What I'm Reading
By Arnold Kling
Back on the Road to Serfdom, a collection of essays edited by Thomas E. Woods, Jr. The authors are mostly people you have not heard of, and the topics are varied.
Per Bylund writes (p. 52),
the Swedish model is unsustainable…The welfare state, it must be pointed out, is dependent on people not using the benefits it makes available to a more than minimal extent…people are supposed to have an impeccable work ethic while being taxed to ridiculous degrees
Dane Stangler of the Kauffman Foundation contributes a very interesting essay on the importance of start-ups in renewing economic growth. p. 98:
At some point, every subsystem of the economy–or the economy as a whole–reaches a point at which further investments in the prevailing model of complexity do not generate any more increasing returns.
On national innovation strategy implemented through government subsidies, Stangler writes (p. 107),
by focusing almost exclusively on established institutions, they contradict the very essence of innovation and entrepreneurship.
Tim Carney’s essay on “The Culture of Corporatism” is particularly timely. On p. 120:
The best case study in political entrepreneurship may be General Electric. CEO Jeffrey Immelt pretty clearly laid out his approach in a letter to stockholders…just days after the inauguration of Barack Obama
He goes on to spell out GE’s rent-seeking strategy. Of course, the essay was written long before the recent appointment of Immelt to head the President’s Council on jobs and competitiveness.
By the way, I hate the term “competitiveness.” One of the main goals of an economics course should be to teach the difference between comparative advantage and absolute advantage. One key result is that there is always comparative advantage, and hence no such thing as the absence of competitiveness. No government fix is required, because nothing is broken.