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On Models - Econlib
Models are indispensable. Reality is insanely complex. Mapping every possible interaction would be computationally impossible and utterly useless for understanding the world. Instead, we flatten things down to key causal variables and use them to help us make predictions and decisions. But models come in different shapes and sizes. Which model is useful depends on […]
The Debate That Never Ends - Econlib
‘Men of good will, will be called upon to use the power of government to solve our problems of all the social ills: poverty, ignorance, squalor. We as economists are entrusted with these tools and with this now power to be able to achieve that.’ ~Paul Samuelson In this episode, Peter Boettke of George Mason […]
Immortality: The Meaning of Buchanan's Life - Econlib
An Econlib article by Peter Boettke on “Virginia Political Economy: James Buchanan’s Journey” shows how political philosophy and economics were enmeshed in Buchanan’s work. It also reminded me of an interesting two-part video of an interview of Buchanan by Geoffrey Brennan. The two economists often worked together and were notably co-authors of The Reason of […]
Your Seat Room Exceeds Your Allowable Freedom - Econlib
Fittingly enough after writing an extended review about a book about the pitfalls of rules that don’t allow for exceptions, I came across a recent news story about a recall issued for the recent ID.Buzz electric van from Volkswagen. Vehicles can be recalled for all kinds of reasons, of course. A vehicle I bought a […]
Adam Smith's Economic Case Against Imperialism - Econlib
Don Boudreaux reminds us that this is Adam Smith’s birthday or, at least, the birthday announced on his tombstone. For that reason, I’m sharing one of the first articles I wrote for antiwar.com. A version will appear in a book on foreign policy that I’m working on. Here it is. Adam Smith’s Economic Case Against […]
Further thoughts on trade balances - Econlib
I recently came across two interesting articles that got me thinking about trade balances. The first was written by Christopher Caldwell and discusses France’s rustbelt: A process that Guilluy calls métropolisation has cut French society in two. In 16 dynamic urban areas (Paris, Lyon, Marseille, Aix-en-Provence, Toulouse, Lille, Bordeaux, Nice, Nantes, Strasbourg, Grenoble, Rennes, Rouen, Toulon, Douai-Lens, […]
How a Lawsuit Against Realtors Went Sideways - Econlib
On March 15th, 2024, the Chicago-based National Association of Realtors (NAR) came forward with a stunning announcement: in response to two 2019 class-action lawsuits, it finally agreed to a settlement sum of $626 million and promised dramatic changes in the real estate business. The lawsuit charged that the NAR had excessive market power that allowed […]
Who Runs the Country? Nobody. - Econlib
I’ve noticed with increasing frequency that various commentators on the media talk about who runs the country. Many right wingers think that Joe Biden was supposed to run the country but didn’t and, instead, he deferred to a troika who ran the country. Many people across the spectrum think that Donald Trump currently runs […]
More Hidden Costs of Tariffs - Econlib
Since Trump declared a global trade war on April 2, American firms have been scrambling to manage tariffs (as an aside, this puts a lie to the oft-repeated claim that only foreigners pay tariffs). I’ve written before on some of the hidden costs of tariffs. Another hidden cost appears in the form of Foreign Trade […]
Does poverty cause homelessness? - Econlib
I like looking at the extremes. If it were actually true that capitalism causes selfishness, then what are the odds that the world’s most free market country would also be the world’s most egalitarian country? But it is. If it were actually true that fertility rates are falling because it’s too costly to raise kids […]
TACO vs. the Game-Theoretic Art of the Deal - Econlib
It is certain that President Trump’s reply to the TACO (“Trump Always Chickens Out”) accusation will not win him a Nobel prize in economics. The Wall Street Journal reports (“The ‘TACO Trade’ That Has Trump Fuming,” May 28, 2025): The president rejected claims that he is backing down on tariffs, saying his strategy involves setting […]
Wrapping up Fewer Rules, Better People - Econlib
Overall, I enjoyed Barry Lam’s book Fewer Rules, Better People: The Case for Discretion. I was initially motivated to read the book because I had been thinking about two different ideas common to classical liberal and libertarians that seemed to be in tension with each other. The first is the idea of dispersed nature of knowledge. […]
EconTalk #1000 (with Russ Roberts) - Econlib
In honor of EconTalk’s 1,000th episode, host Russ Roberts reflects on his long, strange journey from pioneer of the podcast format to weekly interviewer of leading economists, authors, and thinkers. Hear him answer your–and Chat GPT’s–questions about why he got started, how he preps, and how he picks guests. He also explains why debate gave […]
