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Tag Archives: Economics

Quotation of the Day…

… is from page 460 of F.A. Hayek’s profound and important 1964 article “Kinds of Order in Society” (available without charge on-line here) as it appears in Liberty Fund’s 1981 single-volume collection of New Individualist Review: In the order created by the market, the participants are constantly induced to respond to events of which they do not directly know, in a way which secures a continuous flow of production, a coordination of the quantities of the different things so that the even...

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In Praise of Laissez Faire

In my latest column for AIER I marvel at the deep insight that economics, well-taught and well-learned, gives us into reality. A slice: But even many economists whose introduction to economics was as splendid as was my own are nevertheless reluctant to endorse laissez-faire policies. I’m sure that the reasons for this reality are many, including even simple differences in personalities. Yet I suspect that many economists’ reluctance, shall we say, ‘to go full Friedman’ springs ironically...

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Some Non-Covid Links

Craig Richardson and Richard McKenzie reveal some unintended consequences of Progressives’ desires to help the poor. Art Carden writes about incentives, institutions, and intentions. A slice: Prices are crucial: every price represents a momentary social consensus about a good’s best use. The consensus is momentary because people act on a steady stream of new ideas about how to use what. A quick glance at Amazon suggests I could get organic whole-wheat flour for fourteen cents a pound....

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Economics Circa 1820

Here’s a letter to the New York Times: Editor: MIT economist David Autor argues that government welfare programs result in taxpayers subsidizing employers of low-wage workers by “paying for the things their low-wage workers can’t afford” and, thus, artificially lowering the wages employers pay to these workers (“Good News: There’s a Labor Shortage,” Sept. 4). This argument is mistaken. At the core of Autor’s argument is a theory of wage determination that was commonly accepted by...

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Fun on Friday: Celebrating Work By Not Working

Labor day is a weird holiday. We celebrate working people by — not working.If labor is so great, shouldn’t we celebrate by doing more of it?I know — Labor Day isn’t really celebrating working. It’s to acknowledge the contribution of laborers to the economy.Not to be a killjoy, but I have to admit, I’m not a big fan of Labor Day.Don’t get me wrong — I like taking a day off as much as the next guy – and I willAlso, I’m a big fan of grilling meat.But the actual meaning behind Labor Day –...

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On Milton Friedman’s Economics and Motives

Here’s a letter to a high-school senior in Virginia: Mr. H__: Thanks for your e-mail, and for reading Cafe Hayek. As you predict, I join you in rejecting your economics teacher’s belief that “Milton Friedman’s teachings privileged the powerful … and oppressed workers and the disenfranchised.” But it’s not my place to instruct you on how to respond. You are, you say, familiar with some of Friedman’s writings. Re-read these writings, as well as others by Friedman – many of which are...

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Some Non-Covid Links

My GMU Econ colleague Bryan Caplan offers further thoughts on the case for so-called “infant-industry protection.” A slice: In the debate, Daniel Hannan pointed out that almost no one who claims that wages “stagnated” (or even fell) since the 1980s would actually want to go through a one-way time machine back to 1980.  The literature on CPI bias strongly backs him up.  Official statistics overstate inflation every single year (except 2020, where the opposite holds!), so every year...

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Some Covid Links

Mikko Packalen and Jay Bhattacharya dive deeply into the harms caused by lockdowns, and into the silence of so many economists. Six slices: As professional economists, we have watched the response of much of the economics profession to COVID-era lockdowns with considerable surprise. Given the evident and predictable harms of lockdowns to health and economic well-being, we expected economists to raise the alarm when lockdowns were first imposed. If there is any special knowledge that...

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Jerome Powell’s Bad Economics

During a Q&A with students and teachers, Federal Reserve Chairman Jerome Powell praised the bad economics that drove the government response to the coronavirus pandemic. In this clip from his podcast, Peter Schiff breaks down everything Powell got wrong.During the Zoom event, Powell went out of his way to praise Congress for passing the “CARES Act.” The Coronavirus Aid, Relief, and Economic Security Act was the first $2.2 trillion stimulus plan Congress passed in response to the...

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Incentives Matter

Economics 101 – incentives matter.But politicians often seem to forget this. Or simply ignore it. “Generous” unemployment benefits provide the perfect example. With the US government handing out enhanced unemployment checks, we ended up in a bizarre situation with high unemployment even as job openings hit record levels.Both President Joe Biden and Treasury Secretary Janet Yellen insisted that the enhanced government unemployment benefits weren’t incentivizing people not to work. In a...

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