Liberty Fund

Living Well with Adam Smith

Ryan Hanley's Our Great Purpose gives the reader a taste of the depths of Smith’s thought as well as his words in an inviting style.

Lights Out

How the novels of Neal Stephenson illuminate the present and the future.

Susan Houseman on Manufacturing

Economist Susan Houseman of the Upjohn Institute for Employment Research talks about the manufacturing sector with EconTalk host Russ Roberts. Houseman argues that the data surrounding both manufacturing output and employment have been misunderstood and misinterpreted. In particular, she argues that conclusions about the growth of manufacturing are driven overwhelmingly by computer production while the […]

Will “soak the rich” make Democratic states feel blue?, by Scott Sumner

In the 2018 midterms, my congressional district in southern Orange County elected a Democrat named Katie Porter. Although she is quite progressive, she strongly opposes the new cap on deductions state and local taxes (SALT). Southern Orange County is mostly upper middle class, and this tax change hits our area harder than many other parts of the US.

Nonetheless, the cap on SALT deductions is a progressive provision in the tax code, with the higher tax burden falling overwhelmingly on the top quintile. It also makes the tax code more efficient.  As an aside, this was part of a GOP bill that also cut tax rates for affluent taxpayers. So the net effect of the tax bill was probably positive for my district.  It was certainly positive for me, and I’m a fairly typical resident.

At the national level, the Democrats are moving in a “soak the rich” direction, with both Sanders and (frontrunner) Warren proposing wealth taxes for the rich.  But how do the blue states feel about these ideas?

The Losing Winner and the Winning Loser of 1964

Goldwater believed in individuals. Johnson thought in electoral blocs. Goldwater swore by the Constitution, Johnson by the New Deal.

Liberty City, by David Henderson

DEKORNFELD: But nothing would prepare him [James Massey] for what he would find in Von Ormy because all those classes were about building city government. And in Von Ormy, the sole goal seemed to be the opposite.

This is from “The Liberty City,” episode 945 of Planet Money, October 18, 2019.

The whole thing is interesting and, at times, hilarious.

How Von Ormy, Texas started as a city:

DEKORNFELD: Art [Martinez de Vara] told people, look; San Antonio is a growing metropolis. And in the near future, they are going to try to annex us, and that will come with big city taxation. And you know what it won’t come with? Representation.

FOUNTAIN: Or, Mayor Art says, we could see the writing on the wall and come together and do this our own way.

DEKORNFELD: He says people were into it. So he circulated a petition, brought it to a county judge, and the judge ordered an election.

A Better Guide than Reason—Or Not?

In recovering tradition, how can the presuppositions of a believing culture apply to one bereft of belief?

Karl Marx and the close of his system, a criticism (Eugen von Böhm-Bawerk)

Karl Marx and the close of his system, a criticism. Translated by Alice M. Macdonald with a Preface by James Bonar (London: T. Fisher Unwin, 1898).

Anthony de Jasay asks whether states should be invented if they did not already exist (1985)

Getting Rich on Low Pay, by David Henderson

The key is high saving.

Here’s an amazing story about a worker on Wall Street making 40,000 a year and saving 10,500 a year in a 401(k) for 12 years. By the end, he was a millionaire.

Sam Dogen went to extremes to save that much money in such a short time. And I don’t condone his stealing food from his employer, although that “theft” [he puts it in quotation marks and so I don’t know if it was really theft] saved him only a small amount of money.

But what I always take from such stories is that if you really start to focus on what you spend and make some careful decisions, you can save a lot. Let’s say, for example, that you really do want your own room and you split a one-bedroom with a friend, paying 1,300 a month (remember that this was in 2000) rather than splitting a studio and paying 900 a month, your annual saving would have been about 4,500. (I’m also taking into account the reduced tax advantage from saving less in a 401(k)).

Here’s my version of what Sam did. Living in high-tax New York state in 1975-76 and making 20,000 gross at the University of Rochester over 12 months, I saved 9,300.

“Two Kaisers in the Same Grave”: Prohibition at 100

The centennial of Prohibition is an opportunity to retrace our steps and consider afresh the limits of politics.

Justifying Originalism

Originalism provides the surest way to access the Constitution's legal meaning and then to implement it over time.

An Inquiry into the Nature and Causes of the Wealth of Nations: Introduction and Plan of the Work

William Penn on property as one of the three fundamental rights all men have (1679)

Sportometrics

Until recently, economists who analyzed sports focused on such things as the antitrust exemption, the alleged cartel behavior of sports leagues, and the player draft (see sports). Sportometrics is different. It is the application of economic theories to the behavior of athletes to explain what they do and to see if what they do can help to explain the behavior of people in other professions and settings. Instead of being about the “economics of sports,” sportometrics introduces the idea of “sports as economics.”

