EconLog Archive
Public Choice Theory
Why I Love the Electoral College
There’s some evidence that democracy itself makes people happier, but largely I see democracy as a means to an end. One among those ends is “reducing social conflict.” The electoral college, set forth in the U.S. Constitution, is a great tool for reducing social conflict across regions of the United States. You might think .. MORE
Behavioral Economics
Two Verdicts on Two Replies to Two Replies
1. Garett and Me on Evil My reply to Garett: I’d be much more impressed by an experiment showing that subjects spontaneously try to hurt others. Suppose you tell them they can pay some money in order to change others’ endowments. Start with an example where one player pays money to increase others’ endowments. Then .. MORE
Economic Growth
Friday Night Video: Life Without Capitalism
The Fund for American Studies put out this excellent 6-minute video. Posted with permission.
Taxation
Bartlett on Romney’s Tax Plan
In response, Romney put forward a new tax plan in recent days suggesting that he might not raise taxes by eliminating specific deductions that are too popular to touch, but rather by capping all of a taxpayer’s deductions by some amount. At first he put forward the hypothetical figure of $17,000 per taxpayer, but at .. MORE
Growth: Consequences
CPI Bias and Experiment Bias
As Bryan admits, his experiment to figure out whether the economy is stagnating suffered from a small-sample problem. Various commenters when Bryan first asked for volunteers pointed out that there was huge selection bias. The people who are even aware of the experiment are going to be among those who benefit most from the IT .. MORE
Behavioral Economics
On Human Evil (Economic Experiment Edition)
Bryan says: I’d be much more impressed by an experiment showing that subjects spontaneously try to hurt others. Actually, there are plenty of those in the experimental public goods literature. The questions raised by these public goods experiments might be what started the “money burning” experiments. In a typical public goods game, four or five .. MORE
Business Economics
As Goes Janesville
Saturday I had the chance to see a screening of the much awaited documentary film As Goes Janesville (http://371productions.com/what-we-make/documentaries/as-goes-janesville/ ) by Brad Lichtenstein. The documentary follows the life of a small town (Janesville, Wisconsin, 63,479 inhabitants) as a GM plant, the major employer in town, closes. The film has gained instant attention because Janesville is .. MORE
Economic Methods
Rigor, Math, and Numbers
Quickly researching the work of the two Nobel Prize winners Monday morning has given me more than the usual amount of thinking to blog on. I came across an interesting thought in the classic 1962 Gale/Shapley article that, as you’ll see, it did not make sense to put in my article in the Wall Street .. MORE
Cost-benefit Analysis
Does High School Algebra Pass a Cost-Benefit Test?
“How much do students learn in school?” The question is harder than it seems. You get one answer if you measure their knowledge at the end of the school year or right before graduation. You’ll probably get a very different answer, however, if you measure their knowledge a year, five years, or twenty years after .. MORE
Regulation
Ethics, Legality, and Repugnance: This Year’s Nobel
UPDATE BELOW: When I have approximately 4 hours to research and write a Wall Street Journal article each year on the Nobel prize winners in economics, by necessity, I have to pick and choose what to emphasize. Another constraint is my word constraint: this year I was restricted to 800 words. But I’m not so .. MORE
Behavioral Economics
Some Men Just Want to Please the Experimenter
Garett’s post on the prevalence of sheer malevolence is fascinating, but I’m not convinced. A key fact about experiments is that many participants just want to please the experimenter. Once they sit down in the lab, they start asking, “What are we supposed to do?” Thus, when an experiment explicitly gives them an option to .. MORE
Microeconomics
The Wisdom of Prescott 2: Sales taxes=Labor Taxes
You work in the market economy to buy stuff in the market economy, either now or later. So if sales taxes are permanently high that weakens your desire to work in the market economy. That means leisure–which government is still bad at taxing–starts looking like a better alternative. Let’s make that dinner at home .. MORE
Regulation
Designing Men
That’s the title I gave my piece in today’s Wall Street Journal on the Nobel prize winners in economics. But, consistent with my experience as author of over 200 op/eds, the editors didn’t use my title. The title they used was, admittedly, more informative: “On Marriage, Kidneys and the Economics Nobel.” I don’t have the .. MORE
Economics of Education
The Best Kinds of Free Education
EconLog reader Alan Shields sent me some interesting comments on my observation that the best education in the world is already free. Reprinted with Alan’s permission: I’ve been thinking about your thought experiment of “who would choose to take a course for no credit”. Let’s turn the problem around a bit: if one were offered .. MORE
Behavioral Economics
“Some Men Just Want to Watch the World Burn”
A claim confirmed repeatedly in experiments: In the destructor game, players are randomly paired and assigned the roles of destructor versus passive player. The destructor player chooses to destroy or not to destroy a share of his passive partner’s earnings….15% of the subjects choose to destroy. This result suggests that, at least for some, destruction .. MORE
Cross-country Comparisons
True by Definition: Redistribution and Economic Freedom
My main complaint about Scott Sumner is that he still hasn’t joined the faculty of George Mason’s Economics Department. But I’m also unhappy about the distinction he frequently makes between “size of government” (or “redistribution”) and “market freedom.” The latest example: Scandinavian economies are some of the most market-oriented on the planet. Noah is probably .. MORE
Energy, Environment, Resources
Obama’s War on Coal?
I was working Sunday on a talk I’m giving on October 23 in Dallas on Obama’s economic policies. One thing I had taken as given, having talked to a few people who I thought had followed the issue closely, is that Obama is making a “war on coal,” specifically on coal-fired plants. But one of .. MORE
Fiscal Policy
Tax Rates, Efficient Government, and Jobs: Prescott’s Surprise
“Why do Americans work so much more than Europeans?” That’s the title of one of Nobelist Ed Prescott’s papers. His story has something to do with high taxes causing low employment, so you might be tempted to begin your yawning momentarily: Old news. But don’t do that. Prescott rejects one of the main tenets .. MORE
Tax Reform
Romney Tax Cuts: Income and Substitution Effects (Wonkish)
By keeping average taxes the same, while reducing marginal tax rates, it is possible to encourage people to earn and report more income. This is from Alan Reynolds, “Marginal Tax Rates,” in the first edition of The Concise Encyclopedia of Economics, and it relates to the discussion yesterday of my post on the Romney tax-cut .. MORE
Economic Methods
Utopian Experimental Socialism
Larry White’s The Clash of Economic Ideas pointed me to a wonderful short essay by Joshua Muravchik. In it, Muravchik makes the most original observation about socialism I’ve encountered in years: He [“Utopian socialist” Robert Owen] was no obscure crank. When he arrived in the United States in 1824, he was received by a joint .. MORE
Books: Reviews and Suggested Readings
Friedman on Chicago vs. Columbia
I just received my review copy of Lanny Ebenstein’s The Indispensable Milton Friedman. It’s a compilation of less-well-known, but, nevertheless, often very interesting, essays by Friedman. Yesterday morning, I did a “drop-in interviewer” spot on a local libertarian/conservative talk show on Salinas-based KION-AM 1460. I interviewed Lanny about the book. He and I noted two .. MORE