Bryan Caplan and David Henderson

Political Economy

A Category Archive (806 entries)

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

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

The libertarian corner of the internet is aflutter with news that officials in Leawood, Kansas have shut down nine-year-old Spencer Collins' "take a book, leave a book" Little Free Library (HT: Brian Doherty from Reason, originally, and Lenore Skenazy's Twitter... MORE

I like free markets and don't like politics largely because free markets feature better incentives than the political arena. I came across a vivid example while vacationing last week. While flipping through the channels on TV, I came across what... MORE

The Stockpile Solution

Energy, Environment, Resources
Bryan Caplan
If I were convinced that the fate of mankind hinged on massive reductions in carbon emissions, I would still be pessimistic about unilateral taxes or cap-and-trade.  As I told Yoram:National emissions regulations can have perverse global effects.  If relatively clean... MORE

Is the Social Security Tax Cap Disappearing?

Political Economy
Bryan Caplan
How will the U.S. resolve its long-run budget crisis?  I've long predicted the abolition of the Social Security tax cap.  As I told my Public Choice undergrads back in 2011:I think we've likely to eliminate the Social Security payroll tax... MORE

The Cato Institute's Randal O'Toole has recently released a Policy Analysis arguing that low-capacity light rail is a bad deal for cities. I found it especially interesting in light of Scott's post last week on "private affluence and public squalor,"... MORE

Voter Biases, Explained with Video

Labor Mobility, Immigration, Outsourcing
Art Carden
People all across Alabama are voting today in a primary election. Many of them who claim to want more economic growth will vote enthusiastically for candidates espousing policies that will make us poorer. What gives? Just in time, The Institute... MORE

Myth of the Rational Voter: The Animated Series, Part 3

Behavioral Economics and Rationality
Bryan Caplan
I'm back from vacation, and my Learn Liberty video on anti-market bias is up.  Enjoy.... MORE

Exploring Elitist Democracy: The Latest from Gilens and Page

Behavioral Economics and Rationality
Bryan Caplan
In light of the attention my Gilens posts are getting, now's a perfect time to examine his latest research on who actually runs America.  Co-authored with Benjamin Page, "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens," (Perspectives... MORE

Me, Gilens, and Salon

Behavioral Economics and Rationality
Bryan Caplan
Last year I wrote a series of posts (here, here, and here) arguing that Martin Gilens' evidence on the disproportionate influence of the rich on U.S. public policy is very good news indeed.  Long story short:I find Gilens' results not... MORE

Demagoguery Explained

Behavioral Economics and Rationality
Bryan Caplan
In the dictionary, "demagogues" are bad by definition.In Merriam-Webster, a demagogue is "a political leader who tries to get support by making false claims and promises and using arguments based on emotion rather than reason."In the Oxford Dictionary, he's "a... MORE

Cowen and Crisis Reconsidered

Behavioral Economics and Rationality
Bryan Caplan
Robert Higgs famously blames the growth of government on crises - especially wars and depressions.  I firmly believed in this story for over a decade until I read Tyler Cowen's critique:The ratchet effect becomes much stronger in the twentieth century... MORE

Socialism Was Born Bad: The Case of Oskar Lange

Economic Philosophy
Bryan Caplan
Oskar Lange is arguably the most famous of the market socialists.  His fans often see him as a great spokesman for "socialism with a human face."  In the early 1990s, I attended a talk where Ken Arrow lauded Lange as... MORE

What the Swiss Vote Really Shows

Behavioral Economics and Rationality
Bryan Caplan
The Swiss just passed a referendum to restrict immigration from the EU.  Tyler thinks this shows that open borders is a hopeless cause.  When immigration gets too high, public opinion naturally turns against immigration. Normal 0 MicrosoftInternetExplorer4 In my view... MORE

Bias and Bigness Bleg

Political Economy
Bryan Caplan
Question for anyone who thinks that the existing regulation regime is well-designed to protect the interests of big business: Why do so many regulations exempt firms with small numbers of employees (typically 50 or less) - and so few regulations... MORE

Gochenour-Nowrasteh on the Political Externalities of Immigration

Behavioral Economics and Rationality
Bryan Caplan
Does immigration expand the welfare state by increasing the share of voters that benefit from government programs?  Or does immigration contract the welfare state by undermining voters' sense of national identity?  Critics of the welfare state tend to think the... MORE

In Praise of Passivity

Behavioral Economics and Rationality
Bryan Caplan
"In Praise of Passivity" is another gem from Mike Huemer, my favorite philosopher.  Thesis:Voters, activists, and political leaders of the present day are in the position of medieval doctors. They hold simple, prescientific theories about the workings of society and... MORE

Mandela: Reckless But Lucky

Cost-benefit Analysis
Bryan Caplan
I've heard ugly rumors about Nelson Mandela for years.  Was he a Communist - or a terrorist?  His recent death inspired me to learn more.  Alex Tabarrok nudged me to start with Mandela's autobiography, which presumably puts his career in... MORE

The Prudence of the Poor

Behavioral Economics and Rationality
Bryan Caplan
Ari Fleisher in the WSJ:Given how deep the problem of poverty is, taking even more money from one citizen and handing it to another will only diminish one while doing very little to help the other. A better and more... MORE

Will on Somin on Judicial Review

Behavioral Economics and Rationality
Bryan Caplan
George Will shines a spotlight on Ilya Somin's Democracy and Political Ignorance.  Highlight:Political ignorance, Somin argues, strengthens the case for judicial review by weakening the supposed "countermajoritarian difficulty" with it. If much of the electorate is unaware of the substance... MORE

Introducing Scott Sumner

Macroeconomics
David Henderson
Starting tomorrow, Econlog's new guest blogger will be Scott Sumner. Ever since we lost Arnold Kling, in the late summer of 2012, Econlog has needed a macroeconomics presence. Both Bryan Caplan and I post occasionally about macroeconomics, but we are... MORE

How Big of a Deal Is Social Security?

Political Economy
Bryan Caplan
Karl Smith of Modeled Behavior has moved to DC, and yesterday he honored the GMU lunch with what will hopefully be the first of many visits.  During lunch, I asked Karl about a puzzling-to-me line from his latest post:Social Security... MORE

Why Buildings Aren't Taller

Political Economy
Bryan Caplan
Whenever Robin Hanson turns to urban economics, I expect to be edified.  A prime example:Urban economics studies the spatial distribution of activity. In most urban econ models, the reason that cities aren't taller is that, per square meter of useable... MORE

Why Nations Fail: A Contrarian Take

Cross-country Comparisons
Bryan Caplan
Acemoglu and Robinson's Why Nations Fail has been widely praised and extremely influential.  But one of the most brilliant students I've ever taught, Nathan Smith, provides a contrarian perspective.  According to Nathan, it's......one of the most over-rated books I've ever... MORE

Based upon last fall's Humanomics course, Gus Gradinger and I are submitting the following chapter proposal for a book on teaching with The Wire. If it doesn't fit with the editors' vision for the volume, we plan to work out... MORE

Reclaiming Fairness: Competition Policy

Political Economy
Bart Wilson
To follow up on my attempt to reclaim fairness for commerce, let's consider what this means for competition policy. The 18th century meaning of unfair with its roots in commerce didn't completely disappear by the 20th century. In 1914 Congress... MORE

Time for a Third Party? Let's Bet

Politics and Economics
Art Carden
Via Students for Liberty on Facebook, I saw this Politico article reporting polling data showing "Record demand for third party." As one of the comments points out, it's the sort of thing that gets attention periodically but that never really... MORE

When Is Abolitionism Justified?

Economic Philosophy
Bryan Caplan
Tyler on open borders:In my view the open borders advocates are doing the pro-immigration cause a disservice.  The notion of fully open borders scares people, it should scare people, and it rubs against their risk-averse tendencies the wrong way.This raises... MORE

Maxim Lott on the Carrier Cost Overrun

Political Economy
David Henderson
Maxim Lott has a short, excellent piece on the cost overrun for the almost-$13 billion (yikes!) aircraft carrier, USS Gerald R. Ford. Of course, I'm biased, because he quoted me and used the two best quotes I gave him. Here's... MORE

The Homage Statism Pays to Liberty

Economic Philosophy
Bryan Caplan
Here's an odd thought for a libertarian: The government very rarely tells me to do anything.  Once per year, the IRS orders me to pay federal income taxes.  Once per year, the state of Virginia forces me to pay state... MORE

Four Readings from Frederic Bastiat

Economic Philosophy
Art Carden
File Frederic Bastiat under "under-appreciated thinkers." I'm talking about Public Choice in my principles of macroeconomics class tomorrow, and here are a few readings from Bastiat that continue to inspire me: 1. "What is Seen, and What is Not Seen."... MORE

Via Scott Shackford, at Reason, we learn of "The Scourge of Illegal, Underground Dinner Parties." In short, people are paying to attend dinner parties featuring fancy food. And such transactions are unregulated. Naturally, people are concerned. Presumably, some of those... MORE

Liberty Fund's own Sarah Skwire is one of my favorite people, and by reading some of her columns in The Freeman I've been able to catch up on the classical education I thought I had and always claimed but eventually... MORE

This is an almost 2-hour video of a forum held at Butler University in April. The participants are Mike Munger, Robert Skideslky, Richard Epstein and moderator Russ Roberts. The transcript is here. Some highlights: 00:08:40: Mike Munger's "beauty contest... MORE

Motivated Numeracy and the Enlightenment

Behavioral Economics and Rationality
Bryan Caplan
Kevin Drum and Chris Mooney have already posted excellent summaries of this neat study of motivated numeracy.  You should read them.  But if you prefer the digest version: Even unusually numerate people take off their thinking caps when the numbers... MORE

Why Should We Go To War With [Name]?

Politics and Economics
Art Carden
A few years ago--I think this was at Division of Labour--I asked readers to go to RandomCountry.com, spin for a Random country, and then make the case for war with that country. With the prospect of military adventures in Syria... MORE

Henderson on Coase

Obituaries
David Henderson
My op/ed on Ronald Coase's work was published in today's Wall Street Journal. Here's an ungated version published by the Hoover Institution. While, of course, I discussed the two articles that were most responsible for his winning the Nobel Prize,... MORE

I'm working on a book I'm co-authoring with Deirdre McCloskey on the economic history of the last few centuries. Here is a choice passage from page 44 of her 2006 book The Bourgeois Virtues: The tempting shortcut of taxing the... MORE

Immigration, Misanthropy, and the Holocaust

Behavioral Economics and Rationality
Bryan Caplan
The Museum of Jewish Heritage in NYC features an outstanding exhibit on European Jewry's struggle to escape from Hitler's clutches.  Throughout the 1930s, the Nazis officially encouraged Jewish emigration.  The catch: By definition, every emigrant from Nazi territory had to... MORE

The Absurdity of Royalty

Economics and Culture
Art Carden
The world is aflutter with news of the Royal Baby. In a tweet, Neil deGrasse Tyson points out the absurdity of royalty: "@neiltyson: A curious tradition -- to look at a newborn baby and say to yourself, 'Because of your... MORE

In today's post on AL.com, Scott Beaulier of the Johnson Center at Troy University explains how the River Region Obesity Task Force is looking to measure students' BMIs. A few thoughts: 1. First they came for the beer, but I... MORE

On Bastiat and the Edifice Complex

Central Planning vs. Local Knowledge
Art Carden
Last week, I asked my principles of macro students to do the following: Evaluate this argument in light of Frederic Bastiat's essay "What is Seen, and What is Not Seen." You may use the assigned readings and videos, but you... MORE

Long-time readers of EconLog will know that most of the common objections to increased immigration are simply wrong. For review, here's Ben Powell's explanation of how immigrants don't wreck our economy, take our jobs, or depress wages. Still, one of... MORE

A popular saying during the Civil War was that it is a "rich man's war but a poor man's fight." On July 4, Neil DeGrasse Tyson tweeted: July 4th, USA: The Star Spangled Banner, Fireworks, the 1812 Overture, Air Shows... MORE

Statism for Freedom

Economic Philosophy
Bryan Caplan
Normal 0 false false false MicrosoftInternetExplorer4 Libertarians' odd openness to using immigration restrictions to protect American freedom has me thinking.  There are many statist policies that could indirectly lead to more libertarian policy.  If you're open to one, you... MORE

Questions for Independence Day Evening

Political Economy
Art Carden
I thought it best to honor the principles of liberty on Independence Day by reviewing a long defense of the idea that governments' claims to political authority are indefensible. I'm finishing a review if Michael Huemer's The Problem of Political... MORE

Two decades ago, I spent my summer writing my first academic article.  Topic: "The Literature of Nonviolent Resistance and Civilian-Based Defense" (Humane Studies Review, 1994).  I'm still happy with the result.  The piece begins by noting that conservatives' prognosis for... MORE

Don Boudreaux thoughtfully discusses the putative political externalities of immigration, then ends on a pessimistic note:I have no illusions (I really and truly do not) that anything that I write here, or that I might write in follow-up posts or... MORE

The Present and the Future Both Need Bastiat

Growth: Causal Factors
Art Carden
I agree with Bryan: Frederic Bastiat's essay "What is Seen and What is Not Seen" is "the pinnacle of profundity." Indeed, on re-reading Bryan's post on Bastiat from last summer, I realized he wrote most of what I was planning... MORE

Debate: Does Democracy Work?

Behavioral Economics and Rationality
Bryan Caplan
Last week I did an online debate for Learn Liberty with philosopher Helene Landemore.  The topic: Does democracy work?  Here's my opening statement.Democracy clearly works if you set the bar low enough.  Is democracy better than dictatorship?  Of course.  Does... MORE

Quotable

Political Economy
Bryan Caplan
From Shikha Dalmia:[T]he GOP has managed to alienate not just Hispanics allegedly collecting welfare and living below the poverty level. With a few exceptions like Cuban and Vietnamese Americans, it has alienated every ethnic minority: high- or low-skilled; Asian or... MORE

Why My Billion-Dollar Plan Won't Work The Way I Want it To

Central Planning vs. Local Knowledge
Art Carden
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - F.A. Hayek On May 29, I offered my proposal for how I would answer Bryan's "spend a... MORE

The Myth of the Rational Voter: Experimental Edition

Behavioral Economics and Rationality
Bryan Caplan
I've long argued (here, here, and here for starters) that weak incentives are a major cause of political irrationality, but I've failed to convince Gerry Mackie, Jeff Friedman, Tyler Cowen, and many other critics.  So I was delighted to discover... MORE

James Buchanan on Writing

Political Economy
David Henderson
An excerpt from my appreciation of Public Choice, Gordon Tullock, and James Buchanan: One other thing I've gotten from Buchanan--primarily by hearing it from his past students, and mainly from the most-published ones--is his famous line, "Don't get it right;... MORE

Can Expectations Save Communism?

Behavioral Economics and Rationality
Bryan Caplan
Every social system requires favorable expectations to survive.  Democracy can't survive unless people expect losing parties to voluntarily surrender power.  Anarcho-capitalism can't survive unless people expect private defense firms to peacefully resolve their disputes.  Once you take the power of... MORE

Letters to Kim Jong-Un

Political Economy
Bryan Caplan
A thought-provoking request from the noble Vipul Naik, reprinted with his permission:If you were to write a letter to Kim Jong-Un with suggestions on how to improve living conditions in North Korea, what would you write in the letter? Assume... MORE

Crazy Equilibria: From Democracy to Anarcho-Capitalism

Behavioral Economics and Rationality
Bryan Caplan
Imagine advocating democracy a thousand years ago.  You sketch your basic idea: "Every few years we'll have a free election.  Anyone who wants power can run for office, every adult gets a vote, and whoever gets the most votes runs... MORE

Corinne Sauer on U.S. Subsidies to Middle East

Political Economy
David Henderson
After getting various comments on my post about ending U.S. government aid to the Middle East, I asked Corinne Sauer if she would read the comments and give me her take. She has done so. To recall, Corinne Sauer is... MORE

"One might as well be hanged for a sheep as a lamb." Antiproliferators are playing counterproductively with the status issue in another way by seeking to dumb down the definition of a nuclear weapon state. Commonly, this designation has been... MORE

Henderson on the Future of U.S. Politics

Economic Philosophy
David Henderson
Shortly after the Congressional elections of 2010, talk radio host Terry Gilberg of talk radio station KFYI in Phoenix had me on to discuss some of the implications of the Republican takeover, with the help of many Tea Party candidates,... MORE

A Question of War and Peace: Some Answers

Economic History
Bryan Caplan
Before Christmas, I asked EconLog readers for responses to the following test question:"There are multitudes with an interest in peace, but they have no lobby to match those of the 'special interests' that may on occasion have an interest in... MORE

How Would We Really Treat Mutants?

Behavioral Economics and Rationality
Bryan Caplan
In the X-men comics, t.v. series, and movies, normal humans instinctively treat super-powered mutants with fear and disgust.  The popular mutant policy options are: (a) register them as deadly weapons, (b) preemptively imprison them, or (c) kill them one and... MORE

A Question of War and Peace

Economic History
Bryan Caplan
Normal 0 MicrosoftInternetExplorer4 My favorite question from my latest Public Choice final exam:"There are multitudes with an interest in peace, but they have no lobby to match those of the 'special interests' that may on occasion have an interest... MORE

Immigration Policy and the World Values Survey

Behavioral Economics and Rationality
Bryan Caplan
Over at Open Borders, Nathan Smith shares his preliminary immigration policy empirics from the World Values Survey.  Out of 48 countries surveyed, the people of Vietnam (?!) favor the fewest restrictions on immigration, and the people of Malaysia favor the... MORE

The Respect Motive

Behavioral Economics and Rationality
Bryan Caplan
Consider a simple model of voter behavior:People vote for whoever respects them more.My immediate reaction: This Respect Motive is a roughly accurate description of over half the electorate.  Furthermore, it's hard to name any socially recognized group whose members do... MORE

British Democracy and the Death Penalty

Behavioral Economics and Rationality
Bryan Caplan
William Feerick emailed me some interesting thoughts on an old EconLog post, reprinted below with his permission.Hello Bryan, I recently came across an article you wrote some time ago on your EconLog blog, where you mentioned Tim Besley's counter-examples to your... MORE

Modelling the Marriage of High Virtue and Low Cunning

Behavioral Economics and Rationality
Bryan Caplan
David Brooks praises Lincoln for showing that the "challenge of politics lies precisely in the marriage of high vision and low cunning."  He elaborates: The movie is about pushing the 13th Amendment through the House of Representatives. The political operatives... MORE

When to Trust Your Superiors

Behavioral Economics and Rationality
Bryan Caplan
A while back, James Donald left a somewhat strident comment on EconLog.  The key passage:When the superior rule the inferior, it is not only better for the superior, it is also better for the inferior.Many readers will reject Donald's claim... MORE

A Bet I Forgot to Make

Economic Methods
Bryan Caplan
Just one election cycle ago, Tyler embraced a conclusion I found implausible on the basis of a model I found absurd:When it comes to marijuana legalization, I believe that the "anti-" forces will muster as many parental votes as they... MORE

Friday Night Video: Life Without Capitalism

Growth: Causal Factors
David Henderson
The Fund for American Studies put out this excellent 6-minute video. Posted with permission.... MORE

BLS Data

Political Economy
Luigi Zingales
The Bureau of Labor Statistics had not finished releasing the surprisingly good September data that a number of commentators started raising doubts about the truthfulness of the data. There is no doubt that the data were a boost to President... MORE

Affluence, Erudition, and Influence

Political Economy
Bryan Caplan
Whenever someone claims that income affects people's politics, I always ask, "Have you controlled for education?"  I've spent over a decade playing with public opinion data.  I know from experience that if you're trying to predict people's opinions using both... MORE

Why Is Democracy Tolerable? Evidence from Affluence and Influence

Behavioral Economics and Rationality
Bryan Caplan
Before I studied public opinion, I often wondered, "Why are democracies' policies so bad?"  After I studied public opinion, I started asking myself the opposite question: "Why aren't democracies' policies even worse?"  The median American is no Nazi, but he... MORE

Changing the Corporate Form of Organization

Political Economy
Arnold Kling
Concerning U.S. corporate law, Kent Greenfield writes, Compare this to the European model of corporate governance, which requires much more robust social obligation on the part of corporations, embodied not only in cultural norms but also in law. The duty... MORE

Hardline Libertarians?

Political Economy
Arnold Kling
Daron Acemoglu and James Robinson write, Central planning maximizes the extent of control that the state, and the people running the state, exercise. The desire to control others is a constant in history and is part and parcel of the... MORE

The Mind and the Market

Behavioral Economics and Rationality
Arnold Kling
Pascal Boyer writes, I am surprized, nay flabbergasted that there is no study of folk-economics in the social science literature. No-one (except Caplan and a few others) seems to study what makes people's economic modules tick. In psychology we have... MORE

Paul Krugman Chooses a Word Carelessly

Social Security
Arnold Kling
He wrote, Your federal government is basically an insurance company with an army. You and I would read that as an insurance company backed by coercion. Frances Woolley took it that way, and started into the pros and cons of... MORE

Competitive Government

Political Economy
Arnold Kling
The Economist reports, This experiment in radical outsourcing began back in December 2005, when Sandy Springs went from being merely a part of Fulton County--which also includes most of Atlanta, Georgia's capital and largest city--to an incorporated city itself. CH2M... MORE

Politics Channels Hatred

Political Economy
Arnold Kling
In Capitalism and Freedom, Milton Friedman wrote, What the market does is to reduce greatly the range of issues that must be decided through political means Thanks to Don Boudreaux for the pointer. Those who prefer government to markets will... MORE

Behavioral Politics

Political Economy
Arnold Kling
NPR lists policies that economists agree are good ideas but which are political non-starters. Basically, they want to replace the corporate income tax and the payroll tax with a consumption tax and a carbon tax. Let's stipulate that they are... MORE

Capital One vs. CFPB, again

Political Economy
Arnold Kling
For background, I recommend Fast Company's article from 1999, which lauds Capital One's creative use of the customer service process for up-selling. Those of you who are curious about the details of what is going on should find this helpful.... MORE

Fraud, Preferences, and Paternalism

Political Economy
Arnold Kling
Don Boudreaux disagrees with my pro-CFPB post. He writes, Because the transactions in question are voluntary and among adults, it isn't anyone else's business what transpires between A and C. Would Arnold applaud a DHS ban on the sale of... MORE

Unintended Consequences of Intervention

Political Economy
David Henderson
Many libertarian and conservative economists I know are good at pointing out the unintended, and usually negative, consequences of domestic government policy. But a smaller subset of these people seem willing to look at foreign policy with the same skeptical... MORE

Olivia Fox Cabane on Charisma

Books: Reviews and Suggested Readings
Arnold Kling
She is the author of The Charisma Myth, a self-help book that I am in the middle of reading. Before you buy it (and before you comment on this post), I recommend watching this video, evidently from a talk given... MORE

David Brooks Repeats Himself

Behavioral Economics and Rationality
Arnold Kling
I thought that Why Our Elites Stink (I suspect Brooks winces at the headline the editors supplied) these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness... MORE

If I Were on the Left

Political Economy
Arnold Kling
I do not think that I would find Arthur Brooks persuasive. He writes, Free markets and entrepreneurship are driven not by greed but by earned success. He gives examples. I would give counter-examples. I would say that regulation is needed... MORE

Moral Authority, Continued

Public Choice Theory
Arnold Kling
Note Chris Dillow's cynical take: Crony capitalism, then, is the only feasible form of capitalism. Matt Mitchell writes, My colleague Adam Thierer has assembled an interesting compendium of expert opinions on regulatory capture. The quotes show experts interested in grappling... MORE

The Moral Authority Test

Public Choice Theory
Arnold Kling
Tim Carney reports on the latest project from the Mercatus Center. George Mason University's Mercatus Center this week is kicking off a series of papers on cronyism and business-government collusion. (Seemingly-related Video from LearnLiberty) You can think of the project... MORE

Employer Tyranny vs. Guaranteed Freedom

Political Economy
Arnold Kling
John Holbo writes, Libertarians can, of course, just come out and say that they prefer contract rights to guarantees of freedom. No one is paying any attention to me in this debate, But I wrote, Just be careful about assuming... MORE

Employer Tyranny

Labor Market
Arnold Kling
Chris Bertram, Corey Robin, and Alex Gourevitch write, These are just some of the considerations that lie at the heart of any defense of unions, regulation of contract and the workplace, and workplace democracy. Whether we call that defense egalitarian... MORE

Tyler writes:Their "simps" think they should have done better.  In their own, unconstrained models of the world, they each wish they could be doing better.  They each have refused to "do better" out of an understanding of limited institutional and... MORE

The GSS and the Political Externalities of Immigration: A Guest Post by Sam Wilson

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
GMU Ph.D. student Sam Wilson recently mentioned on Facebook that he was using the General Social Survey to test for political externalities of immigration.  He posted a few crosstabs, but nothing more.  I immediately publicly offered him the chance to... MORE

Jonathan Rauch is Uncharitable

Economics of Health Care
Arnold Kling
He writes, According to conservatives, the government should not make people buy insurance; it certainly should not provide coverage for them. That would seem to eliminate the two main ways to deal with free riders. One obvious possibility remains. If... MORE

Deirdre McCloskey Throws Down the Gauntlet

Political Economy
Arnold Kling
She writes, The master narrative of High Liberalism is mistaken factually. Externalities do not imply that a government can do better. Publicity does better than inspectors in restraining the alleged desire of businesspeople to poison their customers. Efficiency is not... MORE

Exit and Voice in the Workplace

Political Economy
Arnold Kling
Elizabeth Anderson writes, I'm arguing that the case for workplace democracy and other democratic constraints on employers is the same as the case for democracy anywhere: it's better for securing the freedom and personal independence of the governed than the... MORE

James W. Ceaser on the Constitution

Institutional Economics
Arnold Kling
He writes, Legalistic constitutionalism refers to formulas and rules. It makes one think immediately of lawyers and judges spinning elaborate constitutional doctrines and devising multi-pronged "tests." Like ancient Egyptian priests, these legal experts speak an occult jargon that few citizens... MORE

Eugenics and Man at Yale

Political Economy
Arnold Kling
The Yale Alumni Magazine has this: In the early decades of the twentieth century, eugenics "fell squarely in the mainstream of scientific and popular culture," according to Yale history professor Daniel Kevles, author of the 1985 book In the Name... MORE

Would a World Plebiscite Lead to Open Borders?

