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Crisis and Leviathan: The Federal Government in the Civil War - Econlib
When the Civil War broke out in 1861, the federal government, like any government in any situation, had three sources of money: taxing, borrowing, or printing. Taxing The federal government was much more successful than its Confederate counterpart in funding the war via taxation. In August 1861, tariffs were hiked and the first federal income […]
The Past and Future of AI (with Dwarkesh Patel) - Econlib
Dwarkesh Patel interviewed the most influential thinkers and leaders in the world of AI and chronicled the history of AI up to now in his book, The Scaling Era. Listen as he talks to EconTalk’s Russ Roberts about the book, the dangers and potential of AI, and the role scale plays in AI progress. The conversation concludes […]
Joseph Epstein Errs on the Dismal Science - Econlib
In the April 24 Wall Street Journal (April 23 electronic version), regular writer Joseph Epstein, in an article titled “Is That an Augur, or a Mere Economist?” does a disservice to economics in two ways. I’ll deal mainly with one of them. Epstein writes: Economics is supposed to be a science. The “dismal science” Thomas […]
My Weekly Reading for April 27, 2025 - Econlib
With Proposed Glue Trap Ban, San Francisco Sides With the Pests by Christian Britschgi, Reason, April 24, 2025. Excerpt: The “abundance” discourse, sparked by Ezra Klein and Derek Thompson’s book of the same name, has directed a lot of attention to liberal America’s failure to build. Blue cities and blue states can’t deliver projects on […]
When externalities conflict - Econlib
Air pollution from coal-fired power plants has negative externalities, damaging human health. Carbon emissions from these power plants contribute to global warming. A recent article in The Economist discusses the recent acceleration in global warming, and suggests that the twin goals of a cleaner air and a cooler planet may be in conflict: Evidence against […]
Clearing the Air on Tariffs and Trade Deficits - Econlib
Let’s consider the argument step by step. First, is a trade deficit with a particular country bad? No. One of the easiest ways to see that is to look at your own spending on other producers’ goods. Consider mine. Our household spends over $5,000 a year on groceries from Safeway. But those scoundrels at […]
Adam Smith Definitely Would Not Approve - Econlib
Janet Bufton has an excellent recent post on Adam Smith on tariffs. I wish to add my own thoughts to her post. Bufton rightfully points out that Smith would staunchly oppose these tariffs because they focus on the trade deficit, something he calls “absurd.” Smith was a free trader, through and through: All systems of […]
EconLog Price Theory: Gas Shortages - Econlib
We’re bringing back price theory with our series on Price Theory problems with Professor Bryan Cutsinger. You can see all of Cutsinger’s problems and solutions by subscribing to his EconLog RSS feed. Share your proposed solutions in the Comments. Professor Cutsinger will be present in the comments for the next couple of weeks, and we’ll post […]
Bans on Artificial Food Dyes are Unjust - Econlib
Artificial food dyes have been garnering a surprising amount of attention over the last few months. The FDA recently banned Red No. 3 due to concerns about the product’s safety. Now a number of states are making a push to prohibit even more artificial food dyes. These bans are defended on the grounds that artificial […]
One way or another - Econlib
In 2014, Vladimir Putin seized the Crimea, even though Russia had previously recognized Ukrainian sovereignty over the peninsula. The US government is now pressuring Ukraine to accept Russia’s sovereignty over Crimea. Xi Jinping suggests that Mainland China will take back Taiwan. He hopes the reunification will be peaceful, but refuses to rule out the use […]
Ted Koppel Does a Lousy Job on USAID - Econlib
I watch CBS Sunday morning every week. One segment on April 20 was Ted Koppel’s look at the cuts in USAID spending. There were three main things wrong with his reporting, all of which showed laziness or indifference or something else. Koppel interviewed a British politician named David Miliband. Koppel stated: For the past […]
The Vice President Meets the Pope - Econlib
Vice President JD Vance, a Catholic, met Pope Francis on April 20, the day before the latter’s death. The meeting with the enfeebled pope was brief and did not touch upon their disagreement about the treatment of immigrants. Early this year, Francis had declared that the mass deportation plan “damages the dignity of many men […]
Silver Linings and Green Clouds - Econlib
As I write this, it’s been about two weeks since the “Liberation Day” tariffs were announced. While nobody expects political economic models to be stellar (see the myriad of “economic impact studies” that come out for any project that just happen to coincide with what the local politician wants to hear), the model released by […]
Health Care Markets Fail So Government Must Intervene? Kenneth Arrow Said No Such Thing - Econlib
