EconLog Archive
Economics of Health Care
Regulation and Vaccines: It’s much worse than you think
The distribution of vaccines is being held up by regulation. But I suspect that even opponents of regulation underestimate its pervasive effects. Regulation goes far beyond things like price controls and mandates regarding distribution, it extends into all aspects of our society (including the “private” sector), in ways that many people don’t even think about. .. MORE
Cost-benefit Analysis
Charles Barkley Articulates the Benefit Principle
There are various versions of the benefit principle of taxation. One is the James Buchanan/Knut Wicksell version, which says that to get unanimous agreement for a government expenditure, you need to have people pay an amount in taxes that is less than the benefit they perceive. That’s not what former NBA player Charles Barkley articulates .. MORE
Economics of Health Care
The “mad scientist” problem
Matt Yglesias has an interesting tweet: Last May, I said the following: Occam’s Razor also applies to the lab release theory. We know that dozens of epidemics have come from viruses jumping from animals to humans without any “lab” being involved. Why construct an entirely new theory for this epidemic? . . . Actually, the .. MORE
History of Economic Thought
Golden Parachutes: The Alchian Thesis
Where do ideas come from, and how are they disseminated amongst economists? One of the great ironies in the history of economic thought has been the development of particular concepts, the theoretical importance of which is misattributed to another economist. For example, the concept of a Giffen Good, attributed to Robert Giffen, was first coined .. MORE
Regulation
Great Moments in California Lockdowns
The Marie Antoinette edition. This was sent to me by a friend last month in response to California governor Gavin Newsom’s order to shut down salons and even outdoor restaurants. I talked to my wife last night and she said that she has 3 close friends in the personal care service business (2 hairstylists and .. MORE
Behavioral Economics
Convenience vs. Social Desirability Bias
Convenience has a massive effect on your behavior. You rarely shop in your favorite store, eat in your favorite restaurant, or visit your favorite place. Why not? Because doing so is typically inconvenient. They’re too far away, or not open at the right hours, so you settle for second-best or third-best or tenth-best. You usually .. MORE
Business Economics
Noubar Afeyan on Academia, Business, Immigration, and the American Dream
Tyler Cowen has posted an outstanding interview of Noubar Afeyan, co-founder of Moderna, which produces one of the two COVID-19 vaccines approved so far by the Food and Drug Administration. Tyler is at the top of his game, asking really good questions, and you can just see the respect that that creates in Afeyan. Some .. MORE
Books: Reviews and Suggested Readings
“Shakespeare in Love” and the Humanity of Business.
I’m reading Tom Stoppard’s biography by Hermione Lee. I never thought I could read 900 pages on a subject previously unimportant to me with such delight. It is a marvelous book. Stoppard’s life is interesting and eventful, it provides a good glimpse into the world of culture and entertainment in the last quarter of the .. MORE
Energy, Environment, Resources
Open Borders and the Environment
My Open Borders neglects two major worries about immigration. The first is contagious disease; I did not see that one coming, though I try to remedy my oversight here. The second omission is less excusable. Somehow I failed to address immigration’s environmental effects. Here’s what I should have said – and what I will say .. MORE
International Trade
China won the trade war
A year ago, Tyler Cowen claimed that President Trump won round one of the trade war with China: I’m not entirely convinced we won even the first round of the trade war, although the claim might be true. The stated goal of President Trump and his advisers was to reduce the US trade deficit with .. MORE
Book Club
The Theory and Practice of Oligarchical Collectivism Book Club Update
Here’s the plan for my new Book Club. After each segment, place your thoughts and questions in the comments and I’ll post an omnibus response later in the week. On January 18, I’ll cover Chapter 1: “Ignorance Is Strength” up to the sentence “The possibility of enforcing not only complete obedience to the will of .. MORE
Behavioral Economics
Against Apology Perfectionism
After last week’s post on apologies, a few readers sent me links on the psychology of effective apologies. Maximally effective apologies include the following elements: Expression of regret Explanation of what went wrong Acknowledgment of responsibility Declaration of repentance Offer of repair Request for forgiveness A similar piece elaborates: Taking responsibility means acknowledging mistakes you .. MORE
International Macroeconomics
Daniel Kaufmann on Swiss monetary policy
My biggest frustration over the past decade is how often I see economists misdiagnose the stance of monetary policy, either reasoning from price changes or reasoning from quantity changes. The “reason from a price change” problem has been discussed extensively in this blog, so today I’ll focus on reasoning from a quantity change. Many economists .. MORE
Economic and Political Philosophy
Economic Questions About the “Temple of Democracy”
Is it true, as House Speaker Nancy Pelosi claimed, that Congress is a temple of democracy (“U.S. Capital Police Officer Brian D. Sicknick, who died after assault on Capitol, Protected With a Kind Touch,” Washington Post, January 8, 2021)? She said: The violent and deadly act of insurrection targeting the Capitol, our temple of American .. MORE
Behavioral Economics
The Theory and Practice of Oligarchical Collectivism Book Club
George Orwell’s 1984 contains excerpts from a fictional book, The Theory and Practice of Oligarchical Collectivism. Orwell provides a short passage from Chapter 1, entitled “Ignorance is Strength” and a much longer passage from Chapter 3, entitled “War Is Peace.” Although 1984 is a work of dystopian fiction, TPOC has long struck me as a profound work of .. MORE
International Trade
Eric Hoffer on “Property Rights” in Jobs
I’ve written before about how “The Box,” that is, containerization, slashed the cost of international trade, thus leading to more of it. My guess is that that reduction in cost was the equivalent of dropping tariffs by at least 5 percentage points. I quoted the famous statement by Paul Krugman that put it nicely: The .. MORE
Taxation
Joe Stiglitz on Taxing Interest
This is another in my continuing series of excerpts from Joseph E. Stiglitz‘s excellent 1988 textbook, Economics of the Public Sector. I’ve previously posted about this textbook here and here. Thus an income tax that taxes interest can be viewed as a differential commodity tax in which future consumption is taxed more heavily than current .. MORE
Politics and Economics
No “Will of the People” in the Election
Writing about the final (with some luck) fireworks of the Trump presidency, Wall Street Journal columnist Holman Jenkins proposes many interesting or challenging insights, up to and including a final contradiction (“Don’t Expect Police to Shoot at Crowds,” January 8, 2021). The penultimate sentence states a deep and science-based idea that you don’t meet often .. MORE
Law and Economics
Did Trump Foment a Violent Assault?
“Today’s violent assault on our Capitol, an effort to subjugate American democracy by mob rule, was fomented by Mr. Trump,” Mattis wrote. “His use of the Presidency to destroy trust in our election and to poison our respect for fellow citizens has been enabled by pseudo political leaders whose names will live in infamy .. MORE
Economics of Health Care
There’s no one behind the curtain
Post-modernists often claim that science reflects cultural biases, and that scientific objectivity is a myth. Conservatives have traditionally been quite hostile to this message. But at least some conservatives are beginning to see that “science studies” may have some merit. Here’s a Razib Khan tweet, quoted by Chad Orzel: one change btwn 2000 and 2020 .. MORE
Foreign Policy
Sunk Costs in Iraq and Afghanistan
Will Joe Biden have the guts and/or the sense to recognize sunk costs? There’s not a single person that has spent significant time on the ground in either of those conflicts that thinks either of them are winnable, but they just continue off of a sense of momentum. And getting back to that .. MORE