Behavioral Economics and Rationality
Bryan Caplan
People occasionally say that "Democracy and open borders are incompatible."  If they're talking about national democracy, they're right.  But suppose we actually lived up to the democratic "one man, one vote ideal" by having a world plebiscite on open borders. ... MORE

Cartel Federalism

Books: Reviews and Suggested Readings
Arnold Kling
In his book The Upside-Down Constitution, Michael Greve suggests that in theory there are two types of federalism. With competitive federalism, state governments compete with one another for citizens. With cartel federalism, state governments collude to raise spending and taxes... MORE

Another Reason to Distrust Non-profits

Political Economy
Arnold Kling
Reihan Salam quotes John DiIulio, Jr., About three-quarters of non-profit organizations, including most faith-based ones, spend under a half a million dollars a year and receive little or no government grant or contract money. But the quarter of the sector's... MORE

Gray on Haidt

Books: Reviews and Suggested Readings
Arnold Kling
John Gray writes, With the possible exception of Poland, there is no advanced industrial country as deeply polarized as America is today. Gridlock in Washington is a failure of American politics, and the solution--if there is one--can only come from... MORE

Unrealist Foreign Policy

Economic History
Bryan Caplan
From Sean McMeekin's The Russian Origins of the First World War:To assume that Russia really went to war on behalf of Serbia in 1914 is naive.  Great powers do not usually mobilize armies of millions to protect the territory of... MORE

My Thoughts on Technology and Government

Economic History
Arnold Kling
Thanks to Bryan for highlighting and hosting Tyler Cowen's paper. My thoughts: 1. For a long time, I've thought that the technologies of the industrial revolution favored centralization, while the technologies of the information revolution shift the balance somewhat more... MORE

The Fissaparous Libertarians

Business Economics
Arnold Kling
Look up fissaparous in the dictionary and you will find Inclined to cause or undergo division into separate parts or groups. You will also find a picture of the libertarian movement. 1. At the first Mont Pelerin Society meeting, Mises... MORE

"Does Technology Drive the Growth of Government?" Bleg

Books: Reviews and Suggested Readings
Bryan Caplan
"Does Technology Drive the Growth of Government?" is one of my favorite Tyler Cowen papers.  It's on my graduate Public Choice syllabus.  Unfortunately, it has strangely disappeared from the Internet - and Tyler himself can't easily locate the paper.  If... MORE

Feeling the Haidt

Books: Reviews and Suggested Readings
Arnold Kling
In this long essay, I write I examine the problem of moral reasoning and offer three proposals for mitigating its damaging effects. The first is to take opposing points of view at face value, rather than attempt to analyze them... MORE

Voluntary Taxes and the Relevant Margin

Political Economy
Arnold Kling
Will Wilkinson writes, Suppose I'm a utilitarian convinced that human consumption of meat causes a huge amount of animal suffering. And suppose I love meat, and giving it up would leave me worse off. I would happily comply with a... MORE

Libertarian Schisms

Political Economy
Arnold Kling
At Cato Unbound, Roderick Long defends Rothbard, Rand, and Mises against charges of absolutism. Daniel Klein expresses his disagreement with Mises and Rothbard. I am keen on liberty as a central principle and analytic fulcrum, and I depend deeply on... MORE

From the weekend's op-ed pages

Political Economy
Arnold Kling
1. Ross Douthat speculates that technological advances could change us from civil societarians to meek subjects of an all-powerful state. 2. Chris Mooney talks about personality traits as determinants of ideology. I think that many people will walk away from... MORE

Ron Bailey on Confirmation Bias

Behavioral Economics and Rationality
Arnold Kling
He wrote, Egalitarian/Communitarians, who are always eager to rein in what they regard as the unjust excesses of technological progress and commerce, see carbon rationing as an effective tool to achieve that goal. Not surprisingly, Hierarchical/Individualists are highly suspicious when... MORE

Private-Sector Urban Renewal

Political Economy
Arnold Kling
from Ikea. The Globe and Mail reports Where once they placed a couch in a living room, the Swedes now want to place you and 6,000 neighbours into a neglected corner of your city, design an entire urban world around... MORE

This is Your Mind on Politics

Behavioral Economics and Rationality
Arnold Kling
Will Wilkinson writes, It turns out politics not only makes us stupid. It also makes us callous. He cites a study showing that we are less likely to project our own feelings on those with whom we have political disagreements.... MORE

Passover Thoughts

Political Economy
Arnold Kling
Robert Higgs writes, I have been struck repeatedly by a certain fact about episodes of sudden or extraordinary expansion of the state: when push came to shove, those who resisted--often to the death--tended to be people of faith. In U.S.... MORE

Political Economy of the Zero Bound?

Politics and Economics
Arnold Kling
Tyler Cowen offers a theory. The greater the number of protected service sector jobs in an economy, the more likely those citizens will oppose inflation. Inflation brings the potential to lower real wages, possibly for good. The wages that are... MORE

Cities and Governance

Political Economy
Arnold Kling
Esther Dyson writes, Most cities evolved blindly, and have ended up semi-workable, whereas a city that is started from scratch can, in theory, benefit from intelligent design. But, even with long-term investors, to build a viable city at scale nowadays... MORE

Of NWW and Fukuyama

Books: Reviews and Suggested Readings
Arnold Kling
Here is my comparison of North-Weingast-Wallis with Fukuyama. Neither book makes one optimistic about the near-term prospects for seeing liberal democracies emerge out of the "Arab Spring." Instead, they suggest that sudden revolution from below is not the route to... MORE

Planning for the Unpleasant Future: Private vs. Public

Behavioral Economics and Rationality
Bryan Caplan
Thinking about being old and sick is no fun.  It's tempting to simply refuse to ponder the unpleasant future.  But notice: Whether people give into this temptation depends heavily on whether they're thinking personally or politically.Personally, almost everyone at least... MORE

Henderson and Gochenour on "Presidential Greatness"

Political Economy
David Henderson
My co-author, Zachary Gochenour, and I have posted our article, "War and Presidential Greatness," on line here. Here's the abstract: Historians and journalists commonly survey other historians on the relative "greatness" of American presidents, and these rankings show remarkable consistency... MORE

Mingardi on Hayek

Political Economy
Arnold Kling
Alberto Mingardi writes, Centralized government allocates resources badly--regardless of its intentions. The very nature of centralization makes it impossible to collect and compute all the information that is needed. This is as true for any grand scheme of industrial planning... MORE

Some Notes from Haidt

Books: Reviews and Suggested Readings
Arnold Kling
That is, from The Righteous Mind. Many of these are gems. I've put them all below the fold.... MORE

The Authority of Ben Bernanke

Political Economy
Arnold Kling
In The Atlantic, Roger Lowenstein makes the case for bowing to the authority of Ben Bernanke. This a cover story, and the cover photo of Bernanke makes him look like a serene, benevolent emperor. There is no substantive argument to... MORE

Another Must-Read

Books: Reviews and Suggested Readings
Arnold Kling
We are only half way through March, and I think I already have come across more must-read books than in all of 2011. I am about 2/3 of the way through Jonathan Haidt's The Righteous Mind, which makes the must-read... MORE

More Classic Jeffrey Friedman

Political Economy
Arnold Kling
This time, it's his essay on The Rhetorical Presidency, a riff on the book of that title by Jeffrey K. Tulis. The book's thesis is that before the Progressive era, Presidents were expected to stay in the background and mind... MORE

Review of Why Nations Fail

Books: Reviews and Suggested Readings
Arnold Kling
The book is by Daron Acemoglu and James Robinson. The review is by Paul Collier. Collier writes, Their argument is that the modern level of prosperity rests upon political foundations. Proximately, prosperity is generated by investment and innovation, but these... MORE

Crowding In

Central Planning vs. Local Knowledge
David Henderson
Austin Keegan kneels on a tiny footbridge on Garrapata State Park's Rocky Ridge Trail and replaces a damaged plank with pre-cut lumber from home. "It's just basic maintenance," he says. "It needs to be done."
 His pal David Thiermann, carrying... MORE

Serfdom Watch

Political Economy
Arnold Kling
The Washington Post writes, Parents [in Adelanto, California] are trying to become the first in the country to use a trigger law, which allows a majority of families at a struggling school to force major changes, from firing the principal... MORE

Dinner with James Manzi

Books: Reviews and Suggested Readings
Arnold Kling
The publishers of Uncontrolled, his forthcoming book, hosted a dinner attended by about a dozen conservative media luminaries, as well as by yours truly. We received advance review copies prior to the dinner. Uncontrolled will not be available until May... MORE

Fisker Update

Business Economics
Arnold Kling
not doing well, apparently Wray alleges he received word from Fisker on January 18th in the form of a letter informing him that due to the need for equity capital financing there was now a pay to play action in... MORE

Sumner on the Mystery of Bernanke

Monetary Policy
Bryan Caplan
Scott Sumner is the latest intellectual detective on the Bernanke case.  The crucial clue is a 2003 piece by Bernanke himself, which states:Ultimately, it appears, one can check to see if an economy has a stable monetary background only by... MORE

Griswold on Immigration and the Welfare State

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Dan Griswold's "Immigration and the Welfare State" was my favorite in the Cato Journal immigration symposium.  Highlights:False stereotypes notwithstanding, immigrants have an awesome work ethic:The typical foreign-born adult resident of the United States today is more likely to participate in... MORE

Match the Passage to the Book

Books: Reviews and Suggested Readings
Arnold Kling
Below are passages taken from the introductory material to two books. Your job is to match the passages with the books. The two books are: A. Ameritopia, a best-seller by talk-show host Mark Levin. B. Why Capitalism?, by distinguished monetary... MORE

Fiscal Federalism's Failure

Institutional Economics
Arnold Kling
Below is an excerpt from a video conference with Michael Greve, Reihan Salam, and me on the problems with fiscal federalism in practice. The full half-hour video is here. And, yes, I also created a podcast. It is a good... MORE

Who Cares About the Poor?

Income Distribution
Arnold Kling
Scott Winship writes, Whether politicians ignore the poor and pander to the middle class or scare the middle class into thinking they are as bad off as the poor, the result is likely to be the same. Most of our... MORE

Michael Munger on Self-Interest

Political Economy
Arnold Kling
In this article (for which the publisher charges a mere $36), he writes, We can't seriously think that people are narrowly and permanently self-interested, because the costs of enforcing agreements and constantly guarding against fraud or theft would be overwhelming.... MORE

Five Myths About Free Markets

Political Economy
David Henderson
The talk I gave at Hoover on Wednesday, "Five Myths About Free Markets," is on YouTube. Here it is.... MORE

Corporatism

Political Economy
Arnold Kling
Edmund S. Phelps and Saifedean Ammous write, This shift of power from owners and innovators to state officials is the antithesis of capitalism. Yet this system's apologists and beneficiaries have the temerity to blame all these failures on "reckless capitalism"... MORE

Good Sentences

Political Economy
Arnold Kling
From Ross Douthat, writing an introduction to a new edition of Robert Nisbet's The Quest for Community. Man is a social being, and his desire for community will not be denied. ... And if he can't find that community on... MORE

Michael Greve on Fiscal Federalism

Fiscal Policy
Arnold Kling
He describes the growth of state and local spending, the incentive for the Federal government to enact soft bailouts, and finally a future in which we come to resemble Argentina. Medicaid represents well over 40 percent of all federal transfer... MORE

The Business Reporters We Have

Business Economics
Arnold Kling
Once again this week, the Washington Post Outlook section is an exercise in feeding its readers' anti-market prejudices. One prominent feature is an article by Jia Lynn Yang, a business reporter. The nagging problem with the consulting worldview, however, is... MORE

Me on Stossel: The Video

Political Economy
David Henderson
Here's a link that takes you to the video of my appearance on John Stossel's show last night. Three comments: 1. One thing that surprised me, when I researched to prep for the "debate," is how small a percent of... MORE

The Real Concentration of Power

Political Economy
Arnold Kling
Robert Lawson and Richard Alm write, In 2010, a tiny cabal of 535 individuals -- just 0.00017% of the population -- spent $3.5 trillion, or about 23% of the $14.5 trillion U.S. economy. That leaves 77% for the other 99.99983%... MORE

Democracy: Worse Than I Thought

Political Economy
Bryan Caplan
The main problem with democracy, I keep arguing, is that harmful policies reliably win by popular demand.  But there are exceptions.  Take Obamacare.  It appears to be genuinely unpopular.  But not only did Obama pass it; it's now very likely... MORE

Some Questions About Government

Political Economy
Arnold Kling
These are rhetorical. 1. Is government subject to diminishing returns to scope? In the business world, it is usually considered a better strategy to stick to one purpose rather than to constantly get into new lines of business. The thinking... MORE

Sentences to Ponder

Finance: stocks, options, etc.
Arnold Kling
Let's start the new year with a quote from April of 2010. If you do wish to break or limit the power of the major banks, running a balanced budget is probably the most important step we could take. And,... MORE

Francis Fukuyama Wants a New Ideology

Political Economy
Arnold Kling
He writes, Politically, the new ideology would need to reassert the supremacy of democratic politics over economics and legitimate anew government as an expression of the public interest. But the agenda it put forward to protect middle-class life could not... MORE

An Extended Take on Ignorance

Political Economy
Arnold Kling
from Xerographica. Note the many links, including one to A Jeffrey Friedman paper.... MORE

An Institutional Check on Financial Regulators?

Finance: stocks, options, etc.
Arnold Kling
Ross Levine writes, [We] propose a new institution, which I label the "Sentinel," to act as the public's sentry over financial policies and to help compel financial regulators to act in the public interest, regardless of their private interests. The... MORE

Laboratories of Socialism

Political Economy
Arnold Kling
Gar Alperovitz writes, Local and state governments are likewise changing the nature of American capitalism. Almost half the states manage venture capital efforts, taking partial ownership in new businesses. Calpers, California's public pension authority, helps finance local development projects; in... MORE

Does This Work?

Political Economy
Arnold Kling
Here is a video on Crony Capitalism. It offers a number of libertarian talking points on the issue. I agree with many of the individual points, but they are made rather quickly. The argument that regulation was intensified, not cut... MORE

My "Occupy Monterey" Talk

Upcoming Events
David Henderson
On Saturday, December 10, I'll be giving a talk at Occupy Monterey. Title: Crony Capitalism versus the Free Market Time: Saturday, 1:15 p.m. to 2:15 p.m. Place: Colton Hall lawn, Monterey.... MORE

Voter Irrationality in Animal Farm

Books: Reviews and Suggested Readings
Bryan Caplan
I recently talked my sons into reading Orwell's Animal Farm as their bedtime story.  [Warning: spoilers.]  They loved it - my asides on the Soviet allegory included.  Most of the book shows how the pigs twist the egalitarian animal revolution... MORE

David Friedman on Consensual Government

Political Economy
Arnold Kling
Speaking at the Cato Institute, David Friedman breezed through a number of deep issues concerning the nature of government. The talk itself is only 30 minutes, but you might have to listen multiple times. I was planning to attend, but... MORE

The Great Books of Liberalism and Conservatism

Political Economy
Arnold Kling
Tyler Cowen finds the most interesting part of the analysis of Carl T. Bogus (whose name reminds me of the old commercial, "with a name like Smucker's, it has to be good"). Conservatives have big appetites for ideology; liberals don't.... MORE

Is the Government an Efficient Charity?

Income Distribution
Arnold Kling
Tyler Cowen agrees with me that the most interesting sentence in Shikha Dalmia's essay is in 1979, households in the bottom quintile received more than 50 percent of all transfer payments. In 2007, similar households received about 35 percent of... MORE

A Quote I Will Use Often

Behavioral Economics and Rationality
Arnold Kling
Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance. That is from Daniel Kahneman, Thinking Fast and Slow, p. 201. The chapter is called "The illusion of... MORE

A Conversation with Jeffrey Friedman

Political Economy
Arnold Kling
Although I missed his appearances at AEI and Cato (videos here and here, respectively), I talked with Jeffrey and his wife, Shterna, in a coffee shop. I did not take any notes. He was in town to talk about his... MORE

The Great Debate

Political Economy
Arnold Kling
I've been working on lectures on microeconomics for my AP econ class. I am finished with macro (I hope), although at some point I will put together something on PSST. Anyway, I was cruising along with micro lectures, getting ready... MORE

Steven Jobs and Steven Chu

Political Economy
Arnold Kling
My latest essay. At this point, it seems likely that Jobs will be remembered as having contributed significantly to human progress. Chu's historical legacy is more problematic. Assuming that Chu's efforts at promoting solar power and electric automobiles are no... MORE

Business Innovation in a Free State

Political Economy
Arnold Kling
Concerning a hypothetical start-up state, Patri Friedman asks, What key freedoms and protections would you create, and what immediate industries would they enable? What business would you start if you moved there? One approach is to think of something that... MORE

Two Interesting Questions

Political Economy
Arnold Kling
1. David Warsh writes about a project in which economists were asked to come up with a long-term research agenda in economics. It appears to me that the suggestions are heavily weighted toward technocratic thinking. If anyone had asked me,... MORE

Did IQ Research Cause U.S. Immigration Restriction?

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
People who believe in the importance of IQ often conclude that they've found a scientific rationale for immigration restrictions.  They're wrong.  But has their mistaken inference led to more restrictive immigration policies?  The Immigration Act of 1924 seems like the... MORE

Who Are the Good Guys?

Political Economy
Arnold Kling
Eric Raymond writes, Community and collectivism are opposites. Community is valuable and powerful; it is individuals freely choosing to cooperate and identify with each other to achieve more than they can individually, as we do in the open-source community. Collectivism... MORE

Miscellaneous

Political Economy
Arnold Kling
Russ Roberts writes, Who really writes the latest financial regulations, where the devil is in the details? Who has a bigger incentive to pay attention to their content -- financial insiders such as the executives of large financial institutions or... MORE

Jackals in Retirement

Behavioral Economics and Rationality
Bryan Caplan
Democracy is also a form of religion.  It is the worship of jackals by jackasses. - MenckenAlmost everyone likes to make fun of politicians.  But Don Boudreaux has an amazingly clear argument confirming that politicians deserve our derision.  Consider, Don... MORE

Unz on Immigration: A Bizarrely Mixed Bag

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Tyler Cowen pointed me to "Immigration, the Republicans, and the End of White America by Ron Unz.  It's one of most bizarrely mixed bags I've ever read.  The piece combines...1. Wise long-run political advice for Republicans:In states or regions experiencing... MORE

The Best and the Brightest

Political Economy
Arnold Kling
Megan McArdle writes, The administration was supposed to have the economic dream team. Couldn't they have spared a moment to sit down with the folks at DOE and explain the concept of sunk costs? This is why everyone has to... MORE

What is Fiscal Profligacy?

Fiscal Policy
Arnold Kling
Tyler Cowen writes, In bad times, and when accounting gimmicks are rampant, a government's fiscal policy is best understood as a portfolio of options positions, not in terms of a static balance sheet. Read the whole post. There is much,... MORE

Ethnic Diversity and the Size of Government: A Belated Reply to Sanandaji

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
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We're Number 10! We're Number 10!

Cross-country Comparisons
David Henderson
The latest issue of Economic Freedom of the World, written by James Gwartney, Robert Lawson, and Joshua Hall, was released this week. You can find the whole thing here. The United States has slipped from #6 last year to #10... MORE

Corn, God, and Smith

Behavioral Economics and Rationality
Bryan Caplan
From The Wealth of Nations, via Dan Klein:The laws concerning corn* may every-where be compared to the laws concerning religion. The people feel themselves so much interested in what relates either of their subsistence in this life, or to their... MORE

Robin Hanson on Libertarian Basics

Political Economy
Arnold Kling
He writes, So everyone agrees that we heroically help some, and leave others to die. We only disagree on who falls into which category. What most non-libertarians favor is some form of collectivist policy at a national level. National socialism,... MORE

The Best Thing I've Read Recently

Political Economy
Arnold Kling
It's the essay "Capitalism and the Jewish Intellectuals," by Jeffrey and Shterna Friedman. It's in the same issue of Critical Review as my essay "Macroeconometrics: The Science of Hubris." I recommend subscribing to Critical Review, even though the publisher maintains... MORE

The Political Externalities of Immigration: Two Graphs to Ponder

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Lately I've been delving more deeply into the empirical evidence on the political externalities of immigration.  Two striking graphs from Alesina, Glaeser, and Sacerdote's "Why Doesn't the United States Have a European-Style Welfare State?" (BPEA 2001):1. Internationally, racially diverse societies... MORE

Is Media Bias a Market Failure?

Behavioral Economics and Rationality
Arnold Kling
A couple of readers have raised this issue. If news media are so biased, why does the market not correct this? My first thought is that there probably is no market for unbiased media. There is definitely a market for... MORE

Adaptation

Business Economics
Arnold Kling
This official Google blog post says, Over the next few months we'll be shutting down a number of products and merging others into existing products as features. The list is below. This will make things much simpler for our users,... MORE

Political Freedom and Economic Freedom

Political Economy
Arnold Kling
I have seen some discussion of the issue of the extent to which libertarians would trade off political freedom for economic freedom. I think some of the pieces were written by trolls, so I will not reward them with links.... MORE

A Questionable Video

Economic Education
Arnold Kling
I took a break from the basic economic concepts to record this video. I am leaning against encouraging my students to watch it. Regular readers of this blog may enjoy it.... MORE

Act Libertarianism and Rule Libertarianism

Books: Reviews and Suggested Readings
Arnold Kling
Robert Frank writes, Personal autonomy will always be compromised unless all problems stemming from activities that cause harm to others are resolved efficiently. That is from p.196 of his latest book, The Darwin Economy. So far, I have just read... MORE

Bill Breit, RIP

Political Economy
David Henderson
I just learned from Don Boudreaux that economist Bill Breit died on Thursday. He was 78. I first heard of him in the fall of 1971 when I was doing a make-up year in undergrad economics and one grad economics... MORE

Politics and Tribalism

Behavioral Economics and Rationality
Arnold Kling
David McRaney writes one of the most insightful paragraphs I have ever read. In a political debate you feel like the other side just doesn't get your point of view, and if they could only see things with your clarity,... MORE

The Feeling is Mutual

Political Economy
Arnold Kling
Brad DeLong writes, America's best hope for sane technocratic governance required the elimination of the Republican Party from our political system as rapidly as possible. DeLong's dream of technocratic governance is some people's nightmare. I think the solution is what... MORE

The Top Political Contributors

Political Economy
Arnold Kling
From Mark Perry. It's mostly labor unions.... MORE

Paul Romer on Institutional Reform

Institutional Economics
Arnold Kling
The talk is here. He says things to offend many people, libertarians in particular. For example, he talks about problems that we would call public-choice issues, with for-profit education and health care. That is, he argues that when government is... MORE

More Thoughts on Metaphors

Political Economy
Arnold Kling
Let me "+1" David Henderson's recommendation of the article by Max Borders. Borders writes, We can no more fix an economy than we can fix a rainforest or a coral reef. I riffed on the metaphor of a rain forest... MORE

Sentences that should be questioned

Political Economy
Arnold Kling
In his semi-farewell column, David Leonhardt writes, we know that a market economy with a significant government role is the only proven model of success I think that the growth of the Internet since 1994 (when the U.S. government turned... MORE

New Commanding Heights Watch

Economics of Health Care
Arnold Kling
Christopher J. Conover writes, Between 1966 and 2007, the entire increase in the size of government relative to the economy resulted from growth in tax-financed health spending. If you have not read it already, you might want to look at... MORE

Sentence to Ponder

Political Economy
Arnold Kling
Robin Hanson writes, It seems an especially bad idea for people to feel moral, without actually acting moral. He proceeds to talk about movies that allow us to feel moral by rooting for the good guy. But I was expecting... MORE

Competitive Government

Political Economy
Arnold Kling
Ilya Somin writes, Because California is extremely large and controls most of the warm-weather coastal territory on the West Coast, people have been willing to put up with a lot of bad policies for the opportunity to live there. Competitive... MORE

Still More on Non-profits

Economic Philosophy
Arnold Kling
A commenter suggested, among other readings, Susan Rose-Ackerman: an organization that binds itself not to distribute its surpluses to owners may be trusted more by customers and donors unable to judge service quality directly... Second...The nonprofit form provides a weak... MORE

More on Profits vs. Non-profits

Economic Philosophy
Arnold Kling
Picking up some comments on this post: 1. Non-profit is just a tax status. 2. One thinks of non-profits serving the poor, with for-profits serving the affluent. On (1), I can see it for hospitals. When I go to a... MORE

On Profits vs. Non-profits

Political Economy
Arnold Kling
I am curious about the intuition that people have about non-profit work. The standard intuition is that going to work for a profitable company means that you are not serving people, only the profits of the company. On the other... MORE

My Standard Question for Liberals/Progressives

Political Economy
Arnold Kling
A commenter suggested to me that Charles Sable does not fit my stereotype of liberals believing that government is the magic solution for human imperfection. But I picked out his paper on health care, and I found exactly that. He... MORE

Libertarianism: How, not Why

Political Economy
Arnold Kling
The game that I call "trolling for libertarians" seems to be quite popular this week. I guess it's a slow summer. So you make straw-man attacks in order to draw hits. Do you want to dissuade people from taking a... MORE

Government and the Financial Sector

Finance: stocks, options, etc.
Arnold Kling
Perry Mehrling writes, The important point is that, to the extent the market-centered credit system is here to stay, the institutions that support the liquidity of that market system are also here to stay. Even more, to that extent we... MORE

Immigration and the Welfare State

Political Economy
Bryan Caplan
I still looking for the time to respond to Tino Sanandaji.  In the meanwhile, though, here's Henry Farrell on a new APSR paper on the political economy of the welfare state:[T]hey argue that if one tries to hold racial and... MORE

Fun Facts of Gilded Age Migration

Economic History
Bryan Caplan
More from Exceptional People:On average, 5 percent of the populations of Britain, Ireland, and Norway emigrated every decade between 1850 and 1910, which increased to 14 percent of the Irish population emigrating between 1890 and 1910.  By the turn of... MORE

State Formation and Tax Collection

Political Economy
Arnold Kling
In Francis Fukuyama's latest book, he talks a lot about the problem of collecting taxes over a wide area. This is one of those processes that we take for granted now, but several hundred years ago it was quite difficult.... MORE

MalAdaptive: The Political Economy of RCTs

Behavioral Economics and Rationality
Bryan Caplan
The gold standard of modern social science is the bona fide experiment, also known as a "random controlled trial."  "The stuff going on at the Poverty Action Lab" is the modal answer to the standard GMU lunch question, "What's the... MORE

Fukuyama and Kuran

Books: Reviews and Suggested Readings
Arnold Kling
Timur Kuran writes, A telling indication is that in their interactions with private or public organizations, citizens of Arab states are more likely than those in advanced democracies to rely on personal relationships with employees or representatives. This pattern is... MORE

How Much Good Can One Intelligent, Wise, Brave Leader Do?

