Bryan Caplan and David Henderson

Arnold Kling: May 2007

An Author Archive by Month (47 entries)

Let's Increase Poverty

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Lant Pritchett writes The principal way rich countries disadvantage the poor world is not through unfair trade, or through intrusive and ineffective aid, or by forcing repayments of debts. The primary policy pursued by every rich country is to prevent... MORE

On heterodox Economics and Innovation

Economic Methods
Arnold Kling
There is a lively discussion at TPM Cafe over whether heterodox economics gets no love from the neoclassical crowd. Here is an excerpt from a summary. Chris Hayes kicks things off by boiling down his feature Nation piece into two... MORE

Against MRV

Political Economy
Arnold Kling
At Mahalanobis, Eric G. Falkenstein writes, I argue in Why Risk is Not Related to Return that a relative status utility function can explain the failure of the risk-return empirical relationship. Perhaps it can explain persistent irrationality on policy matters?... MORE

Income Mobility

Income Distribution
Arnold Kling
Brink Lindsey writes, OK, so how do experts measure intergenerational income mobility anyway? Using survey data that tracks the income of the same individuals and families over time, researchers compare the income of parents at some specific age or age... MORE

Wisdom from Ben Casnocha

Books: Reviews and Suggested Readings
Arnold Kling
Advising would-be entrepreneurs with no business background, Ben Casnocha writes, Learn by doing, learn by failing. ...Leave the office and go immerse yourself in the life of the customer. ...Your network is probably larger than you think. Somewhere in this... MORE

Health Care Cynicism

Economics of Health Care
Arnold Kling
1. Russ Roberts interviews Robin Hanson, for those of you who are curious to find out more about his thesis that when people do not pay for their own health care, the services that they obtain on average do as... MORE

Marriage and Poverty

Income Distribution
Arnold Kling
From The Economist, Avner Ahituv of the University of Haifa and Robert Lerman of the Urban Institute found that “entering marriage raises hours worked quickly and substantially.” Married men drink less, take fewer drugs and work harder, earning between 10%... MORE

Bryan Gets Some Pushback

Books: Reviews and Suggested Readings
Arnold Kling
Christopher Hayes writes, the book eats its own tail. Caplan wants to grant a presumptive authority to the consensus view of economists, but the consensus view of economists is that voters are rational, which is, of course, precisely the position... MORE

Jerry Muller on Schumpeter

Books: Reviews and Suggested Readings
Arnold Kling
One of the reasons that I'm not jumping on the bandwagon for Thomas McCraw's new Schumpeter biography is that I think that Jerry Z. Muller provides more insight into Schumpeter using many fewer words in The Mind and the Market,... MORE

Rizzo vs. Thaler on Libertarian Paternalism

Behavioral Economics and Rationality
Arnold Kling
The latest celebrity death match on the Wall Street Journal site features Richard Thaler and Mario Rizzo. Mario Rizzo writes: I repeat: "Is New Paternalism primarily about advising private individuals and firms? If so, why use a political term --... MORE

Thoughts on Immigration

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Alvaro Vargas Llosa writes, Whenever there is a disconnect between the law and reality, reality finds ways of making the law irrelevant... It is always hard to oppose an emotional reaction with logical arguments and statistical evidence. Otherwise, the argument... MORE

Ideological Games of Tug-of-War

Political Economy
Arnold Kling
Robin Hanson writes, The policy world can thought of as consisting of a few Tug-O-War "ropes" set up in this high dimensional policy space. If you want to find a comfortable place in this world, where the people around you... MORE

The CBO on income dynamics

Income Distribution
Arnold Kling
The Wall Street Journal refers to a Congressional Budget Office report which says, Average income for the bottom 20 percent of all households with children was 35 percent higher in 2005 than it had been in 1991. I am a... MORE

Private Law Enforcement

Political Economy
Arnold Kling
As my co-blogger pointed out, there is an argument for private law enforcement by Edward Stringham. Imagine if Duke University controlled law enforcement in the area around the university, rather than the city, county and local court system. It is... MORE

North and Weingast

Books: Reviews and Suggested Readings
Arnold Kling
Economic conferences rarely produce great papers. Entrepreneurship, Innovation, and the Growth Mechanism of the Free-Enterprise Economies, a conference dedicated to the work of William Baumol, is typically pedestrian, with particularly forgettable contributions from Kenneth Arrow and Robert Solow. However, there... MORE

Wealth and Self-Control

Income Distribution
Arnold Kling
Greg Mankiw writes, The neoclassical theory of distribution teaches us that a person's earnings depend on his or her productivity. But earnings are not the same as wealth. The accumulation of wealth is mostly about the ability to exert self-control.... MORE

