Liberty Fund

Socialist Fantasies, by Sarah Skwire

Ludwig von Mises’s essay “Economic Calculation in the Socialist Commonwealth,” references Aristophanes’ play The Birds and the medieval fantasy of the idyllic and work-free Land of Cockaigne when Mises notes of socialist planners that, “Economics as such figures all too sparsely in the glamorous pictures painted by the Utopians. They invariably explain how, in the cloud-cuckoo lands of their fancy, roast pigeons will in some way fly into the mouths of the comrades, but they omit to show how this miracle is to take place.”[1]  Don Lavoie similarly points to the science fictional/fantastical aspect of socialist planning discussions when he comments in Rivalry and Central Planning that, “Details of future social life are not the province of economic science but of speculative literature.”[2]

Certainly one feels the fantasy novel being written in Michael Albert and Robert Hahnel’s article “Participatory Planning,” as they outline the precisely thought-out details of how their version of socialist planning will function...

What Distinguishes America?

Orestes Brownson’s view is that America is the prudent compromise between two idealistic extremes.

Originalism and Sovereign Immunity

The mistake that the Supreme Court makes is to presume that the answer to this specific question must be found in the Constitution.

Global Poverty and the Lure of Resentment

Oxfam is reluctant to consider a troubling question: What if global poverty declined because economic inequality increased?

Redlining in Reverse

“Adversity scores” are the latest gimmick to justify racial preferences in college admissions.

The confusing terminology of monetary policy, by Scott Sumner

As if monetary policy is not confusing enough, the terminology is also ambiguous, with terms used in inconsistent ways. For instance, is the Fed targeting interest rates, or are they targeting inflation?  Consider the following flow chart, showing two possible monetary policy targets.  At the bottom you have the actual tools that the central bank can use to influence policy.  In the middle you have flexible market prices that they may try to control, with the long run objective of stabilizing growth in NGDP or the price level (on top):

The term ‘instrument’ is sometimes used for variables that the central bank directly controls, like the monetary base, and at other times is used to describe the intermediate target of these open market operations, say the fed funds rate.  The term ‘target’ is sometimes used to describe the intermediate target of policy (say interest rates or exchange rates) and at other times is used to describe the goal of policy, say inflation or NGDP.

Conservatives Have Become as Impatient as Liberals, and That’s Not Good

The conservatives have natural advantages over the progressives that ought not be squandered.

“Socialism”: The Provocative Equivocation, by Bryan Caplan

The socialists are back, but is it a big deal?  It’s tempting to say that it’s purely rhetorical.  Modern socialists don’t want to emulate the Soviet Union.  To them, socialism just means “Sweden,” right?  Even if their admiration for Sweden is unjustified, we’ve long known that the Western world contains millions of people who want their countries to be like Sweden.  Why should we care if Sweden-fans rebrand themselves as “socialists”?

My instinctive objection is that even using the term “socialism” is an affront to the many millions of living victims of Soviet-style totalitarian regimes.  Talking about “socialism” understandably horrifies them.  Since there are plenty of palatable synonyms for Swedish-type policies (starting even “Swedenism”!), selecting this particular label seems a breach of civility.

If this seems paranoid, what would you say about a new movement of self-styled “national socialists”?  Even if their policy positions were moderate, this brand needlessly terrifies lots of folks who have already suffered enough.

Paul Collier and the False Promise of “Centrism”

We need to recognize that the first step—rather than further government "medicine"—is to stop poisoning the patient, and return to capitalism.

“Things have changed”, by Scott Sumner

The Wall Street Journal describes the views of Judy Shelton, one of the names mentioned for a position on the Fed’s Board of Governors:

She wrote critically in the weeks before that election about how the Fed’s low- rate policies were boosting wealthy investors and corporations at the expense of working Americans and retirees with fixed incomes.

On Tuesday, Ms. Shelton said she is no longer concerned about such perils because she believes the administration’s fiscal policies have boosted growth and productivity.

“Things have changed,” Ms. Shelton said in an interview with The Wall Street Journal, reconciling her earlier views with Mr. Trump’s current call for lower rates. She pointed to Mr. Trump’s tax and regulatory policies that she said have boosted growth without raising inflation as an example of a much-needed tool for supporting economic growth.

Higher economic growth is generally associated with higher interest rates, so I’m not sure I follow this argument.  This sort of reasoning seems extremely discretionary, and not in a good way. I favor a rules-based approach to monetary policy.  Yes, “things have changed”, but in a direction calling for higher interest rates.

Making Ourselves at Home: College Students and Safe Spaces

We should offer students a different way of thinking, one that makes college less about private comfort and more about citizenship in the public square.

Game of Thrones Reminds Us That Virtue is Not Enough

These days it takes a medieval fantasy to help us remember why liberal democracy is worth cherishing.

Mary Hirschfeld on Economics, Culture, and Aquinas and the Market

Author, economist, and theologian Mary Hirschfeld of Villanova University talks about her book, Aquinas and the Market, with EconTalk host Russ Roberts. Hirschfeld looks at the nature of our economic activity as buyers and sellers and whether our pursuit of economic growth and material well-being comes at a cost. She encourages a skeptical stance about […]

John Locke and Political Hebraism

Locke published the Two Treatises as a moral justification of violent resistance against tyranny—and the Hebrew Bible was vital to this endeavor.

Michel Chevalier on two kinds of political power in America, the Caesars and the Commissioners (1835)

In Defense of the Supreme Court’s First Constitutional Law Decision

When the Constitution was written and ratified there was no free-floating principle of sovereign immunity, but now the Supreme Court has recognized one.

