Bryan Caplan and David Henderson

Austrian Economics

A Category Archive (121 entries)

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

John Blundell on the Rebirth of Austrian Economics

Austrian Economics
David Henderson
Starting in 1974, the Institute for Humane Studies (IHS), based at that time in Menlo Park, California, began an ambitious plan to resurrect the then near to dead Austrian school of thought in economics. The first three steps were... MORE

Robert P. Murphy on Capital

Austrian Economics
David Henderson
However, the classical understanding of capital and its place in economic theory was muddled. Even though it was refined in light of the new marginal productivity theory of pricing, the increasing formalism of economics in the 20th century led many... MORE

Caldwell on Hayek's "Consistent" Stories

Austrian Economics
David Henderson
In a fascinating article on why Friedrich Hayek did not write a review of John Maynard Keynes's The General Theory of Employment, Interest, and Money, Hayek expert Bruce Caldwell writes: Perhaps most damning is the tendency of Hayek's stories to... MORE

You might be familiar with hand-wringing about how people are extending their adolescence into their twenties and not entering "adulthood" until later ("thirty is the new twenty" and all that). This concerns me a bit, too, but should it? It's... MORE

Sometimes, "Not My Problem" Is the Right Answer

Austrian Economics
Art Carden
Last week, I linked to the LearnLiberty "Why are YOU a Libertarian?" Tumblr. Twitter user @EricPaulDennis posted the following: @Econlib @artcarden @LearnLiberty Because its easier to say, 'not my problem,' than to consider solutions. (?)— Eric Paul Dennis (@EricPaulDennis) September... MORE

Robert Murphy on Math in Economics

Economic Methods
David Henderson
Bryan Caplan (here and here) and I (here) have both posted in Econlog on economics in math. You can read our posts and find links to much of the other discussion. Now Robert Murphy has laid out some of his... MORE

On Re-Reading Hayek's The Road to Serfdom

Austrian Economics
Art Carden
I'm spending the week at a Liberty Fund conference on Hayek dubbed "Hayek Boot Camp." One of the assigned readings was, not surprisingly, The Road to Serfdom. The first time I read it was right before I started grad school,... MORE

But Did it Toast?

Austrian Economics
Art Carden
Yesterday, I offered a few thoughts on "I, Pencil" and related projects with a link to Thomas Thwaites' "Toaster Project" TED Talk. In evaluating students' essays on this, I was struck by how many people wrote that Thwaites "succeeded" in... MORE

I, Toaster: Revisited

Austrian Economics
Art Carden
One of my favorite TED Talks is Thomas Thwaites' explanation of how he tried to build a toaster from scratch. It's an excellent example of the lesson taught by Leonard E. Read in "I, Pencil." A couple of the organizations... MORE

The long-promised but slow-in-coming dialogue promised here. PERSONS OF THE DIALOGUE Jacob Carden, Age 4 Taylor Grace Carden, Age 2 Dad: Art Carden, an Economist, Age 34 Scene: Chuck E. Cheese's in Vestavia Hills, Alabama. Dad: Children, I notice you... MORE

"Social Welfare Groups" Defined in the Process of Their Emergence

Central Planning vs. Local Knowledge
Art Carden
One of my favorite essays in the social sciences is James Buchanan's very short "Order Defined in the Process of its Emergence." It probably has the highest ratio of insight-to-text of any article I've ever read, and I come back... MORE

F.A. Hayek would have been 114 years old today. To celebrate, here's a set of videos in which Hayek is interviewed by, among others, Axel Leijonhufvud (!), Armen Alchian (!!), and James Buchanan (!!!). Or, if you prefer the written... MORE

This is a teaser for a forthcoming post. The scene: Chuck E. Cheese's in Vestavia Hills, Alabama, where my two-year-old and my four-year-old are nibbling like birds on slices of the large pepperoni pizza we ordered. This was not what... MORE

Today is May Day. Never Forget. Never Again. On Saturday, I spent the day in a seminar room with a group of students from Samford and Birmingham-Southern College (plus Paul Cleveland, an economist from Birmingham-Southern and author of Unmasking the... MORE

Questions for Austrians

Austrian Economics
Bryan Caplan
On my latest conversation post at Cato Unbound, I pose some questions for Steve Horwitz:1. What are some important, substantive economic claims that can be known a priori? 2. What are some important, substantive economic claims that can be logically... MORE

Austrian Myside Bias

Austrian Economics
Bryan Caplan
My Cato Unbound reply to Steve Horwitz on empirical Austrian economics is up.  I concede that Horwitz...makes several sensible points: Some Austrians have no methodological objection to empirical work.Mainstream economists have a dogmatic, narrow view of what counts as "empirical... MORE

Are Austrians Anti-Empirical?

