EconLog Archive
Business Economics
Fresh Air
My wife and I went to see the movie Air on Saturday and I highly recommend it. If you follow this blog closely and have read the post about my Wall Street Journal op/ed, co-authored with Don Boudreaux, on Air and ESG, you might wonder how I could write an op/ed without seeing the movie. .. MORE
Institutional Economics
Hayek’s Critique of Unlimited Democracy
I think the main interest of the third volume of Friedrich Hayek’s 1973-1978 trilogy Law, Legislation, and Liberty, titled The Political Order of a Free People, resides in its strong liberal critique of democracy as we know it. My review of this third volume is just out on Econlib. A few excerpts of my review .. MORE
Property Rights
Why Scott Alexander is wrong
Scott Alexander pushes back against the argument that building more housing in a city will reduce housing prices in that city. He begins by noting that housing costs tend to be higher in places that are relatively dense, such as New York and San Francisco. He is aware that this argument is subject to the .. MORE
Economic History
How Many of Marx’s Interim Goals Have We “Accomplished?”
Today, May 1, is May Day. It is celebrated by communists in many countries. So I thought it would be a good idea to take stock and see where we are on the road to the communist ideal. In The Communist Manifesto, Karl Marx and Friedrich Engels laid out 10 interim measures on the .. MORE
Trade Barriers
The cost of economic nationalism
The price of flying from the US to China has risen very sharply in recent years. The primary cause is economic nationalism. Here’s the Financial Times: The US has offered to grant Chinese airlines the same number of weekly flights between both countries as American carriers — but only if they agree not to fly .. MORE
Media Watch
What Does “Marginalized Group” Mean?
In the zeitgeist, “marginalized” seems to mean any group that a mainstram speaker must love. A loved group is typically a set of individuals who deserve some privileges required by “social justice” as understood in the chattering classes, who complain of “micro-aggressions,” and who are not sufficiently empowered to boss others around. By a strange .. MORE
Foreign Policy
The virtue of patience
A few months back, I did a MoneyIllusion post that discussed a fantastical airport project mentioned in an old Life magazine. The same issue (from March 18, 1946), has a few other articles worth thinking about. Here’s one example: The phrase “iron curtain” brought back a lot of memories. It was a term one often .. MORE
Moral Reasoning
When Is Income Not Income?
When the Washington state Supreme Court says it’s not. But in 2021, the [Washington] state legislature ignored the plain language of the constitution, plus decades of precedent, to impose a special 7 percent tax on one type of income, capital gains. That blows through the constitutional strictures in two ways. First, as we pretty .. MORE
Business Cycles
Jamie Dimon Is Correct: More Bank Failures Coming
J.P. Morgan CEO Jamie Dimon is making international headlines with his recent claim that the current U.S. banking crisis is “not yet over, and even when it is behind us, there will be repercussions from it for years to come.” With Congress’s ongoing excessive spending and the Federal Reserve’s continued monetary mischief, Dimon’s prediction seems .. MORE
Books: Reviews and Suggested Readings
Hayek on Benefits of Competition and the Optimal Size of Firms
In the same chapter of Friedrich Hayek’s Law, Legislation, and Liberty that I discussed two days ago, Hayek has some excellent discussion of the benefits of competition and on the optimal size of firms. The benefits of competition Competition, if not prevented, tends to bring about a state of affairs in which: first, everything will .. MORE
Political Economy
Should Russia Be Protected Against Imports?
If the report is true, which would not be surprising, there is a certain irony—a very certain irony—in the US government’s intent to handicap the Russian government by preventing imports into that country from producers of G7 countries (“Allies Resist US Plan to Ban All G7 Exports to Russia?” Financial Times, April 25, 2023). Aren’t .. MORE
Finance
Is the yield curve anticipating a recession?
There are many indicators analysts use to check if the US is heading into a recession (or is already in one). Macro statistics (e.g., Quarterly GDP growth), production measures (such as Industrial Production or the Conference Board Leading Index), labor signs (JOLTS or Initial Jobless Claims), and many other clues regarding housing, confidence and stock .. MORE
Energy, Environment, Resources
Coasean economics in Irvine
Irvine is a master planned community in Orange County, California, with a population of just over 300,000. It is one of the few areas of coastal California where home building is still quite robust, perhaps due to the influence of the Irvine Company. A recent article in the Orange County Register provides a good example .. MORE
Obituaries
John Raisian, RIP
John Raisian, who was director of the Hoover Institution for a quarter of a century, died Monday at age 73, of kidney failure. My guess is that that was a result of the immune suppression drugs he took after he had a liver transplant some years ago. John was a fellow graduate of the UCLA .. MORE
Politics and Economics
Musing on Condorcet’s Paradox
Paradoxes make good brain candy, in my opinion. As a rough approximation, statements can be deemed a paradox when they provoke the reaction “That can’t be right but I also don’t see how it can be wrong.” W. V. Quine once described how paradoxes can be put into three different categories: veridical, falsidical, and antinomy. .. MORE
Competition
Friedrich Hayek on Industrial Organization, Competition, and Monopoly
One of the treats of the recent Liberty Fund colloquium on the Austrian and Chicago schools of thought was getting to read or reread various excerpts from Friedrich Hayek’s work. In a chapter titled “Government Policy and the Market” from his 1982 book Law, Legislation, and Liberty, Volume 3, Hayek nicely puts perfect competition in .. MORE
Business Economics
Condemning the Profit Motive: Part 4
While most people accept that business are in the business of pursuing profits, this pursuit nevertheless prompts many complaints. In two previous posts, I have outlined thirty objections to the profit motive, and I tried to counter each in turn. In this post, I offer ten more complaints that allegedly result from the pursuit of profits. .. MORE
Economics of Health Care
Taxing Higher Earners and Subsidizing Lower Earners Would Reduce Inequality
In a recent paper for the University of Chicago’s Becker Friedman Institute, MIT health economist Amy Finkelstein and three colleagues point out the obvious: taxing higher income people and subsidizing lower income people would reduce inequality. Specifically, they examine what would happen if the U.S. government nationalized the financing of employer-provided insurance, paying for the .. MORE
Macroeconomics
Rising prices and falling output
The “Inflation Reduction Act” of 2022 was one of our more inappropriately named pieces of legislation. (And there’s plenty of competition—recall FDR’s National Industrial Recovery Act.) The Financial Times has a new piece entitled: Critics warn US Inflation Reduction Act could keep prices high A scramble for workers might complicate the Federal Reserve’s efforts to .. MORE
Economic Growth
Some Questions on the Intriguing Twentieth Century
In a 1930 essay titled “Economic Possibilities for our Grandchildren,” John Maynard Keynes predicted that in 100 years, “assuming no wars and no important increase in population,” the standard of living in “progressive countries” would be “between four and eight times as high” as it was then. His most optimistic scenario is being realized. In .. MORE
Economic Education
We’re Number Two; We’re Number Two
According to Feedspot, EconLog is now the 2nd best economics blogs for students. Go here for the list of the top 30. Of course, we should take this with a grain of salt because often these ratings are ways to get peoples to link to the source, which, of course, is what I’m doing .. MORE