AI vs the Rent Seekers

Centuries of argument have left a stubborn question unresolved: how much economic inequality is acceptable? Unlike inequalities rooted in race, gender, or disability—which typically attract broad moral condemnation—economic inequality in income, consumption, and wealth remains fiercely contested. That contestation does not result from a flaw in the debate; it is the debate’s defining feature. This… MORE

There are at least two meanings for “dominance” in relation to monetary and fiscal policy. The first one, proposed by Milton Friedman in 1968, is that when monetary policy and fiscal policy are in contradiction, that is, one is expansionary and the other contractionary, the effects of monetary policy tend to prevail. The other meaning,… MORE

What can Adam Smith teach us today? In this conversation between Ross Levine of Stanford’s Hoover Institution and EconTalk’s Russ Roberts, Smith emerges as a penetrating psychologist who understood that our deepest hunger isn’t for wealth but for respect–and that this hunger, left unexamined, leads individuals and societies alike into serious trouble. The discussion moves… MORE

“[W]hatever we may think of Smith and the Wealth of Nations they did become symbolic of the new discipline of economics through the centuries and it hardly befits us to question the judgments of past generations’s assessments of the value of a work they read for themselves for their own purposes. It is a matter… MORE

For Smith, moral philosophy is the study of virtue and the faculty of mind that allows us to determine what is praise- or blameworthy conduct. When we understand the project of the moral sentiments, we can see that Smith adopts the same logic in his analysis of political economy. Political economy provides a lens through… MORE

Yet the argument of Book V of Wealth of Nations is something quite different. Over hundreds of pages, Smith patiently shows why both peace and a tolerable administration of justice are historically rare, and continually fragile. To the extent that some society or other happens to have them, it seems to be neither the natural… MORE

Recipient of the Nobel Memorial Prize in Economic Sciences, Milton Friedman (1912-2006) has long been recognized as one of our most important economic thinkers and a leader of the Chicago school of economics. He is the author of many books and articles in economics, including A Theory of the Consumption Function and A Monetary History… MORE

Recognized as one of the most influential voices in the areas of market structure, the theory of the firm, law and economics, resource unemployment, and monetary theory and policy, in this 2001 interview, Armen Alchian (1914-2013) outlines the “UCLA tradition” of economics which he founded and explores the many unanticipated consequences of self-seeking individual behavior.… MORE

Nobel laureate Ronald H. Coase (1910-2013) was recorded in 2001 in an extended video now available to the public. Coase’s articles, “The Problem of Social Cost” and “The Nature of the Firm” are among the most important and most often cited works in the whole of economic literature. Coase recounts how he tried to encourage… MORE

Compound Rates of Growth In the modern version of an old legend, an investment banker asks to be paid by placing one penny on the first square of a chessboard, two pennies on the second square, four on the third, etc. If the banker had asked that only the white squares be used, the initial… MORE

  With The Wealth of Nations Adam Smith installed himself as the leading expositor of economic thought. Currents of Adam Smith run through the works published by David Ricardo and Karl Marx in the nineteenth century, and by John Maynard Keynes and Milton Friedman in the twentieth. Adam Smith was born in a small village… MORE

“ Innovation”: creativity; novelty; the process of devising a new idea or thing, or improving an existing idea or thing. Although the word carries a positive connotation in American culture, innovation, like all human activities, has costs as well as benefits. These costs and benefits have preoccupied economists, political philosophers, and artists for centuries. Nature… MORE