Immigration, Libertarianism, and Democracy

Labor Mobility, Immigration, Outsourcing
Arnold Kling
A reader asks, Bryan Caplan's new book (which I look forward to) says voters are irrational. Do you think they would be more or less rational in a society with high migration rates? I am reading Amy Chua's World on... MORE

Another Caplan Fan

Books: Reviews and Suggested Readings
Arnold Kling
Brad DeLong passes along a book recommendation. Bryan Caplan's The Myth of the Rational Voter is, [David Romer] says, brilliant: everybody should read it. But you already have ordered your copy, right?... MORE

Shorter Schumpeter

Books: Reviews and Suggested Readings
Arnold Kling
Robert Solow, in the guise of a review of McCraw's biography, reviews Schumpeter himself. The man was all problems, and one very important idea. Earlier, Solow describes his own experience of Schumpeter. I attended his courses on advanced economic theory... MORE

Dogs Not Barking

Economic Methods
Arnold Kling
In the latest Econ Journal Watch, at least two articles are about what is not found in economic literature. John Dawson argues that The Economic Freedom of the World index is under-utilized in studies of economic growth. Charles Blankart and... MORE

Tyler Cowen on Income Inequality

Income Distribution
Arnold Kling
(I swear I posted on this first thing this morning, and now it's gone. It was a good post, too. I'm attempting to remember it here.) Tyler Cowen writes, For the economy as a whole, labor’s share of national income... MORE

Robert H. Frank writes, But the biggest winners of all have been top earners in the financial services industry. Thus, according to Institutional Investor’s Alpha magazine, James Simons, a hedge fund manager, earned $1.7 billion last year, and two other... MORE

Of Bones and Pomeranian Grenadiers

Cross-country Comparisons
Arnold Kling
Edward Luttwak writes, We devote far too much attention to the middle east, a mostly stagnant region where almost nothing is created in science or the arts—excluding Israel, per capita patent production of countries in the middle east is one... MORE

Kevin Lang on Wage Differentials

Labor Market
Arnold Kling
For those, like my co-blogger, who are interested in the issue of labor market discrimination, I again recommend Kevin Lang's new book, Poverty and Discrimination. On p. 314, Lang writes, if there is discrimination in the labor market, it is... MORE

Culture, Capitalism, and Freedom

Growth: Causal Factors
Arnold Kling
One of Tyler Cowen's readers asks for recommendations of books that examine the cultural requirements for liberty, and Tyler has a number of good suggestions. My instinct is to start with an evolutionary perspective. How did we get out of... MORE

A Controversial Health Insurance Metaphor

Economics of Health Care
Arnold Kling
My latest TCS essay says, Many people began to agitate for universal, government-provided prostitution insurance, arguing that such systems were working in Canada and in many European countries. Such a single-payer system for prostitution would solve the growing problems of... MORE

Scholastics and Pietists

Economic Methods
Arnold Kling
Daniel J. D'Amico and Daniel B. Klein write, scholastics are more concerned with speaking to each other, distilling results, and passing them down through intermediaries to the laity. Pietistic figures are more interested in speaking directly to the everyman. They... MORE

Health Care and the Consumer

Economics of Health Care
Arnold Kling
The Baltimore Sun reports National Imaging Associates estimated several years ago that as many as 30 percent of imaging studies were not needed or not the correct test, although NIA believes the number may have declined as insurers have tightened... MORE

Four Types of Capitalism

Books: Reviews and Suggested Readings
Arnold Kling
In Good Capitalism, Bad Capitalism, William J. Baumol, Robert E. Litan, and Carl J. Schramm write (p.91), Of the twenty-five largest firms in the United States in 1998, eight did not exist or were very small in 1960. In Europe,... MORE

Glaeser on Coercion and Contracts

Economic Philosophy
Arnold Kling
Edward Glaeser writes, there are cases where freedom to contract is and should be imperfect. For example, many contracts rely on expensive government enforcement, and it is reasonable to set limits on the scope of government action in this, as... MORE

Wading Through Schumpeter

Books: Reviews and Suggested Readings
Arnold Kling
From the book du jour, Thomas K. McCraw's Prophet of Innovation: Compared to Keynes, Schumpeter had no reason to think that life was something a person could expect to enjoy automatically. It was one thing to grow up in Britain--stable,... MORE

Another Herring

Economic Philosophy
Arnold Kling
Bryan writes, Suppose that in Libertopia, you're extremely undesirable, so no woman will marry you. In Paterfascista, you're extremely desirable, but it's illegal to marry you. In both Libertopia and Paterfascista, you're not able to marry. So you could say... MORE

