Coordination Problem

Bastiat Spinning; Hazlitt Heaving

It was only a matter of time before "bad" economics would show itself in the wake of the recent events in New Orleans.  But here is what some "economists" have been saying at CNN Money:

J.P. Morgan senior economist Anthony Chan agrees that higher energy prices will curb both regional and national economic growth in the near-term.

"I think a 0.2 percent decline in economic growth due Katrina's impact on oil and the regional economy is a realistic assumption," Chan said. Longer-term, Chan believes hurricanes tend to stimulate overall growth.

Said Chan, "Preliminary estimates indicate 60 percent damage to downtown New Orleans. Plenty of cleanup work and rebuilding will follow in all the areas. That means over the next 12 months, there will be lots of job creation which is good for the economy."

Prof. Doug Woodward, with the Division of Research at the Moore School of Business at the University of South Carolina, has researched the economic impact of hurricanes.

"On a personal level, the loss of life is tragic. But looking at the economic impact, our research shows that hurricanes tend to become god-given work projects," Woodward said.

Within six months, he expects to see a construction boom and job creation offset the short-term negatives such as loss of business activity, loss of wealth in the form of housing, infrastructure, agriculture and tourism revenue in the Gulf Coast states.

In a note late Tuesday, Standard & Poor's estimates that Katrina could "shave a few points off our forecast of 3.7 percent growth."

Among the industries affected, trade, tourism, agriculture, and construction (Florida's largest industries), as well as Louisiana's energy-related industries will be hurt in the third-quarter, the firm said.

"At the same time, repairs to hurricane-related damage in Florida, Mississippi, Louisiana, and other regions affected by the storm should boost GDP in subsequent quarters," S&P analysts wrote in the note.

"Natural disasters bring in a lot of money from the outside to help in the rebuilding," he said. "The rebuilding boom will generate incomes. Insurance money and federal relief money will pour in. This happened very quickly in Florida last year," Woodward said. "Give it a year. We'll see positive economy results maybe by the third-quarter of next year."

Didn't Bastiat and Hazlitt straighten us out on broken window fallacies?  Unfortunately, as Hazlitt pointed out economics is difficult to communicate to the everyman because of the chains of reasoning required.   But for people trained in economics?!  I have to say in my own mind the connection to my earlier entry on macroeconomics and data is the only way one can start to make sense of the existence of such blatant falsehoods in economic analysis persisting.  Rather than economics students reading boring textbooks perhaps they (and in many instances their professors) should read Frederic Bastiat.

Thanks to Rob Jester and David Prychitko for the pointer on this story.

The Data of Development

Why are some countries rich and others poor?  This vexing question has preoccupied the best minds in economics since at least Adam Smith's An Inquiry Into the Nature and Causes of the Wealth of Nations.  In the late 19th century, Max Weber asked why capitalism had developed in Europe and failed to take root in China, and in the early 20th century Joseph Schumpeter sought to understand how entrepreneurial innovation fueled the wealth of nations.  From Smith to Schumpeter questions of economic development were asked without reference to the aggregate data of national income accounting.   But after Keynes, it seemed almost impossible to ask questions of development without reference to aggregate measures of national income.  The aggregated economics of Keynes led to a demand for aggregate economics to complement the theory, and in the wake of the victory of Keynesianism in the economics profession during and after WWII various institutions were instituted (the IMF and the World Bank most prominently) to carry out Keynesian policies to address questions of underdevelopment and international macroeconomic stability.  Armed with Keynesian theory and the statistical tool-kit of refined measurement and control, Keynesian policies could guide government in the effort to correct the flaws of the capitalist system and manage the economic system appropriately so that stability and prosperity could be experienced.

But what if the Keynesian apparatus is intellectually flawed to the core as I believe it to be?  Well perhaps we need to recapture the research agenda from Smith to Schumpeter and eschew the 50+ years of Keynesian inspired economic science in development theory, empirics and policy.  Oh Boettke, you say, that is just your crazy Austrianism coming out.  Well, damn right it is, but it is not crazy.  Ludwig von Mises raised serious doubts about the "new science" of macroeconomics and statistical economics.  And, F. A. Hayek summed up the problem with aggregation as follows:

The consequence of this is that in the statistical study of social phenomena the structures with which the theoretical social sciences are concerned actually disappear.  Statistics may supply us with very interesting and important information about what is the raw material from which we have to reproduce these structures, but in can tell us nothing about these structures themselves.  In some field this is immediately obvious as soon as it is stated.  That the statistics of words can tell us nothing about the structure of a language will hardly be denied.  But although the contrary is sometimes suggested, the same holds no less true of other systematically connected wholes such as, for example, the price system. (Source: F. A. Hayek, The Counter Revolution of Science, Liberty Fund 1979[1952], pp. 108-109)

