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Tag Archives: Competition

Businesses cooperate, politicians compete

The FT points out that US businesses wish to cooperate with China while the politicians in both parties want to compete: America’s public and private elites are no longer as one on China, if they ever were. In Washington, vigilance to Beijing is the nearest thing there is to a bipartisan verity. Democrats, no less than Republicans, brood over Chinese gains in artificial intelligence and hypersonic missiles. Successive governments have tried to knit a web of Asian and...

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Some Non-Covid Links

Phil Magness writes, in the Wall Street Journal, on the antiracist history of the school-choice movement – and of the racist history of opposition to school choice. A slice: Is the school choice movement historically tainted by racism? American Federation of Teachers boss Randi Weingarten described vouchers in 2017 as “slightly more polite cousins of segregation.” Historian Nancy MacLean recently depicted vouchers as a product of an unholy alliance between economist Milton Friedman and...

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Quotation of the Day…

… is from page 122 of the 1976 Liberty Fund edition of John Chamberlain’s excellent 1959 volume, The Roots of Capitalism: Once capitalism is seen as a profit-and-loss system, with everyone at the mercy of the sovereign consumer’s whims as he balances one marginal desire against another, the incidence of anticapitalistic criticism must shift. The capitalist who can make money in a consumer-oriented system is the one who shrewdly anticipates the customer’s desires, and under such a...

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Economists Have Long Been Aware of the Theory of Monopsony

Here’s a letter to a new correspondent: Mr. C__: Thanks for your e-mail. You call my defense of Phil Magness – and his defense of the late Nobel-laureate economist James Buchanan – “unconvincing.” Your assessment springs from your belief that both Phil and I “cherry pick examples” of the mention of monopsony by economists who wrote prior to the 1994 publication of David Card’s and Alan Krueger’s famous paper. “Fact is,” you conclude, “almost nobody paid attention to labor monopsony until...

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Some Non-Covid Links

David Henderson reviews Diane Coyle’s new book, Cogs and Monsters. A slice: One of the biggest surprises I noticed in her view of economics is her statement, “Competition is quite a tender plant.” She explains, “The more successful, the larger, the more profitable and powerful the incumbents, the harder it is to maintain competition.” Actually, something closer to the opposite is the case. The more profitable the incumbents are, the greater is the incentive for new competitors to enter...

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Where’s the Beef?

In her latest book, Cogs and Monsters, University of Cambridge economist Diane Coyle, co‐​director of the Bennett Institute for Public Policy, undertakes an ambitious project: to say what we need to change about economic thinking inherited from the 20th century to help us explain, understand, and make economic policy for the 21st century. Unfortunately, she rarely goes into specifics. Whether it be about how to measure well‐​being, what antitrust policy should be for...

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Some Non-Covid Links

My intrepid Mercatus Center colleague Veronique de Rugy identifies the root evil of cronyism. A slice: My issue, however, is with [Ezra] Klein’s suggestion that changing the status quo requires conservatives and libertarians to stop denouncing Uncle Sam for big fiascoes like Solyndra, the solar company that infamously went under shortly after receiving a $538 million loan guarantee from a green-energy program under the Obama administration. Denouncing such waste, Klein insists, only...

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Asking “Why Don’t You Put Your Money Where Your Mouth Is?” Is a Test of Legitimacy

Here’s an e-mail to a Café Hayek reader: Mr. B__t: Thanks for your e-mail. In response to my criticism of Prof. Eric Posner for not putting his money where his mouth is when he asserts the widespread existence of monopsony power in labor markets, you write: I’ve always found this [response] to be underwhelming. Even if someone accepted the validity of the economic way of thinking, couldn’t someone say using that way of thinking “I agree with you that billions could be made if I invested...

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Assertions are Cheap

Here’s a letter to a new and very persistent correspondent: Ms. S__: You’re correct that I didn’t blog on Eric Posner’s recent New York Times op-ed on the alleged prevalence of monopsony power in U.S. labor markets. You’re incorrect to infer that I therefore “accept American workers are victims of employer monopsonists.” First, the New York Times is a roaring Niagara of economic fallacies. It’s impossible for anyone – never mind someone of my modest abilities – to address more than a...

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Bonus Quotation of the Day…

… is from pages 162-163 of F.A. Hayek’s profound 1952 book The Counter-Revolution of Science, as this book appears as part of volume 13 (Studies on the Abuse & Decline of Reason, Bruce Caldwell, ed. [2010]) of the Collected Works of F.A. Hayek: The problem of securing an efficient use of our resources is thus very largely one of how that knowledge of the particular circumstances of the moment can be most effectively utilised; and the task which faces the designer of a rational order...

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