Gene Callahan breaks down social thought through the ages.
The auto industry’s success story since Obama’s union vote-buying bailout.
Debt: the first 500 pages. An economist from Australia reviews David Graeber.
Daniel Larison laments the terms of debate in regards to US foreign policy this election.
Economist Mark Perry has a great take on the current sluggishness of the jobs rate over at Carpe Diem. He brings our attention to the following graph:
His observations:
Most of the weakness in the U.S. labor market, the stubbornly high unemployment rate, and the slow rate of overall job creation can be traced to the ongoing decreases in government jobs, see chart above, especially at the local level […] Perhaps the significant downsizing of government at the state and local level is a positive development for the future growth of the U.S. economy, and one benefit of the Great Recession. But we should also pay some attention to the fact that one of the reasons for the disappointing monthly employment reports is the persistent weakness in the public sector employment, which is offsetting the relatively healthy increases in private sector hiring.
This is a damn good point: unemployment rates have remained high because of losses in the public sector, not the private sector (which has been steadily growing). As Dr. Perry observes, this is good for long-run growth, but I can’t help but lament the fact that cuts in government spending have not been deeper and more robust. Imagine what the economy would look like if if deep cuts had been made six years ago.
As always, it is important to look at what the graph does not tell us. The graph explains that government jobs have been decreasing, but tells us nothing about expenses for current and retired government employees. Federal and state employees have gained notoriety for their lavish retirement packages (especially in California!), and none of this is covered in the graph. Public sector pension reform is still a vital issue that needs to be solved.
One other lament that I feel I must make pertains to the bank and auto bailouts of 2008-09. Although the bailouts don’t have any casual correlation to the graph I reproduced, I don’t think it is hard to image, again, what the economy would look like today if there had been a rigorous separation between business and state.
Co-blogger Jacques Delacroix writes the following (in 1995!):
Organizational ecology is the other major open system school of thought. Organizational ecology (sometimes called “population ecology”) is built around the concept of structural inertia. In the ecological view, organizations in general have little latitude for effective structural change. Indeed, accoriding to some ecologists, important structural forms are often recipes for disaster and more likely lead to organizational demise than to organizational adaptation, as assumed by managerial schools of thought […] Continue reading
Political scientist Jacob Levy shares his thoughts on unions
Social liberalism and the drug war, in which Bill Clinton and the Left gets taken to task for its hypocrisy
Economist Steve Horwitz has a great lead-off in this month’s Cato Unbound. It’s all about the Austrian School of economics and its various detractors and factions. Some highlights:
Rather than being anti-empirical, modern Austrian economists are trying to open up the box of what counts as “empirical evidence” to include forms normally dismissed out of hand by the rest of the profession. Arguably, then, modern Austrians might well be more empirical than other economists, at least as judged by their professional work […]
Good economics for Austrians means sound arguments, not just valid ones. Too much of modern economics consists of valid reasoning from false premises about human action. The accuracy of those premises matter greatly for Austrians.
That is one reason why subjectivism is more important than praxeology for understanding Austrian applied research. Economics is radically subjectivist in the sense that human action depends upon the perceptions of the world held by the actor […]
Subjectivism also explains Austrian skepticism about statistical correlation being the privileged form of empirical evidence. It only provides correlation, and to provide causation requires a theoretical explanation. If such explanations must start with actors’ perceptions of the world, then forms of empirical evidence that capture such perceptions would be at least as useful. Austrians therefore frequently turn to primary source material and interview and survey work as well as quantitative data to tell a complete story of how a particular economic phenomenon came to be and functioned. How did actors perceive their options and constraints and what sorts of consequences emerged from their choices?
Dr. Horwitz goes on to give readers a brief list of introductory readings for those who are interested in the academic side of the Austrian School, rather than just the political and popular side. Highly recommended. You read the whole thing here.
Update: Longtime reader (and admin of NOL’s Facebook page) Hank points us to a rebuttal over at the Mises Institute’s blog. I didn’t find it convincing, but it’s still worth a look.
Thus Hayek’s 1940 contribution to the “Socialist Calculation” debate debunked the then-fashionable notion that master planners could achieve the economic nirvana of running a centralized economy in which they obtain whatever distribution of income they choose while simultaneously making sound allocations of both labor and capital, just like in Soviet Russia.