We’ve all heard the ritual incantation: Kenneth Arrow showed that markets fail in health care, so government must intervene. What comes next is dealer’s choice. You may be in for a pitch on regulating nurse practitioners. Or against physicians dispensing medicines. Or for price controls on pharmaceuticals. Or for abolishing profit, private health insurance, and human nature itself on […]
Introducing Fewer Rules, Better People: The Case for Discretion - Econlib
Ideas can often be introduced to us in unusual places. The British comedian David Mitchell once quipped that his introductions to Proust and Wagner came from Monty Python and Bugs Bunny respectively. In my own life, I was first motivated to think about the argument over the relative value of rules and discretion while watching […]
The trade debate revisited - Econlib
Within the Trump administration there is a vigorous debate between two camps. One group, headed by Peter Navarro, might be called the “true believers”. They favor mercantilist economic policies of the sort that Argentina implemented during the 1940s and 1950s. Another group, headed by Elon Musk, might be called the free traders. In the middle […]
Why Christianity Needs to Help Save Democracy (with Jonathan Rauch) - Econlib
How does a nice Jewish boy who is also a gay atheist have the chutzpah to lecture Christianity on its obligations to democracy? Listen to author Jonathan Rauch talk about his book Cross Purposes with EconTalk’s Russ Roberts as Rauch makes the case for what he calls a thicker Christianity.
Of ChatGPT’s Sense of Humor - Econlib
Over more than two years, I have occasionally discussed my experience with AI bots—mainly ChatGPT, which I have also used for the featured images of my posts. But except in “TikTok, Godot, Absurd Politics, and Knaves,” I have not directly addressed this bot’s sense of humor, which has become rather impressive. Let me give other […]
My Weekly Reading for April 20, 2025 - Econlib
US Citizens Don’t Have First Amendment Rights If Noncitizens Don’t by David J. Bier, Cato at Liberty, April 15, 2025. Excerpt: I just had a disturbing conversation with a green card holder—a legal permanent resident of the United States. He had asked if he thought traveling internationally was wise for him as someone who […]
Free Stuff is Expensive - Econlib
There is an endless list of ways we want to improve cities and help the poor. The list of problems plaguing poor communities is long. Every major US city has areas where the schools are terrible, crime is rampant, the sidewalks and streets are little more than rubble, fresh food is in short supply, and […]
Why Hold Laws As Binding On the Rulers - Econlib
The economic case for submitting political power (“government”) to general laws that it must itself obey is, at bottom, simple: to blunt the incentives of rulers to become despotic or tyrannical toward a portion of the ruled. (They can’t tyrannize all the ruled because they need supporters and praetorians of different sorts.) Only those confident […]
Public Statement in Favor of Free Trade and Against Tariffs - Econlib
America’s prosperity is today, as it has always been, rooted in principles of entrepreneurship and voluntary economic exchange. For 250 years, the United States of America has demonstrated to the world that a people left free to innovate and produce for themselves, and for all who trade with them, will enjoy increasing abundance, higher […]
Businesses are suffering - Econlib
Almost any economic change produces winners and losers. Ride share companies hurt the taxi industry. In the future, Waymo may undercut the ride share companies. Imports of inexpensive sneakers from China hurt the US shoe making industry. And now we discover that San Francisco’s recent crackdown on street crime also produces negative consequences for some businesses: […]
An Old Movie Reminds Me of Two Lost Freedoms - Econlib
A few weeks ago, I watched a movie from 1943 titled Watch on the Rhine. It starred Bette Davis and Paul Lukas. I highly recommend it. I won’t say much about the plot because it develops as it goes and to say much would be to give away too many spoilers. Here’s the Wikipedia […]
What is the Role of the Expert? - Econlib
Commenting on this post, commentor Warren Platts writes (emphasis added): You economists can debate amongst yourselves about how trade deficits don’t matter. But your debates are what don’t matter now. Now we need to just get this done, come hell or high water. Your job now, as an experienced economist, is to tell us how […]
Artificial Intelligence: Doom or Boom? - Econlib
Join Us! Does the thought of malicious HALs keep you up at night? Are you already on a waiting list for AI implants? Are you skeptical of the modern tendency to make things binary to generate false controversies and erase nuance? Our upcoming virtual reading group is perfect for you! We took inspiration from Russ […]
The Government You Wished For - Econlib
Everybody in America who ever wanted a powerful government to do good should now be happy, for he got his wish. Too bad for half the voters who have different conceptions of the good—their personal good or the “social good”! A government powerful enough to do good is also powerful enough to do bad. A […]
