EconLog Archive
#ReadWithMe
We Have Never Been Woke Part 7: Victimhood Culture
(This post is part 7 of a series of posts on We Have Never Been Woke by Musa al-Gharbi. The previous entry is here.) One of the questions that animated Musa al-Gharbi’s investigation into the causes and consequences of wokeness was why highly successful elites seem so eager to portray themselves as otherwise. As he .. MORE
International Trade
Useful Counterfactuals on Trade
Counterfactuals are a necessary part of any scientific analysis: If X didn’t happen, then Y would have. But counterfactuals, by definition, can never be known. They never occurred, so we can never truly know if the counterfactual would have happened. For example, there was much debate in the Truman Administration and the US military during World .. MORE
Labor Market
A Serious Look at Interest Rates
These tweets caught my eye: I suspect that it would be possible to create some sort of argument that the AI boom is hurting the job market, but at the risk of being unserious I don’t find this one to be particularly persuasive. Suppose I made the following argument: Interest rates would be lower if .. MORE
International Trade
Freedom as a Loophole
The August 29 planned abolition of the de minimis customs exemption in the United States may come as a shock to those who believe that, as the physical universe is made of visible matter and dark matter, the political world is made of Democratic and Republican stuff, “the Left” and “the Right.” The restriction of .. MORE
Economic Education
Fentanyl Elasticity: Cutsinger’s Solution
Question: Suppose the demand for fentanyl is perfectly inelastic, and that the users of fentanyl steal from others to acquire the money to pay for it. In an effort to crack down on fentanyl use, the government imposes harsher penalties on suppliers of fentanyl, reducing its supply. How will this policy affect the amount of .. MORE
Free Markets
My Weekly Reading and Viewing for August 17, 2025
Government Should Experiment with Eliminating Patient Barriers, Not with Covering Ozempic by Akiva Malamet, Bautista Vivanco, and Michael F. Cannon, Cato at Liberty, August 11, 2025. Excerpts: While Ozempic and other GLP‑1 drugs are great at helping patients lose weight(among many other promising uses), these impressive medications come with an impressive price tag. For those paying out of .. MORE
Property Rights
Not in my back pocket (NIMBP)
Most advanced countries are democracies. In most cases, these countries impose heavy taxes, with total revenues often falling between 30% and 50% of GDP. And yet, most people don’t like paying taxes. How can we explain this seeming contradiction? The mainstream view of both the economics profession and the general public seems to be that .. MORE
Incentives
Fascinating Interview of Anne Krueger
I have for many years argued that Anne Krueger and Jagdish Bhagwati should be awarded the Nobel Prize in economics for their work on trade, protectionism, and economic development. Indeed, they should have shared the 2008 Nobel with Bhagwati’s student Paul Krugman. The extensive interview of Krueger in the latest issue of the Journal of .. MORE
#ReadWithMe
We Have Never Been Woke Part 6: Consequences of Awokenings
In the last post in this series, we looked at Musa al-Gharbi’s description in We Have Never Been Woke of what causes Awokenings to rise and eventually fall, what are the long term consequences of these movements? Given that Awokenings consist of wealthy and elite members of the symbolic capitalist class rising in support of .. MORE
International Trade
Evaluating the US-Japan Trade Deal on Mercantilist Terms
Short Version: it’s bad, even by the preferred metrics of protectionists. On July 23, US and Japanese trade negotiators reached a deal on tariffs, investments, and other international transactions. Much has been written about how bad the deal is from a standard economic perspective (see, for example, here). But President Trump and his administration, who .. MORE
Economic Education
Two Economic Ideas That are True and Nontrivial
Timothy Taylor, at Conversable Economist, had a post on August 13 titled “What Economic Ideas are True and Nontrivial?” He starts with a famous story that Paul Samuelson told and I’ll quote it here: [O]ur subject puts its best foot forward when it speaks out on international trade. This was brought home to me years .. MORE
Central Planning
Today’s Convergence of Political Systems
In the 1960s and 1970s, a fashionable idea, at least among the Western intelligentsia, was the convergence between socialism (read: communism) and capitalism. Even less obvious than today was the true distinction between, on one side, a regime of individual and private choice and, on the other side, a system of collective and political choice. .. MORE
#ReadWithMe
We Have Never Been Woke Part 5: The Cause of Awokenings
As I mentioned in my last post, Musa al-Gharbi argues in We Have Never Been Woke that the post-2011 Awokening – that is, the rise of social justice activism and the escalating adoption of social justice ideology among the symbolic capitalist class – was not an unprecedented event. He argues that Awokenings have occurred before and have .. MORE
Cryptocurrency
Stable/Genius: Stablecoins and Free Banking
President Trump signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) into law on July 18th, promising to “cement American dominance of global finance and crypto technology.” In his post-signing speech, the president explained, “the GENIUS Act provides banks, businesses and financial institutions, a framework for issuing crypto assets backed one .. MORE
Property Rights
Federalism and Housing Policy
The Economist has an interesting article speculating that the red state advantage in housing affordability may be about to shrink: But what if red states’ cheap-housing advantage were to start shrinking? That may already be happening in places: a study by Edward Glaeser of Harvard University and Joseph Gyourko of the University of Pennsylvania published .. MORE
Economics and Culture
The Future of Art with AI
AI art and music are quite amazing. In seconds, you can create fun images. To wit, below is a photorealistic image I created with ChatGPT of Adam Smith and David Hume having lunch and Hume sticking Smith with the bill: Or a cartoon image of my summer bowling league team, the Cosmic Colonels: Both of .. MORE
Economic History
My Weekly Reading for August 10, 2025
Child Protective Services Investigated Her 4 Times Because She Let Her Kids Play Outside by Lenore Skenazy, Reason, August 9, 2025. Excerpt: During this visit, the social services worker acknowledged that our home was clean, that the children were happy, well-fed, polite, and well-spoken, but said the children had to be supervised 100 percent .. MORE
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