George Stigler: Market Failure Much Smaller than Political Failure
George Stigler once made the case for a market-based economy (in an entry about "Monopoly" in the Concise Encylopedia of Economics) just by arguing that it beats the alternatives.
- 26/08/2019
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How Adam Smith's Idea of the Division of Labor Led to the Digital Computer
Herbert Simon and Allen Newell tell the story of how Adam Smith's ideas directly led to the development of the digital computer in an address delivered to the Twelfth National Meeting of the Operations Research Society of America, Pittsburgh, Pennsylvania, November 14, 1957. The lecture was published in Operations Research, January-February 1958, under the title "Heuristic Problem Solving: The Next Advance Operations Research" (pp. 1-10). For those who like their stories with some credentials attached, Simon and Newell shared the Turing prize, sometimes referred to as the "Nobel prize in computing" in 1975, and Simon won the Nobel prize in economics in 1978.
- 24/08/2019
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The Iron Law of Megaprojects vs. the Hiding Hand Principle
The next time you read about a "bridge to nowhere" or a giant infrastructure project that started and then stalled, you may wish to mutter to yourself to the "Iron Law of Megaprojects: Over budget, over time, over and over again." It's a coinage of Bent Flyvbjerg. For an overview of his arguments, you can check this Cato Policy Report (January 2017), which in turn is based on this article from the Project Management Journal (April/May 2014). In the Cato report, Flyvbjerg writes:
- 22/08/2019
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Tradeoffs of Free Higher Education: Finland, South Korea, England, United States
All goods and service have both a cost of production and a price paid by the consumer. If the government wishes to do so, it can raise revenues through taxing or borrowing to pay for the cost of production for certain goods and services, and thus allow the consumer to receive the good or service for "free." Many high-income countries around the world subsidize part or most of the cost of higher education in this way.
- 20/08/2019
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What the IMF Thinks about China's Exchange Rate and Trade Balance
A couple of weeks ago, US Treasury Secretary Steven Mnuchin announced his finding that China was manipulating its currency to keep it unfairly low, and further announced that he would be taking the issue up with the International Monetary Fund. I offered some of my own views on this announcement when it happened. But what's interesting here is not what I think, or even what Mnuchin thinks, but what the IMF thinks.
- 19/08/2019
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