Economics 
Essential
Competition, Regulation, and the Market Process: An "Austrian" Perspective
By Israel M. Kirzner: "The point is that in questioning government regulation, the economist makes no claim for the ultimate moral benignity of market process, or of its results; the relevant issue is strictly the effectiveness with which the system serves the goals of its individual participants."
Milton Friedman on "Greed"
In an interview with Phil Donahue, Milton Friedman explains why societies have historically always flourished when they've embraced a political and economic system that encourages economic self-interest -- "greed."
Project on Social Security Choice
The Cato Institute's experts examine the problems facing the current social security system, the methods that can be used to move towards a system of personal retirement accounts, and the effects that a new system would have on workers.
The Layman's Guide to Economics
Five easy lessons to master free market economics, without math or graphs.
Independent Study Guide: Economics
Liberty Guide offers a comprehensive resource for the independent study of economics. The study guide provides access to articles and reviews, online publications, blogs, associations, book recommendations and more. This guide is an indispensable tool for aspiring students of liberty.
I, Pencil
By Leonard E. Read: "A charming story which explains how something as apparently simple as a pencil is in fact the product of a very complex economic process based upon the division of labor, international trade, and comparative advantage."
The Use of Knowledge in Society
By Friedrich August von Hayek: "One of Hayek’s most important contributions to economic theory is his demonstration of the part prices play in disseminating widely diffused knowledge about consumer demand and the availability of economic resources in order to make rational economic calculation possible."
Globalization Is Grrrreat!
Tom Palmer brings the globalization debate to the solid grounds of reason, and provides a series of arguments against the most common fallacies.
The Freedom Philosophy
This anthology includes 14 essays on the political, economic, and moral foundations of a free society. These classic writings by Leonard E. Read, Frank Chodorov, Benjamin Rogge, F. A. Harper, among others, demonstrate the superiority of individual choice and capitalism over any forms of collectivism.
Economic Freedom and Peace
"Since before the time of Thucydides, states have used wealth to acquire more territory and to dominate the affairs of their neighbors. Understanding the reasons that the powerful countries of today are less prone to dispute than their predecessors is critical to maintaining the peace and to extending its benefits more broadly."
Economics in One Lesson
By Henry Hazlitt: "This primer on economic principles brilliantly analyzes the seen and unseen consequences of political and economic actions. In the words of F.A. Hayek, there is "no other modern book from which the intelligent layman can learn so much about the basic truths of economics in so short a time."
Opening the Door to the Economic Way of Thinking
By Russell Roberts: "Here are ten fundamental ideas to help you explore and understand the world around us using the economic way of thinking. "
Entrepreneurs Are the Heroes of the World
By Johan Norberg: "The amazing fact is that entrepreneurs and innovators and businesses have turned luxuries that not even kings could afford into low-priced everyday items at your local store. That is the best defense of capitalism."
Twenty Myths About Markets
Tom Palmer subjects popular fallacies about the market system to the critical scrutiny of economics and ethics.
The Concise Encyclopedia of Economics (CEE)
This encyclopedia contains articles by leading economists on basic concepts, economic systems, schools of economic thought, macroeconomics, economic policy, taxes, money and banking, economic regulation, environmental regulation, discrimination, labor issues, international economics, corporations, financial markets, the marketplace, the economics of special markets, economies outside the U.S., and biographies of famous economists.
The Tide in the Affairs of Men
By Milton Friedman and Rose D. Friedman: "The aim of this brief essay is to present a hypothesis that a major change in social and economic policy is preceded by a shift in the climate of intellectual opinion. The intellectual tide is spread to the public by all manner of intellectual retailers: teachers and preachers, journalists in print and on television, pundits and politicians. "
Selected Essays on Political Economy
By Frédéric Bastiat: "Bastiat directed his arguments against certain ever recurring fallacies as they were employed in his time. Few people would employ them today quite as naively as it was still possible to do then. But let the reader not deceive himself that these same fallacies no longer play an important role in contemporary economic discussion: they are today expressed merely in a more sophisticated form and are therefore more difficult to detect."- F.A. Hayek
Economic Sophisms
By Frédéric Bastiat: "Bastiat was not primarily an original economic theorist. What he was, beyond all other men, was an economic pamphleteer, the greatest exposer of economic fallacies, the most powerful champion of free trade on the European Continent."- Henry Hazlitt
Frederic Bastiat - What is Seen and What is Not Seen
There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen. Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.
Public Choice Theory
By Jane S. Shaw: "Public choice takes the same principles that economists use to analyze people's actions in the marketplace and applies them to people's actions in collective decision making."
Socialism: An Economic and Sociological Analysis
By Ludwig von Mises: "This book must rank as the most devastating analysis of socialism yet penned… . An economic classic in our time." - Henry Hazlitt
Intellectuals and Socialism
"In 1949, Hayek attributed the dominant position of planning in the West to the role of intellectuals, by which he meant 'professional second-hand dealers in ideas' such as journalists and commentators."
The Calculus of Consent
"The Calculus of Consent: Logical Foundations of Constitutional Democracy, by James M. Buchanan and Gordon Tullock, is one of the classic works that founded the subdiscipline of public choice in economics and political science. To this day the Calculus is widely read and cited, and there is still much to be gained from reading and rereading this book."-Robert D. Tollison
Why Do Intellectuals Oppose Capitalism?
By Robert Nozick: "Wordsmith intellectuals fare well in capitalist society; there they have great freedom to formulate, encounter, and propagate new ideas, to read and discuss them. Their occupational skills are in demand, their income much above average. Why then do they disproportionately oppose capitalism?"
Recommended
Billy Mays, Free Market Hero
ABC's 20/20 Co-Anchor John Stossel adds an interesting perspective to the life work of Billy Mays, made famous by his ability to sell things people "hadn’t known they'd wanted," who died earlier this week. Stossel states that "Mays was more of a “public servant” than the regulators who claim to serve us."
King George III: Obama-esque?
Cato scholar David Boaz succinctly lists many examples of the current administration's tendency toward excessive and business-retarding tax policies. He contrasts the opressive attack on American's back pockets with the historical declaration announced by our nation's founders 233 years ago, quoting the Declaration: "He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance." Strangely familiar? You decide.
Global Warming Debate Heating Up
Forecasting scholars Dr. Kesten C. Green and Dr. J. Scott Armstrong take on MIT's recent Global Warming report: "Policymakers and the public should be made aware that the forecasts from the MIT modellers, as well as those used by the [Intergovernmental Panel on Climate Change], are merely the opinions of some scientists and computer modellers. ...The forecasting procedures were not valid and there is no reason for policymakers to take their forecasts seriously."
Globalization = Good
Professor Donald J. Boudreaux discusses trade policy through the impirical demonstration of gains from globalization. "Those who doubt the strength of the theoretical case for free trade should also consider that the empirical evidence in its favour is overwhelming. There is simply no credible evidence to support the belief that restricting trade increases the prosperity of ordinary citizens. All of the evidence points towards the benefits of free trade."
Audit the Fed
Republican Congressman and two time presidential candidate Ron Paul wants to audit the Federal Reserve. Arguing that Americans need to know more about the central bank, especially given the drastic increases in the size of the bank's balance sheet.
At Least Some Are Coming Around
By Daniel J. Mitchell: "The class-warfare crowd in Washington wants bigger government and higher tax rates, so it’s a bit shocking to see that a group of Northeastern Democrats are slashing tax rates. Yet that is exactly what Maine’s politicians are doing. The Governor even makes the common-sense observation (that so far has escaped President Obama’s attention) that there won’t be any jobs without investors and entrepreneurs."
Washington: Too Big To Succeed
By Lawrence W. Reed: "Certain private firms are widely believed to be “too big to fail.” So we’re in the process of handing big chunks of them over to the government. Companies that lose billions are being told what to do by an outfit that loses trillions. The question we all should be asking ourselves is this: Are we trusting our economy and our lives to a government that is too big to succeed?"
No, Really, It's Not Government-Run!
By Michael D. Tanner: "If a "co-op" is run by the federal government under rules imposed by the federal government with funding provided by the federal government, it's simply government-run health insurance by another name. Opponents of a government takeover of the health care system should not be fooled."
Baffled By the Economy? Don't Listen to Economists
By Steve Chapman: "Macroeconomists are expected to be smart, learned and articulate in explaining and predicting the course of the economy. But these days, at least, no one really expects them to be right."
Have We Got a Deal for You
By George F. Will: "'What we are not doing -- what I have no interest in doing -- is running GM,' says the president who, when not firing GM's CEO, purging its board of directors and picking new members, is designing new products (imposing fuel economy requirements that will control size, weight, passenger capacity and safety). The president, overcoming his professed reluctance to run GM, resembles the journalist Don Marquis when, after a month on the wagon, he ordered a double martini and exclaimed: 'I've conquered my goddam willpower.'"
