EconLog Archive
Political Economy
The Office of Free Speech: A Not-So-Modest Proposal for Academia
Here’s a third post from an anonymous professor here at the University of Texas, printed with his permission. The proposal is intended in all seriousness. We are now unquestionably at a crisis point for free speech, academic freedom, and intellectual diversity in higher education. Ritualistic denunciations of faculty who dissent from consensus, under the thin .. MORE
Economics of Health Care
Will the Vaccines Mess With Our DNA?
A friend on an email group I’m on asked my friend and co-author Charley Hooper the following question about the COVID-19 vaccines: Are you sure that the vaccine won’t mess with our genes? Charley allowed me to share his answer: No, I’m not 100% sure. But I’m one minus epsilon (a very small number) sure. .. MORE
#ReadWithMe
The Theory and Practice of Oligarchical Collectivism Book Club, Part 2
The TPOC Book Club continues its march through Chapter 1, “Ignorance Is Strength.” Please leave your thoughts and questions in the comments and I’ll do an omnibus reply later this week. After the revolutionary period of the fifties and sixties, society regrouped itself, as always, into High, Middle, and Low. But the new High group, unlike all .. MORE
Economic and Political Philosophy
The Mittens of Mr. Sanders: Economic Lessons
The mittens that Bernie Sanders wore at the inauguration of the new president have been a big hit in the media and in cyberspace. And we now know where the famous mittens came from, although most people miss the economic lessons of the story. The mittens were sown from recycled materials by a Vermont teacher .. MORE
Behavioral Economics
Richard Yetter Chappell on Lessons from the Pandemic
It’s generally recognized that our (American) response to the Covid-19 pandemic was disastrous. But I think far fewer appreciate the full scale of the disaster, or the most significant causal levers by which the worst effects could have been avoided. (Yes, Trump was bad. But his public health disinformation and politicization of masking—while obviously bad—may prove relatively .. MORE
Economic and Political Philosophy
Welfare states and the new (center) left
In recent years, the reporting at The Economist has moved somewhat to the left. Here’s a recent example: But the assumption of rational self-interest constrains the welfare state significantly. Generous benefits, and the high taxes needed to fund them, will put rationally minded people off work, undermining economic growth and the government’s capacity to help .. MORE
Labor Market
Appreciating Walter Williams
On December 2, just hours after teaching his last class at George Mason University, economist Walter Williams died. He was eighty-four. That same day, I wrote a short appreciation of Walter that led to something unprecedented in my twelve years of blogging: comments by dozens of people, almost none of whom I knew, all .. MORE
Finance
Interest rates and housing affordability
David Beckworth directed me to this Nick Rowe post: Let’s start with land, and assume we are not living in the Netherlands. The supply of land is fixed and hence the price is 100% demand determined. If consumer preferences do not shift, then the affordability does not change at all. But the concept of “price” .. MORE
Books: Reviews and Suggested Readings
John Kay on Mariana Mazzucato’s Capitalism
In the Financial Times John Kay reviews the new book by Mariana Mazzucato. The book is called Mission Economy. A Moonshot Guide to Change Capitalism. Mazzucato, like she did before, argues for governments “creating market” and “steering” capitalism in one direction or another. Ambitious goals should fuel mission-oriented capitalism, with government at the helm. Kay .. MORE
Cost-benefit Analysis
Valerie Ramey Has the Same Quandary I Do
On April 12, in “The VSL Quandary,” I wrote: That $65 trillion is not a typo. Luigi (who blogged briefly on EconLog) is actually advocating that the U.S. government be willing to sacrifice 3 years of GDP to save what he estimates to be 7.2 million U.S. lives. But here’s a good rule for reasoning .. MORE
Economic Methods
I Win My Trump Bet
Back when Trump was President-Elect Trump, I made the following bet: If Donald Trump dies in office, resigns, is removed by the Senate after impeachment, or otherwise is permanently removed as per the the 25th Amendment, or if it never happens that he takes the Oath of office as POTUS on Jan 20, 2017, the .. MORE
Economic and Political Philosophy
Biden’s Endearing but Collectivist Inaugural Speech
If Donald Trump were not (alas) so ignorant, he would envy the quality of Joe Biden’s inaugural speech pronounced earlier today. But there is a deep question to ask: Why are political rulers so insistent on “unity.” It was the main theme of Biden’s speech, where the word appears eight times. It was also a .. MORE
Finance
Monetary Policy: AIT seems on target
Last year, the Federal Reserve announced a policy termed “flexible average inflation targeting.” The basic idea is that the Fed commits to insuring that PCE inflation will average roughly 2% over an extended period of time, and that any short run discrepancies will be offset by future overshoots in the opposite direction. Although they did .. MORE
Books: Reviews and Suggested Readings
William Allen RIP
Last week, Don Boudreaux over at CafeHayek did a nice appreciation of William R. Allen, co-author, with Armen Alchian, of the excellent University Economics textbook. Allen died last week, only a few months before his 97th birthday. Fortunately, Liberty Fund has published Universal Economics, edited by Jerry Jordan, an update of University Economics. I knew .. MORE
Labor Market
Supply and aggregate supply are unrelated concepts
The AS/AD model that we teach our students is misnamed, as it has nothing to do with the supply and demand model used in microeconomics. To take one simple example, the vast majority of industry supply curves are almost perfectly elastic (horizontal) in the long run. The long run aggregate supply curve is almost perfectly .. MORE
Book Club
The Theory and Practice of Oligarchical Collectivism Book Club Commentary, Part 1
Here are my reactions to your thoughts on Part 1 of the Orwell book club. David Henderson: Here’s another glaring statement that shows Orwell at his economically illiterate worst: As for the problem of overproduction, which has been latent in our society since the development of machine technique Orwell buys into the idea of overproduction. .. MORE
Central Planning
Why Is the Vaccine Distribution So Difficult?
Imagine if food were allocated and distributed by the government. Wouldn’t this prevent hunger and famines, which have certainly killed more people than epidemics in the history of mankind? Most students of economics should have a ready answer. The opposite approach—that government allocation is more efficient than the anarchy of the market—is illustrated by the .. MORE
Incentives
A Shocking USPS Admission
USPS: We Don’t Care; We Don’t Have To Last Monday, January 11, I mailed off my estimated tax payments to California’s state government (an agency called the Franchise Tax Board) and the federal government (IRS). Both, but especially the check to the IRS, were for large amounts. At about 10 a.m., I put them in .. MORE
Economic and Political Philosophy
Total Government à la Irving Fisher Is Not Ideal
A major issue at the confluence of economics, political science, and political philosophy is, What is morally or economically better, the state (formal and centralized coercive authority), anarchy, or something in between? Ignorance of this question, which parallels the alternative between collective choices and individual choices, mars most political debates. In 1941, progressive economist Irving .. MORE
Behavioral Economics
The Theory and Practice of Oligarchical Collectivism Book Club, Part 1
This is the first installment of my book club on Orwell’s book-within-a-book, entitled The Theory and Practice of Oligarchical Collectivism by fictional dissident Emmanuel Goldstein. I’m going to treat Orwell as the author of the book, even though he probably didn’t agree with all of the general claims, and almost surely didn’t mean to predict .. MORE
Regulation
Without Government, Who Would Stop Us from Feeding Poor People?
In September, a group of residents in Fort Worth, Texas, decided to do something to combat growing hunger in their city. They placed a refrigerator on a city street and stocked it with food that anyone in need could take and eat. For free. Months later, though, their efforts are in jeopardy due to an .. MORE