The Austrian Economists

Humans as Creators Not Destroyers

Julian Simon remains an inspiration to me in so many different ways, not the least of which was his unbounded optimism about humanity.  A week from tomorrow (Feb 8, the day after my 44th birthday I might note) is the 10th anniversary of his death - a death that took a great mind and a great man from us far too soon. 

His contributions to our understanding of freedom aside, he was a real mensch.  Pete can verify the experience we (along with Dave P.) had spending 45 minutes chatting with Julian on a boat on the way to St. Tropez during the 1994 Mont Pelerin meetings.  Here were three young punks who probably didn't deserve the time of day striking up a conversation with him.  He could have easily found an excuse to duck away, but he didn't.  We stood near the stern of that boat and he talked with us for quite a bit of that boat ride.  To this day, I appreciate that he treated us like colleagues, not the punks that we were, and the memory of that conversation, in the middle of the Mediterranean on a gorgeous day, remains a treasured one.

It is traditional in Judaism to remember the death of a loved one on the anniversary of that person's death.  I'm a bit early with it, but as I'm reading his posthumous The Great Breakthrough and Its Causes and came across this quote that so nicely summarizes his worldview, I decided to go ahead with it anyway.  Here's Julian being Julian:

Humans have evolved into creators and problem solvers to an extent that people's constructive behavior now outweighs their destructive behavior, as evidenced by our increasing life expectancy and richness of consumption.  And in recent centuries and decades, the positive net balance of each generation has been increasing rather than decreasing.  This view of the human as builder conflicts with the view of the human as destroyer, the latter a view that underlies the thought of many other writers on the subject.

Rest in peace Julian.

$25 billion here and $25 billion there and pretty soon we are talking about serious money. Are we?

Tyler Cowen has a nice discussion of the reactions to the Copenhagen Consensus that were published in the Winter 2007 issue of the Journal of Economic Literature.  Douglass North, Vernon Smith and Thomas Schelling were part of the team of researchers that developed the priorities.

Which side do you come down on?  (A) The Copenhagen Consensus is a step forward by reprioritizing our international aid and development activity toward tackling disease like HIV/AIDS over environmental regulations to address Global Warming; (B) The Copenhagen Consensus fails to address the practical inability of introducing an effective HIV/AIDS policy that will change behavior to reduce the spread of the disease; (C) The Copehagen Consensus suffers from the same hubris in public policy that Jeff Sachs's grand plans for ending global poverty.

Addendum: John Nye wrote me this morning to make sure that I clarified that the task of the scholars associated with the Copenhagen Consensus was not to come up with new proposals or uses for the $$$, but given the existing set of proposals and the financial constraint, how would you rank the proposals.  This closed set problem is different from the open-ended project that is associated with a full comparative institutional analysis of possible policy choices.

Go Patriots!

I have been very disciplined lately and kept my comments on sports to a minimum on this list.  A lot of amazing things have been going on in the world of sports.  The issues in baseball, the upcoming Super Bowl, etc.  Personally, I am finishing up another freshman basketball season (we lost yesterday when we had a 1 point lead with 50 seconds to go -- ugh!), cheering on my son's varsity team (they won last night and he scored in double figures), and watching as many college games as I can fit in.

Last night I missed one of the great rivalry games --- VCU vs. GMU --- at the Patriot Center in front of a close to capacity crowd.  Thankfully, the game was on ESPN so I was able to record it and catch the game after the fact.  GMU beat VCU.

We are very fortunate at GMU --- we have a first-class and great coach, who recruits great athletes who play a fundamentally sound and exciting game.

You can follow GMU Basketball at this blog spot.  And just remember, when James Buchanan won the Nobel in 1986, very few thought GMU could ever be so honored again. But in 2002 Vernon Smith won.  Who says lightening cannot strike twice?!  So watch out come March Madness for those Patriots!!!