100 Useful Research Tools for Amateur Economists
"You don’t have to be a professional economist to do some really great research on the web. Whether you’re looking into historical trends, modern buying patterns or the latest stats on the global financial market you won’t find any shortage of information to keep you interested. Here are 100 great resources to utilize that can help you find, organize and understand your economic research."
Sachs Ironies: Why Critics are Better for Foreign Aid than Apologists
By William Easterly: "Official foreign aid agencies delivering aid to Africa are used to operating with nobody holding them accountable for aid dollars actually reaching poor people. Now that establishment is running scared with the emergence of independent African voices critical of aid, such as that of Dambisa Moyo."
Nostalgianomics: Liberal economists pine for days no liberal should want to revisit.
By Brink Lindsey: "The rise in income inequality does raise issues of legitimate public concern. And reasonable people disagree hotly about what ought to be done to ensure that our prosperity is widely shared. But the caricature of postwar history put forward by Krugman and other purveyors of nostalgianomics won’t lead us anywhere. Reactionary fantasies never do. "
Globalisation is Good - Johan Norberg on Globalization
The world is an unequal and unjust place, in which some are born into wealth and some into hunger and misery. To explore why, in this controversial Channel Four documentary the young Swedish writer [and senior fellow at Cato] Johan Norberg takes the viewers on a journey to Taiwan, Vietnam, Kenya and Brussels to see the impact of globalisation, and the consequences of its absence. It makes the case that the problem in the world is not too much capitalism, globalisation and multinationals, but too little.
Do Economists Believe American Democracy Is Working?
William L. Davis and Bob Figgins write, "Economics it is said, presumes that status-quo policy has some sense behind it, that it emerges from a political process that works. Has conomics come to a status-quo orientation from a widespread attitude that the political process works?"
The Dictator’s Handbook
By Paul Collier: "Why is democracy failing even as elections proliferate? A thought experiment sheds new light on why aging autocrats remain so hard to dislodge."
Hedge Fund Manager Strikes Back at Obama
"Clifford S. Asness is not afraid to defend himself against attacks from the Obama administration. The outspoken managing partner of AQR Capital Management, a $20 billion hedge fund in Greenwich, Conn., has written a scathing letter striking back at President Obama for his harsh words blaming hedge funds for Chrysler’s bankruptcy."
Cato Conference: Lessons from the New Deal and Great Depression
With the economy in a deep recession and policymakers turning to massive government intervention in an attempt to create jobs and bolster the financial system—it feels like the 1930s all over again. Today’s new New Deal is rapidly unfolding, with the Obama administration and many lawmakers making it clear that any question of the success of FDR’s New Deal policies was resolved long ago: government intervention worked, and history bears repeating. Join us at the Cato Institute on June 1 to be a part of a highly informative half-day conference. Recognized national experts will discuss the economic and legal impact of the New Deal, and how its legacy is being used and misused to shape policy responses to current economic hardships.
Don't Turn America Into Another France
Veronique de Rugy of the Mercatus Center (and formerly with Cato) narrates a new video warning that it would be a mistake to turn America into a European-style welfare state, which is the fate of her native country.
Alex Tabarrok: How ideas trump economic crises -- a surprising lesson from 1929
"The 'dismal science' truly shines in this optimistic talk, as economist Alex Tabarrok argues free trade and globalization are shaping our once-divided world into a community of idea-sharing more healthy, happy and prosperous than anyone's predictions."
February Op-Ed of the Month
Congratulations to Samuel Sharp for winning the February Cato on Campus Op-Ed of the Month! Arguing against protectionist policies, Samuel highlights the increased costs and economic harms that result when governments interfere in free trade.
Return of the Living Dead: What the U.S. Can Learn From Japan's Failed Experiment With "Zombie Businesses"
By Anthony Randazzo: "Killing zombies isn't typically the responsibility of America's president or treasury secretary. But if the country is going to get through the current financial crisis, President-elect Barack Obama and his economic team better get out their shotguns and aim for the head."
Ask the Expert: Dan Griswold on Work Visas
Dan Griswold, Director of the Center for Trade Policy Studies at Cato, argues that the current H1-B work visa policy hinders economic growth and scolds U.S. companies "for seeking the human capital they need abroad while at the same time denying them the ability to expand their skilled workforce at home."
Free Trade Petition
"In cooperation with the International Policy Network and a worldwide group of think tanks, we are circulating this petition to combat recent moves toward harmful economic nationalism. I urge you to sign it [and to encourage your professors to sign!]. It is not yet a public effort, but please do share it with your colleagues, friends, and professional contacts. The first unveiling of this petition will be April 1st before the G20 meetings in London. It is a part of a much broader campaign that will be mobilized around the world to alert the public to the dangers of attempts to block trade and to revive positive efforts toward increasing freedom of trade. We will have a series of videos on the benefits of trade, booklets, public events, and much more, available in a multitude of languages." - Dr. Tom G. Palmer
Jeffrey Miron on the Stimulus
A friend of the Cato Institute, Professor Jeffrey Miron, writes that "Bailout 2.0, like its previous incarnation, is a dangerous gamble for the Treasury and the economy."
Keep the Banks Private
Donald Boudreaux, an advisor for Cato's Center for Trade Policy Studies, argues that "When government takes over, political meddling is sure to follow."
The Innovation Squelch: Obamanomics is bad news for American entrepreneurs.
By James Manzi: "Like the college students who stayed up late to hear Obama’s campaign speeches only to find his first significant action to be a stimulus program that will transfer about $1 trillion from them to the Baby Boomers, Silicon Valley Obama supporters may find themselves in an uncomfortable environment. A government-dominated economic era may not be an auspicious one in which to start companies that threaten big, incumbent corporations with lots of political clout."
Taking the Name of Lord Keynes in Vain
By Mario J. Rizzo: "But if we are going to attempt to solve the problems of today by drawing inspiration from Keynes, then we should pay attention to his mature ideas rather than to the textbook versions of what he said, some of which reflect Keynes’s earlier thinking. When we do this we shall find that some of his policy proposals were quite different from today’s “Keynesian” wisdom. Other proposals were extraordinarily radical and far from what is being proposed by lawmakers on the political left or right today."
Cato on Campus Challenges the Stimulus
Cato on Campus is proud to bring Cato's message directly to your campus. Cato on Campus is publishing a full page ad in 15 of the U.S.'s most prestigious universities providing a statement, signed by 200 economists, that government intervention in the economy is not a means of producing economic growth. Check out this page to find updates on campus op-eds, letters-to-the-editor, and teach-ins related to the Cato ad and the stimulus package/Keynesian economics in general.
Ask the Expert: Tad DeHaven on Digging Ditches and the Stimulus
A common justification for the stimulus package is that government spending can counteract economic shortfalls. Tad DeHaven explains why this is a common mistake and that the jobs we see created by government stimulus does not encompass the lost jobs and investment that we don't see.
Naomi Klein: A Prebuttal
Who: Will Wilkinson Where: 1505 Seamans Center, University of Iowa Hosts: Co-sponsored by the Advocates of Liberty and U of I Department of Economics Description: Naomi Klein will be on campus giving a UI Lecture Committee speech in February where she will be talking about her book "Shock Doctrine: The Rise of Disaster Capitalism". This book attempts to tie Bush's corporatist big-business ecocomic policies, the Iraq War, and most other bad things to the free market ideas of Milton Friedman. Will Wilkinson will defend "neo-liberal" free markets, defend Friedman against Klein's scurrilous attacks, and reveal the many errors, factual and logical, in Klein's bestseller. In a lecture one night before Naomi Klein's appearance on campus, Wilkinson will give a talk co-sponsored by the Advocates of Liberty and the UI Department of Economics. Let the fun begin.
"Falling Behind: Explaining the Development Gap Between Latin America and the United States"
What: Book Forum Where: Cato Institute Description: Featuring the editor Francis Fukuyama, Professor of International Political Economy, School of Advanced International Studies, Johns Hopkins University; with comments by Norman Loayza, Lead Economist, Research Department, World Bank; moderated by Ian Vásquez, Director, Center for Global Liberty and Prosperity, Cato Institute
The Ad Is Running
Today, Tuesday, February 10, the Cato on Campus/Students For Liberty ad on the stimulus package is running in 14 of the 15 selected newspapers around the U.S. (Berkeley will be running on Thursday, February 12). Check it out in your school's paper!
