New issue of Econ Journal Watch is out!

For those of you who don’t already know, Warren is the math reader for EJW and one of NOL‘s co-founders, Fred Foldvary, is an editor for the journal, so this is very much a family affair. Here are some of the articles that caught my eye:

You get what you measure: Daniel Schwekendiek explains how South Korea followed a proven template of incentivizing exports to boost Web of Science publications and raise the rankings of its academic institutions.

Now entering a Republican-free zone: Mitchell Langbert, Anthony J. Quain, and Daniel Klein report on the voter registration of faculty at 40 leading U.S. universities in Economics, History, Journalism, Law, and Psychology.

Whither science in gender sociology? Charlotta Stern investigates whether gender sociologists blinker themselves from scientific findings about sex differences.

How to Do Well by Doing Good! In this 1984 essay, Gordon Tullock counsels young economists that doing well and doing good go together.

You can download and read the whole thing here (pdf).

From the Comments: Why care about Syrians?

Dr Gibson notes:

I’d say the “big question” makes no sense. Surely some Syrians would be better off under ISIS and some under Assad.

And there’s a bigger question: who the hell cares? Few if any of us Americans have enough information to judge this issue nor should we. We have our own fish to fry. The Washington politicians have done incalculable damage with their ceaseless meddling in the affairs of the Middle East and elsewhere. Let the Syrians and their immediate neighbors sort this out.

I wanted to draw this excellent comment out for two reasons. Reason number one has to do with Dr Gibson’s first paragraph. Questions rarely make sense (which is why you ask people for help), but suppose you asked whether Syrians would be better off under capitalism or socialism. Some Syrians would be better off under socialism than capitalism, but that doesn’t mean it’s just as good as capitalism. Right? One of those systems is better for far more people than the other, and as an individual don’t you have a moral duty to support the more just system in some form or other? These are questions that libertarians, especially libertarians in the United States, should be asking themselves more often than not. There is a disturbing tendency among this faction of libertarians to lean in the direction of nationalist parochialism when it comes to matters outside of our borders. This brings me to reason number two for highlighting Dr Gibson’s (quite excellent) comment: Reminding libertarians and classical liberals that our creed is an international (and a humble) one.

War refugees represent the humblest of our species. The UN estimates that the war has affected nearly 12 million Syrians so far and, of course, that doesn’t include all of the people outside of Syria’s borders who have been affected. Russians, Europeans, North Americans, Syria’s immediate neighbors, and East Africans have all been affected by the ongoing war. How could you not be interested, especially from an individualist point of view?

I think the problem of the American libertarian’s parochialist nationalism stems from Murray Rothbard’s Cold War-era writings. Unlike F.A. Hayek and Ludwig von Mises, who were both big supporters of more international cooperation (but who both saw the glaring flaws in organizations like the UN and what is now the EU), Rothbard’s writings on foreign affairs were heavily influenced by the fact that the world was dominated by two superpowers and that the government he lived under used lies and deceit to counter Moscow’s power plays. Rothbard’s world of bi-polar geopolitics is long gone. It doesn’t exist. It will not exist again in my lifetime. Ours is a world of multipolarity. Yet somehow Rothbard’s writings on foreign affairs (which descended into outright incoherence near the end of his life) still have a profound impact on the American libertarian movement.

Much of my work here at NOL is dedicated to eviscerating this long-expired mindset from the American libertarian movement. Isolationism is nationalist, plain and simple (just pay attention to the rhetoric of libertarians like Justin Raimondo or Doug Bandow if you need more convincing), but Warren’s point about Washington’s meddling in the affairs of other states remains pertinent. So perhaps a different question to ask (even if it doesn’t make sense) is what a more internationalist-minded, in the vein of Hayek and Mises and Adam Smith, US foreign policy would look like. (I’ve been asking this question for a while now.)