Hayek exposed this fool’s mission by stressing how no given individual or group could obtain and organize the needed information about supply and demand conditions throughout the economy. The virtue of the price system was its use of a common unit of measurement—money—to allow various actors to compete for a given resource without having to lay bare why they need any particular good or service. The seller need only accept the highest bid, without nosing around in other people’s business. The interaction between buyers and sellers allows for constant incremental adjustments of both price and quantity. Old information gets updated in a quick and reliable way, thereby eluding the administrative gauntlet of the socialist state.
This essay, which y’all should read, was sparked by the attacks on Rep. Paul Ryan’s supposed intellectual influences F.A. Hayek and Ayn Rand.
Over at the Real-World Economics blog, economist Edward Fullbrook presents a graph of labor’s demise in the United States as well as an article from Al-Jazeera English titled America in Denial that promotes Fullbrook’s new book.
Fullbrook brings it to the attention of work-weary Americans that they work far too many hours per year compared to other rich societies in the West (there are, of course, no rich societies outside of the West, but that’s a different blog for a different day).
Behold! The cold, hard facts informing American workers of their own oppression! Continue reading
I know the last thing everybody wants to hear is another political rant, but I’m going to give it to you anyway.
Has anybody noticed the recent slew of “fact-checking” sheets and reports that have come out since Paul Ryan’s VP speech at the GOP convention*?
Does it really come as a shock to people to find out that politicians lie? I can’t wait to see the other side come out with the same kinds of reports after Joe Biden and the current demagogue-in-chief give their speeches.
Politicians lie? Really? Who would’ve thunk…
Here’s my two cents: Democrats lie more often than Republicans. Hands down. There are always exceptions to the rules, and being more honest than the Democratic Party is not exactly a milestone achievement.
Many people said this race might be the most interesting in a while (thanks to the protection of free speech that Citizens United upheld), but Continue reading
The concept of economic reproduction is emphasized in the Marxian school of economic thought. In Marxist theory, the conditions for production are continuously re-created as a circular flow. The concept of the circular flow of both goods and of factor-inputs was first developed by the French economists of the 1700s, who called their theory of natural economic laws “Physiocracy.” The factors or categories of inputs are land, labor, and capital goods.
From co-editor Fred Foldvary. Do read the whole fascinating article. Many conservatives in the US (as well as libertarians) don’t give Karl Marx the time of day he deserves in order for thoughtful, polite discourse to take place. Many on the Right decry (and rightly so) the various strawmen that Leftists erect when attacking the proponents of private property, personal wealth and international trade, but are we any better when it comes to debunking Leftist arguments? Continue reading
These recent developments in labor relations show how changed market conditions offer welcome correctives to the New Deal approach. It is just these changes that are at risk under an Obama administration whose main agenda tracks Roosevelt’s early one: Vilify the rich as unproductive ciphers of society and work toward a progressive tax rate structure; be hostile toward the growth of international trade by denouncing firms that outsource jobs as the enemies of domestic labor; continue to work in favor of extensive agricultural subsidies for ethanol and other farm crops, no matter how great of a disruption these impose on domestic and foreign food markets; and insist upon a rich set of unsustainable healthcare benefits through Medicare and Medicaid.
This is from Richard Epstein. Okay, so Obama is a demagogue, a thief and a murderer. Is Mitt Romney really any better? Really?
I’m voting for Gary Johnson (if I vote at all).
Recently, I posted some musings on the writings of many libertarian intellectuals concerning world government. It is important to distinguish, really quickly and in blog form, that libertarians are internationalists, and internationalists are individualists. Indeed, the only logical conclusion of individualism is internationalism.
When libertarians speak of world government, though, we are not speaking of economic planning as has been undertaken by national governments (vigorously and largely unopposed) since the turn of the 20th century. Indeed, Hayek saw the problems we now see with supranational economic planning in his 1944 book The Road to Serfdom: Continue reading
Writes Minxin Pei:
The latest news from Beijing is indicative of Chinese weakness: a persistent slowdown of economic growth, a glut of unsold goods, rising bad bank loans, a bursting real estate bubble, and a vicious power struggle at the top, coupled with unending political scandals. Many factors that have powered China’s rise, such as the demographic dividend, disregard for the environment, supercheap labor, and virtually unlimited access to external markets, are either receding or disappearing.