Austrian Economics
Bryan Caplan
Steve Horwitz has the lead Cato Unbound essay this month.  His topic: "The Empirics of Austrian Economics."  My response goes up Friday.  For now, here's Steve:[I]t is not the case, as Josh Barro recently argued, "that Austrian economists reject empirical... MORE

Austro-Keynesianism

Austrian Economics
Arnold Kling
About four years ago, I described myself as an Austro-Keynesian. Recently, I have been asked about that concept. One way to put it is that I accept and reject some major tenets of each camp. From the Keynes camp, I... MORE

Planned vs. Emergent

Austrian Economics
Arnold Kling
Gerald O'Driscoll talks about an important difference between planned systems and emergent orders. (It takes a while for him to get started, so you might skip through the first 8 minutes or so.) Planning works well for institutions with definite,... MORE

Happy Birthday, Eugen and Julian

Austrian Economics
David Henderson
As the NBER web site points out, February 12 is the birthday of economists Eugen Bohm-Bawerk and Julian Simon. Here is the bio of Bohm-Bawerk in The Concise Encyclopedia of Economics. One highlight from that bio: Böhm-Bawerk was also one... MORE

Simpler Frank Knight

Austrian Economics
Arnold Kling
From FastCompany Magazine. "Uncertainty is when you've defined the variable but don't know its value. Like when you roll a die and you don't know if it will be a 1, 2, 3, 4, 5, or 6. But ambiguity is... MORE

Report on the Austrian Economics Conference, 1975

Austrian Economics
David Henderson
Many people have written about the first Austrian economics conference, the one held in 1974. I remember it well and have many reminiscences. But that's not my purpose here. In going through a box of correspondence this morning, I found... MORE

We Are All Austrians Now?

Austrian Economics
Arnold Kling
There is a YouTube going around in which Ron Paul's applause line at a rally is "We're all Austrians now!" Conveniently enough, in this interview, Pete Boettke explains Austrian economics superbly. Austrians want to talk about the institutional environment within... MORE

Cheeseburgers Require PSST

Austrian Economics
Arnold Kling
Waldo Jaquith reflects that it's quite impractical--nearly impossible--to make a cheeseburger from scratch. Tomatoes are in season in the late summer. Lettuce is in season in spring and fall. Large mammals are slaughtered in early winter. The process of making... MORE

Shorter Dierdre McCloskey

Austrian Economics
Arnold Kling
She writes, What works? Creativity. Innovation. Discovery. The Austrian core. And where did discovery come from? It came from the releasing of the West from ancient constraints on the dignity and liberty of the bourgeoisie, producing an intellectual and engineering... MORE

Hayek and 20th Century Economic Thought

Austrian Economics
David Henderson
How important is the work of Friedrich Hayek in 20th-century economic thought? David Warsh has written an excessively nasty piece on that, which doesn't mean it contains no kernels of truth. Alex Tabarrok has written a defense of Hayek which... MORE

My First Austrian Moment?

Austrian Economics
Arnold Kling
In January of 2001, I wrote, You no longer need to plan and manage large capital expenditures, so you do not need a large bureaucracy. What I expect the Internet to generate is an increase in the number of small... MORE

Is This the Cure or the Disease?

