The Homo Economicus is “The Body” of the Agent

The model of the decision-making agent known as homo economicus is a trivial truth, but not a misconception. All agents are supposed to maximize the utility of their resources – that is true in every geography and in every age. But because it is a tautology, it is a mistake to give to the deductions … Continue reading The Homo Economicus is “The Body” of the Agent

Liberal Democracies and Authoritarian Regimes: The Case for Law Enforcement. (Part 3 of 12)

This reference to the distinction of values ​​between the short and the long term also refers to the theory of capital and interest that Eugen v. Böhm-Bawerk and Austrian and Swedish economists who followed him in such developments, such as Ludwig v. Mises, Knut Wicksell, the already named Friedrich Hayek, Ludwig Lachmann, or the British … Continue reading Liberal Democracies and Authoritarian Regimes: The Case for Law Enforcement. (Part 3 of 12)

Efficient markets as normative systems

Recently, I came across this outstanding interview with Eugene Fama published by The Market / NZZ. Besides the main subject discussed -the inability of central banks to control inflation-, the interview is intertwined with gripping assertions about the limits of knowledge, such as the following ones: Bubbles are things people see in hindsight. They don’t … Continue reading Efficient markets as normative systems

Discovery Processes

A good friend of mine encouraged me to read this note published by James Jay Carafano, Vice President of The Heritage Foundation. Despite being as compelling as it is well intentioned, the article misses to mention one of the main arguments for free markets: what once Friedrich Hayek described as “the competition as a discovery … Continue reading Discovery Processes

Institutions, Machines, and Complex Orders (Part 3): Evolutionary drift

The affirmation that one should not judge the historical past with current values ​​forms a topic as widespread as the disobedience to it. However, a conscious exercise of the evaluative critique of the past allows us to identify continuities and disruptions in institutional patterns, i.e., in systems of incentives that are considered legitimate, whether by … Continue reading Institutions, Machines, and Complex Orders (Part 3): Evolutionary drift

Three Lessons on Institutions and Incentives (Part 3): Innovation means creative destruction

The concept of creative destruction was popularised by Joseph Schumpeter and assumes that the economy is in a equilibrium. The “entrepreneur,” therefore, is an unbalancing factor that, through innovation, displaces the winners of the prevailing situation until then, generating a new equilibrium. This notion was criticized by other economists such as Friedrich Hayek and Israel … Continue reading Three Lessons on Institutions and Incentives (Part 3): Innovation means creative destruction

Three Lessons on Institutions and Incentives (Part 2); Institutions: definition and subtypes

Implicitly, Douglass C. North, William Easterly, and Daron Acemoglu & James A. Robinson share the same notion of “institution.” In this respect, what must be taken into account is not a real definition of the former but its operative concept, that is, what characteristic features relate it to the rest of the concepts of each … Continue reading Three Lessons on Institutions and Incentives (Part 2); Institutions: definition and subtypes

What if we have already been ruled by an Intelligent Machine – and we are better off being so?

Common people and even reputed scientists, such as Stephen Hawking, have been worrying about the very menace of machines provided with Artificial Intelligence that could rule the whole human genre in detriment of our liberty and welfare. This fear has two inner components: the first one, that the Artificial Intelligence will outshine human intellectual capabilities; … Continue reading What if we have already been ruled by an Intelligent Machine – and we are better off being so?

Freedom of Conscience and the Rule of Law

Of course the concept of “freedom of conscience” was forged in Europe by Spinoza, Locke, Voltaire, John Stuart Mill, and many other philosophers. But the freedom of conscience as an individual right that belongs to set of characteristics which defines the rule of law is an American innovation, which later spread to Latin America and … Continue reading Freedom of Conscience and the Rule of Law