Speaking of Smith

On First Looking into the Wealth of Nations, with Sarah Skwire

The Wealth of Nations: Book I, Chapter III

That the Division of Labour is Limited by the Extent of the Market

The Works of John Robinson, vol. 1 (John Robinson)

The Works of John Robinson, Pastor of the Pilgrim Fathers, with a Memoir and Annotations by Robert Ashton, 3 vols (London: John Snow, 1851). Vol. 1.

St. Thomas Aquinas discusses the three conditions for a just war (1265-74)

McClay’s Master Work: A History for Citizens

Finally, a narrative account of the United States for students that comprehends the flaws, but also the greatness, of a self-governing nation.

David M. Hart, "Reassessing Bastiat's *Economic Harmonies* after 160 Years" (May, 2019)

With the completion of a draft of Liberty Fund's new translation of Frédéric Bastiat's economic treatise on Economic Harmonies we have invited a group of scholars who know Bastiat and his work to reassess his contributions to economic theory some 160 years after the book's first appearance in 1850-51. Bastiat is widely known for his brilliant economic journalism (the series of Economic Harmonies) but less so for his contributions to economic theory. As an economic theorist, Bastiat has suffered from being misunderstood (even by his colleagues and contemporaries), neglected and forgotten (by most economists since his death), being subjected to abusive or dismissive criticism (Marx and Schumpeter), and being damned with faint praise (Hayek). David Hart, the Academic Editor of Liberty Fund's Bastiat translation project, argues that out of a list of 18 or so key economic ideas Bastiat can be said to have made significant contributions to 11 of them, and so must be considered a serious economic theorist. He is joined in the discussion by Donald J. Boudreaux, professor of economics at George Mason University; Jörg Guido Hülsmann, professor of economics at the University of Angers in France; and Joseph T. Salerno, academic vice president of the Ludwig von Mises Institute and the editor of the Quarterly Journal of Austrian Economics, and professor emeritus of economics in the Lubin School of Business of Pace University in New York City.

See the Archive of "Liberty Matters".

John Millar, "Circumstances which tend to increase the power of the Sovereign" (1771) (John Millar)

The Best of the OLL No. 74: John Millar, “Circumstances which tend to increase the power of the Sovereign” (1771) (Indianapolis: Liberty Fund, 2017).

Have Coase – Will Travel

In 1960, Ronald Coase published what would become one of the most cited articles in economics and contribute to his receipt of a Nobel Prize. Coase’s point was both simple and revolutionary. First, he noted, externalities—costs from economic activity borne by people not directly involved in that activity—are reciprocal: for example, a factory’s pollution that spreads to a homeowner’s backyard is a problem only because it affects the homeowner’s backyard. If, in the above example, the factory or the backyard were in different places, then there would be no externality. Second, he showed that if there were no transaction costs—the costs of completing a bargain, such as finding willing buyers and sellers, negotiating costs, and enforcement costs—the externality would be corrected by the most efficient solution, and the initial allocation of property rights would not matter.

Frederick Douglass and abolition

There are numerous illustrations in the British edition of the Frederick Douglass. They are of three types: pictures of famous abolitionists, Douglass visiting graves and memorials of those who had struggled against slavery, or horror pictures of the treatment of slaves.

The Rationale of Central Banking and the Free Banking Alternative (Vera C. Smith)

Written as a doctoral dissertation under Friedrich Hayek at the London School of Economics in the early 1930s, the book covers the history of free banking in the 19th century and reviews the theoretical arguments both for and against the idea of free banking.

The IVth Amendment to the American Constitution states that the people shall be secure in their persons against unreasonable searches and seizures and that no warrants shall issue, but upon probable cause (1788)

Politics as War: A Conversation with David Davenport

David Davenport discusses how we lost "the cool, deliberate sense of the community" in making public policy and embraced the war metaphor.

The State (Franz Oppenheimer)

The State: Its History and Development viewed Sociologically, authorized translation by John M. Gitterman (New York: B.W. Huebsch, 1922).

Microeconomics

Until the so-called Keynesian revolution of the late 1930s and 1940s, the two main parts of economic theory were typically labeled “monetary theory” and “price theory.” Today, the corresponding dichotomy is between “macroeconomics” and “microeconomics.” The motivating force for the change came from the macro side, with modern macroeconomics being far more explicit than old-fashioned monetary theory about fluctuations in income and employment (as well as the price level). In contrast, no revolution separates today’s microeconomics from old-fashioned price theory; one evolved from the other naturally and without significant controversy.

The strength of microeconomics comes from the simplicity of its underlying structure and its close touch with the real world. In a nutshell, microeconomics has to do with supply and demand, and with the way they interact in various markets. Microeconomic analysis moves easily and painlessly from one topic to another and lies at the center of most of the recognized subfields of economics. Labor economics, for example, is built largely on the analysis of the supply and demand for labor of different types. The field of industrial organization deals with the different mechanisms (monopoly, cartels, different types of competitive behavior) by which goods and services are sold. International economics worries about the demand and supply of individual traded commodities, as well as of a country’s exports and imports taken as a whole, and the consequent demand for and supply of foreign exchange. Agricultural economics deals with the demand and supply of agricultural products and of farmland, farm labor, and the other factors of production involved in agriculture.

What Went Wrong (and Right) with Conservative Philanthropy

Effective nonprofit giving on the Right means searching for the best balance between ideas, policies, and patience.