Here are some of the posts, on this blog, that I consider my best. These posts usually contain points I don’t find frequently emphasized elsewhere. This page is a work in progress,
Business Cycle Theory
⇝ “Austrian Business Cycle Theory: A Comment” (10 October 2012): This is a response to two criticisms posed by David Glasner.
⇝ “Conceptualizing Price Distortions” (21 May 2013): If prices are always in disequilibrium, how can we talk about price distortion? This post tries to argue why we should think in terms of random and non-random error.
⇝ “Dealing with the Evidence” (23 April 2013): The Great Recession sparked a lot of controversy concerning austerity versus fiscal stimulus. After four to five years, it appears as if austerity simply isn’t working. I argue that many of the empirical studies against austerity can be misleading, because a fall in government spending alone doesn’t decide the rate of recovery.
⇝ “Fiduciary Cycles” (14 May 2012): A reconciliation between Austrian business cycle theory and fractional reserve free banking.
⇝ “Freddie and the Crisis” (13 November 2012): Home financing government sponsored enterprises, such as Fannie Mae and Freddie Mac, had comparatively little to do with the financial crisis.
⇝ “Hayek–Mises Theory as a Demand-Side One” (2 February 2013): Oftentimes, Austrian business cycle theory is depicted as a supply-side theory. I argue that it is a demand-side theory, and that changes in demand lead changes on the supply side.
Monetary & Banking History
⇝ “Institutions, Gold, and Banking” (18 April 2013): This turned out to be a criticism of gold standard advocacy. The argument is that we have progressed beyond the use of gold as money, and once this transition from gold to paper is done gold no longer must necessarily be the backing asset. One major reason gold is held in high regard is its physical scarcity, but there are better institutions to constrain the money supply which can be developed through free banking.
⇝ “Investment’s Relationship with Investment” (23 March 2013): A relatively short post that makes a concise case as to why current consumption doesn’t influence the inducement to invest. All investment is future oriented, meaning that only expected future consumption matters.
⇝ “Keynes’ Monetary Glut” (14 March 2013): This is a quick distinction between Keynes’ business cycle theory and the theory of monetary gluts. While Keynes’ theory was loosely based on monetary disequilibrium, it was really much, much more than that. Further, a refutation of Keynes is not a refutation of monetary disequilibrium.
⇝ “Theory of Monetary Gluts” (21 January 2013): This is a, in my opinion, straightforward explanation of the theory of monetary disequilibrium, and why it’s correct.
⇝ “Alchian’s Calculation Problem” (9 September 2013): Armen Alchian and Harold Demsetz advanced a theory of the firm where the purpose was to monitor marginal productivity of inputs in group production, where the price system is not a useful indicator. This should be seen as an extension to Mises’ socialist calculation debate, and it ties it all in with comparative institutional analysis.
⇝ “How to Read ‘Market for Lemons’” (9 October 2013): A review of George Akerlof’s “The Market for Lemons” and what makes it interesting.
⇝ “The Case Against Anarchy” (25 March 2013): The title is strong, but the post is nuanced. My point is that advocating anarchism suffers from a lack of skepticism, and that we should be more open ended when assigning probabilities to future institutional outcomes.
⇝ “Cosmopolitanism and the State” (10 August 2013): The argument here is based on research on Catalán nationalism. The idea is that if people can switch between governing institutions, this creates a competitive dynamic.
⇝ “Democracy and Capitalism” (12 April 2013): I argue that democracy was vital for the development of capitalism, because capitalism thrives under pluralistic political institutions. Nevertheless, that democracy was an improvement over less pluralistic forms of governance — such as monarchy — doesn’t mean that political institutions can’t still be improved.
⇝ “Institutional Comparisons and Economic Growth” (20 January 2013): What if different institutions have different constraints, so that direct comparisons between institutions doesn’t tell us anything as to why one nation is poor and another well off?
⇝ “Immiserizing Free Trade” (17 April 2013): Can free trade hurt small countries? I argue, here, that sudden opening to international markets can cause a negative shock to small, relatively non-diversified economies. Whether this is a case against free trade, in these specific instances, is an open question. I posit that, perhaps, institutional development should precede sweeping economic reforms.
⇝ “Property or Knowledge Problem” (26 February 2013): While only a few paragraphs long, I show how Mises’ case against socialism was a knowledge problem, just like Hayek’s. The difference between the two is that Mises focused on price formation, while Hayek became more interested in institutional formation and spontaneous outcomes.
⇝ “Socialism Defined” (4 February 2013): The central point in this post is that we should drop the capitalism–socialism dichotomy, because what really matters is studying how society deals with the knowledge problem. The property rights approach defines one major institutional innovation to help alleviate issues of discoordination, but other institutions could emerge. In fact, organizations such as the firm, following Ronald H. Coase, are a form of coordination outside the pricing process.
Other Economics Topics
⇝ “Disasternomics” (5 November 2012): The economics of natural disasters and the difference between this and “creative destruction.”
⇝ “The Economics and Economy of Knowledge” (14 November 2013): Apart from a summary of how different economists think about the knowledge problem and the economics of knowledge, I make the point that differences are caused mainly by divergences in interpretation of the problem being solved.
⇝ “How to Think About Inequality” (29 March 2013): This is directed to libertarians and others who don’t like to talk about inequality because they staunchly hold to the premise that inequality is natural to our world. I suggest that not all inequality is explained by comparative advantages, and as economists we should be interested in explaining the world around us — even that which we are uncomfortable with.
⇝ “Quick Point on Intellectual Property” (6 April 2013): Is knowledge superabundant? I argue that we should be careful when distinguishing between non-rivalrous and non-scarce goods is the context of intangible assets. Should we reform current IP law? Absolutely. We should allow an opportunity for market solutions.
⇝ “Thoma, Meet Hayek” (19 June 2013): Do markets need to be perfectly competitive to work? No, perfect competition abstracts away from some of the most important aspects of the market process.
⇝ “Utilitarian Redistributionism” (28 June 2013): Some economists argue that we ought to redistribute income because the poor are more likely to garner greater utility from the redistributed wealth than the well off. If this latter condition is true, however, there is an opportunity from a gain from trade. Because the market does a better job at allocating resources, we should allow trade to happen, rather than forgo trade by redistributing the income through collective action.
⇝ “Epistemology of Rejection” (9 January 2013): I argue that Austrians should be more open minded and should accept that there is more to economics than what is taught in Rothbard, Mises, and Hayek. Further, I suggest that Austrians tend to prematurely dismiss things because they don’t think certain ideas fit their worldview.
⇝ “What is Limited Government?” (31 July 2013): When judging the benefits of government, do some libertarians suffer from a fatal conceit?
⇝ “Where is the Evidence?” (5 June 2013): Why hasn’t libertarianism been more widely implemented, and why have past historical approximations failed? I try to account for these shortcomings and argue for a forward-looking interpretation of libertarian political philosophy.