David Henderson shares a reflection from Nobel laureate Harry Markowitz on the great Armen Alchian. (It’s a genuine shame that so few young economists today read Alchian and learn how to reason, analytically and wisely, as Alchian did. Crunching numbers and cleverly identifying and ‘proving’ theoretical ‘possibilities’ is not economics. Thankfully, first-year econ PhD students, who take Microeconomic Theory I from Alchian’s student Walter Williams, are an exception to this sad reality about modern economic instruction; GMU students read and learn deeply from Alchian’s works.)
With his usual clarity, Steve Landsburg exposes the absurdity of Obama’s mercantilist position on trade. (Obama, of course, is not alone in being a carrier of mercantilist superstitions. Most of the general public believes in these superstitions, and Trump today might fairly be called Mr. Mercantilist.)
Speaking of mercantilist superstitions, Scott Lincicome correctly argues that relying upon such superstitions to win battles in the struggle to make trade freer increases the risk that the struggle itself will be lost.
Richard Epstein describes the poverty of “Progressivism.” (HT Steve Pejovich) A slice:
It is now possible to see how the progressive agenda thwarts the engine for growth in ways that private ingenuity finds it difficult to overcome. The initial observation is that virtually every progressive reform undermines free markets and tends to establish monopolies in labor, agriculture, and other industries. These rules frustrate the free entry into new markets. It is therefore inexcusable that the first impulse of the determined progressive is to impose restraints on voluntary exchange. These new taxes and regulations are always described benevolently as restrictions on the bad parties—on landlords, on employers, on insurers, on health care providers. But in practice they always operate as devastating constraint on both sides of the market.
Regulation of quality and safety is an essential service in any healthy economy. It is too important to be handled by unregulated government monopolies. We should replace government regulation with regulation by market forces.