EconLog Archive
Central Planning
Oops: The Problem with the Athey, Kremer, Snyder, and Tabarrok Proposal
They implicitly threw away markets in favor of central planning. An advance market commitment for Covid-19 should combine “push” and “pull” incentives. The “pull” incentive is the commitment to buy 300 million courses of vaccine at a per-person price of $100, for vaccines produced within a specified time frame. If multiple vaccines are developed, the .. MORE
Behavioral Economics
Escaping Paternalism Wins the Szasz Prize!
This July-September, I ran a book club on Rizzo and Whitman’s magisterial Escaping Paternalism. Now I’m pleased to announce that Rizzo and Whitman have won a much-deserved Szasz Prize for Outstanding Contributions to the Cause of Civil Liberties. From the prize announcement: The professional Szasz award goes to Mario J. Rizzo, a professor of economics at .. MORE
Monetary Policy
Larry White on Bitcoin
In “Has Bitcoin Succeeded?,” Alt-M, December 23, 2020, Larry White of George Mason University has a nicely nuanced piece on, as will not surprise you if you read the title, whether Bitcoin has succeeded. As Larry says, the answer depends on the goal. As a widely used private alternative to government fiat money, it has .. MORE
Economics of Health Care
Nice vaccine; pity there’s no distribution mechanism
Many people are horrified by the prospects of introducing the profit motive into health care. Thus they oppose paying kidney donors, even though it would save tens of thousands of lives. They oppose price gouging on masks or vaccines, even though it would save many lives. They oppose challenge studies for vaccines, even though it .. MORE
Cost-benefit Analysis
The “Democratic Centralism” of COVID
The anonymous author of the satirical “Homeless Camping in Austin: A Modest Proposal” has also sent me this more serious guest post. The title is mine. “Democratic centralism,” you may recall, is the Leninist practice of demanding strict loyalty to a party line after a (usually perfunctory) debate. Printed with the author’s permission. Well-read readers .. MORE
Economic and Political Philosophy
New Year Wish: Political Wars of Religion?
Consider political wars of religion, which I define as confrontations about whose preferences and values will be imposed on other individuals. They are not what any friend would wish you for 2021! President-elect Joe Biden does not seem to understand this as he declared (quoted by Deanna Paul, “Republican Electors Cast Unofficial Ballots, Setting Up .. MORE
Media Watch
The Story Was Written Before They Even Contacted You
Every person who comes into the media’s crosshairs should understand this. Nothing you say or do is going to change the story they are going to write. Indeed, the story was written before they even contacted you. They will falsify quotes and leave out facts. This is from Mark Judge, “‘They Were Relentless’: How I .. MORE
Behavioral Economics
Social Desirability Bias vs. Tourism
In the Yucatan, we stayed at several all-inclusive resorts. These resorts were a good fit for my family: When you’re travelling in a Third World country with four kids during a pandemic, you want a convenient supply of abundant and tasty food – and enough variety to please each and every picky eater. (Me included). .. MORE
Cost-benefit Analysis
Rain, Rain, Go Away. Come Again Another Day?
According to that nursery rhyme we all grew up with: “Rain, rain, go away. Come again another day.” This goes in spades for hurricanes, which have devastated the economy, and tens of thousands of lives. But our complaints about the weather do not end there. Sometimes, on the day of an annual parade, we just .. MORE
Economics of Education
Joe Stiglitz Channels Armen Alchian
For instance, government support for higher education is often viewed as enabling the children of the poor to go to college, and thus is viewed to have a positive redistributive impact. But, on closer examination, children of the middle- and upper-middle-classes are more likely to avail themselves of a higher education and whatever government support .. MORE
Business Economics
Putting Entrepreneurship on the Menu
Even before the arrival of COVID-19, the restaurant industry was being transformed by a variety of forces, in particular the competition for home delivery among UberEats, GrubHub, DoorDash and others. In addition, pop-ups, test kitchens, and food trucks offered unique dining opportunities at a very small scale and for short periods of time. These acts .. MORE
Incentives
Connect the dots
In recent months, a number of important firms have announced they are relocating from California to Texas. An article by Peter Yared discussing this trend had a graphic that caught my eye: The movement of these industries is toward three states that have one thing in common—no state income tax. And these are the only .. MORE
Economic Education
It’s Not Just Christmas Today, but EVERYDAY!
Christmas is not only a time for rejoicing and celebration, but also a time of gratitude for what we have. In times such as these, in which all of us have been affected by the circumstances related to COVID-19, this is all the more important. It’s for this reason I would like to point out .. MORE
Behavioral Economics
Open Letter to Voters: Political Sunk Costs
Considering sunk costs in one’s decisions is a cognitive limitation that behavioral economists may underestimate. If you, dear voter, have already lost $100,000 in a project that you are sure will continue to bring you net losses, you will just lose more money by putting more into it. Your previous cost is sunk and won’t .. MORE
Public Choice Theory
Joe Stiglitz on Taxes
Taxation is unlike most transfers of money from one individual to another: while most other transfers are entered into voluntarily, taxation is compulsory. In Chapter 5 we saw some of the reasons why the contributions to support public services need to be compulsory: because of the free rider problem, unless support for public goods .. MORE
Macroeconomics
The world is full of inflation
I often see pundits talk about how inflation is dead, how “global forces” are holding down inflation. This is nonsense. Most people live in countries where inflation is 3% or higher, often much higher. Here are just a few examples (estimates of 2021 inflation from The Economist). They contain most of the world’s population: China: .. MORE
Cost-benefit Analysis
The Economic Way of Travel
Thinking like an economist about travel. Here’s what happened yesterday. A good friend called me and asked me for advice. I often hesitate to give advice but I don’t hesitate to ask lots of questions. At the end, usually the person can figure it out for himself or come close with a little intellectual nudging. .. MORE
Cost-benefit Analysis
Clear-Cut Price Discrimination
Some economists see price discrimination everywhere. Others see it nowhere. Key point of contention: How do you know that alleged “price discrimination” does not in fact reflect cost differences? First-class airplane seats really are bigger, after all. Logically speaking, though, mindfulness of cost differences can make you see more price discrimination rather than less. Why? Because businesses .. MORE
Regulation
Hypocrisy Over Lockdowns
At pickleball recently, I made the following point to a fellow player: every instance I can think of where a politician imposed or supported lockdowns yet violated the letter or spirit himself of herself is a Democrat. Art Carden talks about the hypocrites here. Notice the names: Chicago mayor Lori Lightfoot, Speaker of the House .. MORE
Books: Reviews and Suggested Readings
Praise and Blame: Meritocracy and Utilitarianism
David Levey directed me to an excellent essay by Agnes Callard, which reviews several books that are critical of meritocracy. While I share many of her criticisms, I’m not persuaded by her recommendations: The question of who we praise and who we blame is not a scientific question, but an ethical one; there is no .. MORE
Cost-benefit Analysis
Homeless Camping in Austin: A Modest Proposal
This winter, I’m a visiting scholar at the University of Texas. Though Austin is gorgeous, visitors can’t help but notice vast homeless villages scattered throughout the city. Local sources tell me that this is driven by Austin’s repeal of the ban on homeless camping. One of the economists I’ve met here has written a Swiftian .. MORE