Finance: stocks, options, etc.
Arnold Kling
From an article on Ricardo Caballero. Because this "insatiable demand for safe debt instruments," as Caballero has called it, was not wholly absorbed by the traditional safe haven of U.S. Treasury notes, it helped spur the growth of the mortgage-backed... MORE

Roundabout Production

International Trade
Arnold Kling
Timothy Taylor writes, Here's a table combining several studies, showing a rise in foreign value-added in exports from 18% in 1970 to 24% in 1990, 27% in 1995, and 33% by 2005. This is a sign of longer global supply... MORE

David Friedman's Defense of His Father

Austrian Economics
David Henderson
David Friedman's latest post is titled "Austrian Fantasy." It's well worth reading. In the post, David defends his father from Lew Rockwell's statement that the whole world is reading Murray Rothbard and that outside of mainstream economics, Milton "is almost... MORE

Learn (Austrian) Economics in an Hour?

Austrian Economics
Arnold Kling
The Institute for Humane Studies has put together instructional material on basic concepts related to libertarian thinking. One set of videos pertains to economics, and it has a very strong Austrian flavor. I have only watched a few of them.... MORE

PSST and Fragility

Macroeconomics
Arnold Kling
Ted, in a comment on this post, asks a number of good questions. How similar is your idea of PSST to David Levine's Production Chains? Thanks for point out this paper. There is a lot of overlap, in that we... MORE

Two From Mark Thoma

Economic Education
Arnold Kling
1. He points to Noah Smith's description of learning Dark Age Macro. I absolutely don't blame Chris House for teaching what he taught. Our curriculum was considered to be the state of the art by everyone who mattered. Without a... MORE

Soros on Hayek

Austrian Economics
Arnold Kling
Yesterday, I attended an invitation-only event at the Cato Institute, featuring a new edition of the Hayek's The Constitution of Liberty. [UPDATE: now available on youtube]. The panel consisted of Bruce Caldwell, Richard Epstein, and George Soros. In terms of... MORE

Robert Murphy Thinks I Fell for a Swindle

Austrian Economics
Arnold Kling
He writes, Contrary to Sumner, there is no huge reallocation of construction workers (from January 2006 to April 2008) that Kling or the Austrians must explain. Scott Sumner used housing starts to suggest that most of the decline in housing... MORE

Worth Reading

Austrian Economics
Arnold Kling
William Easterly on Hayekian order. Impossible to excerpt.... MORE

Semi-Austrians

Austrian Economics
Arnold Kling
On my post on Pete Boettke's podcast, a commenter wrote, The big thing now is combining institutional economics with general equilibrium analysis. This is what Daron Acemoglu has been doing for the last decade now. Which is obviously the way... MORE

Recognized but Marginalized

Austrian Economics
Arnold Kling
In this week's conversation with Russ Roberts, Pete Boettke talks about Ludwig von Mises. A number of interesting issues come up. One phrase that recurs a few times is "recognized but marginalized," which describes the fact that although many Austrian... MORE

The Socialist Calculation Debate, 2010 Edition

Austrian Economics
Arnold Kling
Joseph Antos writes, The problem for a government price controller is that he can never know when the price structure is "right." He can know when physicians are unhappy with their prices because they will complain, but that does not... MORE

Primer on Austrian Economics

Austrian Economics
Arnold Kling
Eamonn Butler, who wrote the much under-appreciated Best Book on the Market, has a new project, a primer on Austrian ecoomics. Once again, I think he has done an outstanding job. In light of our discussion of Arrow, I note... MORE

ABC vs. Recalculation

Austrian Economics
Arnold Kling
A reader asks me to explain the difference. Answer below the fold.... MORE

Rothbard on the Depression

Austrian Economics
Arnold Kling
I started to read it. Should I finish? Some excerpts and my comments. the timidity and confusion of Reagonomics make very clear what its choice will be: massive inflation of money and credit, and hence the resumption of double-digit and... MORE

Austrian Resurgence

Austrian Economics
Arnold Kling
The Wall Street Journal profiles GMU's Pete Boettke. The resurgence of Austrian economics does have its hazards, Mr. Boettke says. The antigovernment fervor on cable-television shows and the Internet may have popularized its theories, but it also "reinforces the idea... MORE

Keynes vs. Bohm-Bawerk

Macroeconomics
Arnold Kling
This morning, we will find out whether the recovery remains jobless. Meanwhile, I have an essay, Labor is Capital, that offers an explanation for jobless recoveries. Much of today's American workforce is engaged in roundabout production, which Böhm-Bawerk equated with... MORE

