Economics

Living Keynes and reading Hayek

June 9, 2010
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Living Keynes and reading Hayek

Back in 1965, it was Milton Friedman’s phrase: “We are all Keynesians now.” He uttered it in the same spirit as Richard Nixon repeated it in 1971: Like it or not, we are in a time when economic and political circumstances dictate that the government take a larger role in trying to steer the economy. In the last half of 2008, the phrase regained currency while the economy hemorrhaged it. We may collectively be living Keynes, but that doesn’t mean we individually believe it. On this blog, we have previously noted the continuing intellectual warfare between Keynes and Hayek. That war is nowhere near closure, thanks to a prominent Hayek cheerleader, Glenn Beck, who devoted a segment of last night’s show to talking about Hayek’s The Road to Serfdom. The manuscript that would become The Road to Serfdom came to the Press in 1943. It was evaluated by two University of Chicago academics to assess its scholarship and potential. Ironically, the economist supporting free-market capitalism, Frank Knight, concluded: “‘the book is an able piece of work, but limited in scope and somewhat one-sided in treatment. I doubt whether it would have a very wide market in this country, or would . . .

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What about women on welfare?

June 7, 2010
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What about women on welfare?

While most recent media coverage of the financial crisis focuses on the economic downturn’s impact on the middle class, in an article which ran last month in The Nation Katha Pollitt asks: “But what about the people who already were poor before the crisis? Like women on welfare?” To help her answer that question Pollitt cites Jane L. Collins and Victoria Mayer’s new book on the subject Both Hands Tied: Welfare Reform and the Race to the Bottom in the Low-Wage Labor Market—an eye-opening account of how the welfare reforms of the past few decades have afflicted poor, single-parent families, ultimately eroding the participants’ economic rights and affecting their ability to care for themselves and their children. In the article Pollitt argues that if welfare reforms were failing economically impoverished single-parents before, the financial crisis has greatly amplified the socially devastating effects they’ve had on America’s underclass. Read it online at The Nation website. . . .

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Hayek’s Moment in the Spotlight Explained

February 17, 2010
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Hayek’s Moment in the Spotlight Explained

Last seen rapping about free-markets, F. A. Hayek is enjoying a popularity resurgence. Not only has his hip hop video been viewed three-quarters of a million times (and with a new recommendation from Boing Boing, hits are bound to keep rising), but he (or at least his legacy) has been appearing everywhere from John Stossel’s Fox Business Channel show to our very own bestseller lists. Not too shabby for an economist who has been dead for nearly twenty years and whose theories have been overshadowed in the era of the stimulus by his rival Keynes. We asked Bruce Caldwell, editor of Hayek’s collected works, why this is Hayek’s moment and why his 1944 book The Road to Serfdom is finding new audiences. His response was published today on the Washington Post‘s Short Stack blog. Check it out for the story behind the book, and be sure to read up on the book’s publishing history (which Caldwell essentially extends in his WaPo piece) here, as well as our library of all of Hayek’s titles. . . .

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Boggs bills—where money ends and art begins

February 12, 2010
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Boggs bills—where money ends and art begins

As a recent post on Amazon’s book blog Omnivoracious points out, the volatile economic climate we’ve been living through the past few years makes it easy to question the real value of the dollar. When a financial crisis can put more Americans out of their homes than any of the major natural disasters that have hit the U.S. in the last decade, the nature of currency as an artificial construct is particularly obvious—and particularly ugly. But as it turns out, one contemporary artist, J.S.G. Boggs, has been using his craft to make a similar point in a somewhat more aesthetically pleasing, though highly controversial, way. As Omnivoracious blogger Tom Nissen writes: J.S.G. Boggs is an artist, and in some minds, particularly those of the Bank of England and the U.S. Secret Service, a criminal. His crime is the reproduction of national currency. He draws money. But he doesn’t just draw dollar bills and put them up in frames on gallery walls as a conceptual joke. He actually goes out and uses his drawings as money. When presented with a bill at a restaurant, say, he’ll offer instead to pay with a Boggs bill… They are usually only drawn on one . . .

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Fear the Boom and Bust

February 12, 2010
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The economist and philosopher F. A. Hayek, best known for his staunch defense of free-market capitalism, may have passed away nearly two decades ago, but he’s recently been resurrected in a viral video in which he rap-debates John Maynard Keynes, an advocate of government invention in the economy. The disagreements between the two great thinkers have been memorialized before, as in our volume Contra Keynes and Cambridge: Essays, Correspondence, but perhaps never so cleverly. (Just try getting the hooky chorus of “We’ve been going back and forth for a century, I want to steer markets, I want them set free” out of your head.) But the economics-lesson-cloaked-as-catchy-rap-ditty is only the latest in a long tradition of popularizing Hayek’s (often unpopular) theories. Bruce Caldwell, editor of The Collected Works of F. A. Hayek, notes in his introduction to The Road to Serfdom: Text and Documents—The Definitive Edition that Hayek was concerned about the book’s popularity and worried about misinterpretation. Indeed, many people were introduced to the book not through the primary object but through Reader’s Digest‘s 20-page condensed version, which appeared in the April 1945 issue of the magazine, or the cartoon treatment that had been published in the . . .

