Daily Archives: 10/26/2010

Hayek Quotes of the Day (via  Modeled Behavior)

I can’t add much other than some of this may shock some who buy Road to Serfdom on Glenn Beck’s advise. Though a lot of people who buy the book may never crack the cover.

My Hayek exposure was mostly The Use of Knowledge in Society style stuff. I am  just now reading The Road to Serfdom for the first time. While his analysis of why markets work has always been wonderful, from what I can tell his political economy seems to echo that of a distinctly left-of-center economist by modern standards. Probably nothing has done so much harm to the [libertarian] cause as the wooden insistence of some [libertarians] on c … Read More

via  Modeled Behavior

Which economic ideas are hard to popularize?

I think the two most important might be:

1. Free trade is good, even if it eliminates some existing jobs; and

2. Policy that produce jobs aren’t always good

People have trouble with the idea that keeping some jobs may be worse than allowing those jobs to be displaced and letting larger benefits accrue to consumers than accrue to those who lost their jobs, and that better jobs will be created.

 

From Marginal Revolution:

“Ryan, a loyal MR reader, asks:

1. What are the most important economic ideas that are not popularized, i.e. not accessible to laypeople in books and articles by credible authors? …Are there any theories that have gained traction over competing theories based primarily on their ability to be more easily conveyed to a layperson audience as opposed to their providing a better solution to a particular problem?

As for non-popularized theories, I have a few nominations. First, the sensitivity of many economic results to assumptions about Bertrand, Cournot-Nash, and other solution concepts is not easily popularized.  Second (until the Cowen-Tabarrok macro text), the Solow growth model was not easily popularized.  The difference between a “once-and-for-all” change and a “change in the rate of growth” is not well understood, probably not at any level, yet it is important.  Tax incidence theory is not easily popularized, although an incorrect version of it — “they’ll pass it all along to consumers” — circulates.

Most behavioral economics can be easily explained in popular terms and that partially accounts for its broad influence.  Most people are also capable of grasping a crude version of Keynesian economics, albeit without the subtleties of Keynes (“we should spend more” resonates).  The insights of supply-side economics and monetarism have been popularized without much difficulty.

Most of all, it is hard to popularize “maybe” claims, agnoticism, uncertainties, confidence intervals, and contingencies.  The marketing process encourages excess certainty.

In terms of good but hard to popularize economic theories, what else can you think of?”

via Which economic ideas are hard to popularize?.

Crass Ass Conservatism: The Real Republican Pledge to America (via The Erstwhile Conservative: A Blog of Repentance)

I was thinking of voting Republican beause of the advantages of mixed government, but I think I’ve drawn back. Read on from “the Erstwhile Conservative” to see why.

Crass Ass Conservatism: The Real Republican Pledge to America Paul Krugman wrote yesterday in the New York Times about the failure of the Obama administration to propose a large enough stimulus plan to combat the financial crisis the administration underestimated. While admitting that the Recovery Act made things better than they would have been—he estimated unemployment would be near 12% without it—Krugman called the stimulus a "political catastrophe."  "Voters respond to facts," he said, "not counterfactu … Read More

via The Erstwhile Conservative: A Blog of Repentance