The Display Test: Market Efficiency - Econlib
While giving some of my thoughts on R. R. Reno’s book Return of the Strong Gods, I gave Reno credit for doing very well at something called the Display Test. I quoted from Justin Tosi and Brandon Warmke’s book Grandstanding: The Use and Abuse of Moral Talk, where it was described this way: Virtually every policy proposal […]
Trade deficits forever? - Econlib
Josh Hendrickson has a new Substack post that discusses the implications of the US dollar’s role as an international reserve currency. This caught my eye: When you are taught a typical model of international trade with flexible exchange rates, discussion of the balance of trade goes something like this. If a country runs persistent trade […]
Whataboutism - Econlib
I often see people in debates online accuse other people of playing “Whataboutism.” Here’s a standard definition: Whataboutism is a pejorative for the strategy of responding to an accusation with a counteraccusation instead of a defense against the original accusation. That raises two issues. First, is whataboutism ever a reasonable way to argue? Second, […]
Colloquial Law - Econlib
For any science to be broadly understood, it needs to be communicated in a helpful manner. Indeed, much of my research focuses on how experts communicate their opinions and on the institutions under which that communication is improved. In this post, I turn my eye toward another form of expert opinion, the law. With law, […]
Sleazy boomers and wholesome zoomers - Econlib
The Economist has a very interesting set of articles on recent trends in western culture. The first one is entitled Aging disgracefully, and documents a major increase in promiscuous sex and drug use among the baby boom generation. (Yes, that’s my generation.) The second article notes a dramatic decease in this sort of behavior among […]
Why Shouldn't We Subtract the Added Value from Imports from the Trade Deficit? - Econlib
Regular reader Alan Goldhammer wrote: I fully understand how tariffs work and know that the calculation for the reciprocal tariffs was something pulled out of a hat (or some malfunctioning AI tool). However, I don’t know if imports are fully modeled for how much they add to the US economy. Any small business that brings in Chinese […]
Remembering Paul Lewis - Econlib
Liberty Fund lost a great friend recently with the passing of Paul Lewis. Paul was a professor of political economy at Kings College, London and had been on the faculty of Cambridge prior to that. Paul was a great interpreter of economic thought and specific thinkers – so much so that Bruce Caldwell asked him […]
Rebranding the Trade Deficit - Econlib
It’s time for another round in the ongoing saga of “Kevin complains that economists are terrible at naming ideas.” Here, I propose that economists should consider rebranding “the trade deficit.” The reason people so badly misunderstand the term is right there in the name – deficit. Deficits sound bad. In most usages, deficits imply something […]
Incoherence, Grand Plans, and Politicians' Self-Interest - Econlib
What motivates President Donald Trump’s chaotic, stop-and-go, incoherent tariff moves? On April 9, a few days after his “reciprocal tariffs” had come into force and after worrying cracks appeared in financial markets including the market for Treasurys, he announced a 90-day pause for most “reciprocal tariffs” over 10%. He explained that people were “getting … […]
Rational and Religious (with Ross Douthat) - Econlib
How can we explain the world’s underlying order? How does consciousness emerge? And why do people from such different cultures have such similar near-death experiences? Listen as Ross Douthat, New York Times columnist and author of the new book Believe: Why Everyone Should Be Religious, argues that these and other unanswerable questions underscore his argument for the rationality […]
Inflation Targets: Cutsinger's solution - Econlib
Question: Some economists have argued that the Fed should raise its inflation target from 2 percent to 3 or even 4 percent. Why might the effect of a higher inflation target on the quantity of real money balances demanded be larger in the long run than in the short run? Solution: Economists often treat […]
Trade as a scapegoat - Econlib
I’ve noticed that many people reflexively blame trade for the decline of the Rustbelt. Here’s one example: Apologists for the outgoing trade regime often ignore that its impact was felt most acutely in particular regions, like the American Midwest. Researchers John Russo and Sherry Linkon describe how the closure of a steel mill in Youngstown, Ohio – the […]
Why Classical Liberals Should be Skeptical of DOGE - Econlib
Charlie Munger once said that “it’s not the bad ideas that do you in, but the good ones.” While some have taken this quote to mean that people get stuck too easily on their good ideas, even if they don’t work. But you can also consider this to mean that poorly implemented “good” ideas can […]