Being in the intellectual company of Mises and Hayek doesn't mean you are right, but it is company I trust more than I question.  It is important to stress that neither Mises nor Hayek used this critique of aggregate economics as a way to avoid empirical analysis of economic systems.  Instead, they were saying that empirical analysis done in this way would more often than not wildly miss its mark.  Historical scholarship and demographics would be a much better way to conduct empirical research on economic systems.  The criticisms they offered were profound and pre-dated by some 40 years the microfoundations of macroeconomics literature.  And despite generations of economists being schooled to accept aggregate economics and aggregate measurement, there were serious questions raised at a conceptual level from the start by scholars who were close to the development of this Keynesian line of research and far from influenced by Mises and Hayek.

National Income Accounting has some serious problems as a tool for public policy, as Simon Kuznets warned as he worked to refine the concept.  For prices in an economy to be added in a meaningful way the presumption has to be that they are market prices, and in fact that they are competitive equilibrium prices to be more exact so that any one price reflects the full opportunity cost of production for that good (P=MC).  Government set prices obviously would not reflect the value produced in an economy at any given time but instead only the arbitrary decision of government official to reflect resource use in non-market settings.  This was particularly important, Kuznets insisted, during wartime, when market prices were often suppressed in the effort to allocate resources to meet war demands, and unless adjustments are made the accounting will be off the mark in terms of capturing the production of economic value in the economic system.  Kuznets argued throughout WWII for a "peacetime" concept of GNP that would not confuse military production with economic well-being.  Robert Higgs has a very illuminating discussion of these problems and other problems in his "Wartime Prosperity?"  [I pretty much recommend everything by Higgs to anyone who will listen, so please listen and read Higgs!].

What is an economist to do in assessing economic systems if he doesn't compare national income statistics?  Doesn't even the Index of Economic Freedom focus on macroeconomics?  Of course it does and this just demonstrates how powerful the sway and complete the intellectual victory of the Keynesian consensus really was.  Even Milton Friedman, perhaps the most important intellectual-economist in beating back the Keynesian policy consensus in the economics profession and in the world, nevertheless thinks in terms of Keynesian concepts and Keynesian inspired statistical measures of the wealth and poverty of nations.  Few were the economists who resisted completely the lure of Keynesianism.

PT Bauer is perhaps the most important figure in the field of development economics to reject the Keyensian hegemony.  Bauer has inspired our efforts at the Mercatus Center in the Global Prosperity Initiative, and it is this research effort that underlies our work Enterprise Africa, which a team of researchers associated with Mercatus will be engaged in over the next few years due to a generous award from the John Templeton Foundation.  Rather than study statistical aggregates, the focus here will be in on-the-ground study of how entrepreneurs are erasing the devastating problems of poverty in some of the poorest regions of the world.  The eradication of poverty will not come from international aid agencies and the decisions by western leaders on how best to redistribute wealth world-wide, but through the entrepreneurial spirit of Africans themselves.  Given the freedom to realize the gains from trade, individuals will strive to improve their lot in life and the lives of their children, etc.

From Smith to Schumpeter we basically understood this.  We lost sight of this for a long time. We are gaining that understanding again ---- though the Joseph Stiglitz's, Paul Krugman's and Jeffrey Sachs's of the world resist mightily the lesson that we must retire Keynesian analytics and Keynesian command and control policies.  Thankful we had brave and serious scholars such as Mises, Hayek and in this field especially P. T. Bauer to resist and uphold an alternative conception of economic science and policy.  William Easterly's new book, The White Man's Burden: Why the West's Big Plans to Save the Rest Fail to Do Good is a worthy successor to Bauer and its publication should be greatly anticipated by economists. Easterly's The Elusive Quest for Growth focused on the simple point that incentives matter.  In The White Man's Burden we see plenty of perverse incentives at work, but we also read extensively about lack of accountability and feedback mechanisms that undermine the workability of big plans.  Assessing economic systems doesn't need aggregate statistics, but instead detailed examination of the institutional environment and economic structures in operation and how they impact the ability of individuals to realize the gains from specialization and exchange.