New issues of Econ Journal Watch, Reason Papers out

Many of you already know that two of NOL‘s Senior Editors are associated with Econ Journal Watch, thus making its publication a family affair. Fred is on the editorial board and Warren is its math reader. Here are some of the highlights I found worth noting in the latest issue:

Eli Heckscher’s Ideological Migration Toward Market Liberalism: Benny Carlson explores the intellectual evolution of a great Swedish economist.

Classical Liberalism in Econ, by Country: Authors from around the world tell us about their country’s culture of political economy, in particular the vitality of liberalism in the original political sense, historically and currently, with special attention to professional economics as practiced in academia, think tanks, and intellectual networks.

New contributions:

Young Back Choi and Yong Yoon: Liberalism in Korea

Pavel Kuchař: Liberalism in Mexican Economic Thought, Past and Present

(All of the papers from this symposium, which has carried across multiple issues of EJW, are collected at this page.)

You can download the whole issue here (pdf).

Dr Khawaja, an Editor-at-Large for Reason Papersreports (2/2/16) on the latest issue over at Policy of Truth:

The latest issue of Reason Papers, vol. 37, number 2 is now out; officially, it’s the Fall 2015 issue, but we only just managed to put it up on the website last night. This link will take you to a monster-size PDF to the whole issue (almost 250 pages). This link will take you to the journal’s Archive page, where you can access individual articles for this or any past issue (you have to scroll down a bit). Finally, this link will take you to three (time sensitive) Calls for Papers issued by the journal’s editors: one on “the philosophy of play” (March 1, 2016); one a fifteen-year retrospective on 9/11 (July 1, 2016); and one an Authors-Meet-Critics symposium on Douglas Den Uyl and Douglas Rasmussen’s forthcoming book The Perfectionist Turn: From Meta-Norms to Meta-Ethics (February 1, 2017).

My own small contribution to Reason Papers can be found here (pdf).

Fretting over Christmas gifts?

Fret no longer! Dr Amburgey smugly reports:

My daughter is a political science major at Queen’s University. She’s putting together her applications for grad school right now [she’s interested in political theory]. Last summer she went to a Libertarian student conference in Montreal [I enthusiastically funded her travel]. At any rate I was doing my annual struggle to come up with good Christmas presents when a visual cue from NOL made the proverbial light bulb light up. She will be tickled when she discovers that Santa Claus gave her a copy of Degrees of Freedom: Liberal Political Philosophy and Ideology by Edwin van de Haar. 😀

I hope I don’t spoil anything here! If political philosophy isn’t your target’s cup of tea, there are plenty of other books by the Notewriters to check out in the book pile to your right (Dr Gibson’s new book comes out in January, but that’s no excuse not to pre-order it now!).

I realize, too, that there’s a way to work with amazon so that when you buy a Notewriter’s book from an NOL account a portion of the money goes back to us (meaning me), or something like that, but I’m lazy and this is a labor of love. Lazy love is the best kind of love.

Happy Holidays.

*The World’s Your Stage* New book by our own Warren Gibson!

The subtitle is How Performing Artists Can Make a Living While Still Doing What They Love.

Here is the link to amazon. You can also find it in the book pile to your right. Hopefully Dr Gibson will be able to blog a bit about the book in the next few weeks or so…

New issue of Econ Journal Watch is out

For those of you just tuning in to NOL, Fred is an editor for the journal, and Warren is its math reader.

Evolution, moral sentiments, and the welfare state: Many now maintain that multilevel selection created a sympathetic species with yearnings for social solidarity. Several evolutionary authors on the political left suggest that collectivist politics is an appropriate way to meet that yearning. Harrison Searles agrees on evolution and human nature, but faults them for neglecting Hayek’s charge of atavism: The modern polity and the ancestral band are worlds apart, rendering collectivist politics inappropriate and misguided. David Sloan Wilson, Robert Kadar, and Steve Roth respond, suggesting that new evolutionary paradigms promise to transcend old ideological categories.