Hundreds of Economists Sign on to Cato Institute Ad
There is plenty of disagreement on whether a big-government stimulus project is the best way to bring the United States out of recession. The Cato Institute purchased a full-page ad in major newspapers across the country listing the names of several hundred economists who object to massive deficit spending as an economic stimulus. Cato scholars and ad signatories have made their case on television since the spending program was proposed.
History Passing By Cornell?
Andrew Loewer, President of the College Libertarians at Cornell University, wrote this letter to the editor of the Cornell Daily Sun, arguing that the stimulus package presents an epochal moment in history that deserves more attention than the Cornell Daily Sun has given it.
Mr. President, We Disagree
President Obama says that "economists from across the political spectrum agree" on the need for massive government spending to stimulate the economy. In fact, many economists disagree. Hundreds of them, including Nobel laureates and other prominent scholars, have signed the statement that appears in the Cato Institute's newspaper ad.
Ask the Expert: Dan Mitchell on Keynesian Economics
Dan Mitchell explains why the current economic crisis is the result of government policy mistakes and why more government intervention will not end the crisis any sooner than the market.
The Road Ahead
The Obama administration comes into office with an overwhelming slate of challenges. From the economy to global warming, from the energy debate to US foreign policy, the new administration will have a host of important issues to deal with immediately after taking power. Check out this collection of studies, op-eds, podcasts, and publications by Cato's scholars on the policy decisions ahead.
Obama Stimulus Bears a Closer Look
By Will Wilkinson: "Last week in his big economic stimulus speech, President-elect Barack Obama promised less waste and a sunny new climate of transparency. Obama says, "We'll invest in what works." This week, we're asking, "So, what works?"
Exposing the Keynesian Fallacy: The Condensed Version from Cato-at-liberty
By Daniel J. Mitchell: "That mini-documentary discussed the theoretical shortcomings of Keynesianism and also reviewed the dismal results of real-world Keynesian episodes."
America Does Not Need More Czars
Will Wilkinson, a research fellow at the Cato Institute, writes that, "In tough times like these, America does not need a dose of tragic Russian authoritarianism."
Keynsian Economics is Wrong
Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.
What is the DEA Smoking?
The U.S. government has recently argued that it is succeeding in the war on drugs because the price of drugs has risen, indicating a shortage of supply. However, Cato's vice president for defense and foreign policy studies, Ted Galen Carpenter points out, "The reality is that street prices for illegal drugs act like the famous observation about prices in the stock market: they will vary."
Bush and Obama Opt for Corporatism Over Freewheeling Capitalism
The auto industry just got its bailout. Cato's Executive Vice President, David Boaz, explains that with the recent bailouts, "the government is seeking to support existing businesses. That isn't laissez-faire. It isn't what free-market advocates support. But it is what Bush is doing and Obama wants to continue."
Obama's New New Deal
reason.tv has just released this new video on addressing the pressing likelihood that president-elect Obama will construct a new New Deal to address the U.S. economic woes. Michael Moynihan interviews UCLA economist Lee Ohanian, who argues that the New Deal's massive intervention into the economy actually prolonged the economic crisis by seven years.
Consequences of the Bailout
Richard W. Rahn, senior fellow at the Cato Institute, writes, "Many policymakers and politicians in Washington seem to be incapable of thinking through the consequences of many of their bad ideas. When a "bailout" is given to one firm, all of its competitors are put at a disadvantage."
Bankruptcy Doesn't Equal Death
Don Boudreaux, chairman of the George Mason University department of economics, writes, "A government bailout of the Big Three keeps huge amounts of productive inputs in firms that can't use them efficiently. Forcing taxpayers to subsidize the continued employment of gargantuan quantities of raw materials, labor and capital goods in unproductive pursuits is a recipe for economic stagnation. The popular and politically convenient myth has matters backwards: The bigger the unprofitable firm, the more vital it is that it be allowed to fail."
Ask the Expert: William Niskanen
William A. Niskanen, chairman emeritus of Cato, discusses the meaning of fiat currency and the relationship to the supply of money.
Cato Out Loud: The Auto Bailout
In a new edition of Cato Out Loud, Daniel J. Ikenson explains why the federal government should not extend a financial bailout to the auto industry. Since November, Cato analysts have appeared on more than 50 radio and television programs discussing the bailout of "The Big Three."
What Happened? Anatomies of the Financial Crisis
In this special issue of Cato Unbound, we’ve asked four respected economists, with four very different perspectives, to supply what they think are the missing pieces of the puzzle and to tell us how they all fit together.
Five Tips to Win Any Debate
By Justin Hartfield & M. Harrison: Don't Debate the Player, Debate the Claim. Five tips to verbally own your opponent with respect, grace and heavily veiled contempt.
Tax Havens: Myths vs. Facts
Politicians from high-tax nations routinely smear tax havens as part of their efforts to undermine tax competition. Using academic research and data from international organizations, this video shows that the most common attacks made against low-tax jurisdictions are empty demagoguery.
Cato's Annual Monetary Conference: LIVE
Listen live to Cato’s 26th Annual Monetary Conference will provide an in-depth treatment of the Lessons from the Subprime Crisis, which some view as the worst financial crisis since the Great Depression. Leading experts will discuss the underlying causes of the loss of confidence, particularly the policies that contributed to the subprime crisis and the reforms needed to avoid future turmoil in financial markets.
Say No to the Auto Bailout
By Daniel J. Mitchell: "A taxpayer bailout would be a terrible mistake. It would subsidize the shoddy management practices of the corporate bureaucrats at General Motors, Ford and Chrysler, and it would reward the intransigent union bosses who have made the UAW synonymous with inflexible and anti-competitive work rules."
Understanding the Financial Crisis
This video, created by AfricanLiberty.org, clarifies the basic causes and consequences of the current financial crisis.
When Corporations Hate Markets
In this month's lead essay, philosopher and libertarian theorist Roderick Long draws a sharp contrast between corporatism and libertarianism properly understood. He argues that liberals, conservatives, and even libertarians have all been guilty to some degree of obscuring this difference, and that the quality of our political discourse has suffered accordingly.
Is it Constitutional?
Richard Rahn, Senior Fellow at the Cato Institute, asks a question about the government's $700 billion bailout that few others are asking: Is it constitutional?
Voting Schmoting
"In this irreverent look at voting, economist Gordon Tullock explains why he believes you're better off avoiding the polls altogether on Election Day."
Changing Times
By Donald J. Boudreaux: "One lesson I draw from this frightening state of affairs is that even the most obvious falsehood stands a good chance of being widely believed if it is repeated often enough. The claim that the U.S. economy of late has been one of laissez faire has become a mantra. And it's now taken as fact."
The End of Jacob Weisberg
By Brink Lindsey: "We’ve just experienced a global disruption of financial markets on a scale not seen in seven decades. And we’re still in the middle of it: the ultimate extent, severity, and consequences of this crisis remain unknown. Yet Weisberg can already sum up the story in a single sentence: the libertarians did it!"
Robert Nozick Vs. The U.S. Congress
Cato Adjunct Scholar, Richard Epstein, provides a philosophical analysis of the effort by the U.S. Congress to increase home ownership in society in this Forbes article. Contrasting the pattern principle of justice held by Congress against Nozick's justice in acquisition, it is a great work that shows how philosophy is important to the real world.
Heroes of Capitalism
Heroes of Capitalism is a new blog that highlights a new capitalist every day and describes how they have made a difference in the world through capitalism. Recent heroes have included the inventor of a mousetrap, an Objectivist banker, and the inventor of cocoa powder.
Ask the Expert: Dan Mitchell
Cato Senior Fellow, Dan Mitchell, answers the question, "Which one of the proposed tax schemes from Senators McCain and Obama is better from a free market perspective and why?"
Suspend Cap Gains Tax on Toxic Assets
By William Shipman: "A simple change in tax laws could do more to resolve the current credit crisis than the massive bailout legislation that was just enacted or Sen. McCain's recent proposal that the federal government buy up all bad mortgages."
On Krugman's Nobel
Many are talking about Paul Krugman winning the Nobel Prize. Read up on Cato's commentary regarding the prize by Sallie James.
Regulators Cannot Avert Next Crisis
By Johan Norberg: "As usual after a financial crisis, we hear demands for new controls and regulations to stop it from happening again. But since every crisis has led to thousands of new pages of regulation, why is it that regulation doesn't stop crises from happening again?'
Cato Debates on Google
The Cato Institute is participating in a debate series hosted by a new interactive site, Google Knol. The debates on Knol are meant to offer a variety of in-depth opinions from experts, and afford visitors the opportunity to engage scholars on the ideas that are posted. Cato Senior Fellow Daniel J. Mitchell is debating the aftermath of the financial bailout bill with John Irons, research and policy director for the Economic Policy Institute. You can log into Google and offer suggestions, edits and comments to each side of the discussion. Mitchell and Irons will both field your comments and may even add them to their arguments.
