Tag Archives: Economics

Capitalism in context


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Obama didn’t kill Osama.

“Obama didn’t kill Osama. A Navy SEAL did, who, less than a month ago, Obama was debating whether to pay at all.” – a Marine

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Calvin & Hobbes do “demand side” economics

“‘Caveat emptor’ is the motto we stand behind! I’d have to charge more if we followed health and environmental regulations!”


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Behavior : Legislation :: Chicken : Egg

Brilliant letter from Prof. Boudreaux to the Saturday NYT:

Reacting to Rand Paul’s remarks about the 1964 Civil Rights Act, you say that his libertarian philosophy “is a theory of liberty with roots in America’s creation, but the succeeding centuries have shown how ineffective it was in promoting a civil society….  It was only government power that … abolished Jim Crow” (“Limits of Libertarianism,” May 22).

You’ve got it backwards.  Jim Crow itself was government power.  Jim Crow was legislation that forced the segregation of blacks from whites.  Research shows that people acting in the free market that you apparently believe is prone to racial discrimination were remarkably reluctant to discriminate along racial lines.  It was this very reluctance – this capacity of free markets to make people colorblind – that obliged racists in the late 19th century to use government to achieve their loathsome goals.*

Had Mr. Paul’s libertarian philosophy been followed more consistently throughout American history, there would have been no need for one government statute (the Civil Rights Act) to upend earlier government statutes (Jim Crow) and the business practices that they facilitated.

Donald J. Boudreaux

* See especially Robert Higgs, Competition and Coercion: Blacks in the American Economy, 1865-1914 (University of Chicago Press, 1976); Jennifer Roback, “Southern Labor Law in the Jim Crow Era: Exploitative or Competitive?” University of Chicago Law Review, Vol. 51 (1984); and Jennifer Roback, “The Political Economy of Segregation: The Case of Segregated Streetcars,” Journal of Economic History, Vol. 46 (1986).


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Weekend Tabs

Greenspan, Summers Optimistic About Economy.

Theory of mind, intuition, and (the English) language.

Is it weird if I like Bruce more for his preference for redheads?

IQ and one bad habit+ questions of causation.

Entrepreneurs love to learn, hate to be taught.

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Imagination Constraint

When groups of libertarians get together one of two things happen.  Either we start discussing What Needs to Be Done, i.e., how do we gain traction, or we start debating ideological margins, like what degree of anarchy would be ideal.

Now.  I am not interested in anarchy.  But it’s true that honing ideas requires some play at the edges of constraint.  And truly when the goal is Smaller Government, there’s no way to hone ideas without at least acknowledging that less government means more governance through individuals, which need not look so much like Lord of the Flies as my cautious heart fears.

There are two paths to finding ideological edges.  We can either start from Point Now or from State of Nature.  Starting from Point Now entails looking at how deeply the Powers at Be are entrenched, how the situation on the ground behaves in practical effect, and how we can roll backwards from here.  Alternatively, starting from State of Nature means that we imagine a sort of naked Robinson Crusoe, adding communitarian elements without regard for how things entrenched to a more realistic, constrained Point Now.

The two approaches become interesting when we look at how the unconstrained version of Enhanced State of Nature — the post-imagined Robinson Crusoe — reflects the current state of affairs.  For instance, even the most government-shy libertarians believe there should be some sovereign body exerting pressure on fiscal policy.  At Point Now, however, we complain about the entrenched, impractical Fed.

Formalizing the social contract does require compromise in the direction of inefficiency.  Men have been social animals since even before we made that apple-d switch to “sapiens” (who was it who said that men are not so much social animals as it is that we’ve discovered the benefits of comparative advantage and free trade?).  The question cannot be whether some action or agreement is best at the margins of this moment.  Instead, we must look ahead to which investments promise best returns.

What’s interesting about the “anarchy” thought experiment in the US is that we’ve done it.  It wasn’t so long ago that a group of dudes sat around and debated how to protect freedom in a real way.  Granted, what “freedom” means may have differed at the margins between Hamilton and Madison.  But in a real way our founding fathers attempted to explore the freedom question from a state of nature, absent imagination constraints, and THIS is what results.

When today’s libertarians describe private structures resembling nothing so much as the Fed and insurance stacks, I can’t help but wonder whether a freer polity could have gone any way but this.  Even the waxing and waning of individual rights — never so well demonstrated as in the comparative Bush/Obama policies — are a sort of required political institution, without which we would never remember what to protect.

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Dear Noreena

Dear Noreena Hertz,

You were the first lady economist I followed, back in the days when I read things like The New Republic and The New Yorker, but before I discovered anything old. We met right after my Chomsky stage, when I flirted with Kibbutz-esque ideas, when I was the only person I knew who could tell you who is John Galt. The internet was still only Al Gore’s hobby then, so nothing pointed me yet to the curmudgeonly stuff I’ve come to prefer.

Noreena you wore white suits with red scarves and worked with Bono, whose music touched my life, and with Yunus, whose investment in investing still resonates for me. You have always been both smart and sexy and you became a role model at that critical time when I started actively to grab ahold of what I was starting to become.

And, perhaps more importantly, it was because I admired you that I started looking into Economics. You might be horrified to learn that I don’t believe, as you do, that Capitalism is dead. So it goes. But it was because you pointed out that Econ is important that I started thinking along those lines at all.

While I’d completely forgotten about you until I read this Jezebel profile today, I’m so glad we met, Noreena. Even if you’d like me less now, I still admire you, still find your scarf-wearing, ass-kicking self an apt role model.

But. That will not stop me from sharing this post dedicated to your communistic sensibilities with an example of the kind of “Government Inefficiency” anecdote I love:

A Chat About Inefficiency:

Speaking of government inefficiency, I was just going to get my car in the FDIC parking lot. It’s 3 levels underground and a HUGE lot.

And they had a worker down there with a broom and a dirt catcher thing.

You’d think that they would have a giant leafblower
not like . . .
a little broom.

Not even an industrial one, but like one you’d use to sweep up spilled rice in your apartment

I mean: Can you get more efficient? And this was 9 pm. And this guy was sorta halfassedly sweeping. Like: “Its impossible for me to sweep all these leaves so im just going to pretend for the 8 hours i work.”

WPA, teeny brooms — this is how we save or create, folks. Oh, and by smashing resources, like cars.

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