Liberty Fund

American Polarization and Extremism Are Just a Return to Normalcy

For better or for worse, the increasing political polarization and extremism we see today is no more than a reversion to the American norm.

The Left’s Anti-Semitism Problem: A History

Organizers of the Women’s March on Washington hold disreputable views, but the marchers don’t seem to care.

Why Bill Barr is Trump’s Best Appointment

No cabinet official can get a President in more trouble faster than his Attorney General, and Trump has made the right choice with Bill Barr.

A Hearty Henderson Salute to John Bogle, by David Henderson

As is probably well-known by now, John Bogle, the man who started Vanguard Financial, died on Wednesday. He helped save millions of people like me thousands of dollars in fees. His basic insight was that it’s hard to beat the market and so the best idea is to have a broad portfolio of stocks that roughly matches the overall stock market. That means that you don’t have to hire high-priced stock pickers and you can pass the savings on to the investor. Much of my wife’s and my IRA savings are in the Vanguard Total Market Index and we are charged approximately 0.10 percent each year for Vanguard to manage our accounts. Some companies that hire stock pickers charge 1 percent or more. That difference over time doesn’t add up; it compounds up.

Novum Organum (Sir Francis Bacon)

Novum Organum, by Lord Bacon, ed. by Joseph Devey, M.A. (New York: P.F. Collier, 1902).

On Obamacare, Is Common Sense Really Judicial Activism?

Ironically, it was efforts to save the ACA that produced Judge O'Connor's conclusion that Obamacare could not stand.

Workplace Challenges, by David Henderson

One of the panelists, Susan Athey, a Stanford economist, said she had bought “khakis and loafers” to fit in with the men in the lunchroom of her first economics department, at the Massachusetts Institute of Technology. She did so even though the department was the “most supportive environment” she has encountered in her career.

“I spent all my time hoping that no one would remember I was female,” said Ms. Athey, a past winner of a prestigious award for young economists. “I didn’t want to remind people that I’m a sexual being.”

This is from Ben Casselman and Jim Tankersley, “Female Economists Push Their Field Toward a #MeToo Reckoning,” New York Times, January 10, 2019. By the way, she’s not just some economist. She’s a heavy hitter in the profession, having won the John Bates Clark Medal, which is arguably on a par with the Nobel Prize, in 2007.

I don’t know how to interpret these comments. Of course, I’m assuming that the two reporters are quoting Professor Athey correctly, and I’m assuming that their words “even though” reflect what Professor Athey said. Those assumptions could be wrong.

No exit?, by Scott Sumner

James Hamilton provided one of my all-time favorite quotations:

You could argue that if the Fed is doing its job properly, any recession should have been impossible to predict ahead of time.

In many cases, the disasters that strike us are unexpected.  The 1973 oil embargo.  The 9/11 attacks.  The Lehman moment.

Many of the disasters that are anticipated, somehow fail to arrive.  I recall a feeling in 2015 that China was sliding into recession.  I recall that many experts expected the Syriza government to take Greece out of the euro (dubbed “Grexit”)–thereby triggering a loss of confidence in other Mediterranean countries.  Often (but not always) these expected crises don’t materialize.

So what is the prospect for a hard Brexit?  On one level, it’s hard to see how this outcome can be avoided.  The votes for Theresa May’s soft Brexit option are simply not there.  Indeed she just suffered the worst defeat by a sitting government in UK parliamentary history, by a margin of 230 votes.  So what will happen?

Bureaucracy, Regulation, and the Unmanly Contempt for the Constitution

John Marini unmasks the century-long effort to undermine the Constitution's distribution of power.

Bloody Religion Versus Bloody Secularism

If we ask what was the greater source of violence in the 20th century, secularism has to trump religion every time.

Stephen Kotkin on Solzhenitsyn

This week, historian and author Stephen Kotkin of Princeton University and Stanford University’s Hoover Institution talks with EconTalk host Russ Roberts about the historical significance of the life and work of Aleksandr Solzhenitsyn on the occasion of the 100th anniversary of Solzhenitsyn’s birth.

In Finance, the Blind Spots Will Always Be With You

There are no financial philosopher-kings and there can never be any, in central banks or anywhere else.

The Theory of Moral Sentiments: Part II, Section I, Chapter III

That where there is no approbation of the conduct of the person who confers the benefit, there is little sympathy with the gratitude of him who receives it: and that, on the contrary, where there is no disapprobation of the motives of the person who does the mischief, there is no sort of sympathy with the resentment of him who suffers it

Principia mathematica (Latin ed.) (Sir Isaac Newton)

Sir Isaac Newton’s Principia, reprinted for Sir William Thomson LL.D. and Hugh Blackburn M.A. (Glasgow: James Macklehose, publisher to the Univeristy, 1871).

William Graham Sumner on the “do-nothing” state vs. ”the meddling” state (1888)

Dickinson, “Penman of the Revolution,” on Freedom of the Press

John Dickinson had a more expansive view of the right of free expression than his contemporary, the English legal authority William Blackstone.

Hobbes' Leviathan

In a mid-19th century edition of the Works of Thomas Hobbes is reprinted the famous Hobbes's best known work of political philosophy Leviathan in which the all-powerful absolute monarch is depicted with sword and sceptre overseeing his domain.

James Buchanan on chaining Leviathan (1975)

Reflections from my Panama Cruise, II, by Bryan Caplan

[For Part I, click here.]

Our ports were Falmouth (Jamaica), Cartagena (Colombia), Gatun Lake (Panama), Limón (Costa Rica), and Grand Cayman.  Reactions to each:

1. Falmouth had the most lavish port shopping area; I’d compare it to Reston, Virginia.  The area beyond, though thinly inhabited, was fairly poor, but with quite a few middle-class homes mixed in.  Our tour guide said that many Jamaicans spend years building their own homes so they can live rent-free (but not property-tax-free) for life.  The many promising but half-built homes I saw seemed to confirm this.  All this made me wonder: If the American poor were allowed to build rent-free shacks on public lands, how many would?