An Open Letter to my Friends on the Left
By Steven Horwitz: "In the last week or two, I have heard frequently from you that the current financial mess has been caused by the failures of free markets and deregulation. I have heard from you that the lust after profits, any profits, that is central to free markets is at the core of our problems. And I have heard from you that only significant government intervention into financial markets can cure these problems, perhaps once and for all. I ask of you for the next few minutes to, in the words of Oliver Cromwell, consider that you may be mistaken."
Cato Scholars on the Financial Crisis and the Bailout
In this video Cato scholars explain the causes of the financial crises as well as the consequences of further government intervention.
Econ Professor Criticizes Bailout
Jeffrey A. Miron is senior lecturer in economics at Harvard University and was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan. He explains why in a CNN commentary.
Doing Something?
By John Berlau: "But what if the bailout, as originally proposed and in its latest incarnation, would spend $700 billion of taxpayers' money and actually make the economy worse? Believe it or not, there is good evidence this may happen."
Bailout Bill Fails
The proposed $700 billion bailout bill just failed in the House of Representatives. Cato Senior Fellow Jagadeesh Gokhale provides a full account.
Bailout Raises Libertarians' Market Value
By David Montgomery: "Instead, in their handsome building on Massachusetts Avenue, faced with a proposed $700 billion government bailout of Wall Street, this town's most gung-ho libertarians and free-marketeers are reaching for their coffee and their keyboards. They are invigorated. The prospect of doom and ruination for everything they hold dear only makes them stronger."
A Little Credit History. Or, Credit where Credit Is Due
By Jason Kuznicki: "The problem wasn't capitalism. It was simply this: Capitalism for thee, but not for me. The word of the day is corporatism, and since the days of the South Sea Company, we've never really been without it. Corporations have always used their power to try to win favors from the government, while leaving all the rest of us still subject to the vicissitudes of the market. That's the essence of corporatism."
Ask the Expert: Tom Palmer
Cato VP for International Programs Tom G. Palmer answers the first question in Cato on Campus's new Ask the Expert series, where you get to email in questions for Cato's scholars to answer. This edition's question takes on the issue of the relationship between government and economic development in impoverished nations.
The Ultimate Resource
In this lecture, the late (and certainly great)economist Julian Simon describes his concept of "the ultimate resource." An idea that Donald Boudreaux, chairman of the GMU economics department, considers "the most profound -- and least understood -- in all of the social sciences."
Organic Market
By Russ Roberts: "Both presidential candidates will promise a risk-free world with high returns. But peddling that fantasy is the cause of the current crisis. We treat our children this way--we do our best to insulate them from harm and still allow them to grow. I'd like politicians to treat me as an adult, paying the price for my recklessness and reaping a reward when I am prudent."
Ticking Time Bomb Explodes, Public is Shocked
By Robert Higgs: "The failure of Fannie Mae and Freddie Mac, setting in motion the biggest government bailout/takeover in U.S. history, brings a grim sense of fulfillment to competent economists. After all, what did people expect, that water would flow uphill forever?"
Tax Havens Are Very Beneficial for Global Economy
"Statist politicians and international bureaucracies such as the OECD and UN routinely attack tax havens, claiming that they lead to “harmful tax competition.” "Yet at no point do critics bother to provide any evidence for this claim. This mini-documentary that I narrated for the Center for Freedom and Prosperity looks at the empirical data and scholarly research and reports that tax havens actually have a very positive impact on the global economy." - Dr. Dan Mitchell
With Friends Like These, Who Needs Enemies?: Aiding the World’s Worst Dictators
Christopher J. Coyne and Matt E. Ryan: "Despite rhetoric supporting liberal values and institutions, the governments of developed countries provide continued development and military assistance to the world’s worst dictators. This aid sustains the status quo and imposes significant costs on ordinary citizens."
Three Days After Klein's Response, Another Attack
By Johan Norberg: "In May I wrote a critical Cato paper on Naomi Klein's attack on economic liberalisation, The Shock Doctrine: The Rise of Disaster Capitalism, which I claimed was hopelessly flawed on virtually every level. Now Naomi Klein has responded to some of my claims. This response is in itself an example of the methods Klein regularly uses in her works, what I have called disaster polemics."
Bailout Nation
By David Boaz: "But the bailout of Fannie Mae and Freddie Mac is another giant step toward government control of the economy. NPR reported this morning that the government takeover “could turn out to be a smart one.” Yes, if you think nationalization of the means of production just might work."
How Markets Use Knowledge
By Russ Roberts: "Economists will often say that prices steer knowledge and resources. Prices are traffic cops that signal to buyers and sellers what is scarce and what is valuable. But what does this mean exactly? How do prices achieve this?"
Creating Prosperity
By Donald J. Boudreaux: "No politician creates prosperity. It is created by countless entrepreneurs, businesses and workers competing and cooperating within markets. For government to avoid obstructing these markets is indeed desirable -- but it does not create the resulting prosperity. To insist otherwise would be no different from my insisting that I, as a driver who did not run over Ms. Jones as she walked back from the supermarket, am responsible for the tasty dinner she cooked that evening for her family."
Norberg on Open Trade
"Here's the eloquent, wise, and learned Johan Norberg -- speaking recently at the Cato Institute -- explaining some of the benefits of open markets." - Donald Boudreaux, Chairman of the Department of Economics at George Mason University
Poverty and Economy in Mugabe's Zimbabwe
A new, deeper poverty has gripped Zimbabwe and the formal economy has utterly been destroyed under the rein of Robert Mugabe. Rejoice Ngwenya, head of the Zimbabwean Coalition for Market and Liberal Solutions, discusses the realities of life in Mugabe’s Zimbabwe.
Keeping Our Cool: What to do About Global Warming
By Jim Manzi: "The loss of economic and technological development that would be required to eliminate literally all theorized climate change risk would cripple our ability to deal with virtually every other foreseeable and unforeseeable risk, not to mention our ability to lead productive and interesting lives in the meantime."
Economics Does Not Lie
By Guy Sorman: "If economics is finally a science, what, exactly, does it teach? With the help of Columbia University economist Pierre-André Chiappori, I have synthesized its findings into ten propositions. Almost all top economists—those who are recognized as such by their peers and who publish in the leading scientific journals—would endorse them (the exceptions are those like Joseph Stiglitz and Jeffrey Sachs, whose public pronouncements are more political than scientific)."
Swedish Myths and Realities
"Johan Norberg, author of In Defense of Global Capitalism, sits down with reason.tv's Michael C. Moynihan to sort out the myths of the Sweden's welfare state, health services, tax rates, and its status as the 'most successful society the world has ever known.'"
Bryan Caplan on Voter Irrationality
Bryan explains the Miracle of Aggregation, shows that its key assumption doesn't hold up empirically, then focuses on systematically biased beliefs about economics.
Greasing the World Economy Without Doha
By Daniel J. Ikenson: "The Doha trade round died a thousand deaths long before this week. But outside the bureaucracies in Geneva, Brussels and Washington, few are grieving because the world economy has moved on."
New on Free Will: Bruce Caldwell on Hayek
"This week, I talk with Bruce Caldwell, author of Hayek’s Challenge, a wonderfully lucid, comprehensive, and penetrating account of the development of Hayek’s economic and methodological ideas. Hayek is one of my enthusiasms, so I had a great time talking to Bruce, who knows as much about Hayek as anyone." - Will Wilkinson
Don't Shed a Tear Over Bid for Beer
By John D. Burger: "An unsolicited bid by the Belgian-Brazilian conglomerate InBev to take over Anheuser Busch has set off a backlash among the American public. Protesters of the proposed deal are relying on patriotic slogans such as "Keep Budweiser American" in an attempt to rally the masses against the originally friendly but increasingly hostile takeover bid. I find this reaction terribly embarrassing."
FARC Politics, FARConomics
By Ibsen Martinez: "Shortly after noon, on Wednesday, I finally sat down to write my monthly column when I received news that 15 hostages, including three U.S. defence contractors, held for years by the Revolutionary Armed Forces of Colombia, or FARC, the infamous drug-trafficking guerrilla, branded a terrorist organization by the United States and European Union, had been rescued by a successful army operation. Most eminent among the hostages was the 46-year-old former presidential candidate Ingrid Betancourt."