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Allen Meltzer on the role of the Federal Reserve

January 7, 2010
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Allen Meltzer on the role of the Federal Reserve

Allan Meltzer author of the definitive History of the Federal Reserve recently made an appearance on C-SPAN to discuss Federal Reserve policy before and after the financial crisis and the role that current chairman Benjamin Bernanke has played. While Bernanke has recently made it quite public that he believes that lax regulation of the financial industry rather than lax management at the Fed is to blame for the recession, Meltzer has some different ideas. Check out the streaming video below: Check out the University of Chicago website for more about Meltzer’s A History of the Federal Reserve. . . .

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A Rescue Plan for America’s Public Universities

January 6, 2010
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A Rescue Plan for America’s Public Universities

As Patricia Cohen recently wrote in the New York Times reviewing two new books on higher education, “champions of the market can turn up in the oddest places. At the same time that bankers and businessmen are acknowledging the downsides of unregulated capitalism, college and university reformers are urging the academy to more closely embrace the marketplace.” And one of the reformers Cohen reviews is our author. In Saving Alma Mater: A Rescue Plan for America’s Public Universities James C. Garland draws on more than thirty years of experience as a professor, administrator, and university president to argue that a new compact between state government and public universities is needed to make these schools more affordable and financially secure. As Cohen writes: Mr. Garland is concerned with putting public university systems on a solid financial footing. Although they educate 80 percent of the nation’s college students, public institutions have seen their quality sapped by shrinking government aid, changing demographics and growing income inequality. In Saving Alma Mater, Mr. Garland argues that government should end subsidies altogether and allow supply and demand to rule. Let public universities compete for students and set their own tuitions. To ensure that poor students can . . .

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Gary Becker and Richard Posner on Extension 720

December 14, 2009
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Gary Becker and Richard Posner on Extension 720

Gary Becker and Richard Posner have been offering up some of the most insightful social and political commentary on the internet through The Becker-Posner blog for five years now. Starting back in December of ’04, Becker, a Nobel Prize-winning economist, and Posner, a renowned jurist and legal scholar, (both at the University of Chicago), teamed up to offer their equally learned, but sometimes conflicting insights on everything from the legalization of gay marriage to the sale of human organs for transplant, quickly building a large, and loyal audience. So large, in fact, that in November of 2009 the University of Chicago Press published a “best of” collection of entries from their blog in their new book: Uncommon Sense: Economic Insights, from Marriage to Terrorism. Recently, Milt Rosenberg, the host of WGN radio’s Extension 720 invited the two on the show to discuss their new book, highlighting their pithy commentary on some of the most hot button issues of the day, including the legitimacy of the death penalty, NYC’s proposed ban on trans fats, and illegal immigration. To listen in navigate to the Extension 720 website to stream or download part 1 and part 2 of their conversation or find out . . .

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Tutorials with Becker and Posner

November 10, 2009
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Tutorials with Becker and Posner

Before Freakonomics there was the Becker-Posner blog. Started in 2004 by Nobel Prize-winning economist Gary S. Becker and renowned jurist and legal scholar Richard A. Posner, the Becker-Posner Blog was unique in the still-developing blogosphere of the mid-aughts in that it offered a reliable source of lively, thought-provoking commentary on current events, its pithy and profound weekly essays highlighting the value of economic reasoning when applied to unexpected topics. Now in their new book Uncommon Sense: Economic Insights, from Marriage to Terrorism Becker and Posner collect some of their best work from their blog, offering uncanny analyses on everything from gay marriage to proposed bans on trans fats. Recently reviewer John Kay summarized their analysis of New York’s 2006 trans fat ban for a review of the book in the Financial Times, detailing Becker’s insightful economic critique of the issue and Posner’s libertarian counterargument. In the end, as Kay notes, Becker and Posner may not deliver easy answers—especially when these two intellectual powerhouses go head to head on an issue—”but the book is like a series of tutorials from a good teacher, and the object of a good tutorial is not to tell the student the answers.… The objective is . . .

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Press Release: Becker-Posner, Uncommon Sense

November 4, 2009
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Press Release: Becker-Posner, Uncommon Sense

What do you get when you combine one of the world’s most influential economists and one of its most important legal thinkers? Well, when the two men concerned are Gary Becker and Richard Posner, you get sharp commentary, serious analysis, and innovative thinking about a stunning range of contemporary political and social issues. Week after week for nearly five years, that’s what Becker and Posner have been offering at the Becker-Posner blog, and with Uncommon Sense, they gather the best of the posts and running debates that have informed, surprised, and confounded a host of readers. Arranged by topic, and updated to take account of subsequent developments, the essays in this volume bring an economic perspective to such questions as the sale of human organs, the use of steroids in professional sports, the regulation of CEO compensation, and many more. To watch two such erudite thinkers trade ideas—and even forceful disagreements—is a sheer pleasure, and a testament to the power of minds unfettered by convention and unwilling to settle for received wisdom. Read the press release. . . .

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