tetlock and Counter-factual History

Economic Methods
Bryan Caplan
I've long been fond of counter-factual history.  Like: If Prinzip hadn't assassinated Archduke Franz Ferdinand, North Korea wouldn't be a Communist dictatorship.  Or: If Lenin had died in early 1917, the Communists wouldn't have taken over Russia, and the Nazis... MORE

Reply to Student on Minimum Wage

Labor Market
David Henderson
Two weeks ago today, I gave a talk at Susquehanna University in Selinsgrove, Pennsylvania. I had a good time, by the way, and I estimate that, in the midst of a small snow storm, over 150 students and faculty attended.... MORE

Smith's Benevolent Baker Quote, in Song

Economic Education
Bryan Caplan
All good economists love the Adam Smith quote about the baker:But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more... MORE

The Ubiquity of Useless Learning, in Song

Economics of Education
Bryan Caplan
You've got a love a rap video that ends with, "If you can't explain why a subject is applicable to most people's lives, that subject should not be mandatory."HT: Jason Arentz... MORE

What's so funny?

Scott Sumner
It's interesting to think about what society views as funny, and what it does not. Comedians make lots of jokes about drinking alcohol, but you generally don't see jokes about serious crimes like rape. (In the rare cases where they... MORE

The Environmental Continuum: Reply to Alex Epstein

Books: Reviews and Suggested Readings
Bryan Caplan
Alex Epstein, author of The Moral Case for Fossil Fuels, replies to my criticism and questions over at Forbes.com.  Overall, I'm dissatisfied with his responses.  Here's why, point by point.  Alex is in blockquotes, I'm not.  I'll address some of... MORE

Decisions and Outcomes

sports economics
David Henderson
UPDATE BELOW In yesterday's post in which I applied the Third Pillar of Economic Wisdom to some decisions made near the end of the Superbowl game, I didn't challenge the conventional wisdom that say that Seahawks coach Pete Carroll made... MORE

Over the past 6 years I've repeatedly warned that monetary policy is the Achilles heel of the right. Perhaps the most famous example was the US during the 1920s, where small government policies under Harding and Coolidge were ruined by... MORE

Seattle Seahawks' Many Margins

sports economics
David Henderson
Pillar #3. Economic thinking is thinking on the margin. If you think that the tools of economics don't apply to yesterday's exciting Superbowl, then you're mistaken. Consider one of the last plays, the one all the commentators were talking about... MORE

Are Competition and Cooperation Opposites?

Competition
David Henderson
In short, real-world examples of "cooperation" are often not as selfless as, say, volunteering to donate blood or anonymously sending cash to a charity. Instead, real-world cooperation is often enforced by a group of peers, using a combination of economic,... MORE

The Jevons Fallacy

Energy, Environment, Resources
David Henderson
Noah Smith writes: And while our use of natural gas and coal doesn't feed the coffers of unsavory regimes like Russia and Saudi Arabia the way our use of oil does, it's still the case that these energy sources are... MORE

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