Category Archives: economics

The Elephant in the Brain: Hidden Motives in Everyday Life

coverExcellent book forum hosted by the Cato Institute:

Robin Hanson and Kevin Simler have written a book about the hidden motives in all of us: quite often, our brains get up to activities that we know little or nothing about. This isn’t just a question of regulating hormone levels or involuntary reflexes. Many of these involuntary behaviors are social signals, such as laughter or tears. Involuntary motives appear to underlie many forms of human sociability, including family formation, art, religion, and recreation. What are the implications for public policy? How can we understand politics and governance better in light of our hidden motives? Our discussion of The Elephant in the Brain: Hidden Motives in Everyday Life will focus on just these questions.

Source: The Elephant in the Brain: Hidden Motives in Everyday Life | Cato Institute

See also Robin Hanson’s TedX talk on this book.

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Why we’re less wealthy than we should: Foolish government policies.

Veronique de Rugy explains how foolish government policies make us poorer and make recessions worse: Making the Most of the Next Recession.

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Government, please impose “net neutrality” for UPS, FedEx, and the Postal Service!

In 2010, Business Insider CEO and Editor-in-Chief Henry Blodget wrote:

ISPs spend billions of dollars building fiber networks. Why on earth shouldn’t they be able to charge what the market will bear to deliver bits over those networks?  If people want their bits delivered quickly and securely, they can pay more.  If they don’t, they can pay less.  It’s as simple (and fair) as that.

To see how silly the whole concept of “net neutrality” is, all you have to do is glance at the physical world.

Imagine if the Post Office (or FedEx, or UPS, or DHL, or any trucking or transport company) were legally prohibited from charging more for delivering some stuff sooner than other stuff.

Ridiculous, right?

Yes, ridiculous.  Those shipping and transport companies spent billions of dollars building their transportation networks.  They have every right to charge whatever the market will bear to deliver stuff via them.

No one has any problem with the concept that the Post Office treats overnight packages differently than slow-boat ones.  Importantly, they also charge different rates depending on what is in the package–see “book rate” and all pricing by weight. So why all this hullaballoo about “NET NEUTRALITY”?

The answer is simple: Self-interest.

Net-neutrality zealots don’t own pipe companies. They haven’t spent billions of dollars building the networks that carry all those bits around.  They HAVE spent (collectively) billions of dollars building the bits that get carried around–so of course they’d like to keep that bit-carrying as cheap as possible.

Read the whole article: Stop Moaning About “NET NEUTRALITY” — Of Course ISPs Should Be Able To Charge Higher Rates For Premium Traffic.

See also:

 

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Why politicians add subsidies instead of removing costly government controls: It makes them look good.

Nick Gillespie of Reason.tv explains:

[The President’s] solution to every rising price is to subsidize its purchase (this is true for health care, education, you name it). But when you subsidize something with tax dollars, you’re likely to increase both aggregate spending on it and increase prices (this too is true for health care, education, you name it). And his nod towards “high-quality” child care suggests more rules and regulations on the practice, which also will like raise prices too.

This isn’t Obama’s failing alone, of course, but why do politicians rarely or ever talk about growing supply as a way of reducing prices? One of the most frustrating aspects of the Obamacare debate was that virtually no one on either side was talking about how to reduce prices by increasing supply. It was all about regulating prices by restricting or dampening demand.

That’s an ass-backwards way of looking at things, but it makes political sense, I guess: You want to be the person cutting the check to a specific beneficiary rather than fading into the background after deregulating an industry and letting innovators come up with new, better, cheaper goods and services.

Read the whole post.

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Please Protect Us from Santa Claus. If cheap imports hurt the economy, imagine the damage done by Saint Nick!

Dear Mr. President:

We applaud your valiant efforts to protect the American economy from the pernicious effects of cheap imports, but we fear you have overlooked one of the worst culprits.

Readily available goods for the consumer at reasonably low prices have been shown time and again to be toxic to domestic producers, who are the backbone of any advanced society. We urge you to expand your scope and protect us from someone your predecessors have neglected to stop: Santa Claus.

More: Please Protect Us from Santa Claus : The Freeman : Foundation for Economic Education.

Via Don Boudreaux at Cafe Hayek.

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Cover contest for Machinery of Freedom

David D. Friedman has announced a cover contest for the new edition of The Machinery of Freedom. (Drafts of new chapters here.)  I’ve always liked this one from a 1973 paperback edition that I found at a used book sale many years ago.
Friedman - Machinery of Freedom
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If increasing cost of carbon decreases its use, does increasing cost of labor decrease employment? (#minimumWage)

Via Don Boudreaux at Cafe HayekCoyote Blog’s Warren Meyer offers this useful Venn diagram:

See also:

Mark Perry:

Does thinking realistically about the proposed minimum wage increase to $10.10 per hour alternatively as a $5,700 annual “unskilled labor tax” make minimum wage proponents less enthusiastic about that increase and its inevitable adverse effects on unskilled workers?

More: Instead of $10.10 per hour, think of the proposed minimum wage as a $5,700 annual tax per full-time unskilled worker.

Also, from Mark Perry:

Mark Perry, professor at the University of Michigan and scholar at the American Enterprise Institute, explains that minimum wage hikes ultimately affect the number of hours worked, not the number of workers employed by a firm. (more)

And the chapter on minimum wage laws in Henry Hazlitt’s Economics in One Lesson. And finally, this video from the Center for Freedom and Prosperity:

 

 

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