Hayekian Moment Watch

Political Economy
Arnold Kling
Dennis Whittle writes, 1. Who decides which problems aid should address? 2. Who comes up with the solutions? 3. Who gives the funding? 4. Who competes to implement the solutions? 5. Who gives feedback on how well the solutions work?... MORE

Russ Roberts on Hayek

Monetary Policy
David Henderson
Russ Roberts has a nice op/ed on Hayek's main ideas in today's Wall Street Journal. He highlights four contributions of Hayek. I agree with all four, but he gave a poor example for one of them. The four are: 1.... MORE

Max Borders on Subjective Value

Microeconomics
David Henderson
The May Econlib article went up yesterday. It's titled "The Relentless Subjectivity of Value" and is written by Max Borders. My favorite paragraph is on Nudge by Thaler and Sunstein. Borders writes: Furthermore, nudgers are usually establishing choice architectures for... MORE

A Simple Reply to Krugman on Austrian Economics

Austrian Economics
Arnold Kling
Paul Krugman writes, why isn't there similar unemployment during the boom, as workers are transferred into investment goods production? He says he has asked this before, and he has. I have answered it before, and he has never responded. The... MORE

More Thoughts on Market Socialism

Central Planning vs. Local Knowledge
Arnold Kling
My first thoughts were here. Below are some further thoughts.... MORE

Market Socialism and the iPad

Austrian Economics
Arnold Kling
Recently, I wrote about market socialism. Why don't individual firms use market socialism? That is, instead of managing through command and control, senior management could set shadow prices for various inputs and outputs, and then allow the managers of individual... MORE

Thoughts on Market Socialism

Austrian Economics
Arnold Kling
I am reading a draft of The Clash of Economic Ideas, by Lawrence H. White. (Googling for it landed me here). One of its topics is the socialist calculation debate, which revolved around the idea of "market socialism," an idea... MORE

Two Links for Hayek Fans

Austrian Economics
Arnold Kling
1. A New Web Site, launched by Jeffrey Friedman. 2. Glenn Harlan Reynolds writes, The United States Code -- containing federal statutory law -- is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which... MORE

What I'm Reading

Austrian Economics
Arnold Kling
Macroeconomic Theory and its Failings, edited by Steven Kates. The publisher, Edward Elgar, prices its hardbacks out of reach for ordinary readers. I assume that their target buyers are libraries. I received a review copy. The book consists of essays... MORE

Brad DeLong's Dangerous Modeling

Macroeconomics
Arnold Kling
From a short paper he calls Picking up Nickels: The more speculators ex ante expect bailouts and the more speculators are impressed with their own cleverness, the more hesitant should the central bank be about providing monetary accommodation. The paper... MORE

Creative Destruction

Business Economics
Arnold Kling
William Easterly writes, The Wall Street Journal featured this awesome chart yesterday. Only 8 of top global 25 companies in 1999 are still in top 25 in 2009, and some of them have shed a lot of market cap. One... MORE

Phelps on the Future of Capitalism

Austrian Economics
Arnold Kling
Nobel Laureate Edmund Phelps writes a long interesting article. Excerpts and my comments below the fold.... MORE

Two Takes on Hayek's Flabbiness

Austrian Economics
Bryan Caplan
I've long since lost all patience with Hayek.  His original, true ideas could have been five good blog posts, his errors and bizarre obsessions are numerous, and his writing style insults every person who ever tried to write a decent... MORE

Mises in the Wall Street Journal

Austrian Economics
David Henderson
Mark Spitznagel has a piece in the Wall Street Journal on Ludwig von Mises' classic book, The Theory of Money and Credit. It's good that Spitznagel is calling our attention to this classic, which is still worth reading. But he... MORE

Hayek Said the Sky is Blue

Austrian Economics
Arnold Kling
My favorite line from Bryan's debate about Austrian economics. Substantively, though, I would disagree with Bryan on the issue of entrepreneurship. I do not think of entrepreneurship in terms of search theory. In From Poverty to Prosperity, we describe the... MORE

Boettke-Caplan Debate on Youtube

Austrian Economics
Bryan Caplan
Back in 2002, I debated my colleague Pete Boettke on Austrian economics before GMU's undergraduate econ club.  When I was throwing out my obsolete possessions (it's amazing what a decade of economic growth will do to your stuff), I came... MORE

Boettke on Masonomics

Austrian Economics
Arnold Kling
Pete Boettke pens An Open Letter to Tyler Cowen (and Arnold Kling). He has some nice things to say about Tyler.... MORE

Why Get Insurance?