Evidence of no problem, or a problem of no evidence? In 2009, Laura Langbein and Mark Yost published an empirical study of the relationship between same-sex marriage and social outcomes. Here Douglas Allen and Joseph Price replicate their investigation, insisting that conceptual problems and a lack of empirical power undermine any claim of evidence on outcomes. Langbein and Yost reply.

The progress of replication in economics: Maren Duvendack, Richard W. Palmer-Jones, and W. Robert Reed investigate all Web of Science-indexed economics journals with regard to matters concerning replication of research, including provision of the data and code necessary to make articles replicable and editorial openness to publishing replication studies. They explain the value of replication as well as the challenges, describe its history in economics, and report the results of their investigation, which included corresponding with journal editors.

A Beginner’s Guide to Esoteric Reading: Arthur Melzer describes techniques and devices used in esoteric writing.

Classical Liberalism in Econ, by Country (Part I): Authors from around the world tell us about their country’s culture of political economy, in particular the vitality of liberalism in the original political sense, historically and currently, with special attention to professional economics as practiced in academia, think tanks, and intellectual networks.

Chris Berg: Classical Liberalism in Australian Economics

Fernando Hernández Fradejas: Liberal Economics in Spain

Mateusz Machaj: Liberal Economics in Poland

Patrick Mardini: The Endangered Classical Liberal Tradition in Lebanon: A General Description and Survey Results

Miroslav Prokopijević and Slaviša Tasić: Classical Liberal Economics in the Ex-Yugoslav Nations

Josef Šíma and Tomáš Nikodým: Classical Liberalism in the Czech Republic

All the links are pdfs. The website is here.

A Humble Creed

I’m talking about substance, not style. Regrettably, someone could display arrogance while insisting that neither he nor anyone else could possibly know enough to plan other people’s lives. However off-putting that style, it does not change the fact that the position embodies a fundamental humility. There are inherent limits to any individual’s knowledge, and therefore government social engineering, which requires the use of aggressive force, must fail.

To put it succinctly, libertarianism has humility baked in at the most fundamental level.

Humility is not to be conflated with radical doubt, however. One can be humble while also believing it is possible to know things. And some things, including the nature and market implications of human action, can be known conceptually. One can know, for example, that intelligently planning an economy or even a particular market is beyond anyone’s, including one’s own, capacities.

This is from the one and only Sheldon Richman, writing for the FFF. Check out the rest. (h/t Warren G)

NOL‘s own tagline, “Spontaneous thoughts on a humble creed,” comes from this same recognition. I first came across the argument that libertarianism is a “humble creed” in F.A. Hayek’s The Constitution of Liberty. Hayek’s simple but hard-to-see point was what sold me on libertarianism actually.

New Issue of Econ Journal Watch: Economists on the Welfare State and the Regulatory State: Why Don’t Any Argue in Favor of One and Against the Other?

For those of you who don’t know Fred is an Editor for the Journal and Warren is its math reader, so this occasion is very much a family affair. Here is the low-down:

Economists on the Welfare State and the Regulatory State: Why Don’t Any Argue in Favor of One and Against the Other?

The symposium Prologue suggests that among economists in the United States, on matters of the welfare state and the regulatory state, virtually none favors one while opposing the other. Such pattern is a common and intuitive impression, and is supported by scatterplots of survey data. But what explains the pattern? Why don’t some economists favor one and oppose the other?

Contributors address those questions:

Dean Baker: Do Welfare State Liberals Also Love Regulation?

Andreas Bergh: Yes, There Are Hayekian Welfare States (At Least in Theory)

Marjorie Griffin Cohen: The Strange Career of Regulation in the Welfare State

Robert Higgs: Two Ideological Ships Passing in the Night

Arnold Kling: Differences in Opinion Among Economists About Government and Market Efficiency

Anthony Randazzo and Jonathan Haidt: The Moral Narratives of Economists

Scott Sumner: Moral Differences in Economics: Why Is the Left-Right Divide Widening?

