EconLog Archive
Uncategorized
“Junk Fees” Typically Serve an Important Purpose
Charging extra for specific preferences, such as a seat selection on a flight, enables lower basic prices, increasing access to no-frills options for lower-income customers, while allowing businesses to customize their services to individual customers’ preferences. Airlines unbundle in-flight food and checked bags, for example, leading to more profit opportunities and lower base fares. Yes, .. MORE
Adam Smith
Professor Hugh H. Macaulay: A Tribute on His Centennial
Click-a-ty-clack, click-a-ty-clack . . ., click-a-ty-clack. Those were the sounds that regularly echoed down the second-floor hallway of Clemson University’s Sirrine Hall in the 1980s and before. Those sounds of metal-on-metal could be expected by the economists on the floor at 10:00 in the morning, carrying a clear message: “Time for coffee!” The sounds .. MORE
Austrian Economics
My Life as an Austrian Economist: My Philosophical Vision and the Critique of Scientism
As with any tale, it is useful to begin at the beginning. And in my instance, all my beginnings related to Austrian economics are found at Grove City College. How I ended up at Grove City is an extremely unlikely journey with zigs and zags, the probability of which defies all calculation. I was not .. MORE
Labor Mobility, Immigration, Outsourcing
The Actual “Great Replacement”
Some people on the right worry that immigration will cause America’s white population to be largely replaced by non-whites. This hypothesis is sometimes referred to as “The Great Replacement”. There is a great replacement occurring, but these worriers have things exactly backwards. (As an aside, this post will not examine the pros and cons of .. MORE
Economics of Crime
How Drug Prohibition Increases the Rate of Crime
This is the fourth in my series on the social costs of drug prohibition. You can read part one here (prison-industrial complex), part two (police militarization) here, and part three (civil asset forfeiture). Prohibition policies are often sold to a willing public on the grounds of crime reduction. This is especially true regarding the .. MORE
Energy, Environment, Resources
Some of the Awful Effects of Price Controls on Oil
Because the price control system was incomplete in that it didn’t cover every part of the U.S. oil market, the price controls were rarely binding. When they were, in the winter of 1972–1973, winter of 1973–1974, and early 1979, shortages occurred. During the rest of the 10 years, the price controls and entitlements program .. MORE
Books: Reviews and Suggested Readings
Free Markets Against Discrimination on eBay
I live in Alabama, where college football is the major religion. The two major denominations are the University of Alabama Crimson Tide and the Auburn University Tigers. They have fought a storied and ludicrously overwrought rivalry since 1893, except for the four-decade gap between 1907 and 1948 when they didn’t play one another because the .. MORE
Business Economics
Who Makes a Promise
Another day, another labor market intervention! Recently, the Biden administration has announced new rules regarding overtime pay and salaried employees. Generally, salaried employees are paid a flat rate, not paid by the hour, and as such don’t get traditional overtime pay. But legislators have decided that lower-paid salaried workers should also get overtime pay. This .. MORE
Money and Inflation
The War on Prices
Co-blogger David Henderson usefully mentioned the publication of an interesting book edited by Ryan Bourne, The War on Prices. The authors, of which I am honored to be part, also include Brian Albrecht, Pedro Aldighieri, Nicholas Anthony, David Beckworth, Ryan Bourne, Eamonn Butler, Vanessa Brown Calder, Michael Cannon, Jeffrey Clemens, Bryan Cutsinger, Alex Edmans, Peter Jaworski, .. MORE
International Trade
Let’s Hope that Tariffs are Inflationary
David Henderson has an excellent post on the effect of tariffs on the price level. I agree with his analysis, but here I’ll reframe the debate in a way that I hope will also be helpful. Let’s begin with a few propositions: 1. Under the vast majority of policy regimes, the imposition of tariffs leads .. MORE
Media Watch
The Alchemy of Military Expenditure
