EconLog Archive
Politics and Economics
The Constitution of Liberty in the Era of AI
We are living through a great social transformation comparable to the industrial revolution. What sets it apart is not only its magnitude, but its multidimensional convergence: technological, economic, political, and epistemic shifts unfolding simultaneously and reinforcing one another. This shift places growing strain on inherited political cleavages and ideological frameworks, many forged under very different .. MORE
Business Economics
The Cultural Theory of YIMBY
How does anything get built? What are the political precursors to development? Michael Munger has an interesting, and at times persuasive, argument that self-interest combines with particular institutional designs, such as public hearings, to create a prisoner’s dilemma where everyone knows that development is in aggregate desirable but wants that development to be in the .. MORE
Business Economics
Put It in Your Own Backyard
On a chilly Thursday evening last December, citizens in Dorr, Michigan, a small community about a half-hour south of Grand Rapids, attended a town hall meeting to discuss the possible construction of a data center on the north end of town. Some of the attendees came from families who had lived in Dorr for generations .. MORE
Uncategorized
AI and the Luddites
Daron Acemoglu has been the target of an unusually harsh piece in The Economist, which prompted fellow economists to come to his aid. The magazine cast doubt on the data and methods underlying his research on institutions; it suggested that Acemoglu frames complex historical episodes through overly simple narratives, and that “institutions” in his hands .. MORE
Books: Reviews and Suggested Readings
The Economist Who Forgot Economics
Daron Acemoglu won the Nobel Prize in economics in 2024 and is the third most cited economist of all time. Thus, the paradox of his new book, What Happened to Liberal Democracy?, is that its most serious analytic failures are economic. He provides a sincere and serious consideration of modern liberalism’s estrangement from the working .. MORE
Uncategorized
The NIMBY Prisoner’s Dilemma
In the last thirty years or so, the United States has seen persistent shortages of housing, waste disposal facilities, electricity generation, and oil refineries. More recently, we have begun to see the difficulties in building data centers, portending new shortages. This is confusing in a wealthy nation. A “shortage” occurs when there is too little .. MORE
Sam's Links
Sam’s Links: August Edition
Sam Enright works on innovation policy at Progress Ireland, an independent policy think tank in Dublin, and runs a publication called The Fitzwilliam. Most relevant to us, on his personal blog, he writes a popular link roundup; what follows is an abridged version of his Links for July. Blogs and short links 1. Questions that .. MORE
Game Theory
The Cost of Conspiracy
People conspire all the time. Firms collude. Politicians bargain behind closed doors. Militaries deceive their enemies. But other conspiracies are detected, or they do not last long. Why do some remain secret while others are revealed? A simple game theory model can help illustrate that the probability of a conspiracy being revealed depends on the .. MORE
Liberty
Atlas Shrugged and Interventionism
I. Atlas Shrugged in Brazil In 1988, when I was 27 years old, I read Ayn Rand for the first time. It was her novel Atlas Shrugged, in its just-released Portuguese edition. At that time, I already considered myself a sort of classical liberal, but my superficial knowledge of political philosophy, among many other gaps .. MORE
Labor Market
Dump Trucks, AI, and Unemployment
In the good old days, dump trucks came in one discrete unit. Nowadays, they pull trailers with as much cubic space as themselves. Once upon a time, buses, too, were constituted in a fairly modest vehicle. Today, they are double their previous size. Half as many drivers are now required to pilot these roadway behemoths. .. MORE
Trade and Exchange
Action Figures and the Balance of Payments
In their textbook, Modern Principles of Economics, Tyler Cowen and Alex Tabarrok ask what happens when Walmart buys toys from a Chinese supplier. I decided to test this once by going to my local Walmart and buying an action figure of All Elite Wrestling’s Brody King, which is part of the Jazwares “Unrivaled” collection and .. MORE
Cost-benefit Analysis
You Cannot Outsource Life: Severance and Wild Problems
In Season 1 of the TV show Severance, we learn that the main character, Mark Scout, once shared a life with his wife, Gemma, whose presumed death he mourns. In Season 2, the audience sees flashbacks of the highlights of their romantic life but also some profound pain they experienced (for example, a miscarriage). Maintaining .. MORE
Economic and Political Philosophy
Human Flourishing and Marginal Utility
The law of diminishing marginal utility is one of the foundational principles of economics, but its significance extends far beyond the marketplace. The principle states that as a person acquires additional units of a good, the satisfaction gained from each successive unit tends to decline. The first glass of water relieves intense thirst, the second .. MORE
International Trade
Trade and Employment
How much is international trade costing Americans jobs? It turns out, not much. A major objection by protectionists is that international trade with other countries, especially low-wage countries, will undermine American workers. As a consequence, there will be a “giant sucking sound” (to use Ross Perot’s phrasing) as jobs are pulled from the United States .. MORE
Sam's Links
Sam’s Links: July Edition
Sam Enright works on innovation policy at Progress Ireland, an independent policy think tank in Dublin, and runs a publication called The Fitzwilliam. Most relevant to us, on his personal blog , he writes a popular link roundup; what follows is an abridged version of his Links for June. Blogs and short links 1. From .. MORE
Political Economy
America the Market
Adam Smith’s publication in 1776 of An Inquiry Into the Nature and Causes of the Wealth of Nations (WN) may not have had a direct influence on the drafting of the Declaration of Independence. Smith’s The Theory of Moral Sentiments (TMS) was better known in 1776 and certainly did influence the colonists. But Smith’s arguments on political economy may .. MORE
Obituaries
A Tribute to Mark C. Schug’s Career in Economic Education
On July 13, the field of economic education lost one of its leading educators, Dr. Mark C. Schug. I had the privilege of knowing Mark for many years and the honor of coauthoring Economic Episodes in Civics and American Government with him. This tribute aims to preserve the historical record of his remarkable career and .. MORE
Economic Methods
What if Canada Did an IPO?
Can a private company be worth more than Canada’s entire economy? Some people seem to think so. Every so often, a superstar company, usually in the tech sector, hits a record valuation, prompting comparisons to a country’s GDP. For example, NVIDIA’s market capitalization surpassed Canada’s GDP in 2025. By May 2026, the chip designer was .. MORE
Political Economy
Taxation Without Representation: An Enduring American Grievance?
Few political ideas have proven as durable as the complaint embedded in the Declaration of Independence that the British Crown was “imposing taxes on us without our consent.” That grievance was not merely rhetorical flourish; it captured a central concern of the American colonists about the relationship between political authority and individual liberty. More than .. MORE
Labor Market
The High Cost of Just Cause
This month, amid World Cup fever, New York City implemented a new job-protection law. This law forbids app-based rideshare platforms from removing drivers unless they can show they have “just cause” or a “bona fide economic reason.” The new law follows a pattern set by a similar pandemic-era law, also from New York City, which .. MORE
Austrian Economics
A World Cup Final Through Austrian Eyes
Imagine that history made one small exception. For one evening only, time stopped separating generations. High above the noise of a packed World Cup final game, in a quiet corner of the grandstand untouched by television cameras, eight elderly gentlemen quietly took their seats. No one around them seemed to notice. The crowd had come .. MORE