Cass Sunstein: Unhelpful Abstractions and the Standard View

There is a lot more here. You can find Econ Journal Watch‘s home page here, on our ‘Recommendations’ page.

New issue of Econ Journal Watch is out

You can find it here, and here is the summary:

One Swallow Doesn’t Make a Summer: In a 2014 AER article, Zacharias Maniadis, Fabio Tufano, and John List grapple with the problem of the credibility of empirical results by presenting a framework for statistical inference. Here Mitesh Kataria discusses some of the assumptions and restrictions of their framework and simulation, suggesting that their results do not, in fact, allow for general recommendations about which inference approach is most appropriate. Maniadis, Tufano, and List reply to Kataria.

Should the modernization hypothesis survive the research of Daron Acemoglu, Simon Johnson, James Robinson, and Pierre Yared? New evidence and analysis is provided by Hugo Faria, Hugo Montesinos-Yufa, and Daniel Morales, supporting the hypothesis that there is a long-run positive relation between socio-economic development and political democracy.

Ill-Conceived, Even If Competently Administered: In a 2013 JEP article, Stuart Graham and Saurabh Vishnubhakat argue that the Patent and Trademark Office (PTO) is doing a good job of interpreting patent law, and suggest that the “smart phone wars” and related disputes are not evidence that the patent system is broken. Here Shawn Miller and Alexander Tabarrok argue that the main problem is not with the PTO but with patent law as it has been applied, particularly to software, resulting in patents that are overly broad and ambiguous, and hence vexing and stifling.

Ragnar Frisch and NorwayArild Sæther and Ib Eriksen contend that for several decades bad policy derived in part from the climate of opinion among the country’s eminent economists.

The ideological evolution of Milton FriedmanLanny Ebenstein explores developments in Friedman’s thinking, particularly after the mid-1950s.

EJW AudioLanny Ebenstein on Milton Friedman’s Ideological Evolution

I might add that notewriter Fred Foldvary is an Editor for the journal, and notewriter Warren Gibson is its math reader, so give the newest issue some family love!

From the Comments: Populism, Big Banks and the Tyranny of Ambiguity

Andrew takes time to elaborate upon his support for Senator Elizabeth Warren, a Native American law professor from Harvard who often pines for the “little guy” in public forums. I loathe populism/fascism precisely because it is short on specifics and very, very long on generalities and emotional appeal. This ambiguity is precisely why fascist/populist movements lead societies down the road to cultural, economic and political stagnation. Andrew begins his defense of populism/fascism with this:

For example, I still have more trust in Warren than in almost anyone else in Congress to hold banks accountable to the rule of law.

Banks have been following the rule of law. This is the problem libertarians have been trying to point out for hundreds of years. See Dr Gibson on bank regulations and Dr Gibson again, along with Dr Foldvaryon alternatives. This is why you see so few bankers in jail. Libertarians point to institutional barriers that are put in place by legislators at the behest of a myriad of lobbying groups. Populists/fascists decry the results of the legislation and seek a faction to blame.

If you wanted to be thought of as an open-minded, fairly intelligent individual, which framework would you present to those who you wished to impress: the institutional one that libertarians identify as the culprit for the 2008 financial crisis or the ambiguous one that the populists wield?

And populism=fascism=nationalism is a daft oversimplification. I’ll grant that there’s often overlap between the three, but it’s far from total or inevitable overlap. Populists target their own countries’ elites all the time.

Sometimes oversimplification is a good thing, especially if it helps to clarify something (see, for example, Dr Delacroix’s work on free trade and the Law of Comparative Advantage). One of the hallmarks of fascism is its anti-elitism. Fascists tend to target elites in their own countries because they are a) easy and highly visible targets, b) usually employed in professions that require a great amount of technical know-how or traditional education and c) very open to foreign cultures and as such are often perceived as being connected to elites of foreign societies.

