EconLog Archive
Economic Education
EconLog Price Theory: Let Them Eat Steak
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
Taxation
In (Sort of) Defense of (Something Like) Property Taxes
A revolt is building across the United States against property taxes. From Florida to North Dakota, states have attempted or are attempting to abolish them. The anger driving this movement comes from two sources. One is the belief that you are being taxed for living in your house. “Is the property yours or are you .. MORE
Economic and Political Philosophy
The Liberal 19th Century
Many libertarians and classical liberals consider the 19th century in the West as the most liberal epoch in history. We can certainly see stains, notably slavery and later Jim Crow, as well as colonialism (think about the control of trade from the colonies, which Adam Smith criticized in his 1776 Wealth of Nations). In many .. MORE
Incentives
The Social Benefits of Iconoclasts
Years ago, my father offered me some advice. (Many such instances, but I have a specific case in mind.) When in class, he told me, never be afraid to raise your hand and ask questions or seek clarification on some point you don’t understand. People are often reluctant to do this, he said, because they’re .. MORE
#ReadWithMe
Evaluating We Have Never Been Woke Part 2: Bootleggers and Baptists
After spending ten posts (beginning here) outlining Musa al-Gharbi’s arguments in his book We Have Never Been Woke, it’s time to move on to my evaluation of those arguments. In my first post discussing this, I covered al-Gharbi’s claim that elite overproduction is an important cause of “Awokenings.” Today I want to explore how thinking .. MORE
Labor Market
AI Won’t Kill Work – It Will Reinvent It
It’s easy to doomscroll these days. AI, it appears, is coming for our jobs. Even occupations that were previously considered an easy path to a middle-class lifestyle, like lawyer and radiologist, may be subject to the AI chopping block. Yet these stories, despite their flashy headlines, are missing nuance. They examine the seen (and likely) .. MORE
Competition
The Virtue of Dissent and Conversation
I have written a lot on dissent and how it serves in the truth-finding process (for selections, see my blog posts here and here, and some of my academic articles like the award-winning “Cascading Expert Failure” and “Expert Failure and Pandemics: On Adapting to Life with Pandemics,” coauthored with Abigail Devereaux of Wichita State University, .. MORE
Cross-country Comparisons
Changing Opinions on America
I have a memory of reading, sometime in the 1980s, a story in a French magazine about the American border patrol along the Mexican border. They don’t use police dogs, the reporter explained approvingly, “because of a certain idea of the rights of man.” I have tried to trace this story, but alas, to no .. MORE
Business Economics
The Problem with Government-Run Grocery Stores
In 1989, Russian President Boris Yeltsin took a famous trip to a grocery store in Texas. The event lives on in popular history because of this famous photograph. Yeltsin was amazed by the food availability in the US, in contrast with the breadlines of the Soviet Union. Markets successfully catered to customers, whereas government central .. MORE
Incentives
Preference Falsification, Marginal Cost, and Cancel Culture
In my earlier post on preference falsification, I argued that a culture of free speech and open debate is a necessary factor for the benefits of free speech to be fully realized. This post expands on that, examining a common fable involving preference falsification, how the dynamics of preference falsification are different in reality than .. MORE
Economic Methods
The Measurement is Not the Thing
Measure what is measurable, and make measurable what is not so. -Galileo Galilei Any science contends with a difficult problem: there are things we want to understand, but we cannot easily measure those things. Any tool for measurement will inherently have technical limitations (that is, limited by the technology of the time) and be subject .. MORE
Information Goods, Intellectual Property
The Anthropic Settlement: A $1.5 Billion Precedent for AI and Copyright
Last week, Anthropic, the AI company behind the Claude chatbot, settled a landmark class-action lawsuit for $1.5 billion. The amount is very large in the context of copyright legal cases, yet it represents just a fraction of Anthropic’s estimated $183 billion valuation. Authors and publishers, led by figures like Andrea Bartz and Charles Graeber, accused .. MORE
Business Economics
Bicycles Before Business
El Camino Real (ECR), State Highway 82, the main thoroughfare connecting San Jose with San Francisco, is sandwiched between Federal Highways 280 and 101. Maintenance and Rehabilitation is largely paid by the state with modest local government participation. Indeed, Caltrans can repave and redesign ECR even without city approval. In 2024, Caltrans decided to repave .. MORE
#ReadWithMe
Evaluating We Have Never Been Woke, Part 1: Elite Overproduction
After spending ten posts (beginning here) outlining Musa al-Gharbi’s arguments in his book We Have Never Been Woke, it’s time to move on to my evaluation of those arguments. In this post, I’ll begin to cover some of my thoughts on al-Gharbi’s more big-picture ideas — the cause of “Awokenings,” and the motivation for “woke” .. MORE
Economic Education
Good Foundations
In the Christian Bible, there is a parable of two builders. One built his house on stone and the other on sand: “Everyone then who hears these words of mine and acts on them will be like the wise man who built his house on rock. The rain fell, the floods came, and the winds .. MORE
Incentives
Incentives Matter, Math History Edition
Economists are fond of talking about how people respond to incentives — and stress how social arrangements can produce suboptimal results when they give people counterproductive incentives. I recently saw a fun video on the history of how mathematicians developed the imaginary number system (hey, I think it’s fun anyway!) that shows an example of this .. MORE
Finance
Rethinking Triffin: The Fiscal Dimension of the Dollar Dilemma
The debate over Robert Triffin’s famous “dilemma” continues to animate policymakers and commentators. Stephen Miran, a leading economic advisor to Mr. Trump, in a November article revived the theme by arguing that the inelastic global demand for dollar-denominated assets imposes structural costs on the U.S. economy. Joseph Sternberg, in a recent column, by contrast, dismisses Triffin as a .. MORE
Economic and Political Philosophy
The State Power to Discriminate
John Locke’s idea that tyranny is defined as arbitrary power as opposed to the rule of law seems to underlie the whole classical liberal tradition (see Locke’s Second Treatise of Government [1690, Chapter 18]). Arbitrary power allows the state or any other central political authority to discriminate among its subjects by bribing its supporters and .. MORE
Economics and Culture
The Costs and Choices of Kiki’s Delivery Service
Despite facing little explicit costs, Kiki’s delivery service is a costly endeavor. Fortunately, for viewers, it’s a charming lesson on the nature of costs and an introduction to James Buchanan’s work on cost and choice. Kiki’s Delivery Service, Studio Ghibli’s 1989 masterpiece, captures genuine moments of a young witch trying to make it on her .. MORE
Regulation
A Substantive Reply on Tariffs
Soon after the Wall Street Journal published Phil Gramm’s and my warning of the destructiveness of President Trump’s steel and aluminum tariffs, a thoughtful CEO of a steel-producing firm in Pennsylvania emailed me to cordially express his concern that, if Sen. Gramm’s and my warning is heeded, failure to protect American producers of steel and .. MORE
Free Markets
A Blessing and a Curse
The market as an institution is both a blessing and a curse. Its blessing lies in its coordinating abilities. As Adam Smith first noted back in his Wealth of Nations, nobody knows how to make a woolen coat. Rather, it is the coordinated (although not planned) actions of “a great multitude” of workers that results in .. MORE