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Beware of Economic Misconceptions

Herbert Stein, an economist who served in the Nixon Administration, wrote a memoir in which he looked back on his experience. He wrote that two main lessons he had learned were: 1. Economists do not know very much. 2. Other people, including politicians who make economic policy, know even less about economics than economists do.1 .. MORE

Book Review

Capitalism, Corruption, and the Ugly Pig

Book Review of What Went Wrong with Capitalism? by Ruchir Sharma.1 Capitalism has a “Pretty Pig” problem. The reference is to a state fair livestock contest, where there is a judging of the beauty of adult swine. There are only two entrants, because adult swine just aren’t pretty. The first pig is brought out, and .. MORE

Book Review

The Wrong Road to Freedom

A Book Review of The Road to Freedom: Economics and the Good Society, by Joseph E. Stiglitz.1 Introduction Columbia University economics professor Joseph E. Stiglitz has recently published a book titled The Road to Freedom: Economics and the Good Society. In it, Stiglitz, who shared the 2001 Nobel Prize in economics with George Akerlof and .. MORE

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Politics and Economics

Is divided government a good thing?

By Scott Sumner

Cost-benefit Analysis

When Should the Government Intervene?

By Art Carden

Books: Reviews and Suggested Readings

Decoupling Desert and Responsibility

By Kevin Corcoran

Economic Education

Introducing EconLog Price Theory: Cutsinger’s Solution

By Bryan Cutsinger

Adam Smith

Pin Factory, 40,000 BC

By Scott Sumner

Labor Market

Baumol’s Cost Disease Comes to Britain

By John Phelan

Central Planning

Notes on Hayek’s “The Use of Knowledge in Society”

By David Henderson

Cross-country Comparisons

Taiwan is the Alternative, Not the CCP

By Marcos Falcone

Political Economy

The Myth of the Lacking “State Capacity”

By Pierre Lemieux

Macroeconomics

Conor Sen on Fed Policy

By Scott Sumner

EconTalk

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econtalk-podcast

Reclaiming Tribalism (with Michael Morris)

Is tribalism destroying democracy? According to cultural psychologist Michael Morris of Columbia University, just the opposite may be the case. As he explains in his new book, Tribal, our tribal instincts can also be the source of our success–in politics, society, business, and even professional sports. Listen as Morris and EconTalk’s Russ Roberts discuss real examples of .. MORE

econtalk-extra

Ravitch’s Resistance

In this episode, EconTalk host Russ Roberts talks with historian Diane Ravitch about her new book, Slaying Goliath. Ravitch, a former proponent of charter schools, now bemoans what she sees as their broken promise to American students. Charters promised to be R&D centers for best educational practices, which they would then share with the traditional .. MORE

EconLog

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Adam Smith

Pin Factory, 40,000 BC

Adam Smith famously commented on how specialization increased productivity in a pin factory, where different individuals specialized in each subtask involved in manufacturing even a simple object. I thought of that anecdote when reading Razib Khan’s account of the difference between Neanderthals and early modern humans in Europe: Though Neanderthals made effective tools, they were .. MORE

Central Planning

Notes on Hayek’s “The Use of Knowledge in Society”

Because this is the 50th anniversary of the announcement that Friedrich Hayek was co-winner of the Nobel Prize in economics (the person who shared it was Gunnar Myrdal), it’s a good time to look closely at his 1945 article in the American Economic Review, “The Use of Knowledge in Society.” When I used to cover .. MORE

LIBERTY CLASSICS SERIES

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continued relevance of our classic titles.

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Poor Law Commissioners’ Report of 1834

By Nassau Senior

WE, the COMMISSIONERS appointed by YOUR MAJESTY to make a diligent and full inquiry into the practical operation of the Laws for the Relief of the Poor in England and Wales, and into the manner in which those laws are administered, and to report our opinion whether any and what alterations, amendments, or improvements may .. MORE

Capital and Its Structure

By Ludwig M. Lachmann

For a long time now the theory of capital has been under a cloud. Twenty years ago, when Professor Knight launched his attack on the capital theories of Boehm-Bawerk and Wicksell, there opened a controversy which continued for years on both sides of the Atlantic. Today very little is heard of all this. The centre .. MORE

Book Reviews and Suggested Readings

The Entrepreneurial Justice of the Market Process

By Rosolino Candela

A Liberty Classic Book Review of Discovery, Capitalism, and Distributive Justice, by Israel M. Kirzner.1 Can the distribution of income generated by the market process be regarded as just? The answer to that question depends on the extent to which economic theory accounts for the role of the entrepreneur in the market process. Israel Kirzner .. MORE

Romance and Reality: A Review of Romance of the Rails by Randal O’Toole

By David R. Henderson

Randal O’Toole’s recent book, Romance of the Rails,1 is a slam-dunk. Actually, that is an understatement. The book is full of slam-dunks. In chapter after chapter, O’Toole, a long-time fan of railroads, puts his fandom aside and shows what a disaster government subsidies to, and regulations of, rail transportation have been. The book, subtitled “Why .. MORE

Conversations

VIDEO

A Conversation with Harold Demsetz

A professor at the Graduate School of Business at the University of Chicago in the 1960s and a primary figure in Chicago School Economics and in the field of Law and Economics, Harold Demsetz has contributed original research on the theory of the firm, regulation in markets, industrial organization, antitrust policy, transaction costs, externalities, and .. MORE

VIDEO

A Conversation with Milton Friedman

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

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Intellectual Portrait Series

Conversations with some of the most original thinkers of our time

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Guides

College Economics Topics

Supplementary materials for popular college textbooks used in courses in the Principles of Economics, Microeconomics, Price Theory, and Macroeconomics are suggested by topic.

Economist Biographies

From the Concise Encyclopedia of Economics

The Economics of Special Markets, The Marketplace

Auctions

When most people hear the word “auction,” they think of the open-outcry, ascending-bid (or English) auction. But this kind of auction is only one of many. Fundamentally, an auction is an economic mechanism whose purpose is the allocation of goods and the formation of prices for those goods via a process known as bidding. Depending .. MORE

Economic Systems

Perestroika

[Editor’s note: this article was written in 1992.] To the outside world, the Soviet Union seemed little different in 1984 from what it had been for at least a decade. Except for a few skeptics, almost everyone agreed that the Soviet Union was the world’s second-largest economy and, if not the most powerful military force .. MORE

Economic Regulation, Government Policy, The Economics of Special Markets

Greenhouse Effect

What Is It? The “greenhouse effect” is a complicated process by which the earth is becoming progressively warmer. The earth is bathed in sunlight, some of it reflected back into space and some absorbed. If the absorption is not matched by radiation back into space, the earth will get warmer until the intensity of that .. MORE

Quotes

Despite the coercion of government, markets are irrepressible because they express the elemental urge of ordinary people to come together as buyers and sellers. “Corrigible Capitalism, Incorrigible Socialism”

-Arthur Seldon

This, then, is freedom in the external life of man—that he is independent of the arbitrary power of his fellows. Ludwig von Mises, Socialism

-Ludwig von Mises Full Quote >>

Among the works of man which human life is rightly employed in perfecting and beautifying, the first in importance surely is man himself.

-John Stuart Mill Full Quote >>