Russell Roberts's Blog, page 1541

The Origins of Moral Sentiments

In today's New York Times, David Brooks nicely summarizes recent research that suggests that moral rules "emerged from a long history of relationships."  A chief conclusion, as he describes it, is vital: "To learn about morality, you don't rely upon revelation or metaphysics; you observe people as they live."

It's worth noting that Adam Smith arrived at the same conclusion 251 years ago.  In The Theory of Moral Sentiments (1759), this brilliant scholar – who, in 1776, published an even more...

Prufrockian Political Economy

When I talk about risk and safety, I always like to point out that it's easy to make sure that no one ever dies in an airplane crash: ban air travel. The fact that we don't suggests that we really don't want perfectly safe air travel.

Similarly, it's easy to make sure that you luggage is never lost when you fly–fine airlines $1,000,000 for every lost bad. (First heard this example used by Jonathan Skinner) Not only would you never lose a bag, if you could collect the fine as compensation...

Today vs. tomorrow

Harry Reid asks (HT: Becky Chandler):

"Isn't it a good thing today in America that we have an automobile manufacturing sector?

Maybe. Certainly it's a bad thing today to subsidize mediocre companies (GM, Chrysler) making it harder for others (Ford) to thrive. And it's a bad thing tomorrow if the costs of those subsidies turn include further encouraging companies to please politicians instead of customers.

But it's particularly bad to think that helping GM and Chrysler is good for Ford, the...

Congress Created Them All

Here's a letter to the Washington Post:

You're right to worry that Uncle Sam responded to the public's anxiety about terrorism by creating an overgrown intelligence bureaucracy with bloated budgets that strain our wallets and arbitrary powers that mock the Constitution as they threaten our freedoms ("The overgrowth of intelligence programs since Sept. 11," July 22).

But why do you not also worry about similar extensions of government's reach into areas such as health-care and finance?  As with...

Monetary Nationalism Is a Curse

Here's a passage from the not-to-be-missed book by Benn Steil and Manuel Hinds, Money, Markets & Sovereignty (Yale University Press, 2009), pages 94-95:

There are many reasons why economies became dramatically more integrated after 1870, both within and across countries.  Among these are tremendous technological advances in transportation and communication, particularly the railroad, steamship, telegraph, cable, and refrigeration.  The spread of free-trade thinking from Britain to the...

Some Links

Boston Globe columnist Jeff Jacoby argues against government subsidies to journalists and the news media.  (My two cents: anyone who believes that a government-subsidized press would not be a politically beholdened press – a press leashed like a lap dog to its paymaster's fist – is hopelessly out of touch with reality.)

Katya Brancato – who earned her economics PhD from GMU – turned her dissertation into an excellent book.

Former GMU student Ryan Young explains, at the American Spectator, some...

And It Said "Let There Be Higher Wages." And There Were.

Writing in today's Baltimore Sun, Marta Mossberg correctly argues that a proposed "living-wage" bill for Baltimore will hurt the poor.  This unintended effect is the inevitable result of prohibiting workers from accepting any wage lower than $10.57 per hour – a wage well above the hourly value that many unskilled workers are capable of producing for employers.

So why are so many people enthusiastic about statutes such as this one?

Proponents of such legislation are economic creationists.  They ...

The Hayek Interviews

Our dear friends at Guatemala's Universidad Francisco Marroquin have assembled these interviews of Hayek – interviews conducted by Armen Alchian, Jim Buchanan, Tom Hazlett and others.  They're fascinating.

Politics Trumping Science? Never!

Division of Labour's Frank Stephenson's letter in today's Wall Street Journal is priceless:

I was surprised to read that "White House economists believe that taxes have little effect on growth." Just a few days ago I received the June 2010 issue of the American Economic Review, the flagship journal of academic economics. The current issue contains an article by CEA Chair Christina Romer and her husband David Romer on the macroeconomic effects of tax changes. Their paper examines "all major...

Tax Cuts and Aggregate Demand

Here's a letter sent yesterday to the Wall Street Journal:

Alan Blinder asserts that opposition by tax-cut proponents to further increases in government spending is inconsistent ("Obama's Fiscal Priorities Are Right," July 19).  Not so.

Viewing reality through a Keynesian template, Mr. Blinder assumes that tax cuts "stimulate" the economy only in the same way that government spending does: by increasing aggregate demand.  In fact, though, the chief argument for tax cuts is not that they...