Behavioral Economics and Rationality
Bryan Caplan
Tim Harford's behavioral political economy from Adapt:Our instinctive response, when faced with a complicated challenge, is to look for a leader who will solve it.  It wasn't just Obama: every president is elected after promising to change the way politics... MORE

The One-Party State

Political Economy
Arnold Kling
Russ Roberts writes, I don't get it. Why is $4 million of taxpayer money going to a mall so that Costco will come to Wheaton? In a one-party state, businesses that are friendly to the party receive subsidies, and businesses... MORE

I think the political externalities of immigration are greatly overblown.  This piece by Chicago Public Policy Ph.D. student Tino Sanandaji presents the other side more effectively than anyone else I've read.  I'm too busy to reply for a while, but... MORE

The Secession Solution

Political Economy
Arnold Kling
From a news report: A long-simmering movement by liberal stalwarts in southern Arizona to break away from the rest of the largely conservative state is at a boiling point as secession backers press to bring their longshot ambition to the... MORE

Choose Your Metaphor

Political Economy
Arnold Kling
I suspect that a lot of the intractability of the disputes between people holding divergent political opinions reflects differences in the metaphors that we implicitly hold about government. It would be interesting to try to make these metaphors more explicit.... MORE

Housing Policy

Political Economy
Arnold Kling
I spoke at a forum on housing finance reform. I have low energy these days, but viewing the talk it is not bad. It starts about minute 3 and goes to about minute 26. One of my themes is that... MORE

Two Systems

Political Economy
Arnold Kling
Here is an idea I am playing with. It is about two systems for obtaining, retaining, and enforcing status. I need to come up with names for the systems. How Status isSystem ASystem BObtainedmarket acceptancecredentials RetainedcompetitiontenureEnforcedchoiceauthority This table is inspired... MORE

Libertarian Seder Questions

Political Economy
Arnold Kling
With Passover coming, something to ponder. We know that Pharoah was part of a long line of autocrats that ruled Egypt. Passover is sometimes called a "festival of freedom." In that case, 1. Why did the Egyptians not attempt to... MORE

Two Questions for Libertarians

Political Economy
Arnold Kling
These occurred to me after the Association for Private Enterprise Education conference over the past few days. 1. How should libertarians frame government? (a) as a criminal enterprise; or (b) as a service provider that does a bad job, largely... MORE

My AEA Speech for Ed Clark, 1980

Political Economy
David Henderson
Here is the speech I referred to in my previous post. I would like to thank Leonard Silk for his fundamental decency and sense of fair play in letting me appear here today. I come before you to speak on... MORE

My AEA Speech on the Presidential Panel, 1980

Political Economy
David Henderson
In 1980, the American Economics Association had its annual meeting in Denver in early September. When I arrived and paid my dues, I noticed that the program had a session planned for the first day titled, "Presidential Candidates' Economic and... MORE

A Review of the Widely Unread

Books: Reviews and Suggested Readings
Arnold Kling
In the latest issue of The Independent Review, Stan Leibowitz reviews Unchecked and Unbalanced. I suppose that the right response from me should be "Thank you for taking the time and trouble to review my book" rather than quibble with... MORE

Morning Crankiness, Nobel Laureates Edition

Macroeconomics
Arnold Kling
I am a bit "off" this morning. Ordinarily, my philosophy is "catch them doing something right." If you try to correct people when they do something wrong, they just take offense, and you accomplish nothing. But, nonetheless: Nobel Laureate Paul... MORE

A Whiff of Liberaltarianism from the Left

Politics and Economics
Arnold Kling
Elaine Kamarck writes, in the spirit of a new progressive incrementalism, here are three battles that progressives should fight in the next Congress to put our fiscal and economic house in order: create jobs by cutting the payroll tax and... MORE

Tyler Cowen Explains the "Flash Crash"

Behavioral Economics and Rationality
Arnold Kling
He writes, computers still are not meta-rational. They do not understand what they do not understand very well But could one argue that Watson is Meta-rational, in that it assigns a probability to having the correct answer? Perhaps this feature... MORE

Economists' Ideological Blind Spots

Economic Methods
Arnold Kling
Tyler Cowen makes up long lists of the blind spots of left-leaning economists and right-leaning economists. If I were asked this question, I would boil my answers down to one suggestion for each. What I think left-leaning economists should do... MORE

From Caplan-Crampton-Grove-Somin's new working paper:Earlier researchers have already identified some systematic biases that undermine retrospective voting.  Voters myopically reward and punish politicians for recent economic performance.  (Bartels 2010; Achen and Bartels 2008, 2004a)  Partisanship heavily distorts voters' attributional judgments. (Marsh... MORE

Systematically Biased Beliefs About Political Influence: The Working Paper

Behavioral Economics and Rationality
Bryan Caplan
My co-authors and I finally have a working paper based on our 2008 survey of the general public and political scientists.  Many thanks to all the EconLog readers who helped along the way.  Here's the basic idea from the intro. ... MORE

Reflections on World on Fire

Behavioral Economics and Rationality
Bryan Caplan
Negative reviews of Amy Chua's Battle Hymn of the Tiger Mother often begin by praising her earlier book, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability.  I was inspired to read it - and... MORE

My Berkeley Talk

Political Economy
David Henderson
On Wednesday evening, I gave a talk at UC Berkeley to a group called the Students for Liberty, UC Berkeley. I've talked to a number of college audiences, but it has been a while since I've spoken to a campus... MORE

Anti-Foreign Bias versus Charter Cities

Behavioral Economics and Rationality
Bryan Caplan
From David Wessel's Honduran charter cities piece in the WSJ:"A good idea from an economic point of view," says Antonio Tavel Otero, a Honduran businessman. "But I don't think you can sell this: Telling Hondurans our laws are so bad... MORE

Peter Berkowitz on Elites

Political Economy
Arnold Kling
He writes, today more than ever conserving liberty and maintaining democracy require an elite whose members possess advanced learning, professional expertise, and wisdom born of extended experience. ...To obtain the elites we deserve, nothing is more urgent than redoubling reform... MORE

Empathizers and Systemetizers

Political Economy
Arnold Kling
Mike Rizzo reminds me of one of my classic essays. I wrote, The analytical brain uses the principles of science. It learns to make predictions of the form, "When an object is dropped, it will fall toward the earth." The... MORE

The Rest of The Great Stagnation

Books: Reviews and Suggested Readings
Arnold Kling
I was planning to review Tyler Cowen's e-book while I read it, but then we lost power, and my Kindle was working while my Internet connection was not, so my comments on the entire rest of the book are below... MORE

Roosevelt and the Puritans

Economic History
Arnold Kling
Razib Khan writes, Walter Russell Mead has a fascinating blog post up, The Birth of the Blues. In it, he traces the roots of modern American "Blue-state" liberalism back to the Puritans, the Yankees of New England. This is a... MORE

Light Blogging

Political Economy
Arnold Kling
I have very little time for blogging this week. Here are some things that would interest me if it were a normal week: 1. Ronald Bailey on various studies of how libertarians differ from others in terms of moral outlook.... MORE

The Disputation

Political Economy
Arnold Kling
You can watch here. Move the slider to around 35 to 40 minutes in. I call it a disputation because, given the differences in religious beliefs, Tim and I were not really going to change any minds.... MORE

More Notes for a Debate

Upcoming Events
Arnold Kling
What have I gotten myself into?. You can watch tonight (Friday, January 21st) on C-span. I have never been booed before, but that seems likely. Tim Carney and I will play the role of Christians in this Roman lion theater,... MORE

Notes for a Debate

Political Economy
Arnold Kling
On the topic of corporate power. Open to the public. This Friday evening, January 21st. 7:30 PM. Washington Plaza Hotel, 10 Thomas Circle, in NW Washington DC. Frederick Hall. My notes follow:... MORE

The Enchantment of the Democratic Process

Political Economy
Arnold Kling
Mark Thoma writes, the real question is why so many people have stopped believing that the state has the authority to be the arbiter of last resort in a pluralistic society. Read the whole thing, which starts out as an... MORE

The Looting of a County

Political Economy
Arnold Kling
Montgomery County, Maryland, where I live, is one of the nation's richest counties, thanks to its proximity to the capital of the empire. A local newspaper reports, The core belief for Prouty and members of the MCEA is that the... MORE

Denmark

Institutional Economics
Arnold Kling
Scott Sumner writes, Denmark is much more decentralized. The same sort of policies adopted in Denmark would work less well in the US, because we are much more centralized, and hence far less democratic (if you define democracy properly, where... MORE

Are Governors and Mayors Scapegoats for the Fed?

Behavioral Economics and Rationality
Bryan Caplan
Here's a passage from the discussion section I'm writing for "Systematically Biased Beliefs About Political Influence": Normal 0 MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New... MORE

Let the Debate Begin

Political Economy
Arnold Kling
So says Uwe E. Reinhardt. Even the word private in "private charitable giving" is not completely accurate. A more accurate term would be "private donations coupled with involuntary, tax-financed public subsidies." If progressives want to attack private charity because they... MORE

Arnold Kling with a Minus Sign

Political Economy
Arnold Kling
I don't know any other way to describe Peter Wilby. Unfortunately, private charity doesn't always have the same priorities as public policy. In the UK, the most popular causes are children, animals, cancer and lifeboats. Overseas causes, for relief of... MORE

Where I Differ with Some Libertarians

Political Economy
Arnold Kling
I don't know what exactly inspired this post (probably Bryan's writing on patriotism and political correctness). Anyway, here are a couple of issues where not all libertarians agree. 1. I just cannot buy into pacifism as some libertarians express it.... MORE

An Article on Libertarianism

Political Economy
Arnold Kling
In New York Magazine, by Christopher Beam. (I got the link from Tyler Cowen.) The writer says, Libertarian minarchy is an elegant idea in the abstract. But the moment you get specific, the foundation starts to crumble. Say we started... MORE

Two Views of Class Struggle

Political Economy
Arnold Kling
Jeff Sachs writes, Since Ronald Reagan became President in 1981, America's budget system has been geared to supporting the accumulation of vast wealth at the top of the income distribution. Amazingly, the richest 1% of American households now has a... MORE

Credential-Free Zones

Political Economy
Arnold Kling
Let me offer a random idea for a political or real-estate entrepreneur. That is, carve out a community of at least 10,000 people in a larger metropolitan area and have it be credential free. In theory, the 10,000 people would... MORE

An Instructional Video

Political Economy
Arnold Kling
Reason TV walks through a series of thought experiments about income redistribution. It's pretty much libertarianism 101, likely to please those who agree and put off those who disagree. One point that the video raises (perhaps the main point) is... MORE

Reflections on a Metaphor

Political Economy
Arnold Kling
On p. 114 of The Symbolic Uses of Politics, Murray Edelman writes, Force signals weakness in politics, as rape does in sex. Some reactions to this metaphor: 1. This suggests that there is political power that is not based on... MORE

The Unconscious Mind of the 1950's

Political Economy
Arnold Kling
Tyler Cowen has found a new game: Google's Ngram. I decided to play it using the word "unconscious." Consistent with what I wrote in my review of Murray Edelman, usage of the word in books in American English peaks in... MORE

Jeffrey Friedman on Edelman and Caplan

Political Economy
Arnold Kling
In an email, he writes, Like the Frankfurters (and Caplan), Edelman simply couldn't understand why everyone didn't agree with him--his own (Marxist) views were so self-evidently true!--that he reduced the views of those with whom he disagrees to dark drives.... MORE

Obamacare's Mandate: Should We Hold Teach-Ins?

Political Economy
Arnold Kling
Megan McArdle writes, If I do a transaction for no business purpose other than to minimize my tax liability, the IRS will dub this a sham transaction and make me pay the taxes anyway. Similarly, I think sham laws aimed... MORE

A Must Read

Books: Reviews and Suggested Readings
Arnold Kling
I finally got around to reading the book that possibly has been my strongest intellectual influence, and certainly the most long-lasting. I will explain below the fold. The book is The Symbolic Uses of Politics, by Murray Edelman. As recently... MORE

A Challenge to Libertarians

Political Economy
Arnold Kling
Eric Liu and Nick Hanauer throw down this gauntlet: Market fundamentalists would have us believe that our success comes in spite of government. There is literally no evidence for this. If less were always better, then the least regulated economies... MORE

Donations vs. Taxes

Political Economy
Arnold Kling
David Welker writes, Arnold Kling rejects the idea of having any duty to society, even while he has enjoyed countless benefits from society. Including receiving a world-class education of the sort enjoyed by a tiny elite. Basically, what Kling does... MORE

A Sentence to Ponder

Political Economy
Arnold Kling
From the comments on this post. most people are libertarian with regards to their own lives and people they like, statist with regards to people they don't know, and positively fascist about people they dislike, stereotype, or don't understand. What... MORE

Does Liberty Come from the State?

Political Economy
Arnold Kling
Daniel B. Klein writes, I believe that President Obama sees himself as the duly appointed officer of the overlord. This overlord is the collectivity called "the people" or "the state." It is one big voluntary club. Its officers are government... MORE

Morality, Rhetoric, and Politics

Political Economy
Arnold Kling
Dwight R. Lee meditates, Still, as long as there are people who cannot resist the appeal of morality on the cheap, the political process will continue to serve up cheap morality. And the result will continue to be neither moral... MORE

Estate Tax Bootleggers

Regulation and Subsidies
Arnold Kling
Tim Carney and Dick Patten write, It's no surprise then that the life insurance industry, which stands to gain an estimated 10 percent of its revenues from estate tax policies, is leading the charge to ensure that the estate tax... MORE

The State of the European Crisis

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Tyler Cowen writes, In a nutshell, we're watching the most pitched, highest-stakes, most determined battle between politics and finance which has been staged. I am expecting finance to win. The question is whether the Eurocrats can beat back the speculators.... MORE

The Park Ranger, Stability, and Resilience

Economic Education
Arnold Kling
From Ashwin: The relevant insight in Holling's work is that resilience and stability as goals for an ecosystem are frequently at odds with each other. In many ecosystems, "the very fact of low stability seems to produce high resilience". Conversely,... MORE

Thoughts on Charity

Political Economy
Arnold Kling
Ezra Klein thinks that political organizations are worthwhile charities. If you donate money to a food bank, it can provide only as much food as your money can buy. If you donate it to a nonprofit that specializes in food... MORE

The Park Ranger Metaphor, Further Continued

Political Economy
Arnold Kling
Here are some responses to comments on my original post and the follow-up. Again, the idea is that the park ranger represents someone who is not convinced that he or she can improve on the natural rain forest, despite what... MORE

Not Who You Think

Politics and Economics
Arnold Kling
1. Not Mencius Moldbug: But a king--a king without any real power, that is--is such an ennoblingly arbitrary, such a tender and organically human institution. It is easy to give our loyalty to someone whose only claim on it is... MORE

Park Ranger, Continued

Economic Methods
Arnold Kling
My earlier post drew a number of helpful comments, including one from Karl Smith on his own blog. it is right that take the knowledge of market failure that we have and do what we can to alleviate what suffering... MORE

Portrait of an Elitist

Energy, Environment, Resources
Arnold Kling
In today's business section, the Washington Post profiles energy secretary Steven Chu. Aides say Chu's ability to understand and absorb technical information sets him apart from the previous 11 energy secretaries... "People don't appreciate what's going on," he says, "that... MORE

Two Strains of Conservatism

Political Economy
Arnold Kling
I found this Jonah Goldberg interview worthwhile. It's three hours! This is from a show where listeners could call in. Goldberg's adversaries strike me as petty. I don't think they raise issues with his views of the relationship between progressivism... MORE

Good Sentences

Political Economy
Arnold Kling
from Steve Randy Waldman: To DeLong, Robert Rubin remains a pontiff of the "bipartisan technocrats". To the rest of us, Rubin has become an icon of self-delusion, corruption, and arrogance. There is more, in what Tyler Cowen calls "The best... MORE

Three that Caught My Eye

Economics of Education
Arnold Kling
1. William Easterly on the $320,000 kindergarten teacher story. Under the project studied, there were random assignments of teachers and students to classes. The striking thing in the findings is the identification of "Good" and "Bad" kindergarten classes, as shown... MORE

Who Said It?

Behavioral Economics and Rationality
Bryan Caplan
This view of democracy is less cheery than the romantic alternatives, and thus less appealing. Its skepticism raises a host of new questions. And it may impose an obligation on those who propound it to make normative sense of the... MORE

The Fed's new policies are arguably as important as the election itself.  How can we explain the timing?  There are two main families of hypotheses:Family #1: The election changed the minds of Bernanke and company.Family #2: Bernanke and company made... MORE

Roosevelt and Retrospective Voting

Behavioral Economics and Rationality
Bryan Caplan
I just finished V.O. Key's 1966 classic, The Responsible Electorate.  It's a seminal work in the retrospective voting literature.  Key tries to convince his fellow political scientists that democracy works well because the electorate rewards success and punishes failure.  He's... MORE

Yesterday I presented two explanations for the Democrats' loss of the House:1. Retrospective voting model.  They're being punished for two years of bad economic performance.2. The median voter model.  They're being punished for being well to the left of public... MORE

Me and the Elephants

Political Economy
Arnold Kling
I like this talk a lot, particularly since right afterward I did not think it had gone well. This was the talk where I thought that I was speaking to backers of the Republican establishment, and what I told them... MORE

If Government Were a Rich Man

Political Economy
Arnold Kling
Wintercow20 writes, The US government (all levels) has 20% more resources itself than the largest economy in the world does yet it cannot take care of health care for the poor and chronically infirm? Where on the list of priorities... MORE

Election Pre-Mortem

Political Economy
Bryan Caplan
There are two standard social science stories about the Democrats' impending humiliation:1. Retrospective voting model.  They're being punished for two years of bad economic performance.2. The median voter model.  They're being punished for being well to the left of public... MORE

The Problem of Fraud

Political Economy
Arnold Kling
A reader recommends a paper by William K. Black. "Control fraud" theory explains why the most damaging forms of fraud are situations in which those that control the company or the nation use it as a fraud vehicle. The CEO,... MORE

Technocratic Overconfidence

Behavioral Economics and Rationality
Arnold Kling
Matt Ridley discusses a paper that uses "behavioral economics" to assess regulators. The paper is by Slavisa Tasic, and I believe that it can be found here. Tasic writes, In the context of political economy, overconfidence takes the form of... MORE

What is Wrong with the New Elite?

Political Economy
Arnold Kling
Charles Murray writes, Far from spending their college years in a meritocratic melting pot, the New Elite spend school with people who are mostly just like them -- which might not be so bad, except that so many of them... MORE

Notes for a Talk

Political Economy
Arnold Kling
I am having trouble putting this together. It is supposed to be based on U and U, for an audience that I expect to lean neocon, and to go for about 20 minutes, followed by Q&A. I would rather provoke... MORE

Fundamentalism

Political Economy
Arnold Kling
David complained about an article in which the author blamed libertarians for the refusal of a fire department to put out a fire because the homeowner had not paid for fire protection. David's point is that it was a government... MORE

Bizarre Salon Attack on Libertarians

Political Economy
David Henderson
Alex Pareene, at Salon, has a bizarre attack on libertarians. He titles it "For-Pay Fire Department Lets Man's House Burn." He refers to a story about a man who failed to pay an annual fee for fire protection and then,... MORE

Outlier Doubts

Political Economy
Arnold Kling
I think it is fair to say that my free-market views are more extreme than most. Non-economists do not appreciate how well markets work. Most other economists do not, in my opinion, appreciate how poorly government works. Naturally, I expend... MORE

Unchecked and Unbalanced Watch

Political Economy
Arnold Kling
Eric Falkenstein writes Back in the bubble, the one thing everyone (regulators, academics, politicians, journalists) thought banks were doing right, was mortgage lending. This conventional beltway wisdom now has more power. Read the whole post, which consists of a 2003... MORE

The Theory of Consent

Political Economy
Arnold Kling
Bart Hinkle poses an issue. Last week a Chesterfield circuit court ruled Romito has no obligation to pay dues to the homeowners' association in the tony Bexley neighborhood. Romito bought his property two decades ago, when membership in the association... MORE

Why Don't U.S. Corporations Threaten to Exit?

Political Economy
Arnold Kling
A reader has the following question: corporations have the power to exit, by locating headquarters overseas, essentially trading its "US citizenship" for one of a number of more attractive locations. Though I admit, corporations can't do this costlessly. Why is... MORE

A Libertarian One-Liner

Political Economy
Arnold Kling
from Kevin D. Williamson: If you're not willing to have somebody hauled off at gunpoint over the project, then it's probably not a legitimate concern of the state. Implicit in this point of view is the presumption that voluntary cooperation... MORE

A Few Links

Labor Market
Arnold Kling
James Hamilton on the JOLTS data, which I have also been pushing. Caroline Baum on the Kling view of the job creation problem. Arthur Brooks on the Arthur Brooks controversy.... MORE

My Hammer and Some Nails

Political Economy
Arnold Kling
My solution is competitive government. I do not think that wanting to live in Silver Spring Maryland should automatically subject me to the local school monopoly, the national pensions system monopoly, and so on. I would like to be able... MORE

Austerity for Liberty

Political Economy
Bryan Caplan
Suppose that in 2005, Bush managed to "privatize Social Security" to a politically astonishing degree.  Under the hypothetical legislation:1. Workers are free to divert 100% of their future payroll tax into private accounts.2. Workers are free to immediately ask for... MORE

The Role of the State: Who Decides?

Political Economy
Arnold Kling
Martin Wolf writes, [Libertarianism] is hopeless intellectually, because the values people hold are many and divergent and some of these values do not merely allow, but demand, government protection of weak, vulnerable or unfortunate people. Moreover, such values are not... MORE

Knowledge-Power Discrepancy

Central Planning vs. Local Knowledge
Arnold Kling
I discuss knowledge and power with Russ Roberts. The central theme of Unchecked and Unbalanced is that we live an a world with increasingly important dispersed knowledge and yet in a structural sense power is becoming more complicated. The result,... MORE

Technocratic Fundamentalism

Finance: stocks, options, etc.
Arnold Kling
Barry Eichengreen writes, Those root causes were an ideology of market fundamentalism and the policies flowing from it. The idea that markets get it right and governments only get in the way, what I refer to here as market fundamentalism,... MORE

Unchecked and Unbalanced Watch

Public Goods
Arnold Kling
Pete Peterson writes, the Los Angeles City Council is expected to overturn the 36-year-old policy of city-funded sidewalk repair, returning responsibility to property owners. The city is attempting to narrow a nearly half-billion-dollar budget gap. The sidewalk repair program costs... MORE

The Desire to See Others Suffer

Behavioral Economics and Rationality
Arnold Kling
James Lewis argues that fascism involves the political use of sadism to recruit millions of followers in a campaign of pleasurable punishment against a scapegoated person or group. I found the essay provocative, which is a term I apply when... MORE

Extraterritoriality

Political Economy
Arnold Kling
That is the title of a work from 1925 by Shih Shun Liu. Richard Johnsson has placed it on line. Some quotes. In the earlier stages of human development, race or nationality rather than territory formed the basis of a... MORE

The Pelican Brief and the People's Romance

Political Economy
David Henderson
A large percent of my vacation reading this last week has been novels, rather than than non-fiction. But even in those, I see things to blog about. One novel I just finished is John Grisham's The Pelican Brief. I won't... MORE

Three Dispositions of (Modern) Liberals

Books: Reviews and Suggested Readings
Arnold Kling
When libertarians read Alan Brinkley's The End of Reform, they will frequently nod with approval when Brinkley refers to some faction within the Roosevelt Administration as "statists." Just bear in mind that for Brinkley, that term is not derogatory. After... MORE

Paul Johnson's Peroration

Books: Reviews and Suggested Readings
Arnold Kling
Since we have been discussing his Modern Times, I thought I would excerpt his conclusion, below.... MORE

Resolution Authority for Governments

Political Economy
Arnold Kling
Paul Romer is always interesting, and especially in this podcast with Paul Kedrosky. In the last quarter of the interview, the discussion turns to badly-performing cities, and Romer speculates that we need a workout procedure that would allow a city... MORE

Structural Decline in Democracy Watch

Political Economy
Arnold Kling
An LA Times editorial notes, that raises the question of whether Congress itself should increase the size of the House, not only to minimize disparities but to take at least some account of the population explosion that has occurred since... MORE

Technocracy

Political Economy
Arnold Kling
David Brooks writes, When historians look back on this period, they will see it as another progressive era. It is not a liberal era -- when government intervenes to seize wealth and power and distribute it to the have-nots. It's... MORE

Ways in Which the U.S. has Become Less Democratic

Political Economy
Arnold Kling
My claim is that a number of factors have reduced the impact of the "voice" (voting or other forms of political participation) of ordinary citizens. You can argue that other factors have increased the impact of ordinary citizens. You can... MORE

The Neo-Reactionaries

Political Economy
Arnold Kling
Angelo M. Codevilla writes, The ruling class's appetite for deference, power, and perks grows. The country class disrespects its rulers, wants to curtail their power and reduce their perks. The ruling class wears on its sleeve the view that the... MORE

Where Do Libertarianst Belong, Continued

Political Economy
Arnold Kling
Nick Schulz puts in his $.02 The original fusionist project of Frank Meyer and others was predicated on a belief that libertarians and conservatives (social/religious/paleo) actually agreed on some basic philosophical principles, not just shared goals such as opposing Soviet... MORE

The Somali Model

Political Economy
Arnold Kling
I enjoyed Ben Powell's lecture on Somalia, although on my computer the volume was barely audible. Among the points of interest: --cell phone spectrum is provided competitively without an FCC. --there is competitive virtual government, in the sense that you... MORE

Unchecked and Unbalanced

Politics and Economics
Arnold Kling
Terrence P. Jeffrey writes, In the July 26, 2008 issue of the British Journal of Medicine (BMJ), Dr. Berwick published an article praising the NHS on its 60th birthday and urging Great Britain to reject free enterprise in health care.... 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

Cato's Voice of Moderation

Books: Reviews and Suggested Readings
Arnold Kling
Brink Lindsey reads Arthur Brooks' new book and gives it a thumbs down. Figuring out how to restore growth and how to construct an effective but affordable safety net, are questions for debate, analysis, and democratic decision-making. My answers to... MORE

Unbundling Government

Political Economy
Arnold Kling
This week is Secession Week at Let a Thousand Nations Bloom. I have no problems with the S word, but I also use the economic expression "unbundling." For example, Ed Glaeser writes, In a sense, the gulf between the political... MORE

The Strange Political Economy of Kidnapping

Economics of Crime
Bryan Caplan
In the United States, stereotypical kidnappings are almost non-existent.  But in some Third World countries - especially Latin America - the problem's quite serious.  Mexico's up to 8000 reported kidnappings per year, and experts plausibly claim that over 90% of... MORE

Caplan on Hayek, Richter, and Socialism

Political Economy
Arnold Kling
Russ Roberts interviews Bryan Caplan. The overall theme is the arguments about socialism. For example, why has socialism produced evil leaders? Is it power that corrupts? Is it that the contest for power selects ruthless individuals? Or is it that... MORE

The Voegeli and Samples Show

Upcoming Events
Arnold Kling
If you are in DC tomorrow morning, I recommend going to hear the authors of two new books. William Voegeli is the author of Never Enough: America's Limitless Welfare State, and John Samples is the author of The Struggle to... MORE

When to Rely on Coercion

Political Economy
Arnold Kling
In the revised edition of The Company of Strangers, Paul Seabright writes (p. 26), One of the great intellectual achievements of modern economics has been to work out very precisely the circumstances under which decentralized systems of market exchange can... MORE

Baiting Bryan

Family Economics
Arnold Kling
Two from the Washington Post. 1. Kathleen Parker writes, By large percentages, the sperm-donor children suffered more depression, delinquency and substance abuse than children who were adopted or raised in a home with their two natural parents. See also Bruce... MORE

Hypothetical Agendas

Politics and Economics
Arnold Kling
Following up on Hypothetical Bargains (read that one first), let me offer some hypothetical agendas for a tea-party influenced Republican Party, as a way of explaining the relationship between the soil and the weeds. Think of the four agendas as... MORE

Hypothetical Bargains

Books: Reviews and Suggested Readings
Arnold Kling
Below the fold is an essay that is partly a reaction to reading parts of William Voegeli's new book, Never Enough, which ruminates on liberalism, conservatism, and the welfare state.... MORE

The State of the European Crisis

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Richard Baldwin and Daniel Gros introduce a set of essays on the crisis in the eurozone. The authors unanimously believe that the crisis is not over, and that the Eurozone rescue is not finished. More needs to be done. I... MORE

Squam Lake or Swamp?