Adam Smith on Relationships between Young and Old - Econlib
The Theory of Moral Sentiments, by Adam Smith Relationships between people of different generations make up some of the most meaningful connections life has to offer. They shape deep-seated beliefs, goals, and priorities. In The Theory of Moral Sentiments [TMS], Adam Smith describes the human actor as one who is guided by relational experiences. Do […]
Virginia Political Economy: James Buchanan's Journey - Econlib
James Buchanan Virginia Political Economy was born in the foyer of the Social Science Building at the University of Chicago early in 1948. In a casual conversation with a fellow graduate student, Warren Nutter, I discovered that we shared an evaluation and diagnosis of developments in Economics, the discipline with which we were about to […]
Life After College - Econlib
Can the four-year degree be saved? Not for most learners, I would argue. Once less expensive alternative pathways become clearer and surer, a full-on degree will seem impractical… But why does the degree have to be the only product that colleges sell? And why can’t the American Dream be achieved by other college products, other […]
The New Deal's False Promise - Econlib
[ Note: This article was originally published on March 10, 2025 by Scott Sumner at his substack under the title “False Dawn: George Selgin on the New Deal.”] A Book Review of False Dawn: The New Deal and the Promise of Recovery: 1933-1947, by George Selgin.1 Franklin Delano Roosevelt’s New Deal policies had three goals: […]
The Market Isn’t a Tool - Econlib
In a nicely nuanced editorial, “JD Vance is Wrong: The Market Isn’t a ‘Tool’” Wall Street Journal, May 26, 2025, Matthew Hennessey, deputy editorial features editor of the Journal, took issue with Vice-President Vance, writing: On a recent podcast, New York Times columnist Ross Douthat asked Mr. Vance for an example of how his Catholicism influences his […]
Everyone Has Their Reasons - Econlib
In the US, national security has been cited by proponents of protectionism for a wide variety of products, ranging from computer chips to automobiles to ship building. But when it comes to foreign countries, our protectionists often have a blind spot. They cannot even imagine that any other country might also have valid national security […]
My Weekly Reading for June 1, 2025 - Econlib
Why California Gas Prices Are the Highest in America By Vance Ginn, The Daily Economy, May 23, 2025. Excerpt: According to the US Energy Information Administration (EIA), gasoline prices are generally shaped by five components: crude oil prices, refining costs, distribution and marketing, taxes, and regulations. In California, taxes and regulatory costs alone account […]
The Free Market Is Not a Tool for Politicos - Econlib
Wall Street Journal editor Matthew Hennessey rightly criticized Vice President JD Vance’s statement that the market is just “a tool, but it is not the purpose of American politics.” (“JD Vance Is Wrong: The Market Isn’t a ‘Tool,’” Wall Street Journal, May 26, 2025). Hennessey argues that markets are simply the way humans naturally trade […]
Responsibility and Religion - Econlib
In this episode of EconTalk, Russ Roberts and Jonathan Rauch explore the instrumental and existential purpose of true religion in liberal democracy. In his new book Cross Purposes: Christianity’s Broken Bargain with Democracy, Rauch argues that the recent failure of Christianity has led Americans to transform politics into a “pseudo-religion.” Instead of relying on the […]
Who Bears the Burden of Tariffs? - Econlib
Co-blogger Jon Murphy, in “Why Must Americans Pay Tariffs?” May 29, 2025, points out that U.S. tariffs are largely paid by Americans. He cites the relevant literature. He then goes on to note that trade occurs between individuals and firms, not countries. This is true and important, but it’s not relevant to the issue […]
Life is Made of Trade - Econlib
Without trade, life more complex than bacteria could not exist. We are literally made of free trade. It is in every cell of our bodies. The first lifeforms to evolve on Earth, at least 3.5 billion years ago, were very simple. They were single-celled organisms that lacked a nucleus or the organelles we see in […]
Ninety years ago - Econlib
In late July 1933, President Roosevelt enacted one of the most destructive economic policies in all of American history. The President’s Re-employment Agreement mandated an immediate 20% rise in hourly nominal wages. The stock market crashed. This action aborted a promising economic recovery that had raised industrial production by 57% between March and July 1933. […]
Why Must Americans Pay Tariffs? - Econlib
A major assertion by the Trump Administration is that tariffs are paid for by foreigners. And, indeed, under very specific circumstances, a tariff may be paid in part or in whole by a foreign producer: if the importing country is a monopsony (or has significant market power), if the exporting country has price power, and […]
Fewer Rules, Better People: Where Lam Falls Short - Econlib