Munger on the Political Economy of Public Transportation
"Mike Munger and Russ Roberts deliver one of the best podcasts ever. Munger describes the way in which moving from a private bus system to a public system in Santiago Chile made essentially everyone in the city worse off. The puzzle that Roberts keeps pushing Munger to resolve is why the political incentives do not work to abolish the public system and revert to a private system." - Bryan Caplan
Tyler Cowen on Bloggingheads.tv
"The chat covers many topics, including whether capitalism will triumph, whether you should have more kids, and which country is most likely to be hit by the next nuclear weapon attack."
Mexicans and Machines: Why It's Time To Lay Off NAFTA
"Like technology, trade gives us more good stuff than bad—yet Americans are likely to cheer technology and fear trade. No doubt TV talkers and White House wannabes will keep stoking our fears of foreigners until voters and viewers stop buying it—or until robots snag their jobs, too."
From Breadbasket to Basket Case
By Mary Anastasia O'Grady: "As the presidential campaign drones on, Barack Obama and the Democrats are fleshing out the promise of "change" with some specific, big-government policy proposals. Many are familiar, perhaps because they already have been tried – in Argentina."
The Klein Doctrine: The Rise of Disaster Polemics
By Johan Norberg: "To make her case, Klein exaggerates the free-market reforms that take place in times of crisis, often by ignoring central events and rewriting chronologies. She uses loose metaphors and wild distortions to claim that free markets are a form of violence. She confuses libertarianism with corporatism and neoconservatism and blames Milton Friedman for encouraging reform by stealth. To do so, she engages in one of the most malevolent distortions of a thinker that has been done in a major work in recent years."
In Defense of "Sweatshops"
Benjamin Powell: "Because sweatshops are better than the available alternatives, any reforms aimed at improving the lives of workers in sweatshops must not jeopardize the jobs that they already have."
Kidneys for Sale: Iranian Organ Donation
By Kerry Howley: "'What can Iran teach us about good governance?' is not a question often posed in Washington. But according to Benjamin Hippen, a transplant nephrologist in North Carolina, the Iranians have managed to do something American policy makers have long thought impossible: They’ve found kidneys for every single citizen in need."
Everyone in Favor, Say Yargh!
By Joanna Weiss: "Long before they made their way into the workings of modern government, the democratic tenets we hold so dear were used to great effect on pirate ships. Checks and balances. Social insurance. Freedom of expression. So Leeson, an economics professor at George Mason University, will argue in his upcoming book, The Invisible Hook: The Hidden Economics of Pirates."
American Idol and Poverty
Ed Crane, President of the Cato Institute, suggests that celebrities take a good look at how to help the poor of the world create their own wealth.
Fairness, Idealism and Other Atrocities
By P.J. O'Rourke: "Well, here you are at your college graduation. And I know what you're thinking: 'Gimme the sheepskin and get me outta here!' But not so fast. First you have to listen to a commencement speech."
Bernstein on the History of Trade
"William Bernstein talks with EconTalk host Russ Roberts about the history of trade. Drawing on the insights from his recent book, A Splendid Exchange: How Trade Shaped the World, Bernstein talks about the magic of spices, how trade in sugar explain why Jews ended up in Manhattan, the real political economy of the Boston Tea Party and the demise of the Corn Laws in England."
Profit: Not Just a Motive
By Steve Horwitz: This article "explores the problems with the frequent argument on the left that we should 'take the profit motive out' of various activities and industries, especially health care."
Bail Bondsmen, Bounty Hunters and Private Prisons
"America’s free enterprise system is at work in many aspects of the criminal justice system. Profit-making bail bondsmen who help defendants post the money needed for their freedom pending trial are common in the U.S. but virtually unheard of across the rest of the world. Bounty hunters lured by big payouts find criminals who have previously eluded the police. And private companies are building and operating prisons and detention facilities."
Roberts on the Least Pleasant Jobs
"EconTalk host Russ Roberts talks about the claim that for capitalism to succeed there have to be people at the bottom to do the unpleasant tasks and that the rich thrive because of the suffering of those at the bottom. He critiques the idea that capitalism is a zero sum game where to get ahead, someone has to fall back. He also looks at the evolution of the least pleasant jobs over time and how technology interacts with rising productivity to make the least pleasant jobs more pleasant."
Fuel vs. Food
By Indur M. Goklany: "In recent years, we've heard that climate change could be catastrophic for nature and humanity. But it's becoming increasingly evident that over the next few decades, climate-change policies could prove even more catastrophic."
Free Trade, Free Markets: Rating Congress
This interactive web site allows users to examine how Congress and its individual members have voted over the years on bills and amendments affecting the freedom of Americans to trade and invest in the global economy.
The Biofuel Brew Ha-Ha
By Peter Suderman: Reason contributor Peter Suderman writes that the biofuels craze is boosting the price of beer, because farmers are shifting away from barley to biofuel crops made more lucrative by mandates and subsidies.
Inequality and Excess
By Arnold Kling: "What the American people really should feel awkward and defensive about is the level of inequality and excess of political power. Instead of asking ourselves what we can do about Warren Buffett or Bill Gates, we should be asking ourselves about what we can do about the Clintons and the Spitzers. Those who want more and more power should be our biggest concern."
McCloskey on Capitalism and the Bourgeois Virtues
"Deirdre McCloskey of the University of Illinois at Chicago and the author of The Bourgeois Virtues talks with EconTalk host Russ Roberts about capitalism and whether markets make people more ethical or less. They also discuss Adam Smith's world view, whether people were nicer in the Middle Ages, and the role of prudence and love."
Incentives, Incentives, Incentives
By Allen R. Sanderson: "If incentives work so well, maybe there are ways to improve public sector outcomes through the application of these same 'incentives matter' principles."
Showing That You Care: The Evolution of Health Altruism
By Robin Hanson: "Human behavior regarding medicine seems strange; assumptions and models that seem workable in other areas seem less so in medicine. Perhaps, we need to rethink the basics. Toward this end, I have collected many puzzling stylized facts about behavior regarding medicine, and have sought a small number of simple assumptions which might together account for as many puzzles as possible."
Bridges Over Troubled Water
By Christopher Preble and Jeremy Lott: "War costs money too. Round the bill for the bridges to nowhere that so incensed McCain up to $500 million. Our occupation of Iraq, which often seems to be getting nowhere, is costing north of $10 billion a month. That sum could finance the construction of 40 superfluous bridges this month and 480 bridges in a year."
Organ Transplants: Kidneys for Sale
"In his most controversial segment yet, reason.tv host Drew Carey offers a startling solution to the critical shortage in kidneys available for transplant: Pay people to donate their kidneys."
Public Choice
"Public Choice studies the intersection between economics and political science. The journal plays a central role in fostering exchange between economists and political scientists, enabling both communities to explain and learn from each other’s perspectives." Now available online.
Peace Won't Come to Zimbabwe
By Marian L. Tupy and David Coltart: "The case against Mr. Mugabe and the ZANU-PF for crimes against humanity would be compelling. They have turned one of Africa's most prosperous and relatively free nations into an Orwellian nightmare. Since 1994, the average life expectancy in Zimbabwe has fallen to 34 from 57 for women and to 37 from 54 for men. Some 3,500 Zimbabweans die every week from the combined effects of HIV/AIDS, poverty and malnutrition."
If I Were a Shill For Industry ...
By Donald J. Boudreaux: "A blogger recently complained that I (along with my fellow bloggers from George Mason University's Department of Economics) "seem to be shills for industry." This lazy accusation is as familiar as it is mistaken, for if I were truly a shill for industry ..."
Feel Safer Now?
From The Economist print edition: "After September 11th 2001, most countries beefed up security at airports and other vulnerable places. Tough-looking immigration officials no doubt made passengers feel safer, offsetting the irritation of longer queues. Yet doing something because it makes people feel good is not adequate justification. Is money devoted to counter-terrorism well spent?"
The Five Dumbest Product Bans
By Eli Lehrer: "Even as the array of consumer products available to the average American expands each day, a bewildering variety of government regulations serve to limit consumer choice. From the aircraft on which Americans fly to the food they buy in the grocery store, government regulation limits product choice at every turn."
I'd rather be Hanged for a Sheep than a Lamb: The Unintended Consequences of 'Three-Strikes' Laws
By Radha Iyengar: "Using criminal records data, I estimate that Three Strikes reduced participation in criminal activity by 20 percent for second-strike eligible offenders and a 28 percent decline for third-strike eligible offenders. However, I find two unintended consequences of the law. First, because Three Strikes flattened the penalty gradient with respect to severity, criminals were more likely to commit more violent crimes. Among third-strike eligible offenders, the probability of committing violent crimes increased by 9 percentage points. Second, because California's law was more harsh than the laws of other nearby states, Three Strikes had a "beggar-thy-neighbor" effect increasing the migration of criminals with second and third-strike eligibility to commit crimes in neighboring states."