Behavioral Economics and Rationality
Arnold Kling
My best guess is that most insurance is bought not to reduce risk but instead to signal prudence and caring. The first life insurance companies had a terrible time selling "bets on their death," and only succeded when they... MORE

An Alternative to Hydraulic Macro

Macroeconomics
Arnold Kling
Mainstream macroeconomics is "hydraulic." There is something called "aggregate demand" which you adjust by pumping in fiscal and monetary expansion. I wish to reject this whole concept of macroeconomics. Instead, I want to get economists to think about unemployment in... MORE

The Irrepressible Boettke

Austrian Economics
Bryan Caplan
My colleague Pete Boettke has been named Faculty Member of the Year by GMU's Alumni Association.  He deserves it.  And while he's got a lot of neat pieces on his vita, many of his bluntest, most perceptive insights are strictly... MORE

Hayek Interviewed

Austrian Economics
Arnold Kling
A quarter century ago, by a pre-white-haired John O'Sullivan, for The Foundation for Economic Education. Very rewarding to listen. For example, a bit over an hour into it, he makes the point that unions that force up wages in one... MORE

Chapters for a book on Masonomics

Austrian Economics
Arnold Kling
Should I write it? I do have other projects, but Tyler believes in multitasking. Possible chapters (not necessarily in this order): 1. The love-hate relationship with Austrian economics. Pete Boettke (note that he has co-bloggers) is relatively gung-ho Austrian, but... MORE

More on Mandel, Austrianism, and Keynesianism

Austrian Economics
Arnold Kling
My take is this: there was some productivity growth but much of it fell outside of the usual cash and revenue-generating nexus. Maybe you will live until 83 rather than 81.5 and your pain reliever will work better. In... MORE

Arnold mentions that:The Washington Post reviews The Lords of Finance, focusing on the role of the gold standard as a policy blunder contributing to the Great Depression. As I've said, a great swath of economists (starting with Milton Friedman and... MORE

Walter Block, arguing against Bryan, says that fractional reserve banking is fraudulent. There is some chance that when you make your deposit you will not get your money back, and instead someone else will have taken title to it. Therefore,... MORE

Watch Walter Block Defend Common Sense

Austrian Economics
Bryan Caplan
Seriously.  He shines in this response to Paul Craig Roberts on economic freedom indices.  Highlight:Then there is this entirely inept, misleading, and even insulting equation of the "American taxpayer's situation today with that a 19th century American slave."  Did you... MORE

Block and Me on FRB

Austrian Economics
Bryan Caplan
A little while back I had another email exchange with the tireless Walter Block.  The subject: The moral legitimacy of fractional reserve banking.  With my permission, Block has posted an edited version of our entire dialogue.  The highlight: Block asks... MORE

Work-Safe Readings for Macro

Austrian Economics
Arnold Kling
In response to my post on the porn that is modern macro, readers naturally asked me for alternatives.... MORE

Monetary Institutions

Austrian Economics
Arnold Kling
Mencius Moldbug sent an email asking me to comment on this post, and we have been corresponding back and forth. I should say that monetary theory gives me a headache.... MORE

Arnold Kling and Russ Roberts

Austrian Economics
Arnold Kling
We discuss his new book, The Price of Everything, and spontaneous order vs. central planning and design. Perhaps the most interesting part of the discussion concerns the issue of how to view political decisions. One tends to view them as... MORE

The Trojan Horse Example

Austrian Economics
Bryan Caplan
Austrian economists often attack the mainstream for ignoring something they call "radical uncertainty," "sheer ignorance," or sometimes "Knightian uncertainty." A common Austrian slogan is that "Neoclassical economists study only cases where people know that they don't know; we study cases... MORE