I had many good things to say about Barry Lam’s book Fewer Rules, Better People: The Case for Discretion. However, no book is flawless, and no argument leaves no room for pushback. There are several places where I think the analysis in the book falls short, or at least misses out on important insights. While Lam’s […]
Marina von Neumann Whitman, RIP - Econlib
Economist Marina von Neumann Whitman died, at age 90, on May 20 this year. She was one of my 3 bosses when I was a summer intern at the Council of Economic Advisers in the summer of 1973. (I think of this as the “Watergate summer” because the hearings of the Watergate Committee were […]
Politicians in Black Robes - Econlib
Rule of law has long been sacred to the classical liberal. While the term was popularized by British jurist A. V. Dicey, the concept is much older. The rule of law has three distinct characteristics in the common law world:* An absence of arbitrary power on the part of the government Every man (regardless of […]
The problem with pessimism - Econlib
At various points in my life, I’ve been very pessimistic about a variety of things. In 2008, it was monetary policy. Today, it’s fiscal policy and authoritarian nationalism. At the same time, I’ve never been so pessimistic that I started planning a move to Canada or New Zealand. The US remains a pretty great place […]
If Mississippi Became a Sovereign Country - Econlib
Welcome to a little thought experiment. Suppose that Mississippi became a sovereign country. “Sovereign” means that the state apparatus can make any decision, even one that violates international law. The flip side of sovereignty is that the state can also impose its decision on the country’s residents or a portion of them, and that other […]
Politics and economics in Africa - Econlib
Despite dramatic progress in a number of areas, global poverty is increasingly concentrated in Africa. This is from a long survey in The Economist: In many ways, there has never been a better time to be born African. Since 1960, average life expectancy has risen by more than half, from 41 years to 64. The […]
Nature vs. Nurture (with Paul Bloom) - Econlib
How much of our success or failure is written in our genes? How much is under our control? Is it nature or nurture or is that dichotomy too simplistic? Hear EconTalk’s Russ Roberts and psychologist Paul Bloom discuss why the nature vs. nurture question is actually worth taking seriously and how by understanding it we […]
A Little Price Theory Goes a Long Way - Econlib
In “Liberation Day for Gas-Powered Cars,” Wall Street Journal, May 22, 2025 (print edition), the Journal editors make a strong case for getting rid of the California government’s mandate that requires an increasing number, year by year, in the percentage of auto makers’ sales that must be “zero-emission vehicles.” For the year 2026, that […]
My Weekly Reading for May 25, 2025 - Econlib
Air Traffic Control: It’s Management, Not Money by Chris Edwards, Cato at Liberty, May 20, 2025 Excerpts: The Secretary of Transportation, Sean Duffy, is on the case, but so far, he is just proposing to throw more money at the problem. By itself, more money will not cure the ATC system’s deep flaws, which stem from […]
The Ethics of Inequality - Econlib
In an era marked by increasing tensions over social justice, wealth redistribution, and the role of the state, it is wise to reflect on the roots of inequality and determine whether they are inherently unjust. From a free-market perspective, inequality can be seen not only as a natural outcome of economic dynamics but also as […]
Murphy on Economic Philosophy - Econlib
I was thrilled to join Nicholls State University student DJ Insomniac of KNSU Radio on his podcast “Philosophicast.” We discussed the history of economic thought from Adam Smith to Vernon Smith, and many things in between. You can listen to the whole thing here.
Joe Weisenthal on jobs and migration - Econlib
I saw an interesting tweet by Joe Weisenthal, discussing the question of what determines interstate migration: This is the classic chicken and the egg problem—which comes first? I view this question as an example of the fallacy of composition—what is true for the individual is not always true for the group. I suspect that Weisenthal […]
Fewer Rules, Better People: What Lam Gets Right - Econlib
Barry Lam’s Fewer Rules, Better People: The Case for Discretion raises a number of interesting arguments, and I think he makes a compelling argument for expanding the role of discretion. Early in the book, Lam suggests his argument would seem unappealing to libertarians, on the grounds that to the libertarian, “Top-down authority in general is […]
America is a manufacturing powerhouse - Econlib
A recent Bloomberg article by Dan Wang and Ben Reinhardt had some interesting things to say about US manufacturing. Instead of high tariffs, they suggested that the US encourage foreign investment into facilities producing goods in America. I particularly liked this paragraph: But the more that Trump makes the country captive to his impulses—whether on […]