Ohio Needs More Foreign Trade
By Daniel T. Griswold: "But tinkering with a 14-year-old trade agreement [NAFTA] will not bring an industrial renaissance to Youngstown and other Rust Belt cites. The relative decline of those regions dates back to the 1960s and 1970s, when the American economy began a transition from heavy industry toward an information-based service economy."
Gun Buybacks a Noble Idea That Always Misfires
By Alex Tabarrok: "Did no one running the program think to look at the price of a new gun? In fact, the first two people in line at one of the three buyback locations were gun dealers with 60 firearms packed in the trunk of their car. One wonders why the police even bothered to buy the guns from Oakland residents. Why not buy directly from gun manufacturers?"
Orders and Organizations
By Don Boudreaux: "More generally, it seems difficult for some people to grasp the fact that society and government are not identical -- or, more precisely, to grasp the fact that civil society can and does often thrive outside of government influence and, indeed, very often (I would say most often) in spite of such influence."
Atlas Hugged
Brian Doherty: "As executive vice president of the Cato Institute, Boaz is one of the media's primary go-to guys on libertarian thought and policy. And in his new book, "The Politics of Freedom," a collection of his short-form journalism from the past 25 years, Boaz pushes an interesting and counterintuitive belief about American politics. The political spectrum, he argues, contains a lot more libertarians than the two major party's stances would lead you to believe."
It's an Election, Not a Revolution
By Tyler Cowen: "And if you’re still worrying about how to vote, I have two pieces of advice. First, spend your time studying foreign policy, where the president has more direct power, and the choice of a candidate makes a much bigger difference. Second, stop worrying and get back to work."
The Ultimate Scholar
By Donald J. Boudreaux: "Last Friday, Feb. 8, marked the 10th anniversary of the death of the great economist Julian Simon. Although he never received the professional or popular acclaim of economists such as Milton Friedman, Paul Samuelson or F.A. Hayek, Simon's insights and work rank with those of history's greatest social scientists."
Living Large: America's Middle Class
"To hear the Lou Dobbses and Bill O'Reillys of the world--not to mention politicians ranging from Ron Paul to Hillary Clinton--the middle class of America (however you define that term) has never had it so tough. Between credit squeezes, out-of-control immigration, rising costs of education and health care and everything else, it's all darkness out there for those of us who are neither millionaires nor welfare cases, right?
In 'Living Large,' Drew Carey and reason.tv examine the plight of the American middle class. What do they find? "
Is the Gold Standard Still the Gold Standard among Monetary Systems?
By Lawrence H. White: "Critics have raised a number of theoretical and historical objections to the gold standard. Some have called the gold standard a "crazy" idea. The gold standard is not a flawless monetary system. Neither is the fiat money alternative. In light of historical evidence about the comparative magnitude of these flaws, however, the gold standard is a policy option that deserves serious consideration."
Atlas Shrugged and Public Choice: The Obvious Parallels
By Bryan Caplan: "Though there is little evidence of mutual influence, Ayn Rand and public choice converge on a strikingly similar vision of the political process. Both emphasize the contradiction between the propaganda of government intervention and the reality. Government supposedly intervenes to advance the interests of the majority. In reality, however, its goal to advance the interests of political insiders at the expense of everyone else."
The Economics of Tolerance
With Will Wilkinson: "When the economy's good, Americans tend to act better toward their fellow citizens. But commentator Will Wilkinson says in a sliding economy, we tend to slam the gates of opportunity."
Flex-Fuel Nonsense
By Jerry Taylor: "Congress can no more guarantee that fuel prices will go down from now until the end of time than it can guarantee a robust sex life for fat, balding, middle-aged men. Fuel prices are subject to supply and demand curves that do not answer to Congress — particularly in global energy markets."
U.S.-Imposed Border Bedlam Will Hurt Michigan
By Jim Harper: "Nobody imagined when Congress created the Department of Homeland Security that the department itself would mount the next attack on American transportation, travel and trade. But the department begins an assault this week that will do billions of dollars in damage if it is not stopped."
Global Warming: Risks and Consequences
"Last fall, at the Reason in DC conference, one of the most strongly attended and memorable panels was titled "Climate Change: Risks and Consequences" and featured Lynne Kiesling, a senior lecturer in economics at Northwestern University, proprietor of the blog Knowledge Problem, and an expert in retail electricity markets; Ronald Bailey, reason's longtime science correspondent and author of, among other books, Liberation Biology: The Moral and Scientific Case for the Biotech Revolution and ECOSCAM: The False Prophets of Environmental Apocalypse; and Fred L. Smith, Jr., the founder and president of Competitive Enterprise Institute."
Tim Hartford on BHTV
Cato's own Will Wilkinson speaks with author and economist Tim Hartford about his new book, The Logic of Life. "Tim’s book isn’t just another foray into pop econ. It’s a fascinating and entertaining overview and synthesis of a good deal of the most important recent research in economics." - Will Wilkinson
Unintended Consequences
By Stephen J. Dubner and Steven D. Levitt: "But with a government that is regularly begged for relief — these days, from mortgage woes, health-care costs and tax burdens — and with every presidential hopeful making daily promises to address these woes, it might be worth encouraging the winning candidate to think twice (or even 8 or 10 times) before rushing off to do good. Because if there is any law more powerful than the ones constructed in a place like Washington, it is the law of unintended consequences."
The Foolishness of Economic 'Stimulus'
By Donald J. Boudreaux: "The best way for policymakers to foster such growth is to avoid panicking over any current economic downswing. Instead, they should focus on getting the economic fundamentals right. Such emphasis might not make things better – or even make things appear to be better – today, but it will make our tomorrows as bright as possible."
Econ Journal Watch
"The electronic triannual Econ Journal Watch publishes Comments on articles appearing in economics journals and serves as a forum about economics research and the economics profession. EJW watches the journals for inappropriate assumptions, weak chains of argument, phony claims of relevance, and omissions of pertinent truths."
Markets in Everything.com
Michael Cleverly has compiled a website consisting of all the "Markets in Everything" posts found on various economics blogs. Highlights include an alarm clock that spends your money if you oversleep, settling a debt with a severed finger, prom date rentals, Bibles for porn stars, and many other ingenious/wacky things.
Don Boudreaux on Globalization and Trade Deficits
"Don Boudreaux, of George Mason University, talks about the ideas in his book, Globalization. He discusses comparative advantage, the winners and losers from trade, trade deficits, and inequality with EconTalk host Russ Roberts."
Dismal Science Sees Upbeat Future
By Alexander Tabarrok: "Forget the talk of recession. The world is about to enter a new era in which miracle drugs will conquer cancer and other killer diseases and technological and scientific advances will trigger unprecedented economic growth and global prosperity."
What to Expect When You’re Free Trading
By Steven E. Landsburg: "All economists know that when American jobs are outsourced, Americans as a group are net winners. What we lose through lower wages is more than offset by what we gain through lower prices. In other words, the winners can more than afford to compensate the losers. Does that mean they ought to?"
The Real Key to Development
By Mary Anastasia O'Grady: "The Index [of Economic Freedom] also reports that the freest 20% of the world's economies have twice the per capita income of those in the second quintile and five times that of the least-free 20%. In other words, freedom and prosperity are highly correlated."
An Empirical Analysis of Street-Level Prostitution
By Steven D. Levitt and Sudhir Alladi Venkatesh: "Unlike most other crimes, prostitution is based on markets, and thus potentially of special interest to economists. It is thus surprising that amidst the burgeoning literature on the economics of crime, there is little analysis of prostitution."
So We Thought. But Then Again . . .
By Tyler Cowen: "Harry S. Truman once said he wanted to talk to a one-armed economist, “so that the guy could never make a statement and then say: ‘on the other hand.’ ” Yet economic knowledge continues to progress in unexpected ways. Here are a few of the things we learned in the last 12 months:"
The Failure of U.S. Organ Procurement Policy
By T. Randolph Beard, John D. Jackson, and David L. Kaserman: "In this article, we calculate how many lives will be lost if the United States continues in its current policy course. We do this to motivate policymakers to stop implementing one ineffectual policy action after another and attack the organ shortage with more effective weaponry in the form of financial incentives."
The Micromagic of Microcredit
By Karol Boudreaux and Tyler Cowen: "If a poor family is able to keep a child in school, send someone to a clinic, or build up more secure savings, its well-being improves, if only marginally. This is a big part of the reason why poor people are demanding greater access to microcredit loans. And microcredit, unlike many charitable services, is capable of paying for itself—which explains why the private sector is increasingly involved. The future of microcredit lies in the commercial sector, not in unsustainable aid programs."