Tyler Cowen writes, Insofar as I am conservative (debatable) I would rewrite the definition: A realization that we will do best by building on the strengths of the particular habits, mores and institutions of the United States (and other successful... MORE

My Research Program for Ph.D Students

Austrian Economics
Arnold Kling
This weekend, I attended a Liberty Fund seminar on Austrian economics vs. neoclassical economics. One point that was made was that the important thing is to have a productive research agenda. In the past Austrians might have been accused of... MORE

Why I am an Austro-Keynesian

Austrian Economics
Arnold Kling
A commenter on an earlier post points me to Steven Horwitz: As excess supplies of money work their way through the market, they cause differential effects on prices. Some go up by a lot, some only by a little. These... MORE

Why I Don't Call Myself a "Moderate Austrian"

Austrian Economics
Bryan Caplan
Here's a fair comment on my last post:Then you need to rewrite your article to say "Why I am a moderate Austrian" rather than why you are not an Austrian. Then you could get the substance right, even if you... MORE

Hal Varian on Modern Capital

Austrian Economics
Arnold Kling
He writes, The only thing one could do with those railroad tracks was carry trains. It would have been fantastic if the miles of excess railroad tracks could have been transformed into highways to service the new growth industry coming... MORE

Hayekian Linux

Austrian Economics
Arnold Kling
A reader sent me a link to something Linus Torvalds wrote in 2001. You know what the most complex piece of engineering known to man in the whole solar system is? Guess what - it's not Linux, it's not Solaris,... MORE

We Have a Winner: Hayek as if Orwell Mattered

Austrian Economics
Bryan Caplan
Here's a sweet rewrite of a typical Hayekian paragraph (Hat tip: Reg Hall): The successful application of science in our society has fostered the belief that the society itself can be similarly manipulated to our benefit. We need powerful arguments,... MORE

Why Oh Why Can't Hayek Write Better?

Austrian Economics
Bryan Caplan
I've returned from the Institute for Humane Studies' Liberty and Society seminar at Wake Forest University. Back in 1991, I was one of the students; now I'm faculty. Funny thing: The older I get, the more the writing style of... MORE

Ed Stringham Won Us $25,000!

Austrian Economics
Bryan Caplan
It's a very ancient saying, But a true and honest thought, That if you become a teacher, By your pupils you'll be taught. --The King and I I've long nagged my students to enter essay contests. So I'm especially pleased... MORE

What Austrian Brain Drain?

Austrian Economics
Bryan Caplan
Degrees of Freedom has an incisive critique of my Austrian brain drain allegation: If Austrian economics and mainstream economics were both equally persuasive, we should still expect to see far more libertarians who were persuaded by mainstream economics than libertarians... MORE

I'm a critic of Austrian economics. I've published general critiques (see here, here, and here), and questioned their positions on economic calculation and the impossibility of socialism (see here and here). Today I just submitted a new piece to the... MORE

A Cantabrian Commerce Centenary

Austrian Economics
Eric Crampton
I ought to shill once for my home institution while guest blogging for Bryan. 2006 marks the Centenary of the Bachelor of Commerce at the University of Canterbury; our centennial celebrations take place in October. Other fun Canterbury facts: Karl... MORE

Second Best and Socialist Calculation

Austrian Economics
Eric Crampton
The socialist calculation debate of the 1920s and 1930s centred on whether a benevolent social planner could allocate resources in a planned economy to replicate the efficiencies of the market while remedying the ills of monopoly losses and profit-taking. Ludwig... MORE

Methodological Individualism

Austrian Economics
Arnold Kling
Don Boudreaux explains, Whatever the topic -- war, economic growth, government regulation -- the only way to achieve genuine understanding of what's going on is to trace all actions back to the individuals who take them. The fact that individuals... MORE

Making a Virtue Out of Compulsion

Austrian Economics
Bryan Caplan
I recently mentioned that if you're feeling lonely, you should criticize Austrian economics, and you'll never again lack for human contact. Now Walter Block, Christopher Westley, and Alex Padilla have a hilarious 79-page piece of satire which turns Austrians' compulsive... MORE

Well, not quite the world, but in the latest issue of Critical Review I debate Pete Boettke, Pete Leeson, David Gordon, Rodolfo Gonzalez, and Ed Stringham. The subject: My earlier CR article, "Is Socialism Really 'Impossible'?", which argued that the... MORE

Back in the day, I was one of the research assistants for the Collected Works of Hayek. Frankly, the more I read, the less impressed I was. Among other things, Hayek spends a lot of time unconvincingly blaming socialism on... MORE

Rename Austrian Economics?