The Evolution of Precedent

Nicola Gennaioli and Andrei Shleifer have an excellent working paper out on "The Evolution of Precedent." Their paper investigates the oft-heard claim that common law converges to efficient legal rules. The authors find:

Convergence to efficient legal rules occurs only under very special circumstances, but the evolution of precedent over time is on average beneficial under more plausible conditions.

In other words, convergence to efficient legal rules is more difficult to achieve via common law than is usually thought.

It struck me that two factors often ignored in considering the efficiency of common law may contribute to this process. The first is the degree of centralization. Where there are multiple 'independent' territories, each with its own common law, it might be more likely that Tiebout-style competition would bring about a situation in which common law converges on efficient rules despite judicial biases. In contrast, where a single 'set' of common laws apply over a larger area, less competition would thwart this process.

Second, the presence or absence of a genuine market for law might also effect common law efficiency. In the international sphere, for instance, where adjudication is a private, for-profit industry and parties to disagreements are free to select the law that will govern their disputes, market competition contributes to (a) the weeding out of biased judges, which improves the law's objectivity through the evolution of legal precedent and (b) efficient legal rules, as considered by parties to adjudication, who in selecting certain systems of law and not others to apply to their disputes put ineffective systems of law 'out of business.'

Will Microcredit Ever Help the Poor?

Helping poor people help themselves is the main idea behind microcredit. Because a whole stratum of society in developing countries has no access to bank credit, microcredit (as well as microfinance which includes a host of financial services for the poor and the famous Grameen Bank) is seen as a solution that could unleash the forces of entrepreneurship and help people transition out of poverty by moving them from the informal to the formal economy. Microfinance is now more important than ever with 2005 being the UN ‘International Year of Microcredit’.

Microcredit typically brings a small group of women together who each are involved in starting-up a small enterprise. Some bring their families into their business, but what matters to the system is that the loans are given out to the women only. They are supposed to be more responsible than men and can better vouch for one another, even though the sums involved are very small by Western standards – a few hundred dollars at most. Because the group is liable for the behavior of its members, monitoring is very strong, and the risk of default is limited.

Since the inception of the idea more than two decades ago, microcredit has become one of the silver bullets against poverty in the developing world. It is seen to fill the gap left by the formal banking system, and the goal is to reach 100 million borrowers by the end of this year. The logic is that if the poor can finally have access to loans, then they may find their way out of poverty. Ultimately, the objective is for borrowers to graduate, that is, to establish some form of credit worthiness and to grow their business enough to interest regular banks. Establishing a relationship with a bank could indeed be the quintessential step leading to the transition into the formal economy.

The Economist recently ran an article on Microcredit in India: Helping Themselves. India has almost two million self-help groups of about 15 women who collectively handle almost 69 billion rupees. Though the country has many public-sector banks, agricultural credit co-operatives and a post office with 154,000 outlets, its rural poor have little access to credit. Microcredit is now growing fast in India, and the government is about to embark in programs to foster its growth.

This article reminded me that a few months ago, Stephen Daley and I published a Mercatus Policy Comment on Microfinance in the Philippines. Steve went to the Philippines in 2003 and 2004 to do research on what stops poor people from joining the formal world and to study the effectiveness of microfinance in the slums of Manila (where he spent a few weeks). What he found does not entirely support the now dominant view that microlending to the poor could be a major solution to poverty.

While it is true that many groups of women have benefited from microcredit, very few have been able to set up successful businesses. Moreover, those who started businesses that became successful did not graduate into the formal banking world for the most part. They still maintained close ties with informal moneylenders – the Mumbais – and preferred paying higher rates of interest rather than dealing with banks.

Our study shows that the poor lack access to credit because of institutional reasons. In the Philippines for instance, it is regulation, corruption and the lack of well defined property rights that stop poor entrepreneurs from seizing opportunities, not the lack of credit.

An instance of institutional deficit is the situation with moneylenders. In many countries they are perceived as taking advantage of the poor. Our experience in the field shows the opposite. Most of the time, moneylenders are entrepreneurs filling a gap that others overlooked by providing loans to the poor. In the Philippines, Mumbais are treated like pariahs. They cannot be citizens and are not allowed to own real property or establish businesses. The truth is that in spite of the constraints put on their ability to do business, they have established relationships with poor people in need of credit. One of the reasons why poor people in the slums of Manila do not enter the formal world is because their credit suppliers cannot do so either. As a result, the evolution from informal to more formal credit arrangements cannot naturally take place.

Microcredit was originally based on private savings handled by non-profit organizations and other private organizations. Many governments in various parts of the world (including the US government which is funding $200 million in 2005) are now willing to help finance microcredit organizations. It is unclear what effects this will have on the incentives that microfinance groups face.

