EconLog Archive
Politics and Economics
Margins and the 2020 Presidential Election
The Power of Thinking on the Margin Because I understand the power of one vote–it’s very close to zero–I always vote in Presidential elections for the candidate who’s closest to my views. The first time I was able to vote in a Presidential election was in 1988 and from then until now I have voted .. MORE
Liberty
Censorship is a two-edged sword
Reason magazine has a very good Nick Gillespie interview of former ACLU head Ira Glasser. (The bolded question is Gillespie, the rest is Glasser): It wasn’t until my 30s that I began to understand free speech, that the real antagonist of speech is power. The only important question about a speech restriction is not who .. MORE
Behavioral Economics
The Theory and Practice of Oligarchical Collectivism Book Club Commentary, Part 3
You’ve got reactions to Orwell; I’ve got reactions to your reactions. Here goes: robc: How close are your 5 steps to what Pinochet did in Chile? I think he at least followed steps 1 and 2. I was offering for steps for reforming a socialist dictatorship from within. While Pinochet did step down and allow .. MORE
Finance: stocks, options, etc.
Robinhood and Redditors: Who’s robbin’ who?
The recent story of Robinhood and the “short squeeze” on GameStop has raised the question whether Robinhood was doing some squeezing of its own, applied to the delicates of the small traders it serves. The comedian and renowned financial analyst John Stewart said it was all, somehow, “bullshit.” An article in New York magazine declared .. MORE
Cross-country Comparisons
Ronald Coase and Reciprocal Externalities: A Refresher
A key insight of the Coase Theorem is that externalities are reciprocal. Yes, a polluter imposes a negative externality on his neighbor. But if the neighbor insists on clean air, he imposes a negative externality on the polluter. While common-sense morality may urge you to take the side of the neighbor, economic efficiency urges you .. MORE
Economic Education
My new article on MMT
I have a new Econlib article, which will appear in two parts. It summarizes the results of my research on MMT. Note that this sentence in Part 1 has a typo: “In Singapore, both the interest rate and the exchange rate are endogenous.” It should have been interest rates and the money supply are endogenous. .. MORE
Business Economics
Stakeholder Capitalism and the “Great Reset”
A couple of weeks ago I published an article in the Neue Zürcher Zeitung, in which I have defended stakeholder value capitalism vis à vis the “great reset” envisioned by the World Economic Forum’s Klaus Schwab. The title of the piece is: “A better capitalism is a worse capitalism”. My main point is that the .. MORE
Book Club
The Theory and Practice of Oligarchical Collectivism Book Club, Part 3
Today, the Book Club finishes with Chapter 1, “Ignorance Is Strength.” Please leave your thoughts and questions in the comments and I’ll do an omnibus reply later this week. The alteration of the past is necessary for two reasons, one of which is subsidiary and, so to speak, precautionary. The subsidiary reason is that the .. MORE
Adam Smith
The Economics of the Hispanic Scholastics
Economics, as a branch of knowledge concerned with human wellbeing, is somewhat like Jenga. The structure cannot hold if certain pieces, such as Adam Smith’s classical school, are removed. In Economics: An Introductory Analysis, Paul Samuelson presents a “family tree of economics” noting the contribution of Aristotle, Aquinas, and medieval Schoolmen to the history of .. MORE
Economics of Health Care
Panda: Pandering to the public’s ignorance
Andrew Gelman has a post discussing a website called “Panda”, which provides a wealth of misinformation about Covid-19. What makes the site of interest is that its board contains some pretty big names, including former Trump advisor Scott Altas, as well as some Stanford University professors: The board also includes, among others, Stanford medical school .. MORE
Politics and Economics
Is there politics after polarization?
A few days ago, Politico published a dense piece featuring a number of intellectuals and academics, left and right, suggesting ideas to “unite” the country, as President Biden proposed to do. As a non-US citizen, I am interested more in the method than in the substance of the different ideas proposed in the article. What .. MORE
Free Markets
People Have Purposes; Markets Don’t
In a comment on my blog post on the GameStop controversy yesterday, Jonathan Seder wrote: Remember – the purpose of the capital markets is to facilitate price discovery for equities, and to direct capital to the most productive uses. Passive investors are outsourcing that job to traders – individuals and pros – who gather information .. MORE
Income Distribution
The equity and efficiency of SALT cap repeal
There’s currently some discussion in Washington DC about repealing the limitation on the deductibility of state and local taxes (from one’s federal taxes.) Back in 2018, the US government began limiting SALT deductions on federal income taxes to no more than $10,000/taxpayer. Repeal of this provision would have effects on both economic efficiency and economic .. MORE
Economics of Health Care
Nationalism, prejudice, and FDA regulation
President Trump was a forceful advocate of nationalism. Many intellectuals (myself included) are strong opponents of nationalism. Indeed I view nationalism and communism as the two great evils of the 20th century. Thus it’s ironic to find many proponents of government regulation making essentially nationalistic arguments. Alex Tabarrok recently pointed to the FDA’s scandalous refusal .. MORE
Finance: stocks, options, etc.
The Big Long
Anywho, if you’re quick on the draw you’ll understand the implications. Shorting is for when you believe* a stock is going down. If you borrow a share from a broker that’s trading for… 10 bucks and short sell it, you pocket 10 bucks then and there. You then stand to gain as much as you .. MORE
Economic Methods
Persecution Bet
I’ve already seen George Mason University badly mistreat non-conformist professors. Should I expect the same to happen to me? I wouldn’t be surprised, but I’m not greatly worried either. I’m definitely not going to self-censor to protect myself. Yet quite a few people tell me that I’m in grave danger. One of them, Todd Proebsting, .. MORE
Free Markets
Selective outrage
Back in 2019, there was outrage among the public that Boeing had built an dangerous airplane that in 500,000 flights had killed precisely . . . (checks notes) . . . precisely zero Americans. (Two international crashes.) Matt Yglesias has some interesting comments on the lack of outrage over the botched vaccine rollout: What’s striking .. MORE
Books: Reviews and Suggested Readings
Five Books for Shakespeare Lovers, or Those Who Want to Be: Doorways In
If you’re enjoying this week’s EconTalk episode with Scott Newstok, you might be ready to jump in and read more about Shakespeare. There is an almost unlimited supply of books on Shakespeare. It’s nearly impossible to keep up with the onslaught of critical literature, popular treatments, retellings, revisionings, and performances. It’s glorious. It also makes .. MORE
Behavioral Economics
The Theory and Practice of Oligarchical Collectivism Book Club Commentary, Part 2
Here are my thoughts on the latest batch 0f Book Club comments. Your words are in blockquotes; mine aren’t. Weir: If your ideology of unfreedom is open, uninfected by any vestige of tolerance, then you can’t pay lip service to some other ideology. If hierarchy is what you consciously aim at, then you can’t also .. MORE
Incentives
The Beatings Will Continue Until Morale Improves
How to slow the recovery. The Biden plan should provide enough relief to carry the economy through the worst of the pandemic. One concrete example is the supplemental unemployment benefit, which Mr. Biden proposes to increase from $300 a week to $400. More important, the extra benefits will last at least through September, then phase .. MORE
Free Markets
Markets are good at allocating resources
By now, this idea is pretty widely accepted. But there’s somewhat more skepticism when dealing with shortages of important goods during an emergency. Consider these tweets: I’m not qualified to opine on the specifics of this issue. But after all the missed opportunities of 2020, I’m skeptical of claims that society could not possibly be .. MORE