EconLog Archive
Incentives
Interesting Facts About the Cocoa Market
I read the Financial Times not mainly for its collectivist ideology (the preference for collective choices), but for its frequently sound reporting on economically significant phenomena and trivial-looking but important facts. I do read this newspaper partly for its collectivist editorializing, for one must not read only what confirms one’s biases; but I would still read it if it .. MORE
International Trade
Jagdish Bhagwati on Protectionism
With all the discussion of free trade, tariffs, and non-tariff barriers, I decided to pick up and quickly skim a short, delightful book by trade economist Jagdish Bhagwati. It’s his 1988 book, titled simply Protectionism. I wrote a short review of the book in the June 5, 1989 issue of Fortune. One of the issues, .. MORE
Economic and Political Philosophy
Constitutional Tradeoffs
Co-blogger Pierre Lemieux’s recent post “Can a Constitution Limit the State?” (July 21, 2025) poses an important question, one political theorists have wrestled with for millennia. In the comments section of that post, I linked to a recent paper in the Journal of Institutional Economics by Jacek Lewkowicz, Jan Falkowski, Zimin Lou, and Olga Marut (henceforth .. MORE
Supply-side Economics
Laffer Curve in the United Kingdom?
The FT has an interesting story on the British government’s attempt to boost capital gains tax revenue: The UK’s efforts to increase revenues from capital gains tax have backfired, with receipts plummeting in the wake of big cuts in allowances. The government’s CGT take fell 18 per cent from the previous year to £12.1bn in .. MORE
#ReadWithMe
We Have Never Been Woke Part 4: Why Are Symbolic Capitalists Woke?
This is the fourth part of my exploration of Musa al-Gharbi’s We Have Never Been Woke. (Part 1, Part 2, Part 3). As we’ve seen, al-Gharbi spends a good deal of time establishing the demographic of people who are most likely to end up being “woke” as he described the term. And that group is overwhelmingly .. MORE
Economic and Political Philosophy
Equality Before the Law, Equality of Permission, and the Language of Libertarianism
When we communicate with one another, how we say things can sometimes be as important as what we actually say. Words matter, which is even more true when we exchange ideas and try to convince others to embrace our viewpoints. Ideological rhetoric, then, merits some thought on the part of libertarians. Of course, libertarians uphold .. MORE
Tax Reform
Who Got the Biggest Percentage Tax Cuts?
The answer may surprise you. In so much of the discussion of tax cuts, whether of the recent one or previous tax cuts, we hear that the highest-income people got the biggest tax cuts. Of course, they did. They pay a disproportionately high percent of overall federal taxes. So it shouldn’t be surprising that they .. MORE
Economic Methods
Accounting Identities and Economic Theories
The relationship between accounting identities and economic models is frequently misunderstood. An accounting identity is an equality that must be true, by definition. It is tautology. It is meant to categorize and organize relationships between variables. For example Assets = Liabilities is an identity. Regardless what “assets” equals, “liabilities” must be the same amount. We .. MORE
#ReadWithMe
We Have Never Been Woke Part 3: Symbolic Capital and Symbolic Capitalists
The previous post in this series touched on Musa al-Gharbi’s identification in We Have Never Been Woke of a class of people as “symbolic capitalists,” his contention that wokeness is the dominant ideology of this group, and that members of this group tend to be most predisposed to amplifying woke ideas. There are multiple “alternative names .. MORE
Economic and Political Philosophy
Sorts of Deals
A deal is an agreement to exchange something for some consideration, but different sorts of deals exist. A deal is not necessarily a free exchange and a free exchange is not necessarily a free-market exchange. The gold standard of all deals is a free-market exchange: a voluntary exchange where alternative demanders and suppliers exist. The .. MORE
Cryptocurrency
Magical Thinking
I worry that people are looking for quick fixes to our current fiscal problems, when in fact we will need to take painful steps in order to get fiscal policy back to a sustainable track. In this post, I’ll look at three recent examples: Here is Arthur Sants: The administration’s “crypto czar” David Sacks told .. MORE
Liberty
My Weekly Reading for August 3, 2025
Canada Seeks To Jail Freedom Convoy Organizers for 8 Years by J.D. Tuccille, Reason, July 30, 2025. Excerpt: While Americans rightfully resent the lockdowns, mask mandates, and other intrusions into their liberty that accompanied the COVID-19 pandemic (not to mention politicians’ flouting of their own rules), most of us had it pretty easy compared to people .. MORE
Economic History
Diocletian, the Roman Empire, and Forever Failing Price Controls
The Roman Empire was in trouble. During the fifty-plus years known as the Crisis of the Third Century (235-284 AD), the throne of Rome changed some 26 times, with the Roman Army engaging in a steady diet of crowning and removing claimants to the throne. These autocrats, known as “barracks emperors,” because they often came .. MORE
#ReadWithMe
We Have Never Been Woke Part 2: Of “We” and “Wokeness”
At the end of my last post, I said I’d be following up by describing both some of Musa al-Gharbi’s modes of analysis and assumptions in his book We Have Never Been Woke, and outline who is the “we” he describes, and what he means by “woke.” First, the ground rules. Musa al-Gharbi sets out .. MORE
Economic Growth
Joshua Rauh on Federal Spending, Tax Revenue, Economic Growth, and Deficits
On July 26, Joshua Rauh, a senior fellow at the Hoover Institution, testified at the Reagan Library before the House Ways and Means Committee. I learned a lot from his testimony and want to share it. Here are some highlights. A growing economy is essential for expanding economic opportunity for all Americans. It is deeply .. MORE
Law and Economics
Eminent Domain and the Problem of Government
In our forthcoming paper at the Review of Law & Economics, “The Long-Term Impact of Kelo v. City of New London: Comparing State Legislative and Judicial Responses”, my former Western Carolina University colleagues Ed Lopez and H. Justin Pace and I discuss justifications for eminent domain.[1] Primarily, we discuss the holdout problem. The holdout problem .. MORE
Economic Methods
We Must Stop Saying “Must”
In my first year of grad school, one of my professors had a long list of “forbidden words”. These were terms that do more to confuse than enlighten when used in economic analysis. Terms like “need”, “afford”, “exploits”, “vicious circle”, etc. Today, I’ll argue that we might wish to add the term “must” to that .. MORE
Economic Education
EconLog Price Theory: Fentanyl
We’re bringing back price theory with our series on Price Theory problems with Professor Bryan Cutsinger. You can see all of Cutsinger’s problems and solutions by subscribing to his EconLog RSS feed. Share your proposed solutions in the Comments. Professor Cutsinger will be present in the comments for the next couple of weeks, and we’ll post his .. MORE
#ReadWithMe
Introducing We Have Never Been Woke
Time again for another one of my multi-post deep dives into a book I found interesting. This time, the book is We Have Never Been Woke: The Cultural Contradictions of a New Elite by Musa al-Gharbi. As always, my next several posts will be my attempts to reflect al-Gharbi’s views rather than my own, and .. MORE
Liberty
A Nonexistent Quote About Free Trade
I fear we have to admit it: there is not a single truly free country among the 200 or so that occupy this planet. If there were one, we would have expected a representative of its state to declare publicly, about the current trade war, something like the following—let me put it in blockquote even .. MORE
Economics of Health Care
My Weekly Reading for July 27, 2025
Meet the Medicaid Double-Dippers by the Editorial Board, Wall Street Journal, July 21, 2025. Excerpt: The Centers for Medicare and Medicaid Services (CMS) reported late last week that 1.2 million Americans last year were enrolled in Medicaid or the Children’s Health Insurance Program in two or more states. The agency worked with software engineers .. MORE