Archive | Economics

Ayn Rand publicly recommended the works of Mises but not of Hayek. Today, when Hayek is much better known than Mises, it’s worth seeing why. I came to the full realization of what’s wrong with Hayek’s approach while re-reading Atlas Shrugged. No, not in Galt’s speech, but surprisingly in the section describing the Minnesota harvest [...]

Advocates of a number of government interventions often argue that such measures are required to deal with the “free rider problem.” Indeed, Mitt Romney has called his insurance mandate in Massachusetts a “free rider surcharge.” Wikipedia describes the “free rider problem” as: In economics, collective bargaining, psychology, and political science, a free rider (or freeloader) [...]

First published in 1946, Economics in One Lesson by Henry Hazlitt remains one of best books on economics ever published. The lesson, to paraphrase Hazlitt, is that economists must look beyond the immediate and visible consequences of economic policies; they must look at the long term and “unseen” consequences. Hazlitt begins his lesson with the [...]

The savings of the wealthy and the innovation of entrepreneurs combined to create a huge benefit for society. Call it trickle down if you want, but it would be more honest to simply call it effective. This is the system that built this country. Relying on trickle up will surely destroy it.

The fundamental issue is not wage rates, but productivity.

For decades, it has been argued that certain goods are “natural monopolies,” which Investopedia describes as: A type of monopoly that exists as a result of the high fixed or start-up costs of operating a business in a particular industry. … The utilities industry is a good example of a natural monopoly. The costs of establishing a means to [...]

President Obama has long told us that “green” energy would create thousands of jobs. His administration has “invested” billions of tax dollars in a myriad of “green” industries. Predictably, the results have been the opposite of what we were promised. As one example, a story in the Houston Chronicle tells us: A123 Systems, a battery [...]

Imagine that you start a business, and after years of hard work, you achieve the success that you had long thought possible. How would you react if, after achieving success, the government told you that you must pay a portion of your revenues to your competitors? The government “justifies” this policy, not because you have [...]