EconLog Archive
Politics and Economics
The Me Decade
Tom Wolfe once designated the 1970s as “The Me Decade”. It seems to me that this label better applies to the 2020s. Consider this action by the New York state Senate: ALBANY — Under cloak of darkness, the state Senate moved to help more than 130,000 reckless drivers avoid accountability in a middle-of-the-night watering down .. MORE
Books: Reviews and Suggested Readings
Lines, Legalism, Limits, and Likeness
For today’s post, further thoughts inspired by Barry Lam’s book Fewer Rules, Better People. When Lam puts forth arguments in favor of legalism in his book, one of the main values he argued legalism seeks to preserve is the idea that justice requires we treat like cases alike. If you and I engage in the same .. MORE
Competition
The Math Ain’t Mathing: Why High Tariff Schemes Will Always Lower GDP
A great deal of blame for declining GDP has been placed on the impact of imports by the national conservative and protectionist crowds. Pierre Lemieux does an excellent job explaining why imports have no direct impact on GDP here, so there’s really no reason to cover that ground again. It is sufficient to revisit the .. MORE
Central Planning
The Curious Task
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” –FA Hayek, The Fatal Conceit: The Errors of Socialism, pg 76 Hayek wrote these words back in 1988, but they could apply just as easily today. The past two months have demonstrated in .. MORE
Politics and Economics
Borrow Billions for Babies?
[Given the recent American trend of political alliteration, I was thinking of entitling this Build Back Better By Borrowing Billions for Big Beautiful Baby Bonds.] The administration has proposed giving newborn babies (whose parents have Social Security numbers) a savings account containing $1,000, which must be saved at least until the child reached the age .. MORE
Economic Education
EconLog Price Theory: Cash Transfers
We’re bringing back price theory with our series on Price Theory problems with Professor Bryan Cutsinger. You can see all of Cutsinger’s problems and solutions by subscribing to his EconLog RSS feed. Share your proposed solutions in the Comments. Professor Cutsinger will be present in the comments for the next couple of weeks, and we’ll post his .. MORE
Books: Reviews and Suggested Readings
Prime Mammals and the Limit of Limits
Recently, co-blogger David Henderson offered some ponderings about the limits of self-ownership. He argued that the government shouldn’t put limits on the self-ownership of adults of sound mind, but such limits could appropriately be placed on children and adults of unsound mind. That raised the issue of how we set about determining when a child .. MORE
Monetary Policy
Thoughts for Your Penny
I’m glad that co-blogger Scott Sumner took on one of the fears about ending the production of pennies. His post made me realize that I had neglected to post on my article on the demise of the penny that I published at Hoover in March. The article is “Thoughts for Your Penny?“, Defining Ideas, March .. MORE
International Trade
Contradictions in “Our National Resources”
Assume for the sake of the argument that the run-of-the-mill nationalist’s expression “our national resources” is meaningful. These resources—physical resources, capital, talents, expertise, etc.—constitute a sort of “public good” belonging to, and to be consumed collectively by, the nation’s members, if not by “the Nation” herself. Consider a first contradiction. Nationalists are usually mercantilist: they .. MORE
International Trade
A Terrible Track Record on Trade Negotiations
One of the myriad of justifications given for Trump’s love of tariffs is that they are actually a negotiating tool to get the rest of the world to be more fair to American firms. American firms supposedly face high trade and non-trade barriers and these tariffs are to show that “we mean business” and force .. MORE
Competition
The Demise of the Penny?
A recent article in the OC Register discussed a proposal to stop producing pennies: Consumers could get shortchanged by a new U.S. policy to stop making pennies by early next year. While the U.S. Treasury would save tens of millions of dollars by eliminating the 233-year-old 1-cent coin, an unintended consequence would be higher prices .. MORE
Regulation
Housing Restrictions Hit Harder Than Tariffs
When I started to write this article, I was ready to blame Paul Krugman for not discussing this far more important economic restriction. Then I did some research. Research is most useful when it changes your mind, and my research did change my mind. It turns out that Krugman has been very good at laying .. MORE
Economics of Health Care
My Weekly Reading for June 8, 2025
Is the Supreme Court Really That Divided? The Facts Say No. by Billy Binion, Reason, June 5, 2025. Excerpt: The gist is simple. That issue focused “on what appears to many to be an existential threat to democracy,” the magazine wrote, which is “the far-right shift of the Supreme Court, and the conservative movement’s plans .. MORE
Economic Education
Speak Now or Forever Hold Your Peace
For 35 years, I taught economics at the college level. When teaching the theory of supply and demand, I would explain how a temporary shortage of goods would lead to higher prices in the short run. The resulting excess profits would draw new firms into the industry, eventually bringing prices back down to their long .. MORE
Politics and Economics
Poor Elon Musk!
I don’t want to sound too paternalistic, but one thing should be said: poor Elon Musk played a game he does not understand. “This is what victory feels like,” he shouted with overexcitement at Mr. Trump’s inauguration event (it is worth watching the one-minute video). He had contributed more than $250 million to the Trump .. MORE
History of Economic Thought
Immortality: The Meaning of Buchanan’s Life
An Econlib article by Peter Boettke on “Virginia Political Economy: James Buchanan’s Journey” shows how political philosophy and economics were enmeshed in Buchanan’s work. It also reminded me of an interesting two-part video of an interview of Buchanan by Geoffrey Brennan. The two economists often worked together and were notably co-authors of The Reason of .. MORE
Economic Education
On Models
Models are indispensable. Reality is insanely complex. Mapping every possible interaction would be computationally impossible and utterly useless for understanding the world. Instead, we flatten things down to key causal variables and use them to help us make predictions and decisions. But models come in different shapes and sizes. Which model is useful depends on .. MORE
Cost-benefit Analysis
Adam Smith’s Economic Case Against Imperialism
Don Boudreaux reminds us that this is Adam Smith’s birthday or, at least, the birthday announced on his tombstone. For that reason, I’m sharing one of the first articles I wrote for antiwar.com. A version will appear in a book on foreign policy that I’m working on. Here it is. Adam Smith’s Economic Case Against .. MORE
Cross-country Comparisons
Further Thoughts on Trade Balances
I recently came across two interesting articles that got me thinking about trade balances. The first was written by Christopher Caldwell and discusses France’s rustbelt: A process that Guilluy calls métropolisation has cut French society in two. In 16 dynamic urban areas (Paris, Lyon, Marseille, Aix-en-Provence, Toulouse, Lille, Bordeaux, Nice, Nantes, Strasbourg, Grenoble, Rennes, Rouen, Toulon, Douai-Lens, .. MORE
Business Economics
Your Seat Room Exceeds Your Allowable Freedom
Fittingly enough after writing an extended review about a book about the pitfalls of rules that don’t allow for exceptions, I came across a recent news story about a recall issued for the recent ID.Buzz electric van from Volkswagen. Vehicles can be recalled for all kinds of reasons, of course. A vehicle I bought a .. MORE
Political Economy
Who Runs the Country? Nobody
I’ve noticed with increasing frequency that various commentators on the media talk about who runs the country. Many right wingers think that Joe Biden was supposed to run the country but didn’t and, instead, he deferred to a troika who ran the country. Many people across the spectrum think that Donald Trump currently runs the .. MORE