Wednesday , October 21 2020
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Cafe Hayek

Explicable and Inexplicable Ignorance

In my latest column for AIER, I distinguish explicable ignorance from inexplicable ignorance. A slice: Equally inexplicable is the widespread trust that people put in politicians. How, for example, can anyone who watched senators questioning Supreme Court nominee Amy Coney Barrett come away with an impression other than that these elected officials – Democrats and Republicans alike – are either stupendously stupid or monstrously Machiavellian? Or consider this report by Peggy Noonan on a...

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Wisdom from Vernon Smith

In response to my note to Ms. Lori Baio on the dangers of so-called “stakeholder capitalism,” my emeritus Nobel-laureate colleague Vernon Smith e-mailed to me this bit of wisdom (shared here with Vernon’s kind permission): Don: May each of us as individuals and as firms collect more in revenue for what we produce than we incur in cost for the resources consumed in producing that revenue. Those who do not profit are a burden on others. Those who do account for the wealth of society. May...

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Some Links

Stacey Rudin eloquently exposes the inexplicable superstition that fueled – and that continues to fuel – most of the world’s hysterical reaction to the coronavirus. A slice: Perhaps [Neil] Ferguson never believed the world’s most powerful governments would take his predictions seriously. The world had not acted on his past predictions, so maybe he expected more of the same. This time, however, the media — breathlessly reporting on hospital overflow in Northern Italy; bolstered by...

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A Stake Through the Heart of the Market System

Here’s a letter to a college student who e-mailed to wonder at my opposition to so-called “stakeholder capitalism.” Ms. Baio: Thanks for e-mailing. I urge skepticism of calls for government to compel corporations to attend to the welfare of so-called “stakeholders” at the expense of the welfare of shareholders. The quotation at my blog from Deirdre McCloskey and Alberto Mingardi nicely summarizes many reasons for such skepticism. I stand by that quotation and encourage you to consider it...

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Quotation of the Day…

… is from page xviii of my emerita colleague Karen Vaughn’s “Introduction” to Liberty Fund’s 1981 edition of Trygve J.B. Hoff’s 1949 study, Economic Calculation in the Socialist Society (typo corrected): Economic activity is the process of discovering alternatives which improve profitability and, hence, resource efficiency. It is part of entrepreneurship to identify superior resources and to combine them in more imaginative ways to produce a product, and it is this activity which adds to...

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The Great Matt Ridley…

… writes again on the calamitous response to Covid-19. Unfortunately, most humans these days seem to be unable to escape the deafening echo-chamber of irrational histrionics in which they, apparently, are trapped. On these hysterical persons the wisdom of serious, knowledgeable thinkers such as Matt Ridley has no effect. So sad. Here are two slices from Matt’s latest: It is counterintuitive but the current spread of Covid may on balance be the least worst thing that could happen now. In...

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Bonus Quotation of the Day…

… is from page 102 of the May 9th, 2020, draft of the important monograph – forthcoming this month jointly from the Adam Smith Institute and AIER – by Deirdre McCloskey and Alberto Mingardi, The Myth of the Entrepreneurial State: And why suppose that profit is inversely correlated with social values? The supposition is fundamental to the statist left: profit is seen as a sin, a pointless and indeed evil extraction by the bosses, when the whole average product of labor should go to labor...

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A Diagnosis

Craig Pirrong makes an excellent diagnosis of the disease that now endangers so much of the world, including America. Two slices: It’s more than fair to say that we are experiencing a pandemic, but not the one you hear about ad nauseum. No, the pandemic is not a virus, it is a pandemic outbreak of Munchausen’s Syndrome by Proxy which focuses its obsessions on the virus. Munchausen’s Syndrome by Proxy is a mental illness in which the sufferer fantasizes that others–usually people in their...

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Some Links

Matt Ridley joined eleven other British peers in sending this letter to The Times: Sir, It is now clear that a policy of lockdown failed to bring the virus under control while having crippling economic and social side effects. Sweden has achieved a lower death rate from Covid-19 than the UK, with far less economic and social damage, despite being a slightly more urbanised society. If lockdown were a treatment undergoing a clinical trial, the trial would be halted because of the side...

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