5 Myths About Our Ballot-Box Behavior
By Bryan Caplan: "We haven't even made it to the New Hampshire primary, but millions of Americans are already sick of hearing about the 2008 race. Bad as the torrent of news is, I find the repetition of myths about voters and voting even more galling. Whether you're arguing with friends or watching the news, you hear many claims about how American democracy works that just aren't true."
Paths to Property
By Karol Boudreaux and Paul Aligica: "The study finds that the “easy option” of agencies entering less-developed countries and using blueprints to try to recreate institutions in Africa that work effectively in the West often fails miserably. Indeed, the failures of such approaches can give the whole privatisation and property rights process, vital for sustainable economic growth, a bad name."
Raw Deal
By Sallie James: "Hollywood had better hope that a services liberalization deal reached Dec. 17 between the United States and the European Union holds. Without a successful resolution to the long-running Internet gambling dispute, American movies, music and software could be vulnerable to copyright infringement."
Regulatory Competition: A Primer
By Jennifer Smith-Bozek: "A given government jurisdiction—local, state, or federal—can provide regulatory alternatives to compete with those of another government. Regulatory competition can attract more businesses and jobs, yield regulations that are more efficient and less expensive, and thereby provide more options to consumers."
Milton Friedman with Charlie Rose
"An hour with Nobel Prize-winning economist Milton Friedman. Friedman discusses his life, his contributions to economics, the Republican Party and his view on the direction of the United States and the world in coming years."
Mugabe's Apologists
By Marian Tupy: "Robert Mugabe's participation in the European Union-Africa summit in Lisbon over the weekend was a triumph of Zimbabwean diplomacy. Both African and EU leaders must share the blame for this farce. Zimbabwe's foreign ministry managed to portray the octogenarian dictator, who has presided over widespread violations of human rights and an astonishing economic collapse, as the victim of a Western conspiracy."
A Bill of Rights Europe Did Not Need
By Anthony de Jasay: "Even if it were less woolly and silly, the Charter of Fundamental Rights could hardly become a force for good."
Boettke on Austrian Economics
Pete Boettke, of George Mason University, talks with EconTalk host Russ Roberts about the origins and tenets of Austrian economics.
Economics Books and Podcasts: The Class of 2007
By Arnold Kling: "For people who like to read about economics, 2007 produced a bumper crop of outstanding books. Here are my top recommendations."
Creative Destruction's Reconstruction: Joseph Schumpeter Revisited
By J. Bradford Delong: "Perhaps this next century will give Schumpeter's work its proper place as the power of innovation to transform, create, enrich, and destroy makes itself manifest globally. And while we marvel at how much he got right, we can hope Schumpeter was wrong in his political analysis. One great test of our era will be whether creative destruction can flourish alongside public order and political liberty."
The Dollar Is Falling, and That’s Good News
By Tyler Cowen: "But when it comes to currencies, a higher value neither brings national success nor predicts future prosperity. The measure of a nation’s wealth is the goods and services it produces, not the relative standing of its currency."
Pigs Don't Fly: The Economic Way of Thinking about Politics
By Russell Roberts: "Politicians are just like the rest of us. They find it hard to do the right thing. They claim to have principles, but when their principles clash with what is expedient, they often find a way to justify their self-interest."
Munger on Fair Trade and Free Trade
"Mike Munger, frequent guest and longtime Econlib contributor, speaks with EconTalk host Russ Roberts about fair trade coffee and free trade agreements. Does the premium for fair trade coffee end up in the hands of the grower? What economic forces might stop that from happening?"
Fed Up
By Alvaro Vargas Llosa: "All in all, financial instability has been far greater since the creation of the Federal Reserve. What did the Great Depression teach us? Essentially that even with the best of intentions, it is impossible for the authorities to manage the supply of money in accordance with the exact needs of the economy."
That "Top One Percent"
By Thomas Sowell. People who are in the top one percent in income receive far more than one percent of the attention in the media. Even aside from miscellaneous celebrity bimbos, the top one percent attract all sorts of hand-wringing and finger-pointing. Who are those top one percent? For those who would like to join them, the question is: How can you do that?
Robert Frank's Strange Case for Taxing "The Rich"
By David R. Henderson: "At one time, critics of economic freedom justified high taxes on high-income people on the grounds of ability to pay. They at least admitted that those taxes hurt those people. But the growing availability to even the poor of goods that were only recently thought of as luxury goods has weakened that argument. Now, Robert Frank argues for higher taxes on high-income people on the grounds that it is good for them."
Economics in Many Lessons: A Better Brew for Rwanda
By Donald J. & Karol C. Boudreaux: "In some parts of the long-suffering continent, good things are happening and too few people, in Africa and elsewhere, know about them."
Adam Smith - A Primer
"Despite his fame, there is still widespread ignorance about the breadth of Adam Smith’s contributions to economics, politics and philosophy. In Adam Smith – A Primer, Eamonn Butler provides an authoritative introduction to the life and work of this ‘founder of economics’. "
Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist
"The economist and blogger Tyler Cowen provides quirky and insightful advice for life based on his signature urbane style of economic reasoning."
Why We Trade
By Russell Roberts: "We’re used to shrugging off all sorts of rhetorical gobbledygook from our politicians. But when you hear U.S. presidential candidates start to mouth off about free trade, watch your wallet: A discredited 14th-century theory of economics is enjoying a dangerous renaissance in the 2008 campaign. "
Fat on the Farm Bill
By Dr. Sallie James: The Farm Bill is the ultimate example of concentrated benefits and diffused costs. Farm subsidies are hard to justify on their merits, and even harder to justify when they go to massive corporate farms.
Undercover Economist: Your Vote Doesn't Count
The concept of a “vote” is meaningless when it comes to the market. If Benn’s claim [that the poor are better represented in a democracy than in a market] means anything at all, surely it means this: that a poor person has more influence over the service he or she receives from the government than over the service he or she receives from the market. That claim means something, but it is also hard to sustain.
Let Them Eat Laptops
By Daniel R. Ballon: "The '$100 laptop,' which actually costs $188, can only be purchased at a minimum quantity of 250,000. OLPC targets countries like Nigeria, where one out of three children suffer from malnutrition. There a $50 million minimum investment could instead be used to feed more than a million children for an entire year."
The Political Economy of Force-Feeding
By Anthony de Jasay: "Compulsory education is delivering contestable results. Governments seek a remedy by providing more of it."
What Can the United States Learn from the Nordic Model?
By Daniel J. Mitchell: "Conservative critics correctly condemn the large welfare states, but often overlook the positive results generated by laissez-faire policies in other areas. Liberals, meanwhile, exaggerate the economic performance of Nordic nations in an effort to justify welfare-state policies, while failing to acknowledge the role of freemarket policies in other areas."
The Tragedy of the Commons and the Implications for Environmental Regulation
Bruce Yandle of Clemson University and George Mason University's Mercatus Center looks at the tragedy of the commons and the various ways that people have avoided the overuse of resources that are held in common.
Free Trade: America’s Opportunity
By Leland Yeager: "Want to read an economist's economist? Want an example of scholarly writing that is crystal clear? Want to understand better the case for free trade? If so, you can do no better than to read this 1954 monograph." - Dr. Donald Boudreaux, Chairman of the Economics Department of George Mason University
The Question of Monopolies
By Nathaniel Branden. A reader asks "In a society of laissez-faire capitalism, what would prevent the formation of powerful monopolies able to gain control over the entire economy?"
What Do We Really Know About the Spread of AIDS?
By Emily Oster. Emily Oster, a University of Chicago economist, looks at the stats on AIDS in Africa -- and comes up with a stunning conclusion: Everything we know about AIDS in sub-Saharan Africa is wrong. We look for root causes such as poverty and poor health care -- but we also need to factor in, say, the price of coffee, and the routes of long-haul truckers. In short, there is a lot we don't know; and our assumptions about what we do know may keep us from finding the best way to stop the disease.
Our Priorities for Saving the World
By Bjorn Lomburg : "Given $50 billion to spend, which would you solve first, AIDS or global warming? Danish political scientist Bjorn Lomborg put this question to economists and students around the world, and the answers they came up with may surprise you. Ranking our toughest problems not on any moral scale but simply by how effectively they can be solved, Lomborg and his colleagues demand we take a fresh look at doing good."
Let's Take a New Look at African Aid
By Andrew Mwenda: "In this provocative talk, journalist Andrew Mwenda asks us to reframe the "African question" -- to look beyond the media's stories of poverty, civil war and helplessness and see the opportunities for creating wealth and happiness throughout the continent. Most important, he says, the solution to Africa's problems is not more aid."