Books: Reviews and Suggested Readings
Arnold Kling
What happens when you bring leading academic experts in economics and finance together to come up with ideas to prevent future financial crises? You get The Squam Lake report, enthusiastically greeted by Ben Bernanke. I am not impressed. The report... MORE

What is Massive Financial Fraud?

Finance: stocks, options, etc.
Arnold Kling
This story says that the government has decided to prosecute one Lee Bentley Farkas for financial fraud. As a non-lawyer, and seeing only the description in this and related stories, it is very difficult for me to discern the difference... MORE

Morning Recommendations

Growth: Causal Factors
Arnold Kling
1. A well-written review of From Poverty to Prosperity. I admit I was surprised when I got to the end of the post. 2. A new metaphor for the economy, from Don Boudreaux. He compares it to a gigantic jigsaw... MORE

Returned From Europe

Political Economy
Arnold Kling
I just returned from Europe, where I participated in two conferences sponsored by market-oriented think tanks. Some impressions below. (Note: Tyler Cowen has some interesting things to say, blogging from Germany--Tyler and I failed to meet in Berlin, primarily because... MORE

What the Klein Study Proves

Political Economy
Arnold Kling
[update: Daniel Klein emails me to credit Zeljka Buturovic for the study.] Dave Leigh writes, People who frequently shop at Wal-Mart scored much better than those who never do (2.24 to 4.24 questions wrong, respectively). This isn't much of a... MORE

The Cognitive Capture Dilemma

Political Economy
Arnold Kling
Steven M. Davidoff writes, What makes these issues so intractable is that you want regulators to interact with the people they regulate. In addition, regulators from industry sometimes best understand the industry they regulate. He correctly points out that the... MORE

To put it baldly, since capitalism undermined aristocracy, it was a good thing from an intellectual's point of view. That is from Alan S. Kahan, Mind vs. Money: The War between Intellectuals and Capitalism. quoted in a review by... MORE

What the Battle is About

Political Economy
Arnold Kling
Scott Sumner continues the discussion of the merits of neoliberalism. Here are some remarks of mine. 1. This relates to what Arthur Brooks calls The Battle. I have not read Brooks' book, and my guess is that I will have... MORE

The Wheels of Housing Regulation Grind On

Political Economy
Arnold Kling
A news report begins, The Federal Housing Finance Agency (FHFA) has sent to the Federal Register a proposed rule to establish a framework for affordable housing goals for the 12 Federal Home Loan Banks (Banks). The proposed rule implements provisions... MORE

Shorter Arthur Brooks

Books: Reviews and Suggested Readings
Arnold Kling
His book is not out yet. Meanwhile, you can listen to the talk. I like the analogy (due to his wife) between believing in free enterprise while distrusting business to believing in marriage while distrusting husbands. Or you can read... MORE

More Matt Ridley

Economic History
Arnold Kling
From The Rational Optimist, p. 182: Empires, indeed governments generally, tend to be good things at first and bad things the longer they last. First they improve society's ability to flourish by providing central services and removing impediments to trade... MORE

The New Matt Ridley Book

Economic History
Arnold Kling
I picked up a copy at the airport yesterday, and I am about half-way through. It is called The Rational Optimist, and John Tierney has a brief summary. My guess is that a lot of people will want to talk... MORE

Virtual Federalism

Political Economy
Arnold Kling
Tyler Cowen quotes from an idea that would allow Israelis and Palestinians to live in overlapping neighborhoods, with choice of political allegiance. This is proposed as a way of solving the problem that there are no natural, mutually agreeable boundaries... MORE

Piggy Banking and Unlimited Government Church

Political Economy
Arnold Kling
A reader asks what I mean by "piggy bank" in reference to a central bank. What I mean is that the central bank, instead of buying safe securities in order to expand the money supply, buys risky securities in order... MORE

Rodrik Update

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
In an email, Dani Rodrik writes to correct my misinterpretation. I don't think the world needs a strong government. I think the world needs to ease up on economic globalization, precisely because it cannot have (and should not have, for... MORE

The Deeper Meaning of the Greek Crisis

Political Economy
Arnold Kling
We are going to argue about this one. Dani Rodrik writes, The choice that the EU faces is the same in other parts of the world: either integrate politically, or ease up on economic unification. I read his essay as... MORE

Public Choice Outreach 2010

Political Economy
Bryan Caplan
The Public Choice Outreach seminar is back!  The dates: August 13-15, at GMU.  It's a great chance to learn Virginia political economy straight from the horses' mouths.  The speakers aren't set yet, but I'll probably be one of them.  The... MORE

Do You Belong to the Church?

Political Economy
Arnold Kling
Make a list of five to ten social issues that you feel are important. Next, make a list of five to ten social issues that you think government should stay out of. What is the intersection of those two sets?... MORE

The New Sectarianism in America

Political Economy
Arnold Kling
Richard Cohen writes the very reason most Americans find secularism a strange and useless term is that this country has never had a state religion. I believe that America does have a state religion. I call it the religion of... MORE

Capitalism: A Confused Story

Political Economy
David Henderson
Last week, I watched Michael Moore's latest movie, Capitalism: A Love Story, with two of my students. I took notes and we stopped at various points to discuss it. Some highlights: 10:40: He has a segment about a firm in... MORE

Four Principles of Human Action

Political Economy
Arnold Kling
I stretched to make them fit into a framework of A, B, C, and D. Think of this post as a follow-up to both the government menace post and the Ropke post. A stands for Altruism. B stands for Business.... MORE

Is Government a Menace?

Political Economy
Arnold Kling
Yesterday, President Obama said, When our government is spoken of as some menacing, threatening foreign entity, it ignores the fact that in our democracy, government is us. We, the people -- (applause.) We, the people, hold in our hands the... MORE

Morning Commentary

Business Economics
Arnold Kling
1. Richard Epstein on the SEC suit against Goldman. the SEC complaint makes no mention that Goldman actually took the same side of the deal as ACA, which puts it in the unique position of defrauding itself. Read the whole... MORE

How Napoleonic Conscription Came to America

Labor Market
David Henderson
My piece on how conscription came to America, titled "From 'Porous' to 'Ruthless' Conscription: 1776-1917," is out in the latest issue of Independent Review. An excerpt: As Robert Higgs insists, beliefs matter in social affairs (1987, 38). Although this idea... MORE

The Cash Nexus

Political Economy
Arnold Kling
Tyler Cowen writes, There's a different way to think about the bailouts, namely that the U.S. government stands at the center of a giant nexus of money raising, most of all to finance the U.S. government budget deficit and keep... MORE

The Looting Classes

Political Economy
Arnold Kling
Steven Malanga writes, Consider the California Teachers Association...Soon after Proposition 13 became law, the union launched a coordinated statewide effort to support friendly candidates in school-board races, in which turnout is frequently low and special interests can have a disproportionate... MORE

What I Said, Recorded Version

Business Economics
Arnold Kling
The April 14 hearing on the HAMP program (modifying loans for troubled mortgage borrowers). I start some time after 1:31 (that is, one hour and 31 minutes into the hearing). I also got some questions at about 1:53. I actually... MORE

If I Had More Time

Finance: stocks, options, etc.
Arnold Kling
I would comment more on the following links: WSJ blog post about a warning that the average ratio of government debt to GDP could top 100 percent in Europe in the near future. That's ok. They can fix the problem... MORE

The Looting Scenario

Political Economy
Arnold Kling
David Henderson's synopsis of Tyler Cowen's speech brings up two key factors in the long-term outlook. I want to resurrect a table from one of my classic essays, called The Great Race. Four ScenariosMoore's Law FailsMoore's Law SucceedsMedicare is ReformedLow... MORE

Size, Scope, and Fragility

Political Economy
Arnold Kling
Andrew Haldane writes, Complex control of a complex system is a recipe for confusion at best, catastrophe at worst. Complex control adds, not subtracts, from the Knightian uncertainty problem. The US constitution is four pages long. The recently-tabled Dodd Bill... MORE

Group Status and Liberty

Political Economy
Arnold Kling
David Boaz wrote, we'd better stop talking as if we think the straight white male perspective is the only one that matters. For the past 70 years or so conservatives have opposed the demands for equal respect and equal rights... MORE

What Nudge Really Says

Behavioral Economics and Rationality
David Henderson
Co-bloggers Arnold and Bryan have posted recently on their view that "libertarian paternalism" would be more attractive if its advocates pushed to replace existing paternalist policies with softer "nudging" paternalist policies. Scott Sumner has said something similar. But as I... MORE

Unable to Simplify

Institutional Economics
Arnold Kling
Clay Shirky writes, Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn't these societies just re-tool in less complex ways? The answer Tainter gives is... MORE

My Question for Nudgers

Behavioral Economics and Rationality
Arnold Kling
Richard Thaler writes, we advocate policies that maintain people's freedom to choose at as low a cost as possible. My question is this: why is it that soft paternalism is always applied to areas where the nudgers want more government... MORE

Comments on Two Columns

Political Economy
Arnold Kling
Peter Berkowitz writes, Given the importance that the French Constitution attaches to liberty and the seriousness of the threat to peace and public order posed by the large, restive and nonassimilating portion of its Muslim population, the veil represents a... 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

Biggest Flaw in Labor Theory of Value

Political Economy
David Henderson
On his blog today, Tyler Cowen responds to the question, "What is the biggest flaw in the labor theory of value?" Tyler does list some sophisticated flaws that have to do with capital and other inputs, but here's my candidate:... MORE

Friday's Rant

Politics and Economics
Arnold Kling
I need to stop this. I don't want to turn into the Paul Krugman of the right.... MORE

If a Libertarian Gave a Sermon for Passover

Political Economy
Arnold Kling
As we approach Passover in 2010, many people are unemployed. But in a free society, government does not create jobs. Pharoah created jobs for us. Moses led us away from those jobs. Even though those jobs helped to complete public... MORE

Miscellaneous

Political Economy
Arnold Kling
My talk in North Carolina. During the Q&A, I get attacked from the right. Michael Elsby, Bart Hobijn, and Ayseful Sahin discuss what is happening the labor market in the current recession. Recommended. Anne Applebaum argues that now that health... MORE

David Brooks Provokes

Finance: stocks, options, etc.
Arnold Kling
with this: The free-market revolution didn't create the pluralistic decentralized economy. It created a centralized financial monoculture, which requires a gigantic government to audit its activities. Yesterday, during my talk at Campbell University, I also used the term monoculture to... MORE

The Case for Competitive Government

Political Economy
Arnold Kling
Tim Harford writes, What is missing is the political demand for tests of what really works. Too many policies on education, welfare and criminal justice are just so much homeopathy: cute-sounding stories about what works leaning more on faith than... MORE

Markets vs. Government

Upcoming Events
Arnold Kling
Again, this will be the subject of my talk on Thursday evening March 18 at Campbell University. It is also the subject of this podcast featuring Don Boudreaux and Russ Roberts. Boudreaux says that he does not vote, which I... MORE

Accounting Standards

Finance: stocks, options, etc.
Arnold Kling
I have been following, but not writing about the Lehman accounting scandal. Simon Johnson brings up a past scandal (Enron) and a future scandal (Greece). He points out the role of investment banks in designing and/or executing transactions that are... MORE

Liberals and Markets

Political Economy
Arnold Kling
Will Wilkinson writes, libertarians are liberals who like markets. This is a succinct way of suggesting that libertarians and liberals share similar personalities and outlooks. There is just an intellectual difference concerning markets and government. I will be speaking on... MORE

Great Minds Think...Somewhat Differently

Political Economy
Arnold Kling
Ethan Porter writes, Staunch environmentalist? Send some money to the EPA. Believe we need an infrastructure upgrade? Direct your funds to the Department of Transportation. Think we need to ramp up our national defense? Send extra tax dollars to the... MORE

From Poverty to Prosperity Watch

Economic History
Arnold Kling
I am interviewed on Australian radio. Also, Don Boudreaux recommends this talk by Stephen Davies. I assume that the "surprising prediction" to which Don refers is that young people today will live hundreds of years. I have been making that... MORE

I could be wrong, but it seems like one of left-libertarians' main goals is to salvage populism.  Most libertarians condemn the public's anti-market reflexes.  Left-libertarians reply, in essence, is: "It's only natural for the public to condemn the unholy alliance... MORE

Opting for Enslavement

Political Economy
Arnold Kling
One of the intriguing short chapters in Africa: A Biography of the Continent is called, with irony, "Merrie Africa." It discusses the issue of slavery within Africa. A history of slavery in Africa claims that between 30 and 60 percent... MORE

sentences to ponder

Political Economy
Arnold Kling
Will Wilkinson writes, Average self-reported life satisfaction rose with GDP per capita over the last several decades in almost all wealthy liberal democracies, but not so much in the U.S. The idea that the unusual composition of U.S. government spending... MORE

A Non-State Within a State?

Political Economy
Arnold Kling
Adam Knott writes, Panarchist society could emerge and proliferate at the same time current society is in place. The community I referred to above would not directly change the coerced wage and trade agreement that we might be subjected to... MORE

The Right of Exit

Political Economy
Arnold Kling
Michael Gibson writes, Is a right of exit compatible with our obligations either to community or to a territorial system of governance? This is an excellent question, because it gets to the heart of whether competitive government is a practical... MORE

Bipartisanship or Irreconcilable Differences?

Politics and Economics
Arnold Kling
Pundits bemoan the absence of bipartisanship. Implicitly, they believe that bipartisanship is necessary and sufficient to solve public policy problems. Another possibility is that our politics today actually involves irreconcilable differences. One picture of American politics is that only about... MORE

Recommended

Behavioral Economics and Rationality
Arnold Kling
These are posts that I recommend, without providing excerpts. Robin Hanson offers an illustration of the theory that prestige-status is less threatening to people than dominance-status. So do people perceive the wealth of Bill Gates as conferring prestige-status (not so... MORE

More Jeffrey Friedman

Finance: stocks, options, etc.
Arnold Kling
Here, he writes, Competition puts capitalists' different motives, like their different ideas, to the acid test of consumer satisfaction. This tends to give consumers what they want--or at least what they think they want--and it diversifies a capitalist society's investment... MORE

Knowledge-Power Discrepancy

Finance: stocks, options, etc.
Arnold Kling
Jeffrey Friedman writes, What I am calling social democracy is, in its form, very different from socialism. Under social democracy, laws and regulations are issued piecemeal, as flexible responses to the side effects of progress -- social and economic problems... MORE

The Progressive Tantrum

Political Economy
Arnold Kling
James Surowiecki writes, People want the government to help provide jobs, but they also want it to cut the deficit. His point is that people are inconsistent, so the government just has to ignore them and run a deficit to... MORE

Fantasy Federalism

Political Economy
Arnold Kling
This is going to be a random daydream sort of post. It beats watching Super Bowl pregame or doing pointless snow-shoveling (you loaded 16 tons, what do you get? Another day older and deeper in debt). I want the U.S.... MORE

Morning Commentary

Political Economy
Arnold Kling
1. The New York Times editorializes, Here is an unpopular but undeniable fact of life: When private sector demand is weak, the federal government must serve as the spender of last resort. When the New York Times entitles an editorial... MORE

Morning Disturbances

Political Economy
Arnold Kling
From the Washington Post 1. In Finance The Federal Reserve would consider reopening its program to support the mortgage market if interest rates spiked or the economy showed new weakness, Federal Reserve Bank of New York President William C. Dudley... MORE

Libertarian Schisms

Political Economy
Arnold Kling
I started with a post by Jim Manzi, worked back to Jonah Goldberg, and landed on an article by Brian Doherty, about some newly-released writings from Murray Rothbard. The uneasy relationship between Rothbard and Hayek is echoed to this day,... MORE

One-Party State Watch

Political Economy
Arnold Kling
Steven Greenhut writes, The United States had 2.3 state and local government employees per 100 citizens in 1946 and has 6.5 state and local government employees per 100 citizens now. In 1947, Hodges writes, 78 percent of the national income... MORE

Why the U.S. is Ungovernable

Political Economy
Arnold Kling
It's the latest meme. The U.S. is ungovernable, because of a) Senate procedures b) Republican obstructionism c) polarization d) special interests etc. I've seen it from Marc Ambinder, Steven Pearlstein, and others. I'm too lazy to copy links, but my... MORE

Recommended

Business Economics
Arnold Kling
Ben Casnocha dug up a James Fallows piece from 1985 on entrepreneurialism vs. credentialism. Fallows writes, Nowhere is the tension between the two cultures, the entrepreneurial and the professional, more evident at the moment than in American business. At just... MORE

Progressive Corporatism Explained

Political Economy
Arnold Kling
Timothy P. Carney never uses that exact term, but he explains it well in an interview with Nick Gillespie. Well worth a viewing. Near the end, the question comes up about whether "libertarian populism" is an antidote. I think that... MORE

Big Banks

Political Economy
Arnold Kling
Tyler Cowen writes, Obama proposes a new banking plan and everyone is commenting for instance here is Simon Johnson. The plan seems to involve limits on bank size and limits on proprietary trading. In principle, I am against attempts by... MORE

The Case for Competitive Government

Political Economy
Arnold Kling
Scott Sumner writes, The recent election of Scott Brown is just one more opportunity to ruminate over the excessive size of the US government. In earlier posts I have argued that there are big diseconomies of scale in governance. Small... MORE

Morning Commentary

Macroeconomics
Arnold Kling
Daniel Little discusses Seeing Like a State, which is something of a cult classic among some Masonomists. Thanks to Mark Thoma for the pointer. Well worth a read. Bill Woolsey says that it is obvious why we had a such... MORE

George H. Nash writes, Traditionally, American conservatives have been Eurocentric in their political and cultural discourse, but how can conservatives convincingly articulate this perspective to non-European immigrants and to millions of superficially educated young Americans, and at a time when... MORE

Two Follow-Ups

Political Economy
Arnold Kling
I want to respond to two comments on previous blog posts. On the issue that I call "market failure," meaning the ability of incumbents to block trial-and-error innovation, I mentioned education. It turns out that Michael Strong has a nice... MORE

Market Failure

Political Economy
Arnold Kling
I want to propose a new definition of market failure. For me, market failure exists to the extent that innovation is blocked by incumbents. If innovators can succeed by out-competing incumbents, then the market is working. If incumbents have a... MORE

The Moral Rot Factor

Political Economy
Arnold Kling
Bryan has brought up the issue of economics textbooks that over-rated the Soviet Union's economic prospects. For some reason, Brad DeLong feels obliged to go after Bryan about this. My view on the Soviet Union is that it collapsed because... MORE

Two Scott Sumner Posts

Macroeconomics
Arnold Kling
First I am so used to NGDP targeting be attacked from the right that I forget that it has no supporters on the left. Recall that conservatives usually support inflation or price level targeting, and think that NGDP targeting is... MORE

What I've Been Reading

Books: Reviews and Suggested Readings
Arnold Kling
Yet another book on World War I. David Fromkin's Europe's Last Summer. His thesis is that the assassination of Archduke Ferdinand was a pretext for two wars that had been previously planned. One was an Austrian war against Serbia, and... MORE

Rules and Culture

Growth: Causal Factors
Arnold Kling
Tim Kane listens to a talk by Paul Romer, and muses, Romer forces us to accept that rules are very difficult to change. Nations in particular, even when its leaders recognize the need for rules to change, have difficulty making... MORE

TeaPartarians?

Political Economy
Arnold Kling
The Bush Administration, particularly in its final year, discredited the Republican Party as a proponent of free markets. What should come next? One idea, promoted at Cato by Brink Lindsey and Will Wilkinson, is liberaltarianism. The idea is to approach... MORE

Intellectuals and Society

Books: Reviews and Suggested Readings
Arnold Kling
It seems to be the theme du jour. The interview with Thomas Sowell continues. At one point, Sowell notes that we cannot blame Larry Summers for policies, because politicians are selecting the policies. I think that Bryan Caplan would say... MORE

When Experts Fail

Central Planning vs. Local Knowledge
Arnold Kling
David Brooks writes, For better or worse, over the past 50 years we have concentrated authority in centralized agencies and reduced the role of decentralized citizen action. We've done this in many spheres of life. Maybe that's wise, maybe it's... MORE

Comes the Revolution...

Political Economy
Arnold Kling
Glenn Reynolds discusses using charitable donations to fund the now-killed D.C. school voucher program. In Unchecked and Unbalanced, one of the reforms I propose is to allow citizens rather than Congress to allocate some of their tax dollars to their... MORE

Manzi's Manifesto, continued

Political Economy
Arnold Kling
Responding to my question about the meaning of the term "social cohesion," he writes, the widespread and irrational willingness and propensity to sometimes and to some extent sacrifice narrowly-defined rational self-interest to the needs of a greater collective, and the... MORE

The Perpetual Foreclosure Crisis, Continued

Finance: stocks, options, etc.
Arnold Kling
Peter J. Wallison writes, On Christmas Eve, when most Americans' minds were on other things, the Treasury Department announced that it was removing the $400 billion cap from what the administration believes will be necessary to keep Fannie Mae and... MORE

Various Follow-ups

Growth: Causal Factors
Arnold Kling
These relate to recent discussions on this blog. 1. Clifford Winston and Robert Crandall on market failure and government failure, from Forbes last October. 2. A review of an optimistic book by Gregg Easterbrook. Mark Perry ties this back to... MORE

Market Failure and Government Failure, Again

Political Economy
Arnold Kling
In the Christian Science Monitor, Nick Schulz and I write, When innovation-driven excesses and imbalances are recognized in the marketplace, the system can correct itself quickly. This is less the case when government policy failure occurs. The theme is that... MORE

Market Failure and Government Failure

Regulation and Subsidies
Arnold Kling
That is the topic of a self-recommending podcast in which Russ Roberts interviews Clifford Winston. Actually, although I have not had time to listen (I am on travel), reading over the notes on the podcast highlights this looks like one... MORE

A Dedicated User of the Harvard-Goldman Filter

Finance: stocks, options, etc.
Arnold Kling
The latest edition of What Went Wrong is up. This is a series of video Q&A's with various experts on the financial crisis. So far, I have been generally disappointed. In the recent episodes, Glenn Hubbard says nothing shocking. Bill... MORE

Time Consistency

Behavioral Economics and Rationality
Arnold Kling
Time consistency is one of those terms that economists throw around, and it has come up several times recently on this blog. It might be worth defining/explaining. The situation arises when someone makes a commitment to take an action in... MORE

Three Links from Mark Thoma

Finance: stocks, options, etc.
Arnold Kling
Chosen from among those here. 1. Gretchen Morgenson and Louise Story write, authorities appear to be looking at whether securities laws or rules of fair dealing were violated by firms that created and sold these mortgage-linked debt instruments and then... MORE

The Harvard-Goldman Filter

Finance: stocks, options, etc.
Arnold Kling
My position on breaking up banks generates questions from two groups. Libertarians ask, how can I justify breaking up private sector institutions? Naive liberals ask, why is this policy not embraced by our political leaders? My answer to both relates... MORE

David Cutler on Health Care Policy

Economics of Health Care
Arnold Kling
Steven Landsburg writes, My gut instincts point me in a different direction that Professor Cutler's do, but I think we agree on what the big problems are and on what would count as solutions. I think almost all economists would... MORE

Anti-Masonomics

Political Economy
Arnold Kling
Don Boudreaux writes, I'd like to ask Prof. Krugman why he's so keen to entrust vastly more resources and power to an agency that, even when controlled by the political party that shares his values and worldview, is "extremely dysfunctional."... MORE

Do You Like Science Fiction?