The Unseen Unintended Doing of Good

Over at Cafe Hayek today, Don Boudreaux highlights the story of Viktor Schreckengost, an inventor industrial designer who passed away recently at age 101.  He was the inventor or designer of a number of products that have certainly made the lives of ordinary Americans better in ways too numerous to count:  mass-produced dinnerware, riding lawn mowers, bicycles and coffins, and putting the cab over the engine in trucks.  As Don points out, he has probably done more for humanity than any single politician of the last century.  I'd add "or perhaps the sum total thereof."  Don's blog entry is a nice tribute.

What fascinates me is the point Don makes about how people like this get overlooked when we think about heroes of humanity.  We laud the politicians and the war-makers and perhaps the great scientists, but almost never the entrepreneur and the inventor even though the latter have done more for humanity than the former.  (Unless, of course, like Bill Gates, the entrepreneur is seen as "atoning for his sins.")

A Stimulating Interview on Economic Stimulus

This morning I was interviewed on Wall Street Journal Radio discussing the Bush stimulus package.  You can listen to the interview here.  This link is to a 35 min segment of the program.  My interview takes place about 5min 15sec into the program.

Bill Gates on Capitalism and a Better World

Last week Bill Gates caused a stir with his remarks about capitalism and the third world.  Here is a video link to his speech.  And, here is a reaction published in the Wall Street Journal.

Is Gates's call for creative capitalism just another example of a wealthy person torn by guilt resulting in an anti-capitalist mentality?  George Soros already beat him to this position.

What can we learn from Gates's speech as it relates to economic educaiton and research?

Couldn't Say It Any Better Than This

I start my Austrian Theory of the Market Process II class tomorrow.  My first lecture emphasizes the ways that contemporary economics has moved in the direction of Mises and Hayek, rather than away.  The examples I give are: microfoundations, new institutionalism, and entrepreneurship studies.  I end my lecture discussing the remaining gaps.  The first example of a major gap is methodology, and I discuss the issues of formalism and positivism.  However, after finishing my lecture I discovered this wonderful post by Peter Klein on these issues.

New Blog Spot for Hayek Scholars

Taking Hayek Seriously is open for business.

Steve Pejovich Knows How to Ask the Right Questions?

Steve Pejovich was a founder of the property rights movement in economic theory.  His JEL survey on property rights economics is still one of the best introductions to the perspective that one can find, and his two-volume reference work on property rights contains all the classic papers.

Pejovich knows how to ask the right questions, whether it is about the Yugoslavian workers' control system, the problems with transition economies, or the futility of economic stimulus packages.

In the Dallas Morning News (January 25, 2008), Pejovich writes the following:

I don't think government can improve economy. If government intervention can improve economic performance and get us out of recession, is it not stupid to wait for recession in order to capture the benefits of government economic policies?  But then, if government intervention can improve economic performance and increase the rate of growth, how come socialist/welfare states consistently perform worse than free-market economies?

Lots of Thoughts on "The Future of Marriage"

Update:  Welcome to Cato Unbound readers.  Take a look around the place while you're here and feel free to check out my working papers page for more.

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As I noted in an earlier entry, this month's Cato Unbound features a roundtable on "The Future of Marriage."  As I continue to work on this topic, and a classical liberal approach to the family more generally, I thought I would weigh in with some thoughts on the four essays that are posted there.  All four are worth reading in their entirety, and I especially recommend Stephanie Coontz's opening essay and the comments from Betsey Stevenson and Justin Wolfers.  The other two, more conservative, replies by Kay Hymowitz and Norval Glenn are worth reading as they raise some good counter-arguments that I will address below. What I want to do in the rather lengthy comments that follow is combine elements of the Coontz and S&W essays to trace a story about how market capitalism has been the major driver in the changes in marriage and the family we've seen over the last few centuries and then see how much light that story can shed on a couple of current issues. I cover some of this ground in my Freeman essay on "Capitalism and the Family" from last summer. I also want to make an important point that applies comparative institutional analysis to family issues.