Chill Out
By Bjorn Lomborg: "The discussion about climate change has turned into a nasty dustup, with one side arguing that we're headed for catastrophe and the other maintaining that it's all a hoax. I say that neither is right. It's wrong to deny the obvious: The Earth is warming, and we're causing it. But that's not the whole story, and predictions of impending disaster just don't stack up."
In Defense of Scalpers
By David Harsanyi: "In the end, I’m not sure why it’s fair to allow monopolies to sell tickets and not individuals. Turning a profit on your investment doesn’t sound like a crime to me. It sounds like America."
So You Want to be a Masonomist
By Arnold Kling: "Years from now, perhaps people will be saying that something big got started recently at the George Mason University department of economics. Maybe if you become a Masonomist now, you will be getting in early on a trend that will soon catch on much more widely."
McCraw on Schumpeter, Innovation, and Creative Destruction
"Thomas McCraw of Harvard University talks about the ideas of Joseph Schumpeter from his book, Prophet of Innovation: Joseph Schumpeter and Creative Destruction. McCraw and EconTalk host Russ Roberts discuss innovation, business strategy, the role of mathematics in economics, and Schumpeter's vision of competition embodied in his most important idea--creative destruction."
Robert Frank on Economics Education and the Economic Naturalist
"Frank argues that the traditional way of teaching economics via graphs and equations often fails to make any impression on students. In this conversation with host Russ Roberts, Frank outlines an alternative approach from his new book, where students find interesting questions and enigmas from everyday life. They then try to explain them using the economic way of thinking."
Democracy and Other Failures
By Doug Campbell: "The theory of public choice helps explain why we get stuck with so many bad economic policies. Or does it?"
Stockholm Syndrome
By Michael C. Moynihan: "Western Europe's most famously socialist country is slowly plodding toward free-market reforms."
Something Besides Money Growth Causes Inflation? It Just Ain't So!
By Howard Baetjer, Jr.: "In the words of the great Milton Friedman, whose masterwork with Anna Schwartz, A Monetary History of the United States, did a lot to settle the matter, 'Inflation is always and everywhere a monetary phenomenon.' Unfortunately, many educated commentators have not learned this important truth."
The Grand Old Spending Party: How Republicans Became Big Spenders
By Stephen Slivinski: "Republicans could reform the budget rules that stack the deck in favor of more spending. Unfortunately, senior House Republicans are fighting the changes. The GOP establishment in Washington today has become a defender of big government."
Economic Freedom Breeds Prosperity
By James Dorn: "The key lesson from Hong Kong's "small government, big market" model of development is that economic freedom is the best path toward sustainable development, understood as increasing the range of choices open to people. "
The Myth of the Rational Voter: Why Democracies Choose Bad Policies
By Bryan Caplan: "In theory, democracy is a bulwark against socially harmful policies. In practice, however, democracies frequently adopt and maintain policies that are damaging. How can this paradox be explained?"
Peace on earth? Try free trade among men
"Much of the political violence that remains in the world today is concentrated in the Middle East and Sub-Saharan Africa -- the two regions of the world that are the least integrated into the global economy. Efforts to bring peace to those regions must include lowering their high barriers to trade, foreign investment, and domestic entrepreneurship."
What Can Foreign Aid Do for The World's Poor?
"Billions upon billions have been spent by governments and institutions like the World Bank over the last half-century to launch less developed countries onto a trajectory of growth. Yet despite all this money—or perhaps because of it—many countries continue to languish in abject poverty. Do we need to spend even more, faster?" William Easterly, Branko Milanovic, Deepak Lal, Jules S. Coleman, and Steve Radelet engage in a debate about the problems with foreign aid and what can be done about it.
Why Does Latin America Fail?
By Mario Vargas Llosa: "Institutions cannot flourish in a country if the people don’t believe in them—if, on the contrary, people have a fundamental distrust of their institutions and see in them not a guarantee of security, or of justice, but precisely the opposite."
Private Education is Good for the Poor
by James Tooley and Pauline Dixon: "Our findings from a two-year in-depth study in India, Ghana, Nigeria, and Kenya suggest that these conclusions are unwarranted. Private schools, we argue, can play—indeed, already are playing—an important, if unsung, role in reaching the poor and satisfying their educational needs."
The History of Economic Thought Website
This web site serves as a repository of collected links and information on the history of economic thought, from the ancient times until the modern day. It is designed for students and the general public, who are interested in learning about economics from a historical perspective.
Underdevelopment in Sub-Saharan Africa: The role of the private sector and political elites
In this paper, Moeletsi Mbeki explains how economic growth in Africa, as in the rest of the world, depends on a vibrant private sector. Entrepreneurs in Africa, however, face daunting constraints. They are prevented from creating wealth by predatory political elites that control the state. African political elites use marketing boards and taxation to divert agricultural savings to finance their own consumption and to strengthen the repressive apparatus of the state. Peasants, who constitute the core of the private sector in sub-Saharan Africa, are the biggest losers.In order for Africa to prosper, peasants need to become the real owners of their primary asset — land — over which they currently have no property rights.
Sports, Jobs, & Taxes: Are new stadiums worth the cost?
"Advocates argue that new stadiums spur so much economic growth that they are self-financing: subsidies are offset by revenues from ticket taxes, sales taxes on concessions and other spending outside the stadium, and property tax increases arising from the stadium's economic impact. Unfortunately, these arguments contain bad economic reasoning that leads to overstatement of the benefits of stadiums."
The Disregard of Reality
By Peter Bauer: "The tendency to disregard simple realities has undermined the poise, self-assurance, and stance of the West in the international arena. It has also underpinned the uncritical acceptance of ideas and policies damaging to the West, and much more so to the peoples of the Third World. This is not surprising. Polities and societies bent on disregarding reality must be vulnerable to adversity, and also to threats from within and without."
Ending Mass Poverty
Economic growth is the "only path to end mass poverty," says economist Ian Vásquez, who argues that redistribution or traditional poverty reduction programs have done little to relieve poverty. Vásquez writes that the higher the degree of economic freedom -- which consists of personal choice, protection of private property, and freedom of exchange -- the greater the reduction in poverty. Extending the system of property rights protection to include the property of poor people would be one of the most important poverty reduction strategies a nation could take, he says.
State and Local Tax Policy
Although the federal government spends more than the states, state taxes and budgets are also an area of interest for Cato scholars. Read what they have to say about keeping the size of state government under control and how to keep state taxes down to reasonable levels.
Tax and Budget Bulletin
Cato's Tax & Budget Bulletin discusses issues in fiscal policy, money, and taxation. This page is an archive of past issues covering a wide range of different topics in this area.
Regulation Magazine
Regulation has examined every market, from agriculture to health and transportation, and nearly every government intervention, from interstate commerce regulation to labor law and price controls. It is an expansive publication - casting a powerful light onto the overall impact of regulatory polices to give you sharp, comprehensive perspectives; and, precise - exploring key subjects with incisive, point-by-point analysis.
Unintended Consequences
By Rob Norton: "The law of unintended consequences, often cited but rarely defined, is that actions of people - especially of government - always have effects that are unanticipated or "unintended." Economists and other social scientists have heeded its power for centuries; for just as long, politicians and popular opinion have largely ignored it."
Rent Seeking Behind the Green Curtain
Jonathan H. Adler explains that "due to the cost and complexity of environmental rules, the environmental policy arena presents an extremely attractive target for those who wish to seek rents in Washington. Indeed, if there is one consistent interest group, it is the inside-the-beltway consultants, lobbyists, and litigators, who benefit from the continuation of a Byzantine regulatory structure, the intimate knowledge of which is incredibly valuable and rare."
The Tradition of Spontaneous Order
By Norman Barry: It is not that the theory of spontaneous order precludes planning as such; it is that only planning by individuals in decentralized markets will tend towards an optimal use of knowledge. The central planner has only that knowledge available to him, which is less than that which is co-ordinated among all the agents in a market process. Furthermore, because the future is unknowable, a system that relies on liberty allows for the accidental and spontaneous.
The Fundamentals of Rent Seeking
By Gordon Tullock: "Once the concept of rent seeking was discovered - and defined as the outlay of resources by individuals and organizations in the pursuit of rents created by government - there followed a flourishing of research as relevant ideas began to disseminate throughout economics. It is now rare to find an issue of an economics journal that does not refer at least implicitly to the concept of rent seeking."
Community-Run Fisheries: Avoiding the "Tragedy of the Commons"
By Donald R. Leal: "Community-Run Fisheries: Avoiding the "Tragedy of the Commons" presents case after case of communities that have effectively protected their fishing territories and preserved fish for the future."