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Tag Archives: Economics

Reality Isn’t Optional, #776

Here’s a letter to a Café Hayek patron: Mr. Bennani: Thanks for your e-mail. You’re one of four people who’ve e-mailed recently to scold me for allegedly failing to understand what you call “real world complications which make price gouging problematic.” These complications lead you to “side with consumers and political leaders that want limits on businesses’ ability to jack prices up.” I’m the last person to deny that reality is far more complicated and complex than any theory can...

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Whatever It Is, It Isn’t Economics

Here’s a letter to a long-time reader of Café Hayek: Mr. Flores: I did indeed read Saez’s and Zucman’s recent New York Times op-ed, but I wrote no letter or post in response. For a thorough demolition of it I recommend this essay by Phil Magness. But I’ll here add that when I try to understand how anyone could endorse proposals such as confiscatory taxation and the other interventions peddled by Saez and Zucman, I find the task to be nearly impossible. Their proposals reveal a belief...

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What About Economists’ Expertise?

Here’s a letter to the Washington Post: Editor These days we are lectured incessantly about the importance of deferring to experts. And those persons amongst us – including members of Congress, state governors, and even the President of the United States – who don’t fully follow experts’ prescriptions are solemnly denounced as fools who irresponsibly endanger the public. Without opining on the merits of epidemiologists’ expert assessments regarding COVID-19, I’m compelled to ask why...

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Quotation of the Day…

… is from page 131 of the 11th (2006) edition of one of greatest economics textbooks of all time: Paul Heyne’s, Peter Boettke’s, and David Prychitko’s The Economic Way of Thinking (original emphasis): We are extremely dependent on changing money prices to secure effective cooperation in our complex, interdependent society and economy. When prices are not permitted to signal a change in relative scarcities, suppliers and demanders receive inappropriate signals. They do not find, because...

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Quotation of the Day…

… is from page 159 of volume III (“The Political Order of a Free People,” 1979) of Hayek’s Law, Legislation, and Liberty (footnote deleted): In particular, in order to explain the economic aspects of large social systems, we have to account for the course of a flowing stream, constantly adapting itself as a whole to changes in circumstances of which each participant can know only a small fraction, and not for a hypothetical state of equilibrium determined by a set of ascertainable data....

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Quotation of the Day…

… is from page 13 of my colleague Richard Wagner’s excellent 2017 intellectual biography of Jim Buchanan, James M. Buchanan and Liberal Political Economy (link added): [Ronald] Coase’s key point of departure was that any situation described as one of market failure simultaneously implied that profit opportunities were present. This didn’t mean that market failures would automatically evaporate, but it did mean that market processes contained generally strong forces operating in the...

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Pittsburgh Tribune-Review: “Changing times”

In my column for the October 23rd, 2008, edition of the Pittsburgh Tribune-Review, I reflected on changing attitudes toward markets and intervention by the state. You can read my reflections beneath the fold. Changing times I became an adult on Jan. 17, 1977. On that day during my freshman year of college I first beheld a supply-and-demand graph. My intro economics professor at Nicholls State University drew this graph on the chalkboard to explain how prices are determined. I was blown...

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Quotation of the Day…

… is from page 59 of AIER’s just-published collection – Historical Impromptus – of many of Deirdre McCloskey’s articles and essays (available on page 55 here) specifically, it’s from Deirdre’s “Thurow’s The Zero-Sum Solution,” a review that she published in the January 9th, 1986, edition of the Des Moines Register: The trade of soybeans for Toyotas is similarly cooperative. The danger is that sports talk might persuade Iowans that subsidizing the U.S. auto industry with more than...

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Bonus Quotation of the Day…

… is from page 11 of my late Nobel-laureate colleague Jim Buchanan’s January 10th, 1997, lecture, “Has Economics Lost Its Way?” (original emphasis): Only if individuals are free to interact, one with another, can they achieve their own values. Informed with this elementary principle, the economist can “earn her keep” many times over by forestalling, even in a limited way, the effectiveness of the interest-motivated arguments of politicians, often advanced through easily-refutable...

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The Most Dangerous Virus

Here’s a letter to a frequent reader of my blog: Ms. Robertson: Thanks for your e-mail. You ask why I write so little about the coronavirus. My answer is simple: I have nothing to add to the already huge discussion of this matter. I’m completely ignorant of medicine and public health, and I know next to nothing about the history and the economics of pandemics. As I recall my great colleague Walter Williams long-ago telling a tv-show host who questioned him on some topic about which...

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