Books: Reviews and Suggested Readings
Arnold Kling
Reihan Salam thinks that Book 2 falls in that general category. In Unchecked and Unbalanced, Arnold Kling offers a trenchant libertarian critique of the policies that led to the financial crisis. His basic take is that as our society has... MORE

Trial and Error

Economics of Health Care
Arnold Kling
Atul Gawande says something I believe to be true and something I believe to be false. What I believe to be true: To figure out how to transform medical communities, with all their diversity and complexity, is going to involve... MORE

Book 1 and Book 2 Watch

Institutional Economics
Arnold Kling
Paul Gregory writes, China and russia in the 1980s offer a unique case study in why some reforms work and others do not. The contrast refutes the notion that a strong, perhaps totalitarian state, is required for successful reform. In... MORE

Wesley Mouch Watch

Political Economy
Arnold Kling
Finreg 21 reports, Regulators will be bringing pressure on banks to make greater efforts to serve poorer communities after an FDIC survey showed that more than a quarter of U.S. households have little or no financial activity through banks. So,... MORE

I Hate This Story

Energy, Environment, Resources
Arnold Kling
I've written about it before, but Wired reminds me, Startup companies that enjoy DOE support, most notably Tesla Motors and Fisker Automotive, have an extraordinary advantage over potential competitors since they have secured access to capital on very cheap terms.... MORE

Morning Commentary, Hubris Edition

Political Economy
Arnold Kling
1. Robert Kagan writes The foreign policy establishment and intellectual world are much the same. They fully supported intervention in Vietnam, mostly supported intervention in Iraq and fully supported the war in Afghanistan -- until the wars got hard, or... MORE

Douglass North on Afghanistan

Political Economy
Arnold Kling
Nobel Laureate Douglass North is not a blogger or an op-ed columnist. But I can guess at his reaction to President Obama's speech last night. The President said, We'll support Afghan ministries, governors, and local leaders that combat corruption and... MORE

Fortune Encyclopedia of Economics in Alexandria

Political Economy
David Henderson
The predecessor to The Concise Encyclopedia of Economics was The Fortune Encyclopedia of Economics. I received the following e-mail from Mark Skousen, just back from a trip to Greece, Turkey, Israel, Egypt, and Italy (edited for space): I lasted visited... MORE

The Party of No

Books: Reviews and Suggested Readings
Arnold Kling
The Washington Post reports, a new Washington Post poll also reveals deep dissatisfaction among GOP voters with the party's leadership as well as ideological and generational differences that may prove big obstacles to the party's plans for reclaiming power. The... MORE

Book 1, Book 2

Books: Reviews and Suggested Readings
Arnold Kling
Tyler Cowen recently said, if everyone read the book and was persuaded by it, would anything change for the better? An author should aim to write a book which matters. My latest book, Unchecked and Unbalanced is out. We might... MORE

Reverse Stimulus

Growth: Causal Factors
Arnold Kling
Jerry O'Driscoll writes there is a name for this economic policy: corporatism. Big government favors selected big business and rewards big labor as a junior partner. It's not socialism, but the economic component of a fascist political program. Credit administered... MORE

The Government/Slavery Analogy

Books: Reviews and Suggested Readings
Arnold Kling
Reacting to my recent post on the analogy Robert Higgs drew between libertarianism and abolitionism, a commenter wrote, Hans Hoppe, hardcore libertarian, once described what may be the crucial difference between a democratic state and slavery: the latter was private... MORE

Unchecked and Unbalanced Watch

Books: Reviews and Suggested Readings
Arnold Kling
Robert Higgs writes, Slavery existed for thousands of years, in all sorts of societies and all parts of the world. To imagine human social life without it required an extraordinary effort. Yet, from time to time, eccentrics emerged to oppose... MORE

Unchecked and Unbalanced Watch

Political Economy
Arnold Kling
Michael Strong talks about special economic zones as a way of creating competition in governance. The idea seems similar to Paul Romer's concept of charter cities. Strong is optimistic that the state will "wither away" (as Marx would put it)... MORE

The Great War

Economic History
Arnold Kling
John Quiggin writes, The names of Asquith, Bethmann-Hollweg, Berchtold and Poincare are barely remembered, yet on any reasonable accounting they belong among the great criminals of history. Not only did they create the conditions for war, and rush (eagerly in... MORE

Unchecked and Unbalanced Watch

Political Economy
Arnold Kling
John Kay writes, Control of rent-seeking requires decentralisation of economic power. These policies involve limits on the economic role of the state; constraints on the concentration of economic power in large business; constant vigilance at the boundaries between government and... MORE

Status Competition

Political Economy
Arnold Kling
Gordon Wood, in Empire of Liberty, writes, After all, wealth, compared to birth, breeding, ethnicity, family heritage, gentility, even education, is the least humiliating means by which one person can claim superiority over another; and it is the one most... MORE

Paul Collier on Democracy

Political Economy
Arnold Kling
He writes, What incumbents fear most is not losing an election, but being overthrown by their own military. When the international community can protect a government from such a threat, it should do so, conditional upon the election being properly... MORE

Book Update

Books: Reviews and Suggested Readings
Arnold Kling
It looks like I will have two books come out in the same month. The first one will be out in two weeks, but you cannot pre-order it on Amazon. The second one will be out in three weeks, and... MORE

Singapore is widely regarded as a dictatorship.  Even the contrarian Gordon Tullock joins in the chorus; in Autocracy, he remarks that, "The dominant form of autocracy has been the non-totalitarian type presented by Franco, Lee of Singapore, or Mobutu of... MORE

Outsiders

Books: Reviews and Suggested Readings
Arnold Kling
Am I too weak to resist financial crisis porn? The latest example of my shameful indulgence is The Greatest Trade Ever, by Gregory Zuckerman. As with Andrew Ross Sorkin's Too Big to Fail, I could not put it down. Even... MORE

Changing People's Minds

Behavioral Economics and Rationality
Arnold Kling
What causes people to change their minds? On this blog, I have argued that people do not change their minds on ideological issues. I have argued that econometric regression results typically do not change people's minds. Why is that?... MORE

Robin Hanson on Ethics

Behavioral Economics and Rationality
Arnold Kling
He writes, Humans overwhelmed by the social complexities of helping a bum nearby think they know enough about societies far away, so that ethics becomes the main concern there... Beware the easy confidence of advising worlds far from your knowledge... MORE

The Pay Czar's Diversion

Political Economy
Arnold Kling
David Brooks writes, Ninety-four percent of college professors believe they are above average teachers, and 90 percent of drivers believe they are above average behind the wheel. Researchers Paul J.H. Schoemaker and J. Edward Russo gave computer executives quizzes on... MORE

The Longstanding Debate over National Defense

Political Economy
Arnold Kling
When Elbridge Gerry proposed in the [Constitutional] Convention that no standing army exceed three thousand men, Washington is supposed to have made a countermotion that "no foreign enemy should invade the United States at any time, with more than... MORE

Chauffered America, Strip Mall America

Books: Reviews and Suggested Readings
Arnold Kling
"Hold on, hold on," [Ruth] Porat said in disbelief. "You're calling me on a Sunday night saying that we just spent the entire weekend on Lehman and now we have this [AIG]? How the [foul language] did we spend... MORE

What I'm Reading

Books: Reviews and Suggested Readings
Arnold Kling
Empire of Liberty, by Gordon Wood. Part of the Oxford series on American history, it focuses on the period 1789-1815. So far, I find myself thinking about it in the context of the Cowen-Hanson theory of political behavior and also... MORE

Irony in the News

Political Economy
Arnold Kling
Car Czar says GM mismanaged. Watchdo excoriates execution of TARP. Of course, in the case of GM, the CEO was fired.... MORE

Health Reform and Vietnam

Political Economy
Arnold Kling
Michael Cannon writes, Massachusetts also demonstrates that compulsory health insurance enables, and ultimately requires, politicians and government bureaus to control nearly all aspects of health care and medical practice. Lately, I've been thinking about Vietnam analogies. For example, mandatory health... MORE

Political Dispositions

Political Economy
Arnold Kling
Daniel B. Klein takes a shot at something I have tried to do, namely, sort out the dispositions of progressives, conservatives, and libertarians. The configuration presupposed by social-justice leftists and social democrats generally is that all resources in society are... MORE

Populism, Left and Right

Finance: stocks, options, etc.
Arnold Kling
Shane Greenstein writes, Russ Roberts is normally a free market economist, but in his essay he sounds like an old fashioned populist. When a firm does something to turn Russell Roberts into a populist then -- perhaps -- something is... MORE

Now I Believe the Insurance Industry Study

Economics of Health Care
Arnold Kling
The Washington Post reports, An internal industry study released earlier this week found that the Senate reform bill would cause premiums to rise sharply, but the report's findings have been widely disputed... Pelosi said the House may adopt a Senate... MORE

Conservative != Libertarian

Political Economy
Arnold Kling
Daniel Klein and Jason Briggeman find that leading conservative magazines are not libertarian. This is no surprise. Read Jordan J. Ballor. He cites an essay by Russell Kirk. This essay leaves no doubt about the distinction between Kirk's conservatism and... MORE

Wesley Mouch Award

Central Planning vs. Local Knowledge
Arnold Kling
Biofuels digest reports, In Washington, the US Secretary of Energy, Dr. Steven Chu, broke with Obama administration renewable energy policy, telling stunned alternative energy developers at a recent meeting on alternative fuels that "if it were up to me, I... MORE

Politics is Not About Policy

Political Economy
Arnold Kling
David Harsanyi improves on David Broooks. Mr. Hoover knows everything. He attended a high-brow graduate school and worked as a Senate aide before becoming a policy expert. (He even pretends to understand Jeremy Bentham.) He is a man who craves... MORE

Business vs. Markets

Political Economy
Arnold Kling
This post is in part inspired by the "sentence to ponder" quoted by Tyler Cowen. Consider the following matrix: Pro-BusinessAnti-BusinessPro-MarketAnti-Market The point is that there really are four separate categories, not just the two pro's and the two anti's. On... MORE

Unchecked and Unbalanced Teaser

Books: Reviews and Suggested Readings
Arnold Kling
Cato's Caleb Brown and I recorded a podcast about Unchecked and Unbalanced, which I gather will appear in late November. If you listen for the eight minutes or so, I think you will get a rough sense of the issues... MORE

Unchecked and Unbalanced Watch

Behavioral Economics and Rationality
Arnold Kling
One of the themes in the second of my forthcoming books is that power is becoming concentrated while knowledge is becoming specialized. David Carr muses about how hard it is to know everything nowadays. In terms of what I call... MORE

Questions About Financial Crises

Finance: stocks, options, etc.
Arnold Kling
Neither a borrower nor a lender be. That's the way I feel after reading This Time is Different, by Carmen M. Reinhart and Kenneth S. Rogoff. This is certainly one of the must-read books of the year. Some thoughts after... MORE

How to Kill Entrepreneurship

Business Economics
Arnold Kling
Make it an exercise in obtaining government money. Fisker Automotive, a private company based in Irvine, Calif., has received a $529 million loan from a Department of Energy program designed to fund the development of alternative vehicles. This was announced... MORE

In previous years, I've taught graduate Public Finance I.  In designing the course, I treated "public finance" as a synonym for "public economics" or "economics of government."  So while I spent several weeks discussing bread-and-butter public finance topics like the... MORE

Friday Afternoon Miscellany

Political Economy
Arnold Kling
Keith Hennessey has an interesting question. What thought leader most clearly and effectively presents points of view with which you frequently strongly disagree? He proposes that awards be given. Would Tyrone be considered eligible? Presumably, my nominees have to be... MORE

Experts and Government

Political Economy
Arnold Kling
An essay in the The Australian touches on issues that I often write about on this blog. The tendency to regard public opinion as the prisoner of irrationality informed the attitude of the elite towards the public display of emotion... MORE

Banana Republic Watch

Political Economy
Arnold Kling
Who wrote this? Answer below the fold. The mystery author writes, The finance sector's increasing concentration and growing political muscle have undermined the traditional American understanding of the difference between free markets and big business. This means not only that... MORE

Boo Alan Blinder

Political Economy
Arnold Kling
He writes, an audit of its monetary policies by the GAO -- which, remember, works for Congress -- could easily develop into something quite dangerous. Here is a not-so-unlikely hypothetical: sometime in 2010, the Fed, wanting to avoid inflation, will... MORE

Spontaneous Order Denied

Economic History
Arnold Kling
Doug Rushkoff says that our capitalist society is neither spontaneous nor an order. He thinks it came about because of some decisions made by monarchs in the 13th century. The first innovation was to centralize currency. What better way for... MORE

Mortgage Markets: The Public Option

Finance: stocks, options, etc.
Arnold Kling
The Washington Post reports, Only one lender of consequence remains: the federal government...nearly 90 percent of all new home loans are funded or guaranteed by taxpayers...Government officials generally agree that it would be better for private lenders to resume their... MORE

What Do Conservatives Believe?

Political Economy
Arnold Kling
Tyler Cowen draws up a list. I liked his last point: Responsibility is a more important value than either liberty or equality. The other night, we had a dinner party where my wife and I were the only ones who... MORE

Identity Politics and Phobias

Political Economy
Arnold Kling
In Commentary Magazine, David Wolpe writes, Podhoretz's book is meant to explain why Jews do not vote their self-interest. I would say it is because they vote their self-conception, which is a very different thing. Jews identify with those who... MORE

Mencius Moldbug, Sighted but Uncited

Political Economy
Arnold Kling
Edward Stringham writes, In an alternative conception of a non-government monopoly system, which is composed of vertically integrated proprietary communities that provide law, each region may include only one law enforcer but one that is private and motivated by... MORE

Tyrone on the Bailouts

Political Economy
Arnold Kling
Tyler Cowen (or perhaps his evil twin) writes, So if you're "opposed to financial bailouts," as a libertarian, you're not for the market. You're saying that one scheme for governmental disposition is better than another. Of course you are entitled... MORE

If the Median Economist Set Health Care Policy

Economics of Health Care
Arnold Kling
Bryan writes, Contrary to Arnold, I think it would be a vast improvement over the status quo. I've talked to plenty of left-wing economists about this topic. On balance, their views are much more reasonable than the median non-economist's. The... MORE

Is Bernanke a Hu Jintao?

Political Economy
Bryan Caplan
Scott Sumner has repeatedly attacked Bernanke for his failure to base his monetary policy on his monetary economics.  But yesterday he argued that leaders in non-totalitarian countries don't make much difference.  Unlike Mao, current Chinese dictator Hu Jintao couldn't start... MORE

Why I am not a Caplanian

Economic Education
Arnold Kling
From Bryan's talk in Sweden. With rational voters, policy-makers have to do whatever the public wants; they can't "make a difference." With irrational voters, in contrast, policy-makers may be able to give the public the policies that it needs, rather... MORE

Why I am Not a Republican, Continued

Economics of Health Care
Arnold Kling
Jeff Miron explains, Medicare should be reduced or eliminated. Opposing government health insurance by defending government health insurance is disingenuous, at best, and utlimately counterproductive. Read the whole thing. Meanwhile, Nick Gillespie writes about the late Massachusetts Senator, In an... MORE

Unchecked and Unbalanced Watch

Political Economy
Arnold Kling
Joel Kotkin writes, American cities are at a critical moment. Our competitive, commercial urban tradition certainly has its flaws, but it also has produced the advanced world's most dynamic roster of modern cities and regions. Ceding the power of urban... MORE

Will the United States Default?

Fiscal Policy
Arnold Kling
Someone asked for my comments on the Jeffrey Rogers Hummel piece. I think that the U.S. government would enact a wealth tax rather than default on its debt. Other countries that have defaulted have not had the option of enacting... MORE

Status, Greed, and Power

Behavioral Economics and Rationality
Arnold Kling
Matt Yglesias wonders why politicians are not more strongly motivated by higher ideals. Selling the public good down the river to bolster your re-election chances isn't like stealing a loaf of bread to feed your starving children. The welfare rolls... MORE

Market Failure or Market Success?

Political Economy
David Henderson
(I got back from Minaki, Ontario last night.) The textbook I use for a Cost/Benefit Analysis course I teach is Public Finance, 8th edition, by Harvey S. Rosen and Ted Gayer. There's much good in that book. I particularly like... MORE

Who Likes Democracy?

Political Economy
Arnold Kling
Alex Tabarrok finds a screed by Bill Maher on the ignorance of voters. People bitch and moan about taxes and spending, but they have no idea what their government spends money on. The average voter thinks foreign aid consumes 24%... MORE

Exit, Voice, and Freedom: An Example

Political Economy
Arnold Kling
Following up on this post and this one, let me try to offer a hypothetical example of freedom without democracy. Maybe Will Wilkinson can comment on the example in a way that sheds light on what he is thinking, because... MORE

Exit, Voice, and Real Freedom, Again

Political Economy
Arnold Kling
My impassioned post draws a response from Will Wilkinson that is self-refuting. He writes, I've noticed that Arnold complains a lot about Montgomery Country, MD, but as far as I know hasn't moved. In other words, he would argue that... MORE

Banana Republic Watch

Political Economy
Arnold Kling
William D. Cohan gives the play-by-play of the Merrill-BofA-government saga. Lewis said Bernanke told him, "We view you as strong and having acted appropriately in difficult circumstances ... We'll make sure you continue that way ... We want to do... MORE

What is Real Freedom?

Political Economy
Arnold Kling
Will Wilkinson writes, What the example of Hong Kong communicates is that authoritarian, illiberal, undemocratic regimes need not feel threatened by semi-independent city states with working "liberal" market institutions. It says to rulers that their countries can get rich without... MORE

Progressivism--My Most Generous Interpretation

Political Economy
Arnold Kling
Inspired by Tyler Cowen, let me offer my most generous characterization of progressivism: Progressives are the proud heirs to a tradition of experiments in public policy that brought about significant social improvements. Its antecedents go back before the Civil War... MORE

One-Party State Watch

Political Economy
Arnold Kling
Mark Thoma highlights a story that I had missed--a bargain between the pharmaceutical industry and the Obama Administration on health care reform.... MORE

Bruno Leoni vs. Paul Romer

Institutional Economics
Arnold Kling
In 1961, Leoni wrote, In reality, the law is something which is not pre-fabricated in some specially-designated place, by some specially-designated producer and with some pre-established technique. In much the same way, no followers of the artificial languages such as... MORE

Do Progressives Believe This?

Political Economy
Arnold Kling
I am going to write down what I think progressives believe. If I'm creating a straw man, then y'all can correct me where you think I need correcting. You believe that: 1. Unfettered free markets nearly always produce sub-optimal outcomes.... MORE

Are Progressives Totalitarian?

Political Economy
Arnold Kling
In comments on this post, SydB argues that I have created a straw-man characterization of Progressivism when I suggest that the Progressive mindset sees a technocratic solution to every problem. He writes, In Mr Kling's analysis, L's are associated with... MORE

Think of three points on an ideological triangle: 1. Point L, where you believe that markets are effective at processing information and solving problems. This position is to take a radically pro-market view, and to let markets fix their own... MORE

Various Links

Monetary Policy
Arnold Kling
I've been away, mostly in Prague (where the big economic question is why so many older buildings have so many fancy details. My answer is that there must have been a very unequal distribution of wealth, so that rich folks... MORE

For Business, Against Capitalism

Political Economy
Arnold Kling
Derek Thompson writes, I get the distinct sense from the transcript that [President Obama is] a bit miffed by the accusations that he's anti-business. He emphasizes (possibly even exaggerates) the "great political expense" with which he bailed out the banks.... MORE

Wesley Mouch watch

Political Economy
Arnold Kling
He is going to take care of executive pay. Also, He is going to clamp down on oil speculators. After all, we would not want the private sector to cause energy prices to rise and to promote conservation. Only Wesley... MORE

Violence, Anarchy, and the State

Political Economy
Arnold Kling
Steven Pinker writes the 17th-century philosopher Thomas Hobbes got it right. Life in a state of nature is nasty, brutish, and short--not because of a primal thirst for blood but because of the inescapable logic of anarchy. Any beings with... MORE

Should the Fed be Audited?

Finance: stocks, options, etc.
Arnold Kling
I want to make a few comments on this issue, which David has touched on On balance, I think I would support auditing the Fed. 1. The conservative case against auditing the Fed is that it will reduce the Fed's... MORE

Unchecked and Unbalanced Watch

Books: Reviews and Suggested Readings
Arnold Kling
Will Chamberlain writes (Will, not Wilt), Romer, clearly having been influenced by our ideas about bloodless instability, argues that we need to be able to create new countries, without the use of military force, in order to gain access to... MORE

From Poverty to Prosperity Watch

Political Economy
Arnold Kling
I should hold off on plugging the book until it's closer to publication date, but reading it over gets me really excited. We include interviews with a number of famous economists, and there are little nuggets of insight buried in... MORE

One-Party State Watch

Political Economy
Arnold Kling
Simon Johnson thinks that CIT, a troubled lender, will not be bailed out. Traditionally, CIT provided vanilla loans to small and medium-sized business. "But under its current chief executive, Jeffrey M. Peek, a well-liked Wall Street veteran who lost out... MORE

Strands of Libertarianism

Political Economy
Arnold Kling
Tyler Cowen lists five major strands, taking a swipe at one. 3. Mises Institute nationalism. Gold standard, a priori reasoning, monetary apocalypse, and suspicious of immigration because maybe private landowners would not have let those people into their living rooms.... MORE

Robert McNamara

Political Economy
Arnold Kling
Today's Washington Post has six op-ed pieces. Three are on Sarah Palin, who resigned as governor of Alaska the other day. The other three are on Robert McNamara, who died yesterday. Palin is known for hunting moose. McNamara is known... MORE

Caplan vs. Sowell

Books: Reviews and Suggested Readings
Arnold Kling
A commenter points to Bryan's critique of A Conflict of Visions, which makes a number of good points. Bryan concludes, What really puzzles me is why Sowell did not try a much simpler typology. Why not simply distinguish between advocates... MORE

Sowell's A Conflict of Visions

Books: Reviews and Suggested Readings
Arnold Kling
My excuse for not reading A Conflict of Visions by Thomas Sowell was that I had already read a fair amount of his other work, and how much new could he have to say? But John Baden pressed me to... MORE

Social Science and Public Policy

Political Economy
Arnold Kling
How do economists and other social scientists influence public policy? Yesterday, I recommended Jeffrey Friedman's article on the financial crisis. Its theme is regulatory hubris, and Friedman disparages "economism," which might be described as a belief that wise economists can... MORE

Virtual Secession

Political Economy
Arnold Kling
Patri Friedman launches secession week, a discussion of secession. In one of my forthcoming books, Unchecked and Unbalanced, I discuss a number of mechanisms for limiting the power of government. You can think of these as mechanisms for achieving virtual... MORE

One-Party State watch

Political Economy
Arnold Kling
Dan Balz summarizes the grim demographic statistics. He quotes Robert Lang of Virginia Tech. "There's just not enough rural folks and small-city people left in America." For Republicans, the most hopeful statistic is this: Democrats lost white college graduates by... MORE

One-Party State Watch

Political Economy
Arnold Kling
Newt Gingrich connects some dots. In 2008 alone, the UAW gave $4,161,567 to the Democratic Party, including Barack Obama. In return, the UAW received 55 percent of Chrysler and 17.5 percent of GM, plus billions of dollars.... MORE

Inequality of Political Power

Political Economy
Arnold Kling
It's hard to decide what to excerpt from Will Wilkinson's article. A fresh-faced 31-year-old, Deese dropped out of Yale Law School last year to work for Hillary Clinton's presidential campaign. When Clinton sank, Deese skipped over to the winning ship,... MORE

One-Party State Watch

Politics and Economics
Arnold Kling
The Bradley Symposium transcript is now available. Mitch Daniels (p.13): You can be a silver-spoon, blue-blood, wind-surfing, coastal elitist, but if you wear the Democratic label you are presumed to be connected and empathetic and to understand the problems of... MORE

Obama on How Markets Reduce Racial Discrimination

Political Economy
David Henderson
University of Chicago economist Gary Becker, in his Ph.D. dissertation, later made into a book, The Economics of Discrimination, showed that free markets make racial discrimination costly. His basic argument is that discrimination is a self-imposed restriction on trade that... MORE

Does Cooperation Lead to Socialism?

Political Economy
Arnold Kling
Kevin Kelly says yes: Did we really believe we could collaboratively build and inhabit virtual worlds all day, every day, and not have it affect our perspective? The force of online socialism is growing. Its dynamic is spreading beyond electrons--perhaps... MORE

One-Party State Watch

Political Economy
Arnold Kling
I went to an event on the future of conservatism, described here.... MORE

The Road to Serfdom

Political Economy
David Henderson
My review of Friedrich Hayek's classic, The Road to Serfdom, is on-line. In it, I summarize the book's message and discuss its relevance today. One passage: In the United States today, the intellectuals' and the public's belief in freedom seems... MORE

Afghanistan's Natural State

Political Economy
Arnold Kling
On William Easterly's blog, Laura Freschi writes, Efforts to curb corruption in Afghanistan are failing, says a new USAID report. Based on dozens of interviews and a comprehensive review of existing studies and polls, the report describes the sources of... MORE

How do Political Beliefs Change?

Political Economy
Arnold Kling
Robin Hanson writes, it looks bad to admit we do politics to selfishly show off, instead of to help society make better policy. So we are built to instead talk, and think, as if we do politics for its influence... MORE

Public Financing of Political Campaigns

Political Economy
Arnold Kling
Jonathan Chait writes, Do Kling and Schulz think that interest groups can have that much influence over the outcomes of elections -- so much influence that the Democrats will have a near lock on power? If so, shouldn't they support... MORE

The Wonder of Economic Freedom, 2

Political Economy
David Henderson
Pinch me A few months ago, I posted about the economic freedom that allowed my wife and me to help our daughter move from San Jose to San Francisco in less than a day. I had another "pinch me; I... MORE

Stuck in the Natural State?