In other words, sportometricians view sports as an economic environment in which athletes behave according to incentives and constraints. Economists have, for example, shown how incentives and costs can explain how much effort runners exert in a footrace (see Higgins and Tollison 1990; Maloney and McCormick 2000). Using data from sprint events of the modern Olympics from 1896 to 1980, Richard Higgins and Robert Tollison (1990) found that running times were faster when there were fewer contestants in a race. This makes sense. With fewer runners, each runner’s chance of winning is greater, and, therefore, each runner’s expected gain from putting out additional effort is greater. This cannot be attributed to decreased congestion: because each runner is given a lane, congestion does not diminish when the number of contestants falls.

Carlo Lottieri, "Exchanges, Claims, and Powers: About Bruno Leoni's Social Theory" (September, 2019)

In this discussion, Carlo Lottieri, Professor of Philosophy of Law at the University of Verona, argues that the main intellectual contribution of the Italian jurist Bruno Leoni (1913-1967) is usually connected to his analysis of the opposition between legislation and law, between the order built by lawmakers on one side and the set of norms defined by jurists (as in Roman jus civile) or courts (as in ancient English common law) on the other. But at the core of his analysis is what he wrote about individual claims: the idea that the legal order is the outcome of specific individual activity when people demand something from the other members of society. However, he argues, that two aspects of Leoni’s theory are quite problematic. First, a philosophy identifying law with the most common claims cancels the tension between legality and legitimacy, between what is and what should be. Second, from the perspective of a general theory of law, it seems reasonable that human coexistence can be better explained if we introduce something more demanding than simple exchange and at the same time something less demanding but no less important, namely the permanent presence of violent behavior. Carlo is joined in the discussion by Boudewijn Bouckaert, professor emeritus of the Ghent University Law School in Belgium; Peter T. Leeson, the Duncan Black Professor of Economics and Law at George Mason University; and Edward Peter Stringham, the Davis Professor of Economic Organizations and Innovation at Trinity College.

Fugitive Essays: Selected Writings of Frank Chodorov (Frank Chodorov)

A collection of Chodorov’s essays selected from The Freeman and Human Events and other publications.

Jacques Maritain on the dynamism of freedom (1938)

James Harrington, “The Commonwealth of Oceana” (1656) (James Harrington)

The Best of the OLL No. 54: James Harrington, “The Commonwealth of Oceana” (1656) (Indianapolis: Liberty Fund, 2013).

Washington and Napoleon in their Study

There are some striking parallels in the lives of George Washington (1732-1799) and Napoléon Bonaparte (1769-1821): both were military leaders who helped their countries during a revolution and both came to power as head of a republic which had shaken off the shackles of monarchy. But whereas Washington was content to return to civilian life and promote the development of the new republican institutions of the U.S., Napoleon sought to centralize power in his own hands as First Consul and then as a self-crowned Emperor of the French. The former remained a staunch republican whilst the latter turned into a military tyrant. Washington in his "Farewell Address" of 1796 warned of the dangers to the new republic of trying to behave like a traditional European power with "entangling alliances" which would suck it into wars and international conflicts. Napoleon on the other hand sought to use military force to "free" Europe from "feudalism," from Spain in the west to Russia in the east. Possibly by the time the portrait of Napoleon was painted (some 8 years after the events depicted in the painting took place) he sensed that his imperial ambitions might lead to naught and that his most enduring legacy would be the legal reform he introduced with the Civil Code.

Scarcity

Introduction

In economics, scarcity refers to limitations–limited goods or services, limited time, or limited abilities to achieve the desired ends. Life would be so much easier if everything were free! Why can’t I get what I want when I want it? Why does everything cost so much and take so much effort? Can’t the government, or at least the college or local town, or if not that, my parents just give it to me–or at least make a law so that if I want to buy pizza, there is a pizza shop nearby that has to sell me pizza at a dollar a slice?

That you can’t have everything you want the moment you want it is a fact of life. Figuring out how individuals, families, communities, and countries might best handle this to their benefit is fundamental to what economics is about.

You are probably used to thinking of natural resources such as titanium, oil, coal, gold, and diamonds as scarce. In fact, they are sometimes called “scarce resources” just to re-emphasize their limited availability. Everyone agrees natural resources are scarce because they take a lot of effort, money, time, or other resources to get, or because there seems to be a finite amount available.

Ideen zu einem Versuch, die Gränzen der Wirksamkeit des Staates zu bestimmen (Wilhelm von Humboldt)

Ideen zu einem Versuch, die Gränzen der Wirksamkeit des Staates zu bestimmen. Einleitung von Dr. Eduard Cauer. (Breslau: Eduard Trewendt, 1851).