Austrian Economics
Arnold Kling
Dan Klein says Let me delineate a set of economists, different from but highly inclusive of the Austrian communities. First, consider only those seeing The Distinction between voluntary and coercive as analytically crucial; these economists, inevitably, are wise to the... MORE

The Joy of Econ

Austrian Economics
Bryan Caplan
Are you puzzled by the appeal of the late Murray Rothbard? Try his newly available lectures on The History of Thought: From Marx to Hayek. All libertarian prejudice aside, I don't think any thoughtful economist could deny that Rothbard exudes... MORE

Austrian Economists and the mainstream

Austrian Economics
Arnold Kling
Pete Boettke highlights that Frederic Sautet asks, Why Aren't Austrians at the Discussion Table [Our thanks to Pete Boettke for correcting this attribution in a comment below.] • H1: We are simply delusional as to what Austrian economics (AE) can... MORE

Evolution vs. Intelligent Design

Business Economics
Arnold Kling
In my latest essay, I write, While I have little faith in individual corporations, I have more faith in decentralized market processes. For example, although I have no admiration for any oil company in particular, I believe that we will... MORE

Private Provision of Public Goods

Public Goods
Arnold Kling
Subir Gokarn observes, I've often been asked for my opinion on what the country's sunrise sectors are. My response, at first tongue-in-cheek, but becoming more and more serious over the years, is that anybody who decides to compete against the... MORE

Book Tag

Austrian Economics
Arnold Kling
Nobody has tagged me (this reminds me of high school dances, somehow), but I'll have a go at it anyway: First, restricting to economic topics. Number of books I own: I would guess around two hundred. Last book I bought:... MORE

Jane Jacobs, Austrian?

Austrian Economics
Arnold Kling
I just finished reading The Economy of Cities, a book written in 1969 by Jane Jacobs. An excerpt from her conclusion: The primary economic conflict, I think, is between people whose interests are with already well-established economic activities, and those... MORE

The Myth of Time Preference

Austrian Economics
Bryan Caplan
How come interest rates are always positive? Austrian economists have a stock answer: it's because of time preference. All else equal, we prefer satisfaction sooner rather than later. If we did not have time preference, we would never consume anything,... MORE

Math and Economics

Economic Education
Arnold Kling
In a wide-ranging essay, I question the dominance of math in advanced economics. The raising of the mathematical bar in graduate schools over the past several decades has driven many intelligent men and women (perhaps women especially) to pursue other... MORE

The Price System

Economic Philosophy
Arnold Kling
Russ Roberts writes Over the next five or ten years, hundreds of millions of Chinese are expected to leave the Chinese countryside and move to the city. This extraordinary migration will require millions of adjustments to take place to make... MORE

Value and Exchange

Austrian Economics
Arnold Kling
Peter Gordon points to an interesting article by Meir Kohn in the Cato Journal The exchange paradigm has a very different theory of growth. Growth does not mean movement along an equilibrium path but rather the unfolding of a complex... MORE

Comments on Hayek

Austrian Economics
Arnold Kling
An interesting collection of comments on the influence of Friedrich Hayek, from the latest issue of Reason. For example, cognitive psychologist Steven Pinker writes, Hayek was among the first to call attention to the emergence of large-scale order from individual... MORE

Discovery Procedure in Wireless Technology

Austrian Economics
Arnold Kling
John Yunker writes, While Japan and Korea will retain their lead for some time, the US is poised to surpass Europe in network speeds, bandwidth consumption and, more important, network variety... Remember when the US was criticized by Europe for... MORE

In Praise of Failure

Austrian Economics
Arnold Kling
Glenn Harlan Reynolds discusses the X-prize for private space travel using a rather Austrian viewpoint. But in all sorts of areas -- from space and jet aviation in the 1950s and 1960s, to computers in the 1970s and 1980s, to... MORE