Growth: Causal Factors
Arnold Kling
Antonio Fatas and Ilian Mihov write, China has sustained high growth rates in recent years despite its poor institutions because institutional quality is relatively less important in developing economies. However, we find that as their incomes increase, such countries need... MORE

Why I Fear a One-Party State

Political Economy
Arnold Kling
Bryan writes, it's not obvious that Republicans actually offer more free-market politics than Democrats do. Probably true, but beside the point. I am not upset with political trends because I want Republicans to win. I am upset because I foresee... MORE

The Case Against Libertarian Hispanophobia

Political Economy
Bryan Caplan
When libertarians (as well as economically literate conservatives) worry about immigration, they usually focus on its undesirable political consequences.  As my co-blogger Arnold puts it:The demographic picture, in which traditional Republican voting groups are shrinking as a proportion of the... MORE

North, Wallis, and Weingast

Political Economy
Arnold Kling
Indeed, Violence and Social Orders is an important book. My guess is that many reviewers will complain about the editing and organization. Many points are repeated ad nauseum. Some reasonably important points are tossed off more casually. I'll quote some... MORE

The Emerging Stagnant Majority

Labor Mobility, Immigration, Outsourcing
Arnold Kling
William Voegeli, in an article for the Claremont Review called "The Wilderness Years Begin," cites an article by Ronald Brownstein. Start by considering the electorate's six broadest demographic groups -- white voters with at least a four-year college degree; white... MORE

Power over Pay

Political Economy
Arnold Kling
The Obama Administration wants it. Wall Street pay has long been a hot-button issue in Washington, but the public outrage over excessive compensation has erupted in recent weeks. I interpret the public outrage a bit differently. It seems to me... MORE

Keith Hennessey is Bitter

Economics of Health Care
Arnold Kling
He writes, The President is attempting to claim credit for [health care] savings that (a) do not yet exist, (b) are not backed up by any specific changes in industry practices or government policies, and (c) are related to him... MORE

The Dictator's Handbook: Read It

Political Economy
Bryan Caplan
Paul Collier's "The Dictator's Handbook," is truly excellent.  The lead-in:The old rulers of the Soviet Union were terrified of facing contested elections. Those of us who studied political systems presumed they must be right: Elections would empower citizens against the... MORE

Revenue Sharing

Fiscal Policy
Arnold Kling
USA Today reports, In a historic first, Uncle Sam has supplanted sales, property and income taxes as the biggest source of revenue for state and local governments. Thanks to Nick Schulz for the pointer. The gist of the story is... MORE

The Problem with Democracy

Political Economy
Arnold Kling
Will Wilkinson writes, People who finally gained equal political rights through a long democratic struggle cannot have been unreasonable to see democratic politics as a morally and politically progressive force. Basically, what I read into this sentence is the notion... MORE

Scott Sumner's Parenthetical Remark

Political Economy
Arnold Kling
He writes, [BTW, Bill Gates essentially taxed middle class consumers all over the developed world, and is giving almost all of the money to the disadvantged in poor countries. That's something governments don't do, and yet for his "monopoly profits"... MORE

Reformers Against Democracy

Political Economy
Bryan Caplan
A recent piece by Joshua Kurlantzick in Foreign Policy argues that middle-class reformers around the world are turning against democracy:Despite its name, the People's Alliance is explicitly antidemocratic. In its platform, the group seeks election reform measures that are basically... MORE

More Thoughts on Masonomics

Macroeconomics
Arnold Kling
Tyler and Alex have new textbooks on micro and macro. Both begin with the same anecdote. In 1787, the British government had hired sea captains to ship convicted felons to Australia...On one voyage, more than a third of the males... MORE

The Case for Libertarian Evangelism

Political Economy
Arnold Kling
Edward P. Stringham and Jeffrey Rogers Hummel write, According to the Mises-Bastiat view, governments are able to get away with as much as they do only because they have the support of enough people. Bad policies persist only because the... MORE

Libertarians: What Now?

Political Economy
Arnold Kling
Cato Unbound this month deals with a core issue. Peter Thiel writes, I no longer believe that freedom and democracy are compatible... As one fast-forwards to 2009, the prospects for a libertarian politics appear grim indeed. Exhibit A is a... MORE

Mueller's Theory, Wilkinson's Practice

Political Economy
Bryan Caplan
I've long remembered this passage from John Mueller's Capitalism, Democracy, and Ralph's Pretty Good Grocery:For generations (actually, for millenia) homosexuals have been persecuted both in democracies and nondemocracies, and their defining sexual activity has been routinely outlawed.  This tiny minority... MORE

Geography as Destiny

Political Economy
Arnold Kling
Robert D. Kaplan writes mostly about politics and conflict. But there is much of importance to economists. Some excerpts follow.... MORE

This Looks Important

Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen finds research suggesting that the more highly you think of your morals, the less altruistic you are. I could think of so many things to say about this, and how it explains who gives to charity and who... MORE

Libertarians and Public Education

Political Economy
Arnold Kling
A reader asks, Do you believe that it is moral for universities to receive state funds? If so, how would you justify it? As a student that attends a state-funded university, I've had to think about this myself. I remember... MORE

We all have flaws

Political Economy
Arnold Kling
James Kwak muses, I like to think that maybe there are people on the House Financial Services Committee who are secretly not so sure about the difference between preferred and common stock, and maybe they will read Financial Services for... 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

Notes on Masonomics, 1: Reason without Rationality

Behavioral Economics and Rationality
Arnold Kling
In chapter one of his economics textbook Hidden Order, David Friedman writes, Economics is that way of understanding behavior that starts from the assumption that individuals have objectives and tend to choose the correct way to achieve them. ...For a... MORE

Status and Contract

Behavioral Economics and Rationality
Arnold Kling
Don Boudreaux writes, progress necessarily involves freeing individuals from their status stations -- freeing persons from stations assigned by circumstances such as skin color, family name, genitalia, sexuality, nationality -- and thereby allowing individuals to determine as best as each... MORE

On Freedom and Democracy

Political Economy
Arnold Kling
Michael Strong has an interesting guest post at a new blog on competitive government. He writes, Another direction that I've been encouraging libertarians to consider is the option of a global free zone industry in which private corporations specialize not... MORE

Democracy: What We Want Is What We Get

Political Economy
Bryan Caplan
Today I got a wonderful coincidental birthday present: I met Patri Friedman.  I also got to enjoy his Cato Unbound essay on "Folk Activism."  It's highly recommended, but here's a passage I've got to criticize:In the modern world, however, bad... MORE

Some Libertarian Basics

Economics of Health Care
Arnold Kling
In the comments on my health care rationing post, I received many standard attacks as being cold-hearted and willing to deny health care to people who need it. From a libertarian perspective, your generosity is reflected in what you do... MORE

Patri Friedman on Seasteading

Political Economy
Arnold Kling
He writes, When we read in the evening paper that we're footing the bill for another bailout, we react by complaining to our friends, suggesting alternatives, and trying to build coalitions for reform. This primal behavior is as good a... MORE

Libertarians and Jonah Goldberg

Books: Reviews and Suggested Readings
Arnold Kling
Jonah argues that we have become belated converts to the Liberal Fascism thesis. And Arnold Kling who said my book was in fact written by three people -- "Goldberg the revisionist historian, Goldberg the outraged conservative child, and Goldberg the... MORE

A Useful Narrative of the Crisis

Finance: stocks, options, etc.
Arnold Kling
Matt Taibbi writes, What had brought us to the brink of collapse in the first place was this relentless instinct for building ever-larger megacompanies, passing deregulatory measures to gradually feed all the little fish in the sea to an ever-shrinking... MORE

Progressive Corporatism and the Resistance

Political Economy
Arnold Kling
Glenn Reynolds comments on the plight of Freddie Mac as reported in today's Washington Post. [The Post reports] When Freddie Mac's executives concluded a few weeks ago that they had to disclose that the government's management of the McLean company... MORE

Lessons from Mancur Olson

Growth: Causal Factors
Arnold Kling
Philip Greenspun writes, The logical conclusion from reading this book is to prefer a new state to an old state, a newly stable state to a long-stable state, and a new industry to an old one. Read the whole thing,... MORE

Thinking Outside the Beltway

Books: Reviews and Suggested Readings
Arnold Kling
I'm reading Be the Solution, by Michael Strong. I'm about 50 pages into it. The book combines a passion for capitalism, a passion for solving social problems, and some New Age spirituality. Think Ayn Rand meets Stephen Covey. I see... MORE

William Isaac is Wrong on Market Value Accounting

Finance: stocks, options, etc.
Arnold Kling
David Henderson quotes Isaac to the effect that we would have had thousands of bank failures under market value accounting in the 1980's. That is wrong. If market value accounting had been in place in the 1970's, we would not... MORE

Shlaes and Mandel

Macroeconomics
Arnold Kling
At the Kauffman forum that I attended in Kansas City the other day, I thought that the most interesting comments, neither of which I agreed with, were offered by Amity Shlaes and Michael Mandel, who blog here and here, respectively.... MORE

The Future

Growth: Causal Factors
Arnold Kling
Jeff Cornwall summarizes the panel on the outlook for the economy and entrepreneurs at the Kauffman Foundation forum this past weekend in Kansas City. In a later post, I will discuss the interesting ideas that were brought up at that... MORE

Links Without Comment (almost)

Behavioral Economics and Rationality
Arnold Kling
Only because I am too busy. Grant McCracken on whether restrained consumer spending will be temporary or permanent. Virginia Postrel on the same topic, based on discussions at the Kauffman Foundation Forum. It was great to see her looking so... MORE

Evening Commentary

Fiscal Policy
Arnold Kling
From Brad DeLong, Michele Boldrin, Clive Crook, and David Brooks. Thanks to Greg Mankiw for the first two pointers. Comments below.... MORE

The Wonder of Economic Freedom

Political Economy
David Henderson
Yesterday my wife and I got on the road early to go to San Jose (we live 75 miles south in Pacific Grove) to help our daughter move her stuff from a storage locker to a shared apartment in San... MORE

Universal Human Nature

Economic History
Arnold Kling
Christopher I. Beckwith writes, Viewed from the perspective of Eurasian history over the last four millennia, there does not seem to me to be any significant difference between the default underlying human socio-political structure during this time period--that is, down... MORE

"I Don't Care"

Political Economy
David Henderson
That's the message President Obama is sending to those who have saved their money and waited on the sidelines to buy a house. One intended effect of his mortgage bailout plan is to support housing prices and the unintended effect... MORE

Official Takes Stand Against Auto Bailout

Political Economy
Arnold Kling
A heroic public servant speaks. "Voters picked me because they wanted nursery schools, police and nurses, and not to buy loss-making car factories," From that bastion of heartless, free-market ideology, Sweden. Thanks to Richard Florida for the pointer.... MORE

Give Back My Wallet

Fiscal Policy
Arnold Kling
Rasmussen reports, Forty-five percent (45%) of Americans oppose the federal government subsidizing mortgage payments for financially troubled homeowners, according to a new Rasmussen Reports national telephone survey. Thirty-eight percent (38%) think government subsidies are a good idea, and 18% are... MORE

The Housing Bailout as a Public Good

Political Economy
Arnold Kling
Why do we have a housing bailout that spends $75 billion, plus $200 billion in "support" for Freddie Mac and Fannie Mae? By what test is this a public good? My test is this: would an overwhelming majority of Americans... MORE

Will's Challenge

Political Economy
Bryan Caplan
I'd like to think that I'm the but-for cause of this paragraph, but either way, the world should listen:[I]t is a mistake to assume that equality of democratic voice improves the prospects of the poor and working classes unless the... MORE

Ross Douthat on Liberaltarianism

Political Economy
Arnold Kling
He writes, ...a bigger-tent liberalism - somewhat chastened, perhaps, by some big-government failures in the Obama era - that makes libertarian intellectuals feel welcome, engages them in conversations about smarter regulations and more efficient tax policy, and generally woos them... MORE

What is Bryan's Analysis?

Economic Education
Arnold Kling
A poll says that two-thirds of the American people think they could do a better job on the economy than Congress. Forty-four percent (44%) voters also think a group of people selected at random from the phone book would do... MORE

Morning Reading

Fiscal Policy
Arnold Kling
Greg Mankiw writes I would institute an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax. I think if you put leading economists into a room to negotiate on... MORE

Who is Advising these Guys?

Finance: stocks, options, etc.
Arnold Kling
Ed Glaeser does not like the Republican mortgage plan any more than I do. I am not sure that plan is still alive. It may have been superceded by another ill-conceived idea, a tax break for home buyers. See Tyler... MORE

A Great Sentence

Finance: stocks, options, etc.
Arnold Kling
From James Hamilton if everybody and their grandmother is lining up for a bailout, and pulling political strings ([1], [2]) to make sure they get it, I read that as prima facie evidence that the taxpayers' interests are not being... MORE

Douglas Rushkoff on the Inauguration Event

Political Economy
Arnold Kling
Some excerpts from his 1999 book, Coercion: Why We Listen to What "They" say. Chapter three is called "Spectacle."... MORE

The Empire Reaps Tribute

Political Economy
Arnold Kling
Radley Balko writes, After the 2000 Census, the richest county in America was Douglas County, Colorado. By 2007, Douglas County had fallen to sixth. The new top three are now Loudon County, Virginia; Fairfax County, Virginia; and Howard County, Maryland.... MORE

Peggy's Praise of Power

Political Economy
David Henderson
One of the columns in the Wall Street Journal I read almost every week is Peggy Noonan's weekend column, "Declarations." A former speechwriter for Ronald Reagan, Ms. Noonan has a way with words. The content can range from the incredibly... MORE

James Surowiecki Makes Libertarianism Impossible

Finance: stocks, options, etc.
Arnold Kling
He writes, among the biggest supporters of both [the bailout and the stimulus] have been the world's investors, at least insofar as their collective judgment is reflected in market prices. As I showed yesterday, investors overwhelmingly supported the Paulson plan:... MORE

Alex Tabarrok on Obama

Political Economy
David Henderson
Alex Tabarrok went to see President-elect Obama speak at George Mason University on Thursday and came away impressed. Why? Here are Alex's words: His [Obama's] goal is "not to create a slew of new government programs, but a foundation for... MORE

The Stimulus and the Somme

Fiscal Policy
Arnold Kling
Mark Thoma gives us Joseph Stiglitz and Martin Feldstein being interviewed by Charlie Rose. I listened to it last night, and I found it so chilling that it adversely affected my sleep. Two issues stand out. 1. Both of them... MORE

We All Wanna Change the World

Political Economy
Arnold Kling
Bryan discusses policy libertarianism and structural libertarianism. If they were 60's leftists, the policy libertarians would be willing to work within the system and the structural libertarians would want to change the system. In this case, I feel ambivalence, of... MORE

Except Seasteading

Political Economy
Bryan Caplan
Out of all the Structural Libertarians named in my last post, there is one counter-example to my claim that "It's policy all the way down": Patri Friedman's "seasteading" proposal.  The whole point of seasteading is to get outside of existing... MORE

Policy All the Way Down

Political Economy
Bryan Caplan
Are policy reformers naive?  Both libertarians and public choice economists (and especially libertarian public choice economists) often say so:  "The policies we have are a rational response of political actors to the institutional incentives they face.  The only way to... MORE

Bailout Rage

Finance: stocks, options, etc.
Arnold Kling
Reason TV has a video of a panel discussion that really articulates the frustration that libertarians feel about the financial bailout. As Tim Cavanaugh points out, the bailout redistributes from the prudent to the profligate. As Veronique de Rugy points... MORE

Inclined to Liberty

Political Economy
Arnold Kling
Louis E. Carabini writes, There are those inclined to liberty--freedom of the individual to live his or her life in any peaceful way. And there are those who are inclined to mastery--permitting others to live their lives only as another... MORE

Krugman's View of Corruption

Economic History
David Henderson
In his column in today's New York Times, Paul Krugman claims that Franklin D. Roosevelt's New Deal was "clean" and avoided corruption. So clean was FDR's Works Progress Administration, writes Krugman, that "when a Congressional subcommittee investigated the W.P.A., it... MORE

The Essence of Scrooge

Political Economy
David Henderson
We often hear the word "Scrooge" used to refer to people who oppose government programs for the poor. Yet a close reading of Charles Dickens' A Christmas Carol shows that this usage is in appropriate. In fact, early in the... MORE

The Zorn Effect

Business Economics
Arnold Kling
Management systems degrade. As a manager or a regulator, if you stand still you fall behind. This year, the Washington Redskins hired a new coach, Jim Zorn. They started out 6-2, but they have since lost 5 out of 6... MORE

What's Wrong With Urban Politics?

Political Economy
Bryan Caplan
David Schleicher continues to turn his powerful intellect to the under-studied subject of urban political economy.  Lack of information is always a problem in democracy, but......voters in national elections are provided with a coping mechanism, a bit of publicly provided... MORE

Schleicher's Model of One-Party Democracy

Political Economy
Bryan Caplan
As promised, Volokh guest blogger David Schleicher posted his preferred explanation for the persistence of one-party urban democracy.  As first glance, his story seems pretty different from mine.  Here's his lead-in: "I argue that the lack of competition in city... MORE

The Puzzle of One-Party Democracy

Political Economy
Bryan Caplan
Over at the Volokh Conspiracy, guest blogger David Schleicher tries to explain why so many cities are, like Singapore, one-party democracies.  He begins by pointing out that the "obvious" explanation is wrong:It is true that in almost all major American... MORE

Hearing Post

Finance: stocks, options, etc.
Arnold Kling
After the hearing on Freddie and Fannie, my wife said, "You know, after I was finished with jury duty, I was feeling pretty patriotic. I wasn't feeling patriotic after this." C-span took this photo. The hearing covers two c-span videos,... MORE

Another Stake in the Taxpayers' Heart

Finance: stocks, options, etc.
Arnold Kling
Don Boudreaux writes, Detroit auto executives advocate "government getting a stake in the auto companies that would allow taxpayers to share in future gains if they recover" ... I remind these executives that each American is already perfectly free and... MORE

Return to Neptune, II: The Corporate Income Tax

Political Economy
Bryan Caplan
While we're on the subject of differential tax treatment, I don't think Rod or his critics ever mentions the notorious double taxation imposed by the corporate income tax.  This tax matters less than it used to, but the U.S. federal... MORE

Return to Neptune, I: Incidence

Political Economy
Bryan Caplan
As I've said before, the conversation sparked by Rod Long's Cato Unbound essay has been rididulously lively.  Now I'd like to append a few points that - as far as I can tell - no one else has made.  (Please... MORE

Different Forms of Government

Political Economy
Arnold Kling
Responding to Bryan, Will Wilkinson writes, bureaucrats in a technocracy will be motivated to explore ideas, while bureaucrats in a democracy will be motivated to signal and recruit fidelity to the coalition's pre-assigned ideas. The point is that a country... MORE

Roderick Long and the Tiny Gnomes from Neptune

Political Economy
Bryan Caplan
When I was flying to Singapore I kept thinking about Roderick Long's Cato Unbound piece on "Corporations versus the Market."  Now that I've returned, I see there's been a ridiculously lively followup discussion.  I'm sorry to have missed it, but... MORE

Here's a question that got a big laugh around a Singaporean lunch table: "So, do most people here support Electronic Road Pricing?"  Not on your life!  If you want to see how S'poreans really feel about ERP, check out this... MORE

Ten Minutes, Eleven Questions

Finance: stocks, options, etc.
Arnold Kling
I have been invited to speak for ten minutes on the financial crisis. As you will see below, I do not agree so much with President Bush (via Mankiw). Unlike the President, I see no benefit in putting credit default... MORE

Quoting Will

Political Economy
Arnold Kling
Wilkinson, that is: We're going to get lectured a lot-probably by many of the same twenty-five year olds who have invested heavily in home decor featuring presidential power porn-on how the failure of this or that is due to a... MORE

Truth and Narrative

Finance: stocks, options, etc.
Arnold Kling
Consider two propositions: 1. Market failure is inevitable. 2. Government failure is inevitable. In talking about the financial crisis, I believe that to speak the truth one has to accept both propositions. Most people prefer narrative, which either explicitly or... MORE

Your Defined Benefits = My Obligations?

Finance: stocks, options, etc.
Arnold Kling
The Associated Press reports, Under the law, companies facing shortfalls must bring their plans up to full funding over the next seven years. Those that fall short will be forced to take steps such as freezing the accrual of new... MORE

Bootleggers, Baptists, and Minorities

Political Economy
Arnold Kling
The new issue of Cato Unbound promises to be interesting. It starts with an essay by Roderick Long. because corporate power and the free market are actually antithetical; genuine competition is big business's worst nightmare. But also, in all too... MORE

For Future Reference

Finance: stocks, options, etc.
Arnold Kling
Megan McArdle writes Money is weird. Finance is weird. There is no other industry that is, first, so tightly coupled, and second, severely affects every other industry in the country. She Is trying to ward off cognitive dissonance over the... MORE

Notes From the Bailout

Finance: stocks, options, etc.
Arnold Kling
Below are various links, including some that pertain to AIG. The government is eventually planning to sell the normal insurance lines of AIG. The proceeds from those sales then can be used to fund losses on the credit default swaps... MORE

The State of Conservatism

Political Economy
Arnold Kling
P. J. O.Rourke writes, The free market is just a measurement, a device to tell us what people are willing to pay for any given thing at any given moment. The free market is a bathroom scale. You may hate... MORE

Anti-Democratic Thought for the Day

Political Economy
Arnold Kling
From Patri Friedman. Only without political freedom can economic freedom thrive (see Hong Kong, Singapore). With political freedom (democracy) comes a welfare state and loss of economic freedom.... MORE

The Wonders of Democracy

Political Economy
Arnold Kling
Some random thoughts. 1. In my county, and in many locations in the U.S., we have had one-party government for longer than the Communists had control of Eastern Europe. 2. In spite of the fact that Congressional approval ratings are... MORE

Highlights from Hayek

Political Economy
David Henderson
I hadn't read Friedrich Hayek's The Road to Serfdom cover to cover for over 20 years. Today I did. I knew it was a good book but I concluded today that it's a great book. Here are two of the... MORE

From The Tax Foundation The Treasury action invalidating SILO depreciation deductions encouraged the banks to look for any opportunity to get out of the contracts. The situation is exacerbated by an IRS settlement offer to banks that lets them keep... MORE

Politics and Identity

Behavioral Economics and Rationality
Arnold Kling
I recommend this lecture from Bill Bishop. By the way, I am finding an incredible amount of interesting videos these days. I think that somebody who is motivated to learn and has some good sources of recommendations could get do... MORE

Could a Libertarian Buy Iceland?

Political Economy
Arnold Kling
Tyler Cowen writes, I wonder what it is like for a country to be truly, permanently bankrupt. And a further difficulty lies on the horizon. Circa 2000, fish accounted for 70 percent of the country's export earnings. Here are many... MORE

Subtle Wisdom

Political Economy
Arnold Kling
From Don Boudreaux. The fact that each of us depends upon the efforts of millions of others does not mean that some "society" transcending individuals produces our prosperity. Rather, it means that the vast system of voluntary market exchange coordinates... MORE

What Next?

Fiscal Policy
Arnold Kling
John Baden writes, there is diminishing support for institutions that generate wealth rather than redistribute it...both positive and negative values increasingly converge and agglutinate. This promotes substantial class differences. If one is blessed with responsible parents, intelligence, favorable genetics, health,... MORE

Narratives of Knowledge and Arrogance

Finance: stocks, options, etc.
Arnold Kling
Megan McArdle has written about the evil man theory (also here). The key to a narrative of evil is that someone knew. Early in the crisis, we were hearing that banks knew that the loans they were making were headed... MORE

Fundamental Causes

Finance: stocks, options, etc.
Arnold Kling
Tyler Cowen invokes Fischer Black. in his 1991 book, "Business Cycles and Equilibrium," and his 1995 work, "Exploring General Equilibrium," he argued that major business downturns could be caused by a combination of excess risk-taking and simple bad luck. If... MORE

The Political Economy of the Bailout

Finance: stocks, options, etc.
Arnold Kling
Tyler keeps wondering whether the bailout (or "bank recapitalization") is going to work. He is asking the wrong questions. Whether the economy needs a "plan," or whether the plan will help the markets, is beside the point. The plan serves... MORE

Other People's Money

Finance: stocks, options, etc.
Arnold Kling
Tyler Cowen puts a lot of the blame for the financial crisis on leverage. He links to Robert Frank, who writes, In financial markets, asset bubbles cause real trouble when investors can borrow freely to expand their holdings. To... MORE

Opposition to the Bail-Out: Strange Bedfellows

Political Economy
Bryan Caplan
From ABCNews:The main opposition in Congress has come from GOP conservatives, especially in the House. Democrats also hope that, after the compromises, enough House Republicans will vote for the package to give Democrats political cover.From FOXNews:Lawmakers had to navigate between... MORE

Here's one of Heinlein's modest proposals for improving democracy:A state that required a bare minimum of intelligence and education - e.g., step into the polling booth and find that the computer has generated a new quadratic equation just for you.... MORE

Ridiculous Regs the Median Voter Doesn't Want

Political Economy
Bryan Caplan
The median voter isn't to blame for everything wrong with the world. Check this out: In Maryland, it's illegal to massage a horse!Mercedes took an eight-month equine massage course and hung up her shingle. She said she so enjoyed massaging... MORE

Friend or Foe?