There may be a charitable way to interpret the following Wall Street Journal statement in a report on Mr. Putin’s replacement of his defense minister (“Russia’s Putin Replaces Defense Minister in Security Shake-Up,” May 12, 2014): Military spending, which has surged to over 6% of gross domestic product this year, up from 2.6% before the .. MORE
Books: Reviews and Suggested Readings
Ryan Bourne’s Supremacy
The quantity of rent-controlled apartments demanded thus becomes enormous. In New York City, some old rent-controlled units have become family heirlooms. A woman went viral on TikTok in 2021 after showcasing her redecorated $1,300 a month rent-controlled two-bedroom apartment on the Upper West Side, after inheriting the lease from her parents—a unit that would .. MORE
International Trade
Tariffs Do Cause a Slight Temporary Increase in Inflation
Don Boudreaux writes: Unlike you who find Duncan Braid’s May 6th harangue against supporters of free trade “devastating,” I find it to be tendentious. Braid writes triumphantly as if he’s caught us free traders in yet another of our Keystone Kops antics – specifically here, our effort to blame tariffs for inflation. Yet no competent .. MORE
Technology
Visions of the 21st century
Niels Bohr once said: “It is difficult to make predictions, especially about the future.” I say: Prediction is not about the future, it’s about the present. Now that I’m fairly old, I can look back on a wide range of visions of the 21st century, many of which now seem obsolete. Here are just a .. MORE
Books: Reviews and Suggested Readings
My Reading Highlights for Week of May 12
First, Happy Mothers’ Day. Trump Promised To ‘Drain the Swamp.’ He Did the Opposite. By John Stossel, Reason, May 8, 2024. Excerpt: In 2020, then-President Trump said he was succeeding: “We’re draining the Washington swamp!” But it’s not true. “He made government bigger,” Economist Ed Stringham says in my new video. ‘That’s going in the wrong direction. .. MORE
International Trade
Biden Is Really Trump 2.0, Not Surprisingly
According to press reports, the Biden administration is on the verge of announcing a quadrupling of the customs tariff (a tax on American importers) on EVs made in China. He may also announce other Trumpian tariffs (“Biden to Quadruple Tariffs on Chinese EVs,” Wall Street Journal, May 10, 2024). That would not be surprising. In .. MORE
Competition
The DOJ-Apple Case: Harming Consumers v. Harming Competitors
The DOJ’s antitrust lawsuit against Apple rounds out the set of cases against the big tech firms that have drawn so much ire from enforcers. These include the DOJ’s ongoing suits against Google, and the FTC’s cases against Amazon and Meta. While the Biden administration’s antitrust officials initially signaled that their targets for enforcement include .. MORE
International Trade
The Ukraine War: Who should sacrifice?
I recently came across three news stories that are worth thinking about. The first story discussed the US government’s role in encouraging gun exports, which often lead to violence in developing countries. Here’s Bloomberg: Last October, a recently fired police officer walked into his stepson’s nursery school in the remote northeast of Thailand and, in .. MORE
Incentives
Disinformation Exists and Is Dangerous
Last week’s issue of The Economist featured a few articles about disinformation, which it defines as “falsehoods that are intended to deceive.” More precisely, I would define it as the intentional publication or spreading of fact-related information that is nearly certainly false by a person or an organization whose self-interest it is to spread the .. MORE
Business Economics
Are Businesses Hard-Hearted?
How often have you heard a line something like the following: “Because businesses care only about making money, they and their executives are hard-hearted towards their customers and employees.” Even some people who think that, on net, businesses are good for our economy, often characterize them as being hard-hearted because of their profit motive. .. MORE
Books: Reviews and Suggested Readings
Legislators, Technology, and Michael Crichton
Michael Crichton once highlighted an unusual quirk in human thinking – something he called Gell-Mann Amnesia, after his friend Murray Gell-Mann. Chrichton said: Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray’s case, physics. In mine, show business. You read .. MORE