Economics

Ignoring the Difference between Free markets and State Capitalism

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Capital in the Twenty-First Century by Thomas Piketty, translated by Arthur Goldhammer (Belknap 2014), 696 pages. The basic phenomenon that Thomas Piketty devotes this book to describing is simple: “When the rate of return on capital significantly exceeds the growth rate of the economy..., then it logically follows that inherited wealth grows faster than output and income.” His historical account ... [click for more]

Bastiat on the Socialization of Wealth

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That … veil which is spread before the eyes of the ordinary man, which even the attentive observer does not always succeed in casting aside, prevents us from seeing the most marvelous of all social phenomena: real wealth constantly passing from the domain of private property into the communal domain. Wealth marvelously passing from the private to the communal domain? ... [click for more]

The Folly and Presumption of Big Government Social Engineers

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One of the social mythologies of our time is that it is in the power and ability of governments to remake society in any image or shape that those with political authority consider “good,” “right,” and “just” for mankind. No other idea has caused more horror and hardship in modern times. The extreme attempts at such “social engineering” in the ... [click for more]

Consumers’ Sovereignty and Natural vs. Contrived Scarcities

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One of the great myths about the capitalist system is the presumption that businessmen make profits at the expense of the consumers and workers in society. Nothing could be further from the truth. In the free market, consumers are the sovereign rulers who determine what gets produced, and with what qualities and features. The sovereign consumers also determine who will ... [click for more]

TGIF: The Economic Way of Thinking about Health Care

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I realize Mike Lupica is a sports columnist -- and that Howard Cosell called sports "the toy department of life" -- but maybe that's what makes Lupica's recent declaration about Obamacare all the more representative a reaction. Appearing on a morning cable news program, Lupica declared that “health insurance for all is a noble idea.” He repeated this a few ... [click for more]

Two Kinds of Income Inequality

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Income inequality is back in the news, propelled by an Oxfam International report and President Barack Obama’s State of the Union address. The question is whether government needs to do something about this — or whether government needs to undo many things. Measuring income inequality is no simple thing, which is one source of disagreement between ... [click for more]

TGIF: Monopoly and Aggression

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The concepts monopoly and aggression are intimately related, like lock and key, or mother and son. You cannot fully understand the first without understanding the second. Most of us are taught to think of a monopoly as simply any lone seller of a good or service, but this definition is fraught with problems, as Murray Rothbard, Austrian economists generally, and ... [click for more]

Hayek’s Warning: The Social Engineer’s Pretense of Knowledge

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Forty years ago, on December 11, 1974, Austrian economist, Friedrich A. Hayek, formally received that year’s Nobel Prize in Economics at the official ceremonies in Stockholm, Sweden. He delivered a lecture called, “The Pretense of Knowledge,” which forcefully challenged all those who believe that government has the wisdom or ability to successfully plan the economic affairs of society. His primary ... [click for more]
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