Yet China’s declining fortunes have not registered with U.S. elites, let alone the American public.
Do read the rest of the article. I’ve said as much on this blog before, and there is certainly no reason to fear a rising Beijing. Nor is there a good reason to spend more money on East Asian “defense” projects or stifle growth at home by throwing up isolationist tariffs. (h/t Daniel Larison)
I’m going to begin some pretty intensive research and writing projects over the next month and a half, so you probably won’t hear from me much (keep the hooting and hollering to yourselves, please!).
A couple of quick items of blogging business:
One of our loyal readers, Hank Moore, has generously volunteered to become the administrator of our revamped Facebook page. You can check out what he has been doing here. Thank you so much Hank! Honorable men are hard to come by these days.
I’ve been listening to this one song over and over again for the past three weeks. Sometimes I’ll even listen to the rest of the album, too.
If you haven’t heard yet, the ‘Recommendations‘ section has been in a steady process of renovation since the blog launched, and now I like what I’m beginning to see. let us know what you think. I think it does a good job of flexing the intellectual firepower of the libertarian movement (broadly construed).
Have a great weekend everybody!
I was hoping somebody out there could answer for me. Why is Ludwig von Mises such a bad ass? From the foreign policy section of Liberalism:
The right of self-determination works to the advantage only of those who comprise the majority. In order to protect minorities as well, domestic measures are required, of which we shall first consider those involving the national policy in regard to education.
In most countries today school attendance, or at least private instruction, is compulsory. Parents are obliged to send their children to school for a certain number of years or, in lieu of this public instruction at school, to have them given equivalent instruction at home. It is pointless to go into the reasons that were advanced for and against compulsory education when the matter was still a live issue. They do not have the slightest relevance to the problem as it exists today. There is only one argument that has any bearing at all on this question, viz., that continued adherence to a policy of compulsory education is utterly incompatible with efforts to establish lasting peace.
The inhabitants of London, Paris, and Berlin will no doubt find such a statement completely incredible. What in the world does compulsory education have to do with war and peace? One must not, however, judge this question, as one does so many others, exclusively from the point of view of the peoples of Western Europe. In London, Paris, and Berlin, the problem of compulsory education is, to be sure, easily solved. In these cities no doubt can arise as to which language is to be used in giving instruction. The population that lives in these cities and sends its children to school may be considered, by and large, of homogeneous nationality. But even the non-English-speaking people who live in London find it in the obvious interest of their children that instruction is given in English and in no other language, and things are not different in Paris and Berlin.
However, the problem of compulsory education has an entirely different significance in those extensive areas in which peoples speaking different languages live together side by side and intermingled in polyglot confusion. Here the question of which language is to be made the basis of instruction assumes crucial importance. A decision one way or the other can, over the years, determine the nationality of a whole area. The school can alienate children from the nationality to which their parents belong and can be used as a means of oppressing whole nationalities. Whoever controls the schools has the power to injure other nationalities and to benefit his own.
I’m going to keep reading (you should too) and hopefully write up a little sum-sum about what I’ve learned soon.
I’ve been doing a little bit of side reading on capitalism and charity and I came across some of Ludwig von Mises’s writings on foreign policy. I’ll have a longer post on his foreign policy arguments in the future (promise!) but for now lemme just say it falls roughly in line with many other classical liberals.
One interesting tidbit about classical liberals like Mises, Hayek, and Adam Smith is that they were actually very much in favor of some kind of world governing body that would be able to standardize laws and further erode the arbitrary borders drawn up by statesmen over the course of centuries. However, they were much more realistic about the practicality of such an endeavor, as well as suspicious of other kinds of international government being espoused by various thinkers (in Smith’s time, this was done by despots and Popes [same thing!], and in Hayek’s and Mises’s time this was done by despots and socialists [again, same thing!]).
This realism should not be confused, though, with opposition to an international governing body charged with codifying a standard, minimum set of global laws concerning trade, private property, individual rights, and, of course, peace.
Again, I’ll have a longer post explaining the foreign policy arguments of classical liberals in the near future, but for now this juicy little tidbit is all I can offer y’all. You can find Mises’s musings on foreign policy in his book Liberalism (available to read for free at mises.org).