While Steve and I agree that microcredit ought to be tried and developed, we share The Economist’s skepticism regarding its potential large success. It does bring financing at low cost to poor people, but it does not necessarily overcome the difficulty for poor people to enter formal economic relations. In our view, microcredit is just a band-aid solution to relieve poverty in the short run.

The sad story is that there are many institutional changes that would be immensely beneficial to the development of financial markets in poor countries that should be implemented urgently, but are not. We believe these changes would have a greater impact on the future of millions of people than government financing of microcredits.

Research Seminars

My favorite work on intellectual movements is Randall Collins The Sociology of Philosophies (Harvard University Press, 2000).  The book is over 1000 pages long and provides a detailed analysis of the main and minor philosophical movements throughout history.  I recommend this work to all who wish to understand why some movements rise and others fall in stature within the intellectual/scientific community.

Anyway a common characteristic of intellectual movements in the modern world is the regular meeting of scholars in a research seminar.  These seminars --- much more important than conferences --- give scholars the constant opportunity to be exposed to the work of others and also for those presenting to get critical feedback before they submitt their work for publication. For younger scholars these seminars are important for also learning how to present their work and field critical questions and incorporate crticism in revising their work.  And for the core group that regularly meets it builds a common sense of purpose and research cohesiveness which is vital to builidng and sustaining an intellectual movement.

The Society for the Development of Austrian Economics has a section on its web site dedicated to keeping members alert to the seminars that are going on at different universities (that list currently lists NYU, GMU, San Jose State, and Loyola --- but it should also include now West Virginia University). The oldest regular research seminar devoted to Austrian economics is the Austrian Colloquium at New York University and now run by Mario Rizzo.  Mario has renamed the Austrian Economics Program at NYU to "The Program on the Foundations of the Market Economy".

The seminar series at GMU is the second longest running regular research seminar.  Since 1998 I have been in charge and I renamed it the Workshop in Philosophy, Politics and Economics.  This fall the seminar will focus on the philosophy and methodology of the social sciences.

The spring 2006 scheduel will be set in December-January so if you are currently working on papers that you would like to present at our seminar please email me.

How to Succeed in Graduate School (for those seeking an academic career)

Tomorrow I have the orientation for the new graduate students attending our program.  This is a talented and interesting class on paper.  We had 200 applicants to our PhD program, admitted 50 and about 35 will show up.  The profile for our incoming class is:

• 3.6 GPA
• 760 GRE-Quantitative
• 630 GRE-Verbal

And in terms of interest our incoming class listed the following as the reason for attending GMU:

• Austrian Economics
• Development and Transition Economics
• Law and Economics
• Public Choice and Political Economy
• Religion and Economics
• Experimental Economics

Our students are unusual for PhD students and many of them are more likely to be weighing a PhD in another discipline rather than another economics department when making their decision.

These students are about to embark on an exciting intellectual adventure.  The first year is pretty standard at GMU as the students need to demonstrate proficiency in mathematical modeling and statistical testing.  But the seminars offered and the discussion groups that emerge provide the students with ample opportunity to pursue their broader intellectual interests.  Still the major challenge they will face is learning to prioritize and focus their energies on mastery of technical economics.

For those entering the PhD program with the hope of pursuing an academic career, they need to start thinking about research papers right now.  For students coming from an out of sync department such as GMU the most important signal they can send is with published papers in refereed journals, and in particular published papers in mainstream journals.  Failure to do so will result in a frustrating job search.  I have been telling graduate students for a decade that the formula for success is:

PhD in hand + refereed publication(s) + strong teaching evaluations = tenure track job

The other factor in this equation is the "lunch tax" that the individual represents.  The more difficult the person is to take as a personality, the stronger publications they will have to have in order to signal that they are worth it.

In my experience both as a student and then as a teacher at NYU and now at GMU I have found that no PhD student who satisfies all the conditions in the above formula has failed to get the desired result of a tenure track appointment.  However, I have known several students who have struggled through graduate school and then failed to fulfill those conditions and then experienced a frustrating job search and disappointment with their chosen career path.

As my colleague Bryan Caplan has argued, once a PhD student realizes how important refereed publication is for successful academic job search those who want to pursue that path should infer --- through backward induction --- that they should start working on publishable articles TODAY so that they will appear when they are on the market in their fourth year.

What Role for Liberalism in the War on Terror?