Questioning Libertarian Coercion Arguments

Political Economy
Arnold Kling
From my latest essay. Suppose that in community Libertopia, in response to customer preferences, all of the better restaurants ban smoking. In nearby community Paternafascista, there is a law that bans smoking in restaurants. ...In both Libertopia and Paterfascista, smokers... MORE

The Creation of Ritual Goods

Economics of Education
Arnold Kling
Bryan writes, If you think that entrepreneurs can easily find a cheaper way to certify worker quality, why can't entrepreneurs easily find a cheaper way to reinforce membership in the "upper and/or upper-middle class tribe"? The context is that we... MORE

The Theory of Pandering

Politics and Economics
Arnold Kling
Russ Roberts, in this speech, offers a theory of political pandering. He suggests that politicians know that they are exaggerating problems, because the solutions they offer are so pathetic. If you really thought that all the gains in the economy... MORE

Hanson on Hanson

Economics of Health Care
Arnold Kling
What is this Hansonian view of medicine that you hear me talk about? Robin Hanson explains. The bottom line is that thousands of people randomly given free medicine in the late 1970s consumed 30-40% more medical services, paid one more... MORE

Progressive Taxation is Anti-Education?

Economics of Education
Arnold Kling
Gary Becker and Kevin Murphy make the case. For many, the solution to an increase in inequality is to make the tax structure more progressive—raise taxes on high-income households and reduce taxes on low-income households. While this may sound sensible,... MORE

Barone on the Kling Scenario

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Michael Barone writes, Start with the Coastal Megalopolises: New York, Los Angeles, San Francisco, San Diego, Chicago (on the coast of Lake Michigan), Miami, Washington and Boston. Here is a pattern you don't find in other big cities: Americans moving... MORE

Coercion

Economic Philosophy
Arnold Kling
Daniel Klein writes, In my view, economic understanding, by experts and the general public alike, would gain by economists doing more of the following: (1) using the voluntary/coercive distinction in their formulations, analysis, and discourse; (2) making that utilization explicit... MORE

Hayek and Anti-capitalist Intellectuals

Institutional Economics
Arnold Kling
Reviewing a new edition of The Road to Serfdom, Roger Kimball writes, In the end, though, the really galling thing about the spontaneous order that free markets produce is not its imperfection but its spontaneity: the fact that it is... MORE

Kling vs. Lang

Income Distribution
Arnold Kling
My latest essay concerns poverty. the results of centrally-planned anti-poverty efforts are small, and perhaps negative (certainly very negative in the case of Communism). Decentralized capitalism, in which no one sets out to broadly reduce poverty, is the best anti-poverty... MORE

Investor Returns, Stock Returns, and My Intuition

Finance: stocks, options, etc.
Arnold Kling
Hal Varian writes, An investor who bought a value-weighted portfolio of stocks in the New York Stock Exchange and American Stock Exchange in 1926 and held them until 2002 would have earned an average annual return of about 10 percent.... MORE

An Old Prediction May Come True

Business Economics
Arnold Kling
Jane Galt (who showed up at a lunch at Cato today) found this story. Several electronics outfits now sell head-mounted displays that they claim are the next frontier in gaming and movie watching. Rudimentary virtual-reality tech has been around since... MORE

I Heart Kevin Lang

Income Distribution
Arnold Kling
With his new book, Poverty and Discrimination, Kevin Lang becomes my go-to guy on poverty. I disagree with him on some important and emotional points, and I'll have more to say about that at a later date. But I want... MORE

I Trust My Statistical Intuition

Behavioral Economics and Rationality
Arnold Kling
Bryan writes, Sincere question: Have you personally reviewed the evidence on smoking, Arnold? I haven't. I believe that smoking causes cancer based on scientific consensus. ...Still, Arnold seems to be saying that you should base all your beliefs on direct... MORE

Climate Change, Capital Mobility, and Futures Markets

Energy, Environment, Resources
Arnold Kling
Robert Haddick writes, Unless China, India, and other rapidly expanding economic centers in the developing world fully participate in greenhouse gas reduction efforts, regulatory schemes in the west will simply displace economic activity from the "clean" developed world to the... MORE

Climate Change--a Range of Views

Energy, Environment, Resources
Arnold Kling
First, there is Larry Summers. Those who still deny that human activity is warming the planet, or claim that “business as usual” can continue indefinitely without profoundly adverse consequences, are increasingly seen as the moral and intellectual equivalent of those... MORE

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