Political Economy
Arnold Kling
I am cited by, of all people, David Brooks, for coining the term "progressive corporatism." I guess it goes down easier than "liberal fascism." My original post is here. Should I be happy or unhappy with the way I appear... MORE

Progressive Corporatism

Political Economy
Arnold Kling
Roderick Long writes, The vast regulatory apparatus that emerged in the late 19th and early 20th centuries was thus specifically campaigned for by the business community. ..The supposedly pro-labour legislation that emerged from this area was also mostly bogus, a... MORE

Barney Frank goes Jacksonian

Political Economy
Arnold Kling
The Wall Street Journal reports, "No one in a democracy, unelected, should have $800 billion to spend as he sees fit," said Mr. Frank. Andrew Jackson felt similarly, which is why he refused to renew the charter of the second... MORE

Another Definition of Democracy

Political Economy
Arnold Kling
From David Brooks. Democracy is not average people selecting average leaders. It is average people with the wisdom to select the best prepared. I still prefer the quote of the day. When I read Bobos in Paradise several years ago,... MORE

Quote of the Day

Political Economy
Arnold Kling
Robert Higgs writes, Call it democracy in action or utterly corrupt governance; they are the same thing. He wrote this in regard to the Fannie-Freddie implosion, also known as "last week's news." Next Monday, in Hartford, I will be arguing... MORE

Two Aphorisms

Political Economy
Arnold Kling
Steve Horvitz highlights a quote from Jonathan Sacks, the Chief Rabbi of Great Britain: It is through exchange that difference becomes a blessing, not a curse. Alex Tabarrok nominates that for sentence of the year. Next, Jonathan Haidt writes, politics... MORE

Competitive Government

Political Economy
Arnold Kling
I will be a participant in a seminar in a couple of weeks called making democracy smarter. My essay is called competitive government vs. democratic government. I make the case against democracy. Democratic government in the United States today offers... MORE

Recession-Proof

Political Economy
Arnold Kling
A newspaper in Anne Arundel County, Maryland reports, the number of school employees earning more than $100,000 doubled from 213 in 2007 to 450 in fiscal 2009, which started in July. ...62 school employees received pay hikes of more than... MORE

Five Myths of the Rational Voter

Political Economy
Arnold Kling
Rick Shenkman writes, by most measures, voters today possess the same level of political knowledge as their parents and grandparents, and in some categories, they score lower. In the 1950s, only 10 percent of voters were incapable of citing any... MORE

The Binary Fallacy

Political Economy
Bryan Caplan
When I was at the APSA meetings, the famed Arthur Lupia gave yet another speech in defense of voter competence. He offered a long list of arguments. But his most important mistake, in my view, was his claim that voters... MORE

Why Parties Won't Deliver

Political Economy
Arnold Kling
Tyler Cowen types, I also think, though, cynically, that the GOP knows that "delivering" on the abortion issue would spell their doom and thus they won't ever do it. I have thought that this holds for the Democrats and universal... MORE

Public choice scholars often say that democracy underperforms the market because of: 1. Infrequent choice. In the market, consumers can continuously change their minds. In politics, however, voters are stuck with their choice until the next election. 2. Bundled choice.... MORE

My Campaign-Season Pledge

Political Economy
Arnold Kling
Readers have noticed that my tone has been relatively bitter the last several months. One possible reason is that the election campaign is heating up. To me, political campaigns are not sacred events, to be eagerly anticipated and avidly followed.... MORE

Public Goods, Externalities, and Education

Books: Reviews and Suggested Readings
Arnold Kling
Bruno S. Frey and Reiner Eichenberger write, externalities are not technologically but rather socially determined. There are no inherent properties of a good or service producing external effects, therefore, citizens have to use the political process to determine what is... MORE

Fragmentation of States

Political Economy
Arnold Kling
Eric Posner writes, People should be more worried than they are by the fragmentation of states. . .in recent years, the main cause has been, essentially, ethnic separatism. . .the resulting nation states can be too small to govern themselves... MORE

The Soldier and the Capitalist

Political Economy
Arnold Kling
How does the liberal elite view the American military? It seems to me that they view the military as a group of basically evil men, inclined to torture and commit war crimes. It would be better if we could do... MORE

A Guy in the Wrong Profession

Political Economy
Arnold Kling
I just heard about this story. When Landmarks Association of St. Louis embarked on an ambitious plan to create a tourism-oriented architectural center downtown, Larry Cohn said he wanted to help and eagerly pledged $500,000. After two years of planning,... MORE

The Case for Planning

Political Economy
Arnold Kling
James K. Galbraith writes, The job of discipline belongs to governments. And they must act not only on behalf of today's citizens but of all those yet to come - of those who need clean food and water, of those... MORE

Political Pluralism

Political Economy
Arnold Kling
Nicholas Lemann discusses a book by Arthur Fisher Bentley on political theory that came out one hundred years ago. Under Bentley’s rules, you can’t talk about public opinion, because there is no such thing as “the public” (there are only... MORE

Martin Wolf on Political Economy

Political Economy
Arnold Kling
He writes, But what is a confiscatory government? It is just a government run by profit-maximizers. ...There have to be rules, ethical norms and institutional constraints governing profit-maximizing behavior, to ensure that the maximization operates for the social good. Of... MORE

Two Ideas from Brad Templeton

Political Economy
Arnold Kling
1. A Ship of Nomads. My goal is to build a large ship and put around 100 decent sized condominiums on it for co-owners. The ship would have a few megabits of satellite connectivity for internet and telephone, plus equipment... MORE

Communications Media and Institutions

Political Economy
Arnold Kling
Marc Pesce delivers a few facts and a lot of breathless prose. Somewhere in the last few months, half the population of the planet became mobile telephone subscribers. In a decade's time we've gone from half the world having never... MORE

An Anarcho-Capitalist Tranzy?

Political Economy
Arnold Kling
John Stewart writes, Global governance is essential if nations are to cooperate to overcome the deficiencies of global markets...It can ensure that nations capture the benefits of their contribution to global social, economic and environmental projects that have collective benefits... MORE

An Inconvenient Question

Political Economy
Arnold Kling
Glenn Reynolds asks, If somebody offered us our current income tax system for the first time, would we buy it? On another topic, but effectively asking the same question, Washington Post editorializes, the policies and institutions that worked in the... MORE

My latest essay: Financial markets will always be subject to miscalculations and mistakes. However, the more we ask politicians to provide perfect insulation from financial risk, the more fragile the system will become. That is the real lesson we should... MORE

The Lesson of the Housing Bill

Political Economy
Arnold Kling
Think of the following as a diagram: High Collective BenefitsLow Collective BenefitsMostly Market MechanismsMostly Government Mechanisms Along the horizontal axis, as you move to the right, resources are allocated by government mechanisms more than by market mechanisms. Along the vertical... MORE

Morning Reading on Political Economy

Political Economy
Arnold Kling
First, Jesse Larner on Hayek. So to Hayek, the common law is a spontaneous phenomenon, without obvious human direction. In a sense law is related to custom in this manner, but there is no guarantee that honoring this concept of... MORE

The Social Costs of Getting Out the Vote

Political Economy
Bryan Caplan
John Stossel interviewed me today. (Here's his review of my book). If everything goes as planned, I'll play the foil to some get-out-the-vote activists on a forthcoming 20/20 segment. I'll keep you posted on the airdate. But whatever happens, meeting... MORE

Jeff Frankel on the Faith Trap

Political Economy
Arnold Kling
He writes, Someone this week asked me what I thought of policy-makers who ex ante profess a free-market ideology and acute sensitivity to the dangers of moral hazard from financial bailouts, but who toss that ideology overboard when faced with... MORE

The Faith Trap

Political Economy
Arnold Kling
Robin Hanson writes, It seems we hope a stronger and more benevolent God or State will protect us when feel less able to protect ourselves. He is reporting on a paper in a psychology journal by Aaron C. Kay with... MORE

The Consensus Economic Platform?

Political Economy
Arnold Kling
Greg Mankiw runs on support for free trade, opposition to farm subsidies, an energy tax, raising the retirement age, and other proposals. I think he is correct that this platform would win a lot of votes with Ph.D economists. It... MORE

Participatory Dictatorship

Political Economy
Arnold Kling
Stephen R. Shalom has a proposal to re-scale government institutions. I propose that legislative functions be carried out by a system of nested councils. Here is one way that such a system might function. There would be primary-level councils that... MORE

More Rebooting America Quotes

Political Economy
Arnold Kling
In general, the writers are better at diagnosis than prescription.... MORE

Rebooting America

Books: Reviews and Suggested Readings
Arnold Kling
Clay Shirky writes, If I had to pick one method of rebooting civic life, it would be by finding new ways to grant groups the legitimacy essential to pursuing long-term and constructive goals on their own. This is in the... MORE

Behavioral Politics

Political Economy
Arnold Kling
Mike Munger and Russ Roberts deliver one of the best podcasts ever. Munger describes the way in which moving from a private bus system to a public system in Santiago Chile made essentially everyone in the city worse off. The... MORE

What Went Wrong?

Political Economy
Arnold Kling
In a somewhat melancholy 4th of July essay, Canadian libertarian Pierre Lemieux writes, How could a country founded on the ideal of individual liberty, with a state devoted to the mission of protecting it, slide down the road to tyranny... MORE

Mencius Moldbug proposes a thought experiment. Imagine that there had been no scientific or technical progress at all during the 20th century. That the government of 2008 had to function with the technical base of 1908... [Conversely, imagine] what would... MORE

Dorothea Dix

Political Economy
Arnold Kling
The more I read (or Kindle) Daniel Walker Howe's What Hath God Wrought, the more antecedents I see to modern liberal reformers. For example, he describes Dorothea Dix, who is summed up well in her Wikipedia entry. Dorothea Lynde Dix... MORE

Tyranny Without Law Enforcement?

Political Economy
Arnold Kling
Bradford Plumer writes, Finamore points out, for instance, that if China enforced all the building codes it has on the books, it could cut its energy use dramatically. NRDC is training Chinese building inspectors, who often don't understand the codes,... MORE

The Reform Mindset

Behavioral Economics and Rationality
Arnold Kling
Peter Orszag recommends a talk by David Brooks at the Aspen Ideas Festival. The web site for the conference says that full video will be available, but for now there are only short clips. Go here and look for the... MORE

New NBER working papers

Business Economics
Arnold Kling
Mihir A. Desai, Dhammika Dharmapala, and Monica Singhal write, The Low Income Housing Tax Credit (LIHTC) program provides for the majority of new affordable housing units built in the U.S. and has resulted in the production of 1.5 million low-income... MORE

Producer and Consumer Cities

Growth: Causal Factors
Arnold Kling
Maarten Bosker, Eltjo Buringh, and Jan Luiten van Zanden write, The sociologist Max Weber introduced a distinction between ‘consumer cities’ and ‘producer cities’... The classical consumer city is a centre of government and military protection or occupation, which supplies services... MORE

Reformers vs. Limited Government

Political Economy
Arnold Kling
I am not repeating the famous sentence of the Massachusetts Bill of Rights, "to the end that this may be a government of laws and not of men." There never was such a government. Constitute them how you will,... MORE

The Big Tent of Happiness

Behavioral Economics and Rationality
Arnold Kling
Reviewing Bruno Frey's latest book, Alan Wolfe writes, Frey proposes what he calls "positive Constitutional economics." ...Federalism would be strengthened by decentralizing power, not to the states but to an entirely new political element that would have limited and defined... MORE

Three Moldbug Quotes

Political Economy
Arnold Kling
This week, he writes, According to this article, for example, there are "over 7500 nonprofits" in the Bay Area, "3800 of which deal with sustainability issues." These appear to employ approximately half of our fair city's jeunesse doree, occupying the... MORE

Long Tail of Politics Watch

Political Economy
Arnold Kling
Felix Salmon writes, What’s needed here is not ad-hoc coalitions along single-issue lines, which is what we’ve had until now: a group of mayors against guns here, a livable-streets group there, a green group, a gay-rights group, and so on.... MORE

The Westphalian State

Political Economy
Arnold Kling
In 2005, Richard CB Johnsson wrote, the territorially sovereign states of today claim absolute political authority within their respective fixed territories. Wherever you are in the world today, you basically have to yield to the laws of that particular territory,... MORE

A Loss of Sovereignty?

Political Economy
Arnold Kling
Benjamin Barber laments the erosion of national autonomy—and, with it, the state’s monopoly over violence, the power to enact binding laws, and other essential aspects of sovereignty. Sovereignty, in turn, is an obvious precondition for democracy (which you cannot have... MORE

A Hazy Question

Economics of Education
Arnold Kling
Stephen Dubner looks at a reader's question of who is the greatest modern thinker. I love this question. It first requires you to define what a “thinker” is, and also raises the question of what incentives exist in the modern... MORE

The Player and the Referee

Political Economy
Arnold Kling
Mary Anastasia O'Grady writes, neither environmentalists nor Brazilian politicians have raised concerns about exploiting oil in the waters off the Brazilian coast. it is also worth noting that the Brazilian government has a 58% controlling stake in Petrobras's voting shares... MORE

Jurisdictional Disputes

Political Economy
Arnold Kling
A comment on this post raises a valid issue. I was suggesting that I wanted a sort of anarcho-capitalism in which I can choose the government or governments I wish to operate under. The comment reads, in part Multiple states... MORE

Unanimity, Consent, and the Lisbon Treaty

Political Economy
Arnold Kling
Tyler Cowen writes, Some deluded soul in the EU read a copy of John Calhoun instead of Buchanan and Tullock's Calculus of Consent. Hadn't they remembered the history of 17th and 18th century Poland and decided that a unanimity rule... 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

Who is Freedom's Enemy?

Political Economy
Arnold Kling
This Symposium offered many choices (all the papers are available at the link). Several years ago, I went to a Pop!Tech conference where each speaker was saying, in effect, "My research opportunity needs more attention." Today's symposium was more like... MORE

Arnold Kling Doesn't Get It

Institutional Economics
Arnold Kling
John Fonte writes, For some (clearly not all) libertarians opposition to the “state,” even the constitutional democratic nation-state leads to an affinity to transnational (as opposed to international) politics. Indeed, on Cato’s website, adjunct scholar Arnold Kling...“proposes” an “alternative ideology”... MORE

Follow-up Question for Modern Liberals

Political Economy
Arnold Kling
My earlier post elicited some responses denying that free-market liberalism is an oxymoron. My view is that modern liberalism is an ideology of government expansion. Let me re-iterate that the ideology of government expansionism invokes the following: 1. X is... MORE

Learn to Love the Liberal Welfare State?

Political Economy
Arnold Kling
Will Wilkinson makes the case. Freed to be full-on social liberals, many libertarians are left sensing a much deeper cultural affinity for the left than the right. And this leads naturally to seeing more clearly their ideological affinities with welfare... MORE

Public Service Signaling

Behavioral Economics and Rationality
Arnold Kling
David Boaz writes, Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide... MORE

Charter Communities

Political Economy
Arnold Kling
Robert Nelson, a public policy professor at the University of Maryland, gave me a copy of an argument he submitted on behalf of a Montgomery County neighborhood (his) that was attempting to incorporate in order to have jurisdiction over some... MORE

Conservatives, Libertarians, and Big Ideas

Political Economy
Arnold Kling
Stephen Bainbridge writes, it is the Libertarians and the progressives who are Big Idea people. Despite their obvious differences in philosophy, they share the absurd belief that if only their big idea(s) came to pass, society would inexorably progress towards... MORE

Libertarians Living on Subsidies

Political Economy
Arnold Kling
Thomas Frank writes, Almost by definition, our young libertarian's job is to celebrate the profit motive from the offices of a not-for-profit organization. He is subsidized, in other words, to hymn the unsubsidized way of life. Rugged individualism may be... MORE

Ignorant Masses, Dogmatic Elites

Energy, Environment, Resources
Arnold Kling
Concerning polling results on the issue of global warmaing, Andrew Gelman writes, Among college grads, there is a big partisan divide between Democrats and Republicans. Among non-graduates, the differences are smaller. This is completely consistent with research that shows that... MORE

The Right to Vote and the Right to Leave

Political Economy
Arnold Kling
Ibsen Martinez writes about the perception that Chile's economic success is tainted by its origins in the Pinochet regime. Sadly enough, many people in Latin America who believe in the virtues of free-market economies still argue that it takes a... MORE

A Basic Divide

Political Economy
Arnold Kling
Greg Mankiw writes, If you think it is the job of government to take from Peter to pay Paul, and if Peter can move around the globe, then you need international tax cooperation. Otherwise, some countries will become nations of... MORE

I'll Shill for Hillary

Political Economy
Bryan Caplan
Hillary's having trouble finding an economist to back her suspension of the gas tax. But she need look no further - I'll rise to the challenge. Here's my economic case for the tax cut: 1. The American people want to... MORE

If Merle Kling Could Have Met Brian Doherty

Political Economy
Arnold Kling
Imagine in 1958 an innocent Associate Professor of Political Science spending a summer in Mexico and getting mixed up with these guys: A considerable number of the folletos, almost half, originally were prepared by foreign, non-Mexican authors...Fred Clark, of the... MORE

A Meditation on Minarchy

Political Economy
Arnold Kling
Charles Kessler writes, continued growth of government is not inevitable. But a word of caution: Neither is big government’s demise inevitable. Sometimes conservatives and even libertarians predict that big government is doomed. Some point to modern technology as the savior:... MORE

Insiders, Outsiders, and Voting Behavior

Political Economy
Arnold Kling
Tyler Cowen writes, real world political debate is not fundamentally a macro-cosm of the thought processes of a smart person, or of one smart person debating another. The politics of confrontation usually turn ugly. Since my father's death, I have... MORE

Assortative Living

Political Economy
Arnold Kling
Reviewing a book by Bill Bishop, Alan Ehrenhalt writes, there is one simple statistic, rightly seized on by Mr. Bishop, that is difficult to explain away. It is this: In 1976, less than a quarter of the American people lived... MORE

Merle Kling

Political Economy
Arnold Kling
His obituary is in today's St. Louis Post-Dispatch. Merle Kling, retired provost, dean and professor of political science at Washington University, died Tuesday (April 8, 2008) at Barnes Extended Care in Clayton... Mr. Kling's tenure as dean covered the Vietnam... MORE

Daniel Klein on Libertarianism

Political Economy
Arnold Kling
For an encyclopedia, he writes, In the eyes of the libertarian, everything the government does that would be deemed coercive and criminal if done by any other party in society is still coercive. For example, imagine that a neighbor decided... MORE

American Excess

Income Distribution
Arnold Kling
From a longer essay on Inequality and Excess: I feel awkward and defensive when the subject of economic inequality comes up. The fact is that I cannot say that I feel comfortable with the levels of inequality and excess that... MORE

Be Careful What You Wish For

Political Economy
Arnold Kling
Dean Baker writes, Remarkably, the Post editorial writers seem to be the only ones who have noticed that the Senate "Foreclosure Prevention" bill will give banks an incentive to carry through foreclosures. The bill would give a $7,000 tax credit... MORE

Public Opinion as a Political Speed Limit

Political Economy
Bryan Caplan
Suppose someone said: "People drive 5-15 miles over the speed limit. It's obvious, then, that speed limits have no effect on how people drive." It's a pretty silly argument, isn't it? People drive 5-15 miles over the speed limit in... MORE

Snippets of Subversive Folk Songs

Political Economy
Arnold Kling
I have not had much time to pursue the folk song idea, but I have written a few snippets. [now slightly revised] First, I am trying to do something to the tune of "Union Maid" that speaks to the moral... MORE

The Medium and The Message

Political Economy
Arnold Kling
Not the topic du jour, by any means, but one that has interested me for a long time. Megan McArdle writes, I'm an enormous fan of John McWhorter's book on the decline of formal language, Doing Our Own Thing. I... MORE

An Army of Spitzers

Political Economy
Arnold Kling
Amidst the tawdriness, I attempt to draw a real lesson. Suppose that we define "Spitzer" as someone who believes in the aggressive use of political power. A Spitzer believes it is his mission to tell us what to do for... MORE

Selection and Politicians

Political Economy
Arnold Kling
Today's news (usually not my best blog topic) is Eliot Spitzer. When I heard about his, er, affair, I started wondering: Is every successful politician that arrogant? Does our process work that well at selecting for arrogance, or am I... MORE

Civil Disobedience Alert

Political Economy
Arnold Kling
The LA Times reports, Parents who lack teaching credentials cannot educate their children at home, according to a state appellate court ruling that is sending waves of fear through California's home schooling families. ..."Parents do not have a constitutional right... MORE

Jonah Goldberg's Alternative Title

Political Economy
Arnold Kling
He writes, the one thing libertarians grasp better than conservatives or liberals is the danger of the category error when it comes to the role of government...The fundamental insight of libertarianism is that the government is the government. It cannot... MORE

Thursday through Sunday, I'll be at the 2008 Public Choice meetings for the first time since I became a dad. Reviewing the schedule, here's what stands out to me:Mitchell, Matt — Justices, Presidents and Nominations: A Public Choice Model of... MORE

The Civic Duty to Know Your Limits

Political Economy
Bryan Caplan
Selwyn Duke says it short and sweet in "Why Most Voters Shouldn't Vote":Most of us agree that having an educated populace is a prerequisite for a sound democratic republic. We also know that not everyone is well-educated. Thus, it cannot... MORE

Progressives, Eugenics, and Airbrushing

Political Economy
Arnold Kling
In a history of Swarthmore's economics department, Joshua Hausman wrote, Nearing is also the only Swarthmore professor to have taught eugenics in an economics class. He omits his past interest in eugenics from his 1972 autobiography... In a 1912 book,... MORE

Security Symbolism

Political Economy
Arnold Kling
Megan McArdle writes, Perhaps I am too jaded by excess air travel, but most of our homeland security seems designed to A) Increase the power of congressmen and agency heads or B) Put on a show for the yokels rather... MORE

Life Under Socialism

Political Economy
Arnold Kling
Ibsen Martinez writes about life in Venezuela. Consider breakfast. My breakfast, to be exact. It's been months since I have had an oatmeal breakfast or a nice cup of espresso with a drop of milk because coffee and milk has... MORE

I plead guilty to plagiarism

Political Economy
Arnold Kling
Brian Doherty at Reason Hit and Run set up a thread on the civil disobedience idea. A commenter named Picaro listed videos of some folks who could accuse me of plagiarism. For example, this manicurist. If nothing else, the video... MORE

Put up with it

Political Economy
Arnold Kling
Ken Silber writes, The idea that people should be, say, lying down in front of police cars to protest hair salon regulations and the like is disproportionate, counterproductive and inane. It amounts to saying libertarian ideas aren't compelling enough to... MORE

Paging Randle McMurphy

Political Economy
Arnold Kling
My latest essay talks about the possibility of letting groups of people splinter off to form new states within the United States. It gets pretty weird. Ken Kesey wrote a novel in which a ward of mental patients has their... MORE

Most academic departments are democracies, at least on paper. Do they work the same way as other democracies, where the median voter basically gets his way? (Well, at least that's my take on democracy). From my experience, the answer is... MORE

More on the Trouble with Minarchism

Political Economy
Arnold Kling
More material has been added to Cato Unbound since I first posted. Michael Munger writes, The danger to limited government, the threat to the Montesquieuan system of checks and balances, comes from an unexpected source. “Good government” types, people who... MORE

Anti-fascism

Political Economy
Arnold Kling
Thomas Sowell writes, What is called "planning" in political rhetoric is the government's suppression of other people's plans by superimposing on them a collective plan, created by third parties, armed with the power of government and exempted from paying the... MORE

Conservative Fascism

Political Economy
Arnold Kling
David Brooks writes, National service should be a rite of passage for 20-somethings, and these volunteers could mentor students through high school and college years. ...That’s the conservatism of the fresh start. I think that everyone who is in favor... MORE

The Trouble with Minarchism

Political Economy
Arnold Kling
Anthony de Jasay writes, To the extent that the collective choice rule can define or by a rule-change amend the frontier, its zone may encroach on the zone of individual choices, while the reverse is of course not the case;... MORE

Frank Knight on the Humility Factor

Political Economy
Arnold Kling
He said, The probability of the people in power being individuals who would dislike the possession and exercise of power is on a level with the probability that an extremely tender-hearted person would get the job of whipping master in... MORE

Sell-Out Symmetry

Political Economy
Bryan Caplan
A good question from Trent McBride at Distributed Republic:When Republicans use free market rhetoric while campaigning, only to reverse when in office, we (most libertarians) decry their hypocrisy and warn not to believe future statements. And likely correctly so. However,... MORE

Trade and Hegemony

International Trade
Arnold Kling
My latest essay says, In the absence of hegemony, trade is impaired. If Marco Polo wants to buy goods in Afghanistan and sell them in China, he has to be able to avoid having his goods stolen, either by bandits... MORE

Some Wishful Prizes

Political Economy
Arnold Kling
A web site called The Victory Project proposes billion-dollar prizes for To the first person(s) that solves any of these Problems: 1. Develop a cure for breast cancer. 2. Develop a cure for diabetes. 3. Reduce greenhouse emissions from petroleum... MORE

Richard T. Ely, Founding Fascist

Political Economy
Arnold Kling
One of the revelations of Jonah Goldberg's Liberal Fascism was the beliefs espoused by Richard T. Ely, the founder of the American Economic Association. In this essay, Ely wrote The law of society is service. This is the supreme law... MORE

A Good Sentence

Political Economy
Arnold Kling
Tyler Cowen writes, a good notion of individual responsibility might start with: "We're not going to label every "little guy" a victim, even when it supports our political narrative to do so." Of course, we will abolish political demagoguery just... MORE

Outrunning a Bear

Political Economy
Arnold Kling
Tyler Cowen responds to a typical straw-man argument against libertarianism. I am more likely to think -- or should I say admit -- that human beings are irrational, even when the stakes are high (see the self-deception chapter in Discover... MORE

Mencius Moldbug Asks Some Questions

Political Economy
Arnold Kling
He writes, given your rather vehement views on the Ron Paul controversy, I am curious as to how you might answer the following questions. I would not describe my views on Ron Paul as vehement. His supporters are vehement. I... MORE

Liberal Fascism Watch

Political Economy
Arnold Kling
The Boston Globe reports Mayor Thomas M. Menino embarked on a highly public campaign yesterday to block CVS Corp. and other retailers from opening medical clinics inside their stores, an effort that exposed a rift between Menino and the state's... MORE

Politics and Cults

Political Economy
Arnold Kling
I started to write this as a blog post this morning, but I turned it into an essay, and TCS quickly ran it. So, I still have not defined "cult." For now, let's say that you are in a cult... MORE

Virtual Political Economy

Behavioral Economics and Rationality
Arnold Kling
Edward Castronova talks about World of Warcraft, Second Life, and such with Russ Roberts on the latest econtalk. I used to play bridge quite a bit, but I stopped when I went to grad school. At that point, the last... MORE

Pathological Individualism?