Hayek and the Internet

Austrian Economics
Arnold Kling
Michael Van Winkle argues that the Internet's weblogs represent Hayek's concept of spontaneous order. We've all heard critics of the Internet claim that, because no one "controls" it, no one can control it from disseminating the most outrageous rumors and... MORE

Paul Samuelson

Austrian Economics
Arnold Kling
Since the name of Paul Samuelson came up recently, I thought I would toss out a few random impressions of him. I only had Samuelson for one course, which I believe was in the Spring of 1977. It was part... MORE

Incumbents and Government

Austrian Economics
Arnold Kling
What does government do? Austrian economists fear that government simply serves to protect incumbents. In a long, informative review of a book by Hans Herman-Hoppe, Andy Duncan writes, ask yourself if there are many large corporations in the US or... MORE

Caldwell, Hayek, and Math

Austrian Economics
Arnold Kling
Francis Fukuyama reviews Bruce Caldwell's Hayek's Challenge, an intellectual biography of Friedrich Hayek. As Caldwell notes, Hayek initially thought the dividing line between possible and impossible positivism lay in the distinction between natural sciences and social sciences, but by the... MORE

Government vs. Private Debt

Austrian Economics
Arnold Kling
A reader points to a fresh post on the Mises.org web site of a decade-old piece by Murray Rothbard arguing that the Federal government should not be allowed to create obligations for future taxpayers. One solution he proposes: I would... MORE

Meeting the Enemy

Austrian Economics
Arnold Kling
What leads to bad economic policy? Bryan Caplan writes, On the conventional view—widely accepted by economists, pundits, and the man in the street—the public demands policies in its own best interest, but the political system ignores their wishes. Bastiat and... MORE

Austrian Economics

Austrian Economics
Arnold Kling
After taking a quiz on Austrian Economics, I wrote about my agreements and disagreements with that school. Much of what I believe about economics is based on the concept of imperfect knowledge. Imperfect knowledge implies that as we gain knowledge,... MORE

Hayekians vs. Stiglitzians

Information Goods, Intellectual Property
Arnold Kling
I contrast Hayek and Stiglitz on the importance of imperfect information. Hayek would have the government tolerate messy competition. His point is that with the optimal outcome unknown, government resolution of issues shuts off the learning process that market competition... MORE

Doubts about Planning

Growth: Causal Factors
Arnold Kling
Jonathan Rauch argues that the absence of a plan for post-war Iraq is a feature, not a bug. In truth, the planning mind-set is exactly wrong for Iraq. Anything might have happened after the war: a flood of refugees, a... MORE

Europe's Constitution

Austrian Economics
Arnold Kling
Europe's proposed constitution is receiving scant attention in mainstream media, but many Web sites that I visit have discussed it. Most of the reviews are mixed, but Marian L. Tupy's opinion is unambiguous. They could have liberalized the rigid European... MORE

Comment of the Week, 2003-05-07

Energy, Environment, Resources
Arnold Kling
In the thread about capitalism as a benevolent system, Ward mused, Maybe there should be a school of Austrian Environmentalism that studies innovative ways to clean up or maintain the environment. To which Lynn Kiesling replied, one organization that does... MORE

Capitalism as a Benevolent System

Austrian Economics
Arnold Kling
Critics of capitalism see it as a cruel system that fosters injustice and exploitation. An alternative view is offered by many economists, particularly those of the Austrian School. George Reisman, for example, speaks of what he calls twelve insights into... MORE

Leftist Austrian Economics

Austrian Economics
Arnold Kling
I don't know how else to describe this article by Richard Florida (recommended with reservations by Stephen Karlson). In the later 20th century, the pace of creativity quickened while the profit from routinized production plummeted. A new version of capitalism... MORE

Defending Imperfect Markets

Austrian Economics
Arnold Kling
Sean Gabb explains how Austrian economics differs from Anglo-American economics. the standard economics textbooks provide an utterly unrealistic defense of the market. They begin with the claim that markets are efficient, and then define efficiency as it does not and... MORE

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