The anti-elitism of fascists/populists is something that libertarians don’t think about enough. Anti-elitism is by its very nature anti-individualistic, anti-education and anti-cooperative. You can tell it is all of these “antis” not because of the historical results that populism/fascism has bred, but because of its ambiguous arguments. Ambiguity, of course, is a populist’s greatest weapon. There is never any substance to be found in the arguments of the populist. No details. No clarity. Only easily identifiable problems (at best) or ad hominem attacks (at worst). Senator Warren is telling in this regard. She is known for her very public attacks on banks and the rich, but when pressed for details she never elaborates. And why should she? To do so would expose her public attacks to argument. It would create a spectacle out of the sacred. For example, Andrew writes:

Still, I’d rather have people like Warren establish a fuzzy and imperfect starting point for reform than let courtiers to the wealthy and affluent dictate policy because there’s no remotely viable counterpoint to their stances […] These doctrinaire free-market orthodoxies are where the libertarian movement loses me. There are just too many untrustworthy characters attached to that ship for me to jump on board.

Ambiguity is a better alternative than plainly stated and publicly published goals simply because there are “untrustworthy characters” associated with the latter? Why not seek plainly stated and publicly published alternatives rather than “fuzzy and imperfect starting points for reform”?

Andrew quotes a man in the street that happens to be made entirely of straw:

“Social Security has gone into the red, but instead of increasing the contribution ceiling and thoughtfully trimming benefits, let’s privatize the whole thing and encourage people to invest in my company’s private retirement accounts.”

Does the libertarian really argue that phasing out a government program implemented in the 1930s is good because it would force people to invest in his company’s private retirement accounts? I’ve never heard of such an example, but I may just be reading all the wrong stuff. Andrew could prove me wrong with a lead or two. There is more:

This ilk of concern trolls (think Megan McArdle: somewhat different emphasis, same general worldview) is one that I find thoroughly disgusting and untrustworthy and that I want absolutely no part in engaging in civil debate. Their positions are just too corrupt and outlandish to dignify with direct responses; I consider it better to marginalize them and instead engage adversaries who aren’t pushing the Overton Window to extremes that I consider bizarre and self-serving. They’re often operating from premises that a supermajority of Americans would find absurd or unconscionable, so I see no point to inviting shills and nutters into a debate […].

Megan McArdle is so “disgusting and untrustworthy” that her arguments are not even worth discussing? Her name is worth bringing up, of course, but her arguments are not? Ambiguity is the weapon of the majority’s tyranny, and our readers deserve better. They are not idiots (our readership is still too small!), and I think they deserve an explanation for why McArdle is not worthy of their time (aside from being a shill for the rich, of course).

I think populism/fascism is often attractive to dissatisfied and otherwise intelligent individuals largely because its ambiguous nature seems to provide people with answers to tough questions that they cannot (or will not) answer themselves. Elizabeth Warren’s own tough questions, on the Senate Banking Committee, revolve around pestering banks for supposedly (supposedly) laundering money to drug lords and terrorists:

“What does it take, how many billions of dollars do you have to launder from drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution?” Warren asked at a Banking Committee hearing on money laundering.

Notice how the populist/fascist simply takes the laws in place for granted (so long as they serve her desires)? The libertarian would ask not if the banks were doing something illegally, but why there are laws in place that prohibit individuals and organizations from making monetary transactions in the first place.

Senator Warren’s assumptions highlight well the difference between the ideologies of populism/fascism and libertarianism: One ideology thinks bludgeoning unpopular factions is perfectly acceptable. The other would defend an unpopular faction as if it were its own; indeed, as if its own freedom were tied up to the freedom of the faction under attack.

New Issue of Econ Journal Watch is Out

For those of you who don’t know, co-editor Fred Foldvary is an editor for the Journal, and Warren Gibson is the math reader. From the website:

James Tooley on Abhijit Banerjee and Esther Duflo’s Poor Economics: Banerjee and Duflo propose to bypass the “big questions” of economic development and focus instead on “small steps” to improvement. But, says Tooley, they proceed to make big judgments about education in developing countries, judgments not supported by their own evidence.

