Liberty Fund

Independent Agencies Brought to Heel?

Originalism sits uneasily with the concept of independent agencies, and textualism raises questions about the basis for some agencies' independence.

Richard Robb on Willful

Economist, author, and investor Richard Robb talks about his book Willful with EconTalk host Russ Roberts. Robb is interested in what motivates and explains the choices we make. He explores alternatives to the optimizing model of economics including what he calls “for-itself” behavior–behavior that isn’t purposive. Topics discussed in this wide-ranging conversation include the nature […]

Overcoming the Evils of Meritocracy

Markovits alternates between acknowledging the opportunity for advancement for all and claiming that the system enables only “the rich” to win.

Market-Driven Health Care Is Worth the Effort

While challenging politically, the payoff—better medical care at much lower costs—is too substantial to abandon for a lower-performing alternative.

Fiscal stimulus doesn’t require big government or budget deficits

In the Keynesian model, fiscal stimulus is measured by the change in the size of the budget deficit, or perhaps the change in the cyclically adjusted budget deficit. In that model, a shrinking budget surplus is every bit as expansionary as an increasing budget deficit.  Because it has nothing to do with “big government”, Keynesianism is neither “liberal” nor “conservative”.

Hong Kong provides an interesting example.  A recent Bloomberg article shows the expected effect of a recent decision to give each adult citizen a 10,000 (HK) cash payment. That’s about 1284 US dollars, and thus is somewhat larger than the (ineffective) Bush tax cut of 2008.

Hong Kong had no budget deficits during 2005-19.  Notice that the budget surplus shrank dramatically during the recession of 2009, by roughly 6% or 7% of GDP.  That’s comparable (as a share of GDP), to the change in the US budget deficit between 2008 and 2009.  Thus fiscal stimulus doesn’t require either “big government” or budget deficits.  Indeed, Hong Kong had neither in 2009.  This is why even relatively conservative economists (like Greg Mankiw) can be Keynesians.

Three Cheers for the Coronavirus

I don’t propose to cheer for the death, financial loss, or other impairment of anybody (sorry if I weep less for rulers), but I do find a silver lining in three benefits of the current Covid-19 epidemic or pandemic. These benefits are not net benefits and certainly not net benefits for everybody: only public goods, by definition, provide net benefits to everybody.

First, the epidemic illustrates the benefits of free speech, even for a tyrant such as president Xi Jinping and the Chinese state. The Economist published an obituary of Li Wenliang, the Wuhan ophthalmologist who tried to alert people to the new epidemic and later caught the virus and died (“Li Wenliang Died on February 7th,” February 13, 2020). It is worth reflecting on what happened just before he became ill:

[On] January 3rd he was summoned to the police station. There he was accused of spreading rumours and subverting the social order. He then had to give written answers to two questions: in future, could he stop his illegal activities? “I can,” he wrote, and put his thumbprint, in red ink, on his answer. Did he understand that if he went on, he would be punished under the law? “I understand,” he wrote, and supplied another thumbprint.

Adam J. Macleod, "Bagehot and the Causes of Our Crises" [January 2020]

In this edition of Liberty Matters, Adam MacLeod, Professor of Law at Faulkner University, Jones School of Law, considers the English constitution of Walter Bagehot. Bagehot’s constitutionalism is not just a theory of institutions. It is far more radical. It concerns what it means to be human. At stake is the question whether a people can govern themselves or instead must be ruled by their intellectual superiors. Bagehot’s constitutional anthropology matters because Bagehot’s constitutionalism is now our constitutionalism. The ascendance of the administrative state, rule-making and adjudication predicated on expert insights, legal positivism and judicial supremacy, and many other features of American constitutionalism that are now taken for granted in our law schools, policy schools, and bar associations are rooted ultimately in the concept of human nature that Bagehot articulated.

The Theory of Moral Sentiments: Part V, Chapter II

Of the Influence of Custom and Fashion upon Moral Sentiments

Environmental Quality

There are many different measures of environmental quality, and most of those in use show that environmental quality is improving. For example, from 1970 to 2000, concentrations of carbon monoxide, a pollutant, fell by 75 percent in the United States and by 95 percent in the United Kingdom. From 1975 to 2000, nitrogen oxides declined by 35 percent in the United States and by 40 percent in the United Kingdom. The percentage of beaches in Denmark not complying with local or European Union regulations fell from 14 percent in 1980 to approximately 1 percent by 2000. Between 1969 and 1994, DDT and PCB contamination of fish fell by more than 80 percent. Indeed, it is difficult to find measures indicating that environmental quality is deteriorating in countries enjoying relatively high incomes.

The Present Age (Robert A. Nisbet)

Nisbet examines the role of the United States in the world since World War I focusing on the threats that the unprecedented militarization of American life in the decades after 1914, bureaucracy, centralization, and creeping conformity pose to liberty and individual independence in the western world.

Friedman, Heller, and the Audience

Here’s an interesting discussion between Keynesian Walter Heller and monetarist Milton Friedman in 1978. It was one of the early productions of Bob Chitester who, in the next year, put together the famous PBS series “Free to Choose.” The moderator, Marina von Neumman Whitman, does a good job. I found her more impressive on this show than I did when she was one of my bosses at the Council of Economic Advisers in 1973, when I was a summer intern.

Some highlights:

27:45: Heller criticizes the minimum wage, which was then 2.65 an hour.

34:40: A young audience member Laura Tyson, later the chair of the Council of Economic Advisers under Bill Clinton, asks a question from the audience.

45:30: Heller says “Milton’s quite right.”

46:20: Heller calls for taxes on pollution rather than regulation, and Friedman agrees. Then Marina makes a great point about valuing human life. (She does get the “dismal science” point wrong, but the reality is that we didn’t know at the time the source of that term.)

53:20: Marina really nicely addresses the “you’ve got the statistics but what about real people?” charge that economists often get. Indeed, I think her answer, including her example, is one of the nicest statements I’ve seen on this.

There’s a point in the discussion, but I forgot to write down the time, at which Heller notes a discussion with a smaller group years earlier where he and Friedman agreed on a number of policy issues.

By the way, as I document in this entry in The Concise Encyclopedia of Economics, Heller wrote some great analysis of the German economic miracle in the late 1940s. Here’s the bio of Heller in the Encyclopedia. He died way too soon.

Also, here’s an earlier post that contains some fond reminiscences of Heller, whom I never met but talked to on the phone and found to be a real gentleman. My reminiscences of Milton Friedman are too numerous to list. Here’s what I got with a search.

Note: The picture above is of Friedman and Heller at their 1968 debate, not one of them in the 1978 video.

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