This week's Economist has an interesting article, "For jihadist, read anarchist."  The article attempts to draw parallels between the left anarchist bombings of the 19th century and the present day terrorist threat.  The main conclusion is that the standard measures - repression, expulsion and restrictions on speech - by government were ineffective in preventing terrorism in the past and will be ineffective in the present as well.

Pete (Boettke) and I are currently working on a paper titled "Liberalism in the Post-9/11 World."  On the surface, it may appear that there is little role for classical liberal principles in the post-9/11 world.  In the face of the threat of terrorism, the federal government has significantly increased its level of involvement in our everyday lives.  Pete and I argue that these interventions will be largely ineffective in overcoming the terrorist threat.

The logic behind our argument is the realization that the demand curve for terrorist behavior is relatively inelastic.  Most terrorists believe they are "doing the right thing" no matter what the associated cost.  Indeed, many are willing to pay the ultimate price of dying.  Given the inelasticity of the demand curve for terrorism, efforts to raise the price of engaging in terrorist acts will have a disproportionately small impact.  We conclude by arguing that returning to the core principles of classical liberalism is the most effective means of dealing with the terrorist threat.

Negative sanctions may prevent terrorists from the current generation but there will be subsequent generations to take their place.  Only by shifting the underlying preferences of future generations, and hence the demand curve for terrorism inward, will terrorism actually decrease.  The best way to shift preferences, we argue, is through a return to princripled non-intervention, coupled with a commitment to free trade not only in goods and serves, but also in cultural products, ideas and (formal and informal) institutions.

This commitment to non-intervention and trade has a long history in the U.S.  I leave you with the following from George Washington:

The great rule of conduct for us, in regard to foreign nations, is in extending our commercial relations to have with them as little political connection as possible.  So far as we have already formed engagements, let them be fulfilled with perfect good faith.  Here let us stop.  It is our true policy to steer clear of permanent alliances with any portion of the foreign world.

Why Aren't Institutions Like Can-Openers?

In focusing on the transition problem, I have been struck by how simple the economics of transition are, and how, in contrast, difficult the political, legal and social aspects of the transition are.  Private property, freedom of contract, monetary responsibility, fiscal restraint, and open trade provide the basic policy recipe.  But saying that is much easier than achieving that, and the blocking point is not always the interest group logic of concentrated benefits and dispersed costs.  Public choice analysis goes a long way to explain the selection and persistence of bad economic policies, but it doesn't exhaust the explanation.  Interests and ideology are equally part of the explanation.  But once we open ourselves up to an analysis of ideology, we have to recognize that there are deeper issues such as deep beliefs that cannot be simply discard as easily as yesterdays newspaper.

To illustrate this point I have often told the following story to my students.  Imagine that a friend of yours is in Peru and he has a bottle of soda in his hand, but it is not a twist off cap.  He needs a can-opener to do the job but one is not available.  He can call his friend in NJ, and that friend can ship him an old fashioned can-open that he can purchase for $1 at any local grocery store and ship it to his friend in Peru overnight express with UPS.  The next day our thirsty Peruvian can open his package, take out the can-opener and utilize it and alleviate his thirst.  The technology of the can-opener transfers simply and accomplishes it task of opening bottles of soda whether we are in NJ, Peru or Alaska.

Now consider that our Peruvian friend, rather than trying to open a bottle of soda is entrusted with running the political and economic situation in Peru.  He once again calls his good friend in NJ and asks for help.  His NJ friend sends him a copy of the original Declaration of Independence and the US Constitution and says that these 'social contracts' represent a contract technology that limits the power of the government but creates an economic environment conducive to entrepreneurial innovation and the expansion of the division of labor and thus the gains from trade among citizen within the system.  Our Peruvian friend receives the package from UPS and stands in front of the national assembly that afternoon and announces these are now the rules governing Peru.

Do we expect that same results with the transfer of the constitution as we do with the transfer of the can-opener?  I don't think the empirical record can offer us much confidence in this regard.  The transfer of deep beliefs seems much more difficult than the transfer of things. Why that is so, it is not obviously clear.  Pete Leeson, Chris Coyne and I have a paper, "Institutional Stickiness and the New Development Economics" which tries to address this issue that is currently under review at a journal. This work develops themes I first addressed in my "Why Culture Matters" paper that was published in an Italian journal of political economy and then reprinted in English translation in my Calculation and Coordination.  Chris Coyne's work on the political economy of post-conflict reconstruction is grounded in this puzzle and he has made great strides in the theoretical underpinnings of this argument and the empirical illustration of the point.