Political Economy
Bryan Caplan
I just got back from LA, and Ron Paul's signature was everywhere. A random "Who is Ron Paul?" billboard. A mini-rally at the Palm Springs public market. A button on the collar of my flight attendant. I have to admit... MORE

Predicting What Bryan will Write Sunday

Political Economy
Arnold Kling
Mark Thoma peers into the future to find this column by Bryan Caplan. In 1996, Gallup ran a survey about the minimum wage. Some respondents were asked if they favored an increase. More than 80 percent said yes. The rest... MORE

Political Long Tail, Revisited

Political Economy
Arnold Kling
Out of the blue, Newsweek's Andrew Romano quoted me, citing something I wrote over two years ago. It was an essay about the conflict between mainstream politicians and what I called the "Long Tail" of politics. If we had a... MORE

A Non-Pacifist Syllogism

Political Economy
Arnold Kling
A few weeks ago, Bryan wrote, Premise #1: Wealth makes men cowards. Premise #2: When all men are cowards, there will be no war. Conclusion: When all men are wealthy, there will be no war. Here is my non-pacifist syllogism:... MORE

A Russian Defends Rent-Seeking

Political Economy
Bryan Caplan
This passage from Anna Karenina reminds me of Tyler Cowen's "Rent-Seeking Can Promote the Provision of Public Goods" (1994. Economics and Politics 6(2), co-authored with Ami Glazer and Henry McMillan):...Oblonsky began telling them of a delightful shooting party at Malthus's... MORE

Ambiguity and Disagreement

Political Economy
Arnold Kling
Caleb Crain writes, It can be amusing to read a magazine whose principles you despise, but it is almost unbearable to watch such a television show. And so, in a culture of secondary orality, we may be less likely to... MORE

A Corporate State?

Political Economy
Arnold Kling
Mencius Moldbug writes, the purpose of property is to prevent violence. The formalist is completely unconcerned with the moral legitimacy of property rights. She is entirely concerned with their stability. To a formalist, a system in which no involuntary property... MORE

A Pacifist Syllogism

Political Economy
Bryan Caplan
Premise #1: Wealth makes men cowards. Premise #2: When all men are cowards, there will be no war. Conclusion: When all men are wealthy, there will be no war. Reasons to Believe Premise #1: Richer countries are much less violent... MORE

Popular Putin's Persecutions: What's the Point?

Political Economy
Bryan Caplan
Western media and the Russians I know agree: Putin is popular. An op-ed in the Washington Post says "He Delivers. That's Why They Like Him."Russians support their president because he did something rare for a politician: He delivered. Russia today... MORE

Basic Political Economy

Political Economy
Arnold Kling
Russ Roberts gives a lesson. Bruce Yandle uses bootleggers and Baptists to explain what happens when a good cause collides with special interests. When the city council bans liquor sales on Sundays, the Baptists rejoice—it's wrong to drink on the... MORE

Political Science

Political Economy
Arnold Kling
Terence Jeffrey writes, "The growing political importance of unmarried women is undergirded by a demographic shift that is fundamentally changing America," Greenberg Quinlan Rosner reported. "Between 1960 and 2006, the percentile of the voting age population (as opposed to households)... MORE

Selection Bias

Political Economy
Arnold Kling
Today's Washington Post has three prominent op-ed pieces. Mark Winne writes, During my tenure in Hartford, I often wondered what would happen if the collective energy that went into soliciting and distributing food were put into ending hunger and poverty... MORE

The Engineering Mindset

Political Economy
Arnold Kling
Diego Gambetta and Stefan Herzog write, Friedrich von Hayek, in 1952, made a strong case for the peculiarity of the engineering mentality, which in his view is the result of an education which does not train them to understand individuals... MORE

Caplanians in the Ivy League?

Political Economy
Bryan Caplan
I still remember when I was an undergraduate and Bill Dickens taught me how to pronounce "Mankiw." (That's MAN-KYOO to you.) I never would have believed that one day he'd be turning my name into an adjective:The public tends to... MORE

The Personal is Political

Political Economy
Arnold Kling
Reuters reports, Karl Marx, who complained of excruciating boils, actually suffered from a chronic skin disease with known psychological effects that may well have influenced his writings, a British expert said on Tuesday. ...hidradenitis greatly reduced his self-esteem," said Shuster,... MORE

Piling On

Political Economy
Arnold Kling
Dan Klein writes, If it happened that it was the sociologists who were relatively enlightened and libertarian, while economists were relatively foolish and statist, Bryan would have said Sociologists represent the more “rational” answers to questions. Let me start with... MORE

Two Metaphors for Government

Political Economy
Arnold Kling
On our left, we have George Lakoff, discussing the way taxes ought to be framed. Are you paying your dues, or are you trying to get something for free at the expense of your country? It's about being a member.... MORE

Doug Campbell's written a great short history of public choice for Region Focus, the newsletter of the Richmond Fed. Or at least that's what my Inner Megalomaniac thinks, since 50% of this short history is about my work! One highlight:To... MORE

Becker vs. Caplan

Political Economy
Arnold Kling
Gary Becker writes, the evidence that has been accumulated since Schumpeter's book gives good marks to free market systems in promoting the interests of the poor and middle classes, including minorities. And examples abound of corrupt and incompetent government officials... MORE

Bon Mot

Political Economy
Arnold Kling
From Alex Tabarrok: In fact, liberalism, meaning classical liberalism, has never been conservative. It began as a movement of the left against feudalistic, conservative insiders and it remains so today.... MORE

More on Journalists

Political Economy
Arnold Kling
Tyler Cowen makes 8 remarks about journalism. The one that most reinforces what I believe is: Journalists tend to favor visible stories and neglect invisible opportunity costs and invisible hand mechanisms, which often but not always puts them against the... MORE

Justin Wolfers on Divorce

Political Economy
Arnold Kling
Guest-blogging at Marginal Revolution, Wolfers writes, When the latest divorce numbers came out last week, they once again confirm this quarter-century long decline in divorce, but the media (including the Times, Post, and the Inquirer) chose instead to write (incorrectly)... MORE

Hindsight Bias

Political Economy
Arnold Kling
My latest essay is on this topic. it sets up a false set of expectations about what government can do. For example, people believe that government can regulate financial markets so that there are never any bubbles or miscalculations, no... MORE

Where Haidt Falls Short

Political Economy
Arnold Kling
Going back to Will Wilkinson's exposition. Haidt’s research leads him to posit five psychological foundations of human moral sentiment, each with a distinct evolutionary history and function, which he labels harm, reciprocity, ingroup, hierarchy, and purity. While the five foundations... MORE

Confusion About Greenspan

Political Economy
Arnold Kling
Felix Salmon writes, It's not very often that Brad DeLong and Paul Krugman find themselves epitomizing opposite sides of an issue, but DeLong seems to have become Alan Greenspan's apologist in chief even as Krugman sticks the knife in to... MORE

Cultural Contradictions of LIbertarianism?

Political Economy
Arnold Kling
Kay Hymowitz writes, libertarians depend on the family--an institution that, in crucial respects, is unfree--to produce the sort of people best suited to life in a free-market system (not to mention future members of their own movement). The complex, dynamic... MORE

Morning Reading and Reactions

Political Economy
Arnold Kling
We'll start with good news, and move down. Greg Mankiw (among others) links to a profile of Robert Barro. The main result of Barro's other hit paper on economic growth—a 1992 article in the Journal of Political Economy, coauthored with... MORE

Foreword to Bryan's Book

Political Economy
Arnold Kling
Jerry Muller, a historian of economic thought, emailed me a paper that begins, While there have been many historical instances of capitalism without liberal, representative democracy, there are no known cases of liberal, representative democracy without capitalism. Some other interesting... MORE

Anarchy, the State, and Utopia

Political Economy
Arnold Kling
Dani Rodrik writes, The problem with self-enforcing agreements is that they do not scale up. One of the findings from Elinor Ostrom’s extensive case studies is that self-enforcing arrangements to manage the “commons” work well only when the geographic scope... MORE

Various Links

Political Economy
Arnold Kling
Michael Cannon describes how the self-selection process in politics works against my ideas for reforming health care. “Insulation” is another term for spending Other People’s Money. Politicians are predisposed not to see spending Other People’s Money as a problem, because... MORE

Which Economists to Trust?

Political Economy
Arnold Kling
In a new econtalk podcast, David Henderson and Russ Roberts discuss the issue of how a layman should deal with economic expertise. They mention the problem that the press will seek out "balance" when in fact one side is represented... MORE

The Context and the Leader

Political Economy
Arnold Kling
I assess the Bush Presidency Claims that ordinary workers fared poorly under President Bush are suspect. Data on the "distribution of income" are often abused by people making the claim that only the rich are getting ahead. Even the abusers,... MORE

Positive Freedom, Negative Freedom, and Wealth

Political Economy
Arnold Kling
Julian Sanchez writes Is the freedom and individualism Lindsey sees the freedom from interference we find in Kansas or the plenitude and diversity of options we find in Manhattan? Or more generally, which of Isaiah Berlin’s “two concepts of liberty”... MORE

From Di Tella and MacCulloch:A finding that people who perceive corruption to be widespread also want more government regulation would be difficult to explain if regulations were simply facilitating rent extraction by bureaucrats.Is it really so "difficult" to believe that... MORE

Here's the beginning of the abstract from Di Tella and MacCulloch's "Why Doesn't Capitalism Flow to Poor Countries?" (non-gated version here):We find anecdotal evidence suggesting that governments in poor countries have a more left wing rhetoric than those in OECD... MORE

Most policies are popular. But I'm almost sure that Virginia's draconian new traffic fines are a counter-example. This part clinched it for me:Although the amount of the tax can add up quickly, the law forbids judges from reducing or suspending... MORE

Ballots Are Better than Bullets

Political Economy
Arnold Kling
Louis Menand writes, If all policy decisions were straightforward economic calculations, it might be simpler and better for everyone if only people who had a grasp of economics participated in the political process. But many policy decisions don’t have an... MORE

P. J. O'Rourke has Competition

Political Economy
Arnold Kling
It comes from 'Mencius Moldbug,' who says the US is just a corporation. It is not a mystic trust consigned to us by the generations. It is not the repository of our hopes and fears, the voice of conscience and... MORE

Anti-Finance Bias

Political Economy
Arnold Kling
Greg Mankiw writes A student who regularly reads and comments on this blog asks me for career advice, from a social point of view: How does someone like Warren Buffett contribute to the economy? It seems investing in old line... MORE

A Political Prediction

Political Economy
Arnold Kling
My latest essay concludes, If politics were football, then I would say that the Clinton and Bush years saw little forward progress for either side. Clinton might have moved the ball toward the progressives' goal line, but only a few... MORE

Ezra Klein writes, Michael Cannon and I would build very different systems, to be sure, but at base, we both believe the employer tie to be awful, and the insurers to suck, and the hospitals to be performing below expectations,... MORE

MRV update

Political Economy
Arnold Kling
Nick Schulz interviews Bryan Caplan. An excerpt, SCHULZ: William Buckley once said "I would rather be governed by the first 2000 names in the Boston phone book than by the Harvard faculty." Do you disagree? Why? CAPLAN: I'd definitely rather... MORE

Internet and Ideology

Political Economy
Arnold Kling
Russ Roberts writes Seems to me the essence of the web is a decentralized world, a world whether information and power and ideas and solutions don't have to be top-down but are more likely to be bottom-up. It would seem... MORE

Myth of the Rational...

Political Economy
Arnold Kling
Very interesting article by Ron Bailey. researchers polled 1,850 Americans about their attitudes toward nanotechnology. Eighty-one percent of those polled had heard nothing at all (53 percent) or "just a little" (28 percent) about nanotechnology. Nevertheless, after being offered a... MORE

Confucianism vs. Irrational Voters

Political Economy
Arnold Kling
Daniel A. Bell writes, The Confucian view is that political leaders should be the most talented and public-spirited members of the community, and the process of choosing such leaders should be meritocratic, meaning that there should be equal opportunity for... MORE

The Tug-of-War over Capitalism

Political Economy
Arnold Kling
From my latest essay. Those of us on the pro-capitalist (P) side tend to approve of the price system, because we think it helps send signals. Those on the anti-capitalist (A) side see prices as corrupt. For example, when the... 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

Reply to Grier on Venezuela

Political Economy
Bryan Caplan
Kevin Grier replies to my reply to his MR post on Chavez. First, an apology: Bryan: Why in the world would you say my post was "calculated to offend"? In all honesty I find that labeling offensive.Sorry if the humor... 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

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

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

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

Drum Roll Please...

Political Economy
Bryan Caplan
I've got an op-ed based on my book in today's Wall St. Journal! You'll soon see me at Wegmans buying a stack of ten copies.... 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

Would Ageless People be Libertarian?

Political Economy
Arnold Kling
The point is raised by a commenter on Futurepundit. curing aging will not make us immortal in the true sense of the word. We can still die due to accidents, homicide, and suicide. The word immortality is not appropriate. I... MORE

How Irrational are Voters?

Political Economy
Arnold Kling
My co-blogger's Myth of the Rational Voter has gotten well-deserved thumbs up from Greg Mankiw and Tyler Cowen. Tyler raises some issues, including 3. Voters are less irrational in many northern European countries. I don't agree with their socialistic view... MORE

Rodrik and Economic Policy Reform

Political Economy
Bryan Caplan
I cherish my negative inspirations - the thinkers who clearly and cogently champion positions I think are completely wrong. So I'm pleased to see that one of my favorite negative inspirations, Dani Rodrik, has taken to the blogosphere. I keep... MORE

Government is not going away

Political Economy
Arnold Kling
In an interview, Jonathan Rauch says, When you get right down to it, there doesn't seem to be really much of a constituency in this country for reducing the size of government in painful or unpleasant ways. Even Barry Goldwater,... MORE

What is a Collapse?

Political Economy
Arnold Kling
I'm surprised that Bryan, of all people, would ask. If you're looking for a notion of collapse, try here. A society can get stuck in an "idea trap," where bad ideas lead to bad policy, bad policy leads to bad... MORE

State of Fear

Political Economy
Arnold Kling
Megan McArdle participated in a panel discussion on fear with Chris somebody and Frank Furedi. The topic was fear, which I discussed here. Furedi, a sociologist, complained that people are starting to have their identities wrapped up in what they... MORE

A Theory of Government

Political Economy
Arnold Kling
My latest essay is something that, if I were so inclined, I could try to dress up in academic jargon and send to a professional journal. But having to dress thoughts up that way is one of the things that... MORE

Libertarianism's Crisis

Political Economy
Arnold Kling
I am going to disagree with Bryan's criticism of Tyler. What I would say (and Tyler seems to be saying) is that libertarians currently lack a rallying point. From the 1930's through the Nixon Administration price controls, the forces of... MORE

David Friedman on Taxis and Tipping

Political Economy
Arnold Kling
In the book that everyone is reading but I'm still only 2/3 through, Brian Doherty writes, [David] Friedman points out the intriguing datum that tipping in taxi cabs--almost purely a situation of paying for a public good because of social... MORE

Taxes and Tipping

Political Economy
Arnold Kling
In an essay called Foundations of the Kling School, I write, Economics should be subsumed under the general study of human behavior, not the other way around. ...The conceptual differences between leaving a tip and paying income taxes are not... MORE

Tyler on the Problems of Libertarians

Political Economy
Arnold Kling
Tyler Cowen writes, Overall libertarians should embrace these developments. We should embrace a world with growing wealth, growing positive liberty, and yes, growing government. We don’t have to favor the growth in government per se, but we do need to... MORE

Shimer on Acemoglu

Political Economy
Arnold Kling
Robert Shimer tries to summarize the research of Clark Medalist Daron Acemoglu. One example. Daron and James [Robinson] explore the transition from autocracy to democracy. What makes the political elites allow the poor to vote? Daron and James argue that... MORE

Church and State

Political Economy
Arnold Kling
In In this essay, I coin a term civil societarian. The stereotypical libertarian might cite Ayn Rand and exalt the independent individual. Instead, a civil societarian would cite Alexis de Tocqueville, and his observation that "Americans of all ages, all... MORE

"Pro-Gamer Groups Oppose Dungeons & Dragons"

Political Economy
Bryan Caplan
When I was a young nerd, a local busy-body told my mom that I shouldn't be allowed to play Dungeons & Dragons because "It's devil worship." Such complaints continue to this day. But I do have one thing to say... MORE

Hayek and Fusionism

Political Economy
Arnold Kling
Ed Feser writes, The foundation of Hayek's thought is an emphasis on the severe limitations on human knowledge, especially where human social institutions and other complex phenomena are concerned. For Hayek, even the knowledge we do have is dispersed and... MORE

Rational Autocrats

Political Economy
Arnold Kling
Another terrific audio interview by Russ Roberts. In this case, he talks to political scientist Bruce Bueno de Mesquita. Basically, his outlook on the world is that autocrats are rational, and they do what is best in order to maintain... MORE

Politics, Economics, and Religion

Political Economy
Arnold Kling
I write, I find it a challenge trying to persuade religious conservatives to loosen the relationship between their religious beliefs and their political agenda. However, I find it even more of a challenge to deal with the Left, where their... MORE

Libertarian Principles

Political Economy
Arnold Kling
In my latest essay, I articulate a list. It starts with, 1. We weave a thread of self-reliance into a sturdy fabric of interdependence. By respecting the law, we reinforce impersonal justice. By competing intensely and fairly in an impersonal... MORE

Milton Friedman Day

Political Economy
Arnold Kling
Today is Milton Friedman day. More information is here My little contribution is this essay. I call this the Fundamental Problem of Political Economy. How do we limit the power that idiots have over us? One solution, that might be... MORE

Multiple Choice

Political Economy
Arnold Kling
[2] once wrote, While [1]'s theoretical work is universally admired by professional economists, there's much more ambivalence about his policy pronouncements and especially his popularizing. And it must be said that there were some serious questions about his intellectual honesty... MORE

Telling Bias Stories

Political Economy
Arnold Kling
Robin Hanson writes, Each side in a controversy feels a need to offer bias theories to explain why the other side disagrees. Without such bias theories, observers will wonder why they should side with one side against the other, if... MORE

Avoiding Truth

Political Economy
Arnold Kling
My latest essay says, The great mass of people form their political beliefs with little regard for facts or logic. However, the elites also have a strategy for avoiding truth. Elites form their political beliefs dogmatically, using their cleverness to... MORE

Notes on Critical Review's Converse issue

Political Economy
Arnold Kling
I recommend the "triple issue" of Critical Review, entitled Is Democratic Competence Possible?. Its starting point is a 40-year-old essay by public opinion researcher Philip Converse called "The Nature of Belief Systems in Mass publics." I am using this post... MORE

Political Beliefs and Self-Deception

Political Economy
Arnold Kling
Tyler Cowen wrote, Just about everyone thinks that their political views are better than the views of smarter or better trained others. On economic issues, few voters defer to the opinions of economists. Nor does this appear to be a... MORE

Clive Crook on Milton Friedman

Political Economy
Arnold Kling
he writes (link may expire soon), Much of what is wrong with popular attitudes to capitalism comes down to one thing: a lack of wonder at what uncoordinated markets can achieve. Going to a grocery store for the hundredth or... MORE

My Take of Milton Friedman

Political Economy
Arnold Kling
is this essay. On questions of public policy, Friedman's answer was always that it is better to allow individuals to make their own decisions than to impose government fiat. His opponents were always in the position of arguing that government... MORE

On Milton Friedman

Political Economy
Arnold Kling
Brad DeLong writes, Friedman was a pragmatic libertarian. He believed that -- as an empirical matter -- giving individuals freedom and letting them coordinate their actions by buying and selling on markets would produce the best results. It was not... MORE

Technocrats and Populists

Political Economy
Arnold Kling
Bryan writes, Politicians usually ignore wise advice. Is that a reason not to try to make them take wise advice? Coming from a libertarian (or someone who I thought was a libertarian a few weeks ago), is that a trick... MORE

Brad DeLong is Fantasy-Based

Political Economy
Arnold Kling
Brad DeLong writes My natural home is in the bipartisan center, arguing with center-right reality-based technocrats about whether it is center-left or center-right policies that have the best odds of moving us toward goals that we all share--world peace, world... MORE

Faith in Leaders

Political Economy
Arnold Kling
In my latest TCS essay, I write, Democracy does not lead to particularly good choices. Most successful institutions in society are not democratic. ...For me, the value of democracy is that it provides a check on government officials. The fact... MORE

One Manifesto, Two Responses

Political Economy
Arnold Kling
University of Chicago Law Professor's ten principles of liberalism drew two responses in today's TCSdaily. Professor Stephen Bainbridge writes, the progressive communitarian's basic flaw is his willingness to invoke the coercive power of the state in ways that deny the... MORE

Democracy's Vices

Political Economy
Arnold Kling
Michael Munger writes, On many kinds of policy, where one unique alternative must be selected from among many, and the legitimacy of that choice is at least as important as the choice itself, democracy has no equal. One defense budget,... MORE

Lawyers in Government

Political Economy
Arnold Kling
'Cactus' of Angry Bear writes, Why is it OK to have an attorney making decisions about nuclear power, or how to combat mad cow disease or scrapie, or whatever else, regardless of the attorney’s level of ignorance on the subject... MORE

Capitalism, Democracy, and Polygamy

Political Economy
Bryan Caplan
There's a memorable passage in John Mueller's Capitalism, Democracy, and Ralph's Pretty Good Grocery where he argues that minorities can stop majority oppression by (a) coming out of the closet, and (b) banding together to complain: For generations (actually, for... MORE

Murray Edelman and the Myth of the Rational Voter

Political Economy
Arnold Kling
Critical Review has come out with an issue for which I have been waiting eagerly, because it has a symposium on Murray Edelman, a political scientist. My father knew Edelman and was a big fan of his 1964 book The... MORE

Bryan's Thought Experiment

Political Economy
Arnold Kling
Someone claiming to be Bryan writes, After fifty years of libertarian dominance in academia, we'd be in the same situation. Lots of our least-favorite policies would be drastically scaled back. But we'd seem out of touch for demanding abolition, and... MORE

MRV watch

Political Economy
Arnold Kling
Ilya Somin writes Recent research suggests that even the most sophisticated and highly rational voters may rely on shortcuts that have little relevance to political candidates’ likely performance in office. For example, a recent study of elections for the presidency... MORE

What Should Classical Liberals Do?

Political Economy
Arnold Kling
Tyler Cowen writes, 1. The welfare state is not going away. But it is imperative that we avoid Western European levels of taxation through the explosion of Medicare liabilities... 2. What recipes lead to both strong markets and decent governance?...... MORE

Confirming Arnold's and Bryan's Biases

Behavioral Economics and Rationality
Arnold Kling
Michael Shermer writes, During the run-up to the 2004 presidential election, while undergoing an fMRI bran scan, 30 men--half self-described as "strong" Republicans and half as "strong" Democrats--were tasked with assessing statements by both George W. Bush and John Kerry... MORE

Bartlett's Theory of Political Dynamics

Political Economy
Arnold Kling
Bruce Bartlett writes, The fact is that a lot of people who get into politics don't really have any ideology... Rather, their only concern is which party will give them the best chance of winning. Secondarily, they are concerned about... MORE

Take the Test

Political Economy
Arnold Kling
I have a test to see whether you are a conservative. It has six questions. For example, Do you believe that the flaws and imperfections of human beings are reflected in government? See how you do.... MORE

I am not a Populist

Political Economy
Arnold Kling
Bryan asks, Arnold, do you really think that Miron's proposals would appeal to a majority of Americans? Raising the retirement age to seventy? It depends on how the issue is framed. When Al Gore framed it during his acceptance speech... MORE

Question for Arnold

Political Economy
Bryan Caplan
Arnold's sounding like a bit of a populist: Miron writes as if the main issue is between Democrats and Republicans. Instead, the issue is Inside vs. Outside the Beltway. It is inside the beltway that these spending cuts are "unthinkable"... MORE

MRV Alert

Political Economy
Arnold Kling
Holman Jenkins writes, When Americans finally must look daily to the stock market rather than the government as guardian of their retirement, their appetite for fantasies and demagoguery on bread-and-butter issues like gas prices will decline too. The single biggest... MORE

Emergent Nations

Growth: Causal Factors
Arnold Kling
From my latest essay: What [Meir] Kohn points out (in other chapters) is that medieval guilds, which we think of as backward institutions, helped to solve the lemons problem long before government inspection came along. Each guild jealously guarded its... MORE

Private Security

Political Economy
Arnold Kling
The Boston Globe reports, UN's plans to take control of the troubled peacekeeping operations currently being led by the African Union, and NATO recently stated publicly that a force of its own in Darfur is ''out of the question." Meanwhile,... MORE

Transparent Government and Libertarianism

Political Economy
Arnold Kling
Will Wilkinson writes, [There is ] a big principle-agent/incentive compatibility problem between representatives and the citizens they represent. Politicians want to get re-elected. If they can subsidize interest group A at group B’s expense without group B really noticing due... MORE

Alan Blinder is not Boring

Political Economy
Arnold Kling
In another paper, on the relationship between economics and policy, he writes, In the academic world, where we routinely prepare papers that perhaps two dozen other people will ever read, the standards of evidence are quite strict. Proofs must be... MORE

Type II error

Political Economy
Arnold Kling
"Where's Arnold?" you may be asking. I had jury duty this week, and it was a difficult criminal case. We deliberated for almost three days, and deadlocked at 6-6. Loosely speaking, the liberals voted acquittal, and the conservatives voted conviction.... MORE

Economic Nationalism

Political Economy
Arnold Kling
My latest essay: Nationalistic rhetoric about economics is even worse than nationalistic rhetoric about the Olympics. Nationalism about the Olympics is a marketing tool for commercial exploitation, and the harm done is relatively minor. Nationalism about the economy is a... MORE

New and Exciting Economics

Political Economy
Arnold Kling
Tyler Cowen asks what is the most interesting work in the economics profession today? He gives a few answers, one of which is World Bank data on corruption and governance. I would broaden that to political economy and institutional economics... MORE

Data on Political Beliefs

Political Economy
Arnold Kling
Two items in the Wall Street Journal. An editorial notes that the Chinese top the world in their support for market capitalism. In a poll conducted for the University of Maryland's Program on International Policy Attitudes between June and August... MORE

Elite Fools

Political Economy
Arnold Kling
Although I like Bryan Caplan's new book, I disagree with treating government as an elected dictator. Another aspect that troubles me is Caplan's brand of elitism.... MORE

An Elected Dictator?

Political Economy
Arnold Kling
Although I agree with much of what Bryan Caplan has to say in his new book, there are a couple of points that give me problems. One, which has come up before in this blog, is his dismissal of the... MORE

Majority Fools

Political Economy
Arnold Kling
I don't know whether it comes across to our readers, but co-blogger Bryan Caplan is an important scholar. His latest book, for which he is still mulling a title, is a major work. I like the title Majority Fools, which... MORE

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