Topic: Economic Theory

A Case for Corruption

– March 5, 2020

Suppose you live in a country with nationalized communications companies, indifferent and intermittent service, and extremely slow maintenance and repair responses. But you have an idea that is likely to produce tens of millions of sales, and quickly.

Economic Theory

There Is No Way You or Anyone Can Fully Understand the Economy

– March 3, 2020

The economist’s main value to society lies in his or her ability to reveal that which in the economy typically remains unseen. This function of the economist is explained most famously by Frédéric Bastiat. But also, of course, this understanding of the …

Economic Theory

Kenneth Arrow and the Odd Form of Dictatorship He Helped Create

– February 23, 2020

It may be time to reconsider some of the foundations of economic theory. When we do, Arrow’s prominent role in the history of economics should be reconsidered too.

Economic Theory

Cuckoo for Marginalism

– February 21, 2020

When I was a kid, I would ask my mother if she likes this cereal, that song, or this soft drink. She would often reply in her droll way: “I wouldn’t want a steady diet of it.” I came to conclude that this really meant that she didn’t like it. …

Economic Theory

The “Paradox of Thrift” Myth Is Back, Again

– February 20, 2020

This is nothing but the classic case of the damage of a little learning: the overwhelming majority of people who study economics at all take a single economics class, espousing a single economic perspective, which leads to the pervasive spread of pernicious ideas.

Economic Theory

Neoliberalism and Intellectual Turing Tests

– February 11, 2020

Is neoliberalism libertarianism? Is it a form of market-oriented technocracy? Is it a form of elitist ideology favorable to markets? Is it a justification for a rent-seeking elite? It’s unclear exactly what it is.

Economic Theory

How the Coase Theorem Solves the Problem of Wolves

– February 10, 2020

Making it possible to imagine creative ways to compensate the losers in policy initiatives can make policies more effective, more fair, and more politically viable.

Economic Theory

Say’s Law versus Keynesian Economics

– February 9, 2020

There’s no more important principle in political economy to get right – and avoid getting wrong – than Say’s Law.

Economic Theory

All Hail Statistics!

– February 7, 2020

Yes, statistics can deceive — think Mark Twain’s apocryphal claim about lies and damned lies — but statistics can also give nuance to our worldviews.

Economic Theory

Creativity Is the Driving Force of the Market

– February 3, 2020

Creativity cannot be planned. While this observation, so stated, sounds trite, it is a fact ignored by those who call for the government to superintend commerce.

Economic Theory

The Economics of Price and Quantity Signals

– January 29, 2020

The first time I thought about the relationship between quantity and price, I was a teenager working at the same job that taught me about transaction costs in labor markets. Evidently, there was much for me to learn at this rather dull junior sales job …

Economic Theory

The Paranoid Fear of Intellectual Property Theft

– January 28, 2020

Sad is that some of the most important centers of opinion in all of the U.S. now direct significant real estate to the alleged thievery of American know-how by the Chinese.