Again in reading for my graduate seminar in Constitutional Economics that I start teaching in 2 weeks, I was struck once again by the wisdom of Adam Smith and how it relates precisely to this point.  In his Lectures on Jurisprudence, the appendix includes Smith's plan for The Wealth of Nations.  On pages 578-579 of the Liberty Fund edition of this work, he has a section in his plan entitled "Concerning the causes of the slow progress of opulence."  Smith states that there are two reasons for why some countries are poor while others are rich. The first are natural impediments and the second are the policies of oppressive and injudicious government.  Bad public policy render a countries agriculture and its arts and commerce underdeveloped.  Bad public policy, the reader is told, increase the natural impediments to development.

What are the natural impediments? 

The original poverty and ignorance of mankind the natural impediments to the progress of opulence.  That it is easier for a nation, in the same manner as for an individual, to raise itself from a modern degree of wealth; money, according to the proverb, begetting money, among nations as among individuals.  The extreme difficulty of beginning accumulation and the many accidents to which it is exposed. The slowness and difficulty with which those things, which now appear the most simple inventions, were originally found out. That a nation is not always in a condition to imitate and copy the inventions and improvements of its more wealthy neighbors; the application of these frequently requiring a stock with which it is not furnished. (emphasis mine)

And this stock need not refer to material accumulation, but as Chris is showing relates more to the stock of social capital that resides in the people of the nation under investigation.

The Mercatus Policy Series

One of my responsibilities at the Mercatus Center at George Mason University is to be the editor (and sometimes author or co-author) of a new policy publication: The Mercatus Policy Series.

With this new series, I am hoping to achieve three important goals:

·         to communicate with those in the policy world in a constructive and realistic way;

·         to address unusual topics (because economics is not meant to be boring) that will prove useful to help social change; and

·         to ground the endeavor as much as possible on field work research done by the PhD students at the department of economics at George Mason University (as well as the Mercatus team of scholars and others).

Keeping these goals in mind will hopefully make the series different from other policy publications that are out there. There is already a market full of very good policy periodicals (most of them given away by the various organizations that publish them), and successfully entering this world is not an easy task. However, I believe that our narrative approach to economic problems, our attention to local circumstances and knowledge, our understanding of the role of political groups, and our emphasis on good (Austrian) theory will set the The Mercatus Policy Series apart.

We launched the publication in February 2005 with three categories: Primers, Comments and Country Briefs. Primers are addressing ideas that we think are poorly known in policy circles. Comments are analysis of current situations that are relevant from a policy perspective. Finally, Country Briefs come from the idea that when our students go and explore small countries, they should be able to say something about them.

So far, we have dealt with institutions and entrepreneurship, property rights, the role of media, microfinance in the Philippines, and Botswana. Judging by the rate of downloads (more than 27,000 in total for the whole series at the end of July ’05, often one of the most downloaded items off of the Mercatus website) people have found the topics covered interesting and the approach useful. We have had reactions from people as far as Pakistan, and even from the IMF! The accent so far has been put on the issue of development, but I am hoping to enlarge this in the future and thus reach more policy audiences.

There are plenty of issues scheduled for the next months: SME financing in Romania, self-enforcing institutions, entrepreneurship (there is never enough of this one), fair-trade in Costa-Rica, picketing in Argentina, school vouchers in China, the role of development economics, Montenegro, and more. My co-bloggers have been put to the task (Chris Coyne on the role of media: highly recommended), and Pete Boettke and Pete Leeson are preparing issues.

I will be using this venue to announce new issues, and I hope those who read these lines will keep an eye on the exciting issues to come.

Google Discovery of Your Own Work

In preparing for my constitutional economic class this fall I was doing some background searching on the internet focusing on Adam Smith's statement from his 1755 notebooks where he states:

Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being bought about by the natural course of things.

I was pleasantly surprised to see that an article of mine was picked up, though I was somewhat thrown when I realized it was a talk I had given in Prague three years ago, and it was published without my having seen page proofs, etc.  Still I appreciate it whenever anyone finds something I write worthy of publishing.  This article was incorrectly titled as "An 'Austrian' Economists Perspective on Transnational Political Economy"  --- the offending word is "Transnational" and it should be "Transitional".  The article also lists me as a research fellow in the department of economics, while I am actually a professor in the economics department, and a research fellow at the Mercatus Center.  But beyond that, the article as printed communicates my basic message about what we have learned from the transition experience.

I have now obtained a pdf of the original publication and will make it available on my web site this fall as I am updating those pages and using the magic of Adobe 7.0 I have even fixed the title.