Why the Denial? Pauline Dixon asks why writers at UNESCO, Oxfam, and elsewhere have denied or discounted the success and potentiality of private schooling in developing countries.

Neither necessary nor sufficient, but… Thomas Mayer critically appraises Stephen Ziliak and Deirdre McCloskey’s influential writings, particularly The Cult of Statistical SignificanceMcCloskey and Ziliak reply.

Was Occupational Licensing Good for Minorities? Daniel Klein, Benjamin Powell, and Evgeny Vorotnikov take issue with a JLE article by Marc Law and Mindy Marks. Law and Marks reply.

Mankiw vs. DeLong and Krugman on the CEA’s Real GDP Forecasts in Early 2009: David Cushman shows how a careful econometrician might have adjudicated the debate among these leading economists over the likelihood of a macroeconomic rebound.

Rating Government Bonds: Can We Raise Our Grade? Marc Joffe, a former Senior Director at Moody’s Analytics, discusses limitations of the methods employed at the credit rating agencies and problems in trying to infer default risks from market prices, suggesting another approach.

Also, if you’re unsatisfied with the status quo in terms of political parties, including the Libertarian party, Dr. Foldvary has established the Free Earth Party for you to look at. Be sure to check it out!

Islam and Free Speech

Dr Gibson and Dr. Delacroix have both staked out their positions on the matter, and Dr. Delacroix has promised more, but I thought I’d add my own two cents to the matter.

I’ve already shared my thoughts here before, and nothing that I see in the Middle East or elsewhere changes my argument.

Among observers of all political stripes, there have been two broad categories into which they have gravitated. One of these has been the Islamic societies are still in the middle ages argument. This is a legitimate point, too. As Dr. Gibson points out: Continue reading

Sex and Economics (And Karl Marx Too!)

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

Capital Day?

Co-blogger Warren Gibson e-mailed me a great quickmeme earlier this afternoon. The details are beneath the fold. Continue reading

From the Comments: the Unemployment Rate

Dr. Gibson has won the much-cherished gold star I had offered in a previous comment. My question had to do with the green dot in this graph, and Dr. Gibson explained it to perfection. He writes:

The widely followed U3 unemployment rate, as shown in the figure, is the number of unemployed divided by the labor force. The labor force excludes discouraged workers. The labor force participation rate is the labor force size (employed & unemployed) divided by the population. The green dot shows what the U3 rate would be if that ratio had stayed the same since Jan. 2009.

The U6 statistic counts discouraged workers as unemployed. That rate is currently around 15%.

See also: Unemployment: What It Is

From the article Dr. Gibson directs us towards comes some other important information:

Government policies contribute to unemployment above and beyond natural unemployment. The most notorious of these policies are minimum wage laws. These laws make it illegal, effectively, for low-skilled workers to accept employment. Anyone who cannot generate $8 worth of production per hour cannot expect to be paid more than $8. Such unfortunate people might be productive at $6 per hour but are forbidden to accept employment at this rate and are instead condemned to joblessness and all its attendant miseries. This burden falls most heavily on black teenagers, whose unemployment rate (based on those seeking work and excluding those who are in school) is well over 40 percent. The benefits accrue mainly to slightly higher-skilled workers, who have climbed onto the metaphorical ladder leading to better jobs and who are shielded from competition from those excluded by minimum-wage laws […]

Labor unions, as voluntary associations bargaining freely with employers, are unobjectionable. They did a lot of good in the past when working conditions in many places were pretty bad. But now they are granted special privileges by law—basically the privilege to engage in violent or coercive activities. The result is often wage agreements that are above market-clearing levels. Those left out are of course unemployed.

While labor unions can boost their members’ compensation at the expense of non-union workers, higher wages generally and higher living standards are due mainly to increased productivity, which in turn depends on high levels of capital investment. People are more willing to save and invest when they have confidence in the future, and that confidence comes from respect for property rights.

For more on minimum wage laws, see Bad Idea of the Year.