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Business Economics

Fresh Air

By David Henderson | May 2, 2023

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

By Pierre Lemieux | May 2, 2023

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

By Scott Sumner | May 1, 2023

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?”

By David Henderson | May 1, 2023

  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

By Scott Sumner | Apr 30, 2023

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?

By Pierre Lemieux | Apr 30, 2023

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

By Scott Sumner | Apr 29, 2023

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?

By David Henderson | Apr 29, 2023

  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

By Chris Schwing | Apr 28, 2023

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

By David Henderson | Apr 28, 2023

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?

By Pierre Lemieux | Apr 28, 2023

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


Is the yield curve anticipating a recession?

By Chris Schwing | Apr 27, 2023

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

By Scott Sumner | Apr 27, 2023

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


John Raisian, RIP

By David Henderson | Apr 27, 2023

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

By Chris Schwing | Apr 26, 2023

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


Friedrich Hayek on Industrial Organization, Competition, and Monopoly

By David Henderson | Apr 26, 2023

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

By Chris Schwing | Apr 25, 2023

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

By David Henderson | Apr 25, 2023

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


Rising prices and falling output

By Scott Sumner | Apr 24, 2023

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

By Pierre Lemieux | Apr 24, 2023

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

By David Henderson | Apr 24, 2023

  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

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