EconLog Archive
Books: Reviews and Suggested Readings
Is Politics Immoral? Meet Princess Mathilde
Political and moral philosophy are related to economics, and even less stealthily to the older political economy. The economist cannot recommend a government policy without making or accepting a value judgment consistent with who is going to be helped and who will be harmed. At least, he must believe that the policy falls within the .. MORE
Energy, Environment, Resources
Externalities Should be Handled with Care
The Financial Times has an interesting interview with Esther Duflo, who was awarded the Nobel Prize in Economics in 2019. She argues that developed nations have a moral duty to compensate poor countries for the damage done by carbon emissions: If you combine these three numbers, you get basically the money value of the cost .. MORE
Books: Reviews and Suggested Readings
Ideas and Implications
Thomas Sowell frequently emphasizes the importance of thinking beyond the immediate and obvious impact of some economic policy and thinking through the larger implications. He actually wrote an entire book dedicated to this idea – Applied Economics: Thinking Beyond Stage One. A similar and useful exercise to evaluate an idea is to really try to .. MORE
Violence and War
Neoconservatism, Nationalism and Liberalism
In recent years, the Republican Party has been drifting toward authoritarian nationalism. The globalists within the party are moving toward retirement, and younger people who are deeply skeptical of the previously dominant neoconservative wing of the party are replacing them. I am also skeptical of neoconservativism, but do not believe that authoritarian nationalism is the .. MORE
Public Choice Theory
Is Our Way of Electing a President Really that Unusual?
A commenter on a recent Pierre Lemieux post wrote: The only shot Trump has (and had) at the Presidency is due to the arcane system used in America to elect Presidents (why not use direct presidential elections like the rest of the world? … it is so much clearer and easy to understand! … .. MORE
Cost-benefit Analysis
My Weekly Reading for April 21, 2024
Five Fiscal Truths by Ryan Bourne, Cato at Liberty, April 18, 2024. Excerpt: The recorded federal deficit from 2023, at $1.7 trillion (or 6.3 percent of gross domestic product, or GDP), was 23 percent higher than in 2022, but even that was pushed artificially downward by the Congressional Budget Office (CBO) recording the Supreme Court’s .. MORE
Economic Methods
Human Costs, Animal Costs, and Economic Costs
People who distinguish “human costs” from “economic costs” are either making an ideological statement or don’t understand what economic theory usefully calls a cost. Just to quote one example: a Financial Times columnist mentions, as if it goes without saying, the “economic, military and human costs” of further confrontation with the Iranian rulers (“Israel Has .. MORE
Cross-country Comparisons
Socialism is a Luxury Good
Several decades of neoliberal economic reforms brought about the greatest global reduction in poverty ever achieved, by far. But success brings laziness, and many countries began to take their achievements for granted. Even successful policies fail to eliminate all economic problems, and because neoliberalism was the dominant strategy from the 1980s to the 2000s, pundits .. MORE
Public Choice Theory
There Are Degrees of Disavowal
Co-blogger Pierre Lemieux writes: Whatever one thinks of the criminal prosecutions and state “civil” suits against Donald Trump (and there are good reasons to question many aspects of them), they represent the powerful state that he has not disavowed, except perhaps in occasional and incoherent baby talk, as long as he was running it. And .. MORE
Political Economy
There Is Politician’s Talk and Politician’s Talk
Whatever one thinks of the criminal prosecutions and state “civil” suits against Donald Trump (and there are good reasons to question many aspects of them), they represent the powerful state that he has not disavowed, except perhaps in occasional and incoherent baby talk, as long as he was running it. And there is something special .. MORE
Business Economics
Robert Hessen RIP
Economic and business historian Robert Hessen died on Monday, April 15 at age 87. I wrote some reminiscences of him on my Substack site, “I Blog to Differ.” Here I want to link to his 2 contributions to my Concise Encyclopedia of Economics. One is his article “Corporations.” Here are two key paragraphs. Here’s a .. MORE
Cross-country Comparisons
Now do Japan
I have frequently argued that China has the world’s largest economy, at least if measured in PPP terms. (Of course in per capita terms they are still only a middle-income country.) Others insist on using market exchange rates, which suggest the US economy is still significantly larger. Fair enough. But you need to be careful .. MORE
Books: Reviews and Suggested Readings
On Fairness – Aesop vs Sesame Street
The YouTube algorithm is a mysterious thing. It’s supposed to recommend videos you might like, based on videos you’ve watched and rated before, but as far as I can tell the recommendations are generated randomly by a half-asleep chimpanzee. Still, just as broken clocks are still right twice a day, random suggestions can manage to .. MORE
Game Theory
Prisoner’s Dilemma: A Simple Model of War
Economic models of cooperation and conflict are often based on the Prisoner’s Dilemma (PD) of game theory. As simple as this model is, it helps us understand whether or not a war will be fought, where “fought” includes escalation steps through retaliation—the current situation between the government of Israël and the government of Iran. Assume .. MORE
International Trade
Why the Status Quo Matters
In an earlier post, I listed some questions for interventionists to consider before advocating their interventions. This is part of my ongoing crusade to get interventionists to think about things as they actually are as opposed to a blank slate. These two modes of thinking I call “status quo reasoning” (seeing the world as it .. MORE
Macroeconomics
Hey teacher, call on me!
Do you recall that student back in middle school, frantically waving his hand trying to get the teacher to call on him? That’s how I feel when I read the following sort of news story: As the US economy hums along month after month, minting hundreds of thousands of new jobs and confounding experts who .. MORE
Books: Reviews and Suggested Readings
Means, or Ends?
Years ago, I read Banker to the Poor: Micro-Lending and the Battle Against World Poverty by Muhammad Yunus. In the book, Yunus describes the origins and purpose of the Grameen Bank. This bank specializes in offering small loans to people in poverty to help them begin to attain self-sufficiency. This isn’t a charitable organization – .. MORE
Labor Mobility, Immigration, Outsourcing
Military Age Males
Lately I’ve been watching Fox News Channel more than usual. I’ve noticed Jesse Waters (who replaced Tucker Carlson, who replaced Bill O’Reilly) using a phrase a lot: military-age males. He invariably uses it to refer to immigrants, typically illegal immigrants. Glenn Reynolds at Instapundit also did it recently. When you observe the males they’re talking .. MORE
Macroeconomics
Some Counterintuitive Thoughts on Monetary Policy
Here are five observations about recent trends in monetary policy: 1. The Fed would really like to avoid any further increase in interest rates. This psychological aversion to interest rate increases in not rational, and it actually makes it more likely that the Fed will find it necessary to raise interest rates even further. That’s .. MORE
Income Distribution
The Inheritances that Matter Most
Inheritances can be controversial because some people inherit enormous wealth while others inherit nothing or even debts. Due to this apparent inequity, even the archconservative economist James Buchanan supported massive inheritance taxes. By contrast, another free-market economist, Milton Friedman, argued such taxes are inefficient because they encourage people to consume during their lifetimes rather than .. MORE
Books: Reviews and Suggested Readings
My Weekly Reading for April 14, 2024
Here are some highlights of my weekly reading for the week just passed. Providing Labor Market Context for Debt-Related Driver’s License Suspensions in Ohio by Kyle D. Fee and Brian A. Mikelbank, Federal Reserve Bank of Cleveland, Community Development Reports, February 23, 2o24. Excerpt: Based on our analysis, over 830,000 Ohioans could be at risk .. MORE