The Unbearable Lightness of Free Trade

We need to keep the true justifications for free trade in mind as we assess NAFTA.

The Works of Benjamin Franklin, Vol. I Autobiography, Letters and Misc. Writings 1725-1734 (Benjamin Franklin)

The Works of Benjamin Franklin, including the Private as well as the Official and Scientific Correspondence, together with the Unmutilated and Correct Version of the Autobiography, compiled and edited by John Bigelow (New York: G.P. Putnam’s Sons, 1904). The Federal Edition in 12 volumes. Vol. I (Autobiography, Letters and Misc. Writings 1725-1734).

Vera Smith: The Contrarian View

In 1936, seven years into the Great Depression, John Maynard Keynes’ General Theory of Employment, Interest, and Money was published. The culmination of Keynes’ theorizing in support of policies of manipulation of money and credit by the state in order to achieve macroeconomic equilibrium came with that book. A central bank, in that context, became the main instrument enabling governments to execute such policies.

With all that going on, what does London School of Economics student Vera Smith do? She writes a doctoral dissertation bringing irrefutable historical evidence contrary to the idea that the manipulation of money and credit is a “new” thing necessary to produce macroeconomic stability. That dissertation became the basis of The Rationale of Central Banking and the Free Banking Alternative,1 her book, also published in 1936.

Alexander Hamilton denounces the British for imposing "oppressive taxes" on the colonists which amount to tyranny, a form of slavery, and vassalage to the Empire (1774)

The efficiency of regulatory arbitrage

VLAD TARKO, ANDREW FARRANT PUBLIC CHOICE Abstract: Classic public choice skepticism about the regulatory state, based on theories of rent-seeking, rent extraction and regulatory capture, is based on the unrealistic, and usually unstated, assumption of a monopolist regulator. In practice, the regulatory state is polycentric, involving numerous quasi-independent agencies with overlapping responsibilities. This has led to […]

The Place of Language in Adam Smith's Economics

by Graham McAleer for AdamSmithWorks

Telecommunications

Telecommunications matters economically for two reasons. First, it plays a role perhaps second only to brain power in the operation and rapidly expanding productivity of the modern “information-based” economy; indeed, it supplies a primary technical means for productively harnessing the information and knowledge spread among individual economic actors throughout the global economic order. Second, the evolution of telecommunications from a “natural monopoly” to a more competitively structured industry has raised many challenging economic issues, the analysis and resolution of which are important in their own right and relevant to other sectors of the economy as well.

There’s No “There” Anymore … Only “Here” Information and communications technology plays an increasingly important role in the wealth of nations. Adam Smith’s theory of economic growth emphasized the “division of labor” (i.e., productive specialization), and he argued that growth through the division of labor was limited by “the extent of the market.” Thus, he favored extension of markets overseas and expansion of trade as practical methods of extending market boundaries, and thereby the scope available for further division of labor. Improvements in maritime navigation and the development of the steam engine and rail transport were important because they increased the size of economically relevant markets, thereby fostering greater productive specialization. Increases in market size also encourage economies of scale and scope and more intense competition among buyers and sellers.

Just as improvements in transportation during the Industrial Revolution expanded the breadth of markets, so also recent improvements in the availability of information and the ability to communicate are expanding markets by making buyers and sellers aware of each other. High-quality transportation and communications sometimes make physical distance irrelevant: a buyer and seller may be thousands of miles apart but still figuratively “next door” (see spatial economics).

Matthew McCaffrey, “Frank Fetter and the Austrian Tradition in the United States” (January, 2019)

Matthew McCaffrey, assistant professor of enterprise at the University of Manchester, explores the economic and political work of the "forgotten giant" of economics, the Indiana-born Frank Fetter. At the height of his career in the early 20th century, Fetter was one of the most respected, cited, and debated economists in the United States. He taught for over 40 years at prestigious universities, including Stanford, Cornell, and Princeton, and his research appeared in practically every major publication in economics and political science. yet today he is virtually forgotten outside a small group of Austrian economists. In his opening essay, McCaffrey explores two aspects of his thought in particular: his contributions to theoretical economics and their relationship to Austrian ideas, and his political views as they relate to the philosophy of classical liberalism. He is joined in the discussion by Geoffrey M. Hodgson, Research Professor of Business Studies in the University of Hertfordshire, Peter Lewin is Clinical Professor in the Jindal School of Management, University of Texas, Dallas, and Joseph T. Salerno, professor of economics in the Finance and Graduate Economics Department in the Lubin School of Business of Pace University in New York.

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Rousseau on the natural tendency of governments to degenerate into tyranny (1762)

Dialogues Concerning Two New Sciences (Galileo Galilei)

Dialogues Concerning Two New Sciences by Galileo Galilei. Translated from the Italian and Latin into English by Henry Crew and Alfonso de Salvio. With an Introduction by Antonio Favaro (New York: Macmillan, 1914).

Twenty-Five Years of NAFTA

A much-maligned trade pact that needed to be updated, NAFTA now faces an uncertain future.

Hobbes on Civil Association (Michael Oakeshott)

Hobbes on Civil Association consists of Oakeshott’s four principal essays on Hobbes and on the nature of civil association as civil association pertains to ordered liberty. The essays are “Introduction to Leviathan” (1946); “The Moral Life in the Writings of Thomas Hobbes” (1960); “Dr. Leo Strauss on Hobbes” (1937); and, “Leviathan : A Myth” (1947). The foreword remarks the place of these essays within Oakeshott’s entire corpus.