Economics: A Survey

There are many books that offer sweeping views of economics, from its theoretical and empirical foundations to a broad range of applications. An equivalent, available at no cost on the internet, is College Economics Topics, which is broader and, in some cases, deeper than the offerings at this blog.

This is an annotated compilation of links to the pages and posts at this blog which, taken together, will enlighten those readers who seek a candid — and often unorthodox — view of economics and economic issues. Many of the pages and posts listed below are illustrated by statistics that are a few months to several years out of date.  The conclusions remain valid, however.

Some pages and posts are cited more than once because of their relevance to various aspect of economic theory and the many political issues that are economic in nature.

BROAD VIEWS OF ECONOMICS

I have published several series of posts in which I plow the landscape of economics from different directions. “A Short Course in Economics” and “Addendum to a Short Course in Economics” state a number of basic propositions about economics and economic behavior. These aren’t rigorous expositions of economic principles, but they will point a neophyte in the right direction — that is, away from the upside-down economics spouted by leftists and “journalists” (but I repeat myself).

A second series comprises these posts:

The Essence of Economics
Economics and Science
Economists as Scientists
Mathematical Economics
Economic Modeling: A Case of Unrewarded Complexity” (updated by “Macroeconomic Modeling Revisited“)
Economics from the Bottom Up

These are the entries in a third series:

Unorthodox Economics: 1. What Is Economics?
Unorthodox Economics: 2. Pitfalls
Unorthodox Economics: 3. What Is Scientific about Economics?
Unorthodox Economics 4: A Parable of Political Economy
Unorthodox Economics: 5. Economic Progress, Microeconomics, and Microeconomics

The fourth series spans these topics:

Economics Explained — Part I: What Is Economics About?
Economics Explained — Part II: Economic Principles in Perspective
Economics Explained — Part III: The Principles Illustrated
Economics Explained — Part IV: Loose Ends and Finishing Touches

Also broad in scope is “Economic Growth Since World War II“, which comprises these sections:

I. The Causes of Economic Growth
II. The Record Since World War II
III. The Rahn Curve in Action
IV. The True Multiplier
V. Government vs. Growth: A Natural Experiment
VI. Employment vs. Big Government and Disincentives to Work

There is, of course, much overlap between the various broad treatments of economics listed above, and between them and the many specialized posts mentioned below.

FOUNDATIONAL ERRORS OF ECONOMICS

There are many of these, most of which are covered in the pages and posts listed above. There are a few that warrant special mention. “The Rationality Fallacy” exposes an error common among economists, which is to equate wealth maximization and happiness. “Income and Diminishing Marginal Utility” and “Diminishing Marginal Utility and the Redistributive Urge” expose an error common among economists and leftists (but I repeat myself), which is to assume that a person’s marginal utility (gain in happiness) diminishes with income and therefore justifies the redistribution of income.

The most egregious of the errors, because it wields the most influence, is the belief that that an exogenous (deficit-financed) increase in government spending can stimulate the economy through the multiplier effect when there is general underemployment of resources. I demolish the multiplier in “Keynesian Multiplier: Fiction vs. Fact“. Also of note are:

A Keynesian Fantasy Land
The Keynesian Fallacy and Regime Uncertainty
Why the “Stimulus” Failed to Stimulate
Say’s Law, Government, and Unemployment
Regime Uncertainty and the Great Recession
Vulgar Keynesianism and Capitalism

To round out this section, I strongly recommend Arnold Kling’s essay, “The Great Miscalculator” (National Affairs, Spring 2019). Kling, who holds a Ph.D. in economics from M.I.T, takes no prisoners in his dissection of economic theory and modeling.

THE ECONOMIC (AND SOCIAL) EFFECTS OF GOVERNMENT INTERVENTIONS

Government spending, coupled with regulatory activity, has cost Americans trillions of dollars and tens of millions of jobs (see “The Rahn Curve in Action“). This happened mainly because the Great Depression provided a convenient excuse for the attainment of the left’s desideratum: government control of the social and economic affairs of Americans (see “The Indivisibility of Economic and Social Liberty” and “The Fourth Great Awakening“). As it happens the Franklin Delano Roosevelt’s New Deal prolonged the Great Depression (see “FDR’s Policies Prolonged Depression by 7 years, UCLA Economists Calculate“) while providing a stage for America’s truly fascistic president: FDR himself (see “FDR’s Fascism, Underscored” and the posts linked to therein).

The Federal Reserve, to name the main culprit, can claim responsibility for the Great Depression and the Great Recession, as well as other recessions. See “Mr. Greenspan Doth Protest Too Much“, “The Fed and Business Cycles“, and “Money, Credit, and Economic Fluctuations“.

Then there is a phenomenon known as regime uncertainty, in which entrepreneurship and capital formation are discouraged — temporarily, at least — by the threat of new government interventions. That threat that is more potent now than it has been since the New Deal-Great Society era. I address regime uncertainty in “The Keynesian Fallacy and Regime Uncertainty” and “Regime Uncertainty and the Great Recession“.

Government interventions in economic affairs are prompted by many interests and impulses — power-seeking, rent-seeking, economic illiteracy, and plain old do-goodism being among them. Among the chief reasons given for interventions is “market failure”, which is among the subjects addressed in “Regulation as Wishful Thinking“. Closely related posts that bear reading are “Socialist Calculation and the Turing Test“, “What Free-Rider Problem?“, “Don’t Just Stand There, ‘Do Something’“, “The Public-Goods Myth“, “, and “Megaprojects, Cost-Benefit Analysis, and “Social Welfare“.

The political economy of government intervention is treated generally in “Tocqueville’s Prescience” and “Understanding Hayek“. The rhetorical advantage enjoyed by pro-interventionists is explored in “Asymmetrical (Ideological) Warfare” and “An Addendum to (Asymmetrical) Ideological Warfare“.

The darker impulses of pro-interventionists are addressed in “Don’t Use the ‘S’ Word When the ‘F’ Word Will Do” (the “S” and “F” words are “socialism” and “fascism”),  “Society, Culture, and America’s Future“, “The Democrats’ Master Plan to Seize America“, “The Allure of Leftism“, “Leftism in Summary“, “Peak Civilization?“, “A Footnote to “Peak Civilization?”“, and “A Warning Too Late?“.

Finally, “Homelessness” treats one of the most visible and tragic effects of government interventions.  But homelessness is just the tip of the iceberg, as “The Rahn Curve in Action” attests.

OTHER SALIENT ISSUES

We’re not through with government, which plays an explicit and implicit role in the following matters (arranged alphabetically):

Government Debt and Deficits. The best posts on this subject were inspired by the Bowles-Simpson Deficit Commission, whose work — flawed as it is — seems to have been ignored. The “can” is still being kicked down the road, and the consequences will be dire. Read on: “The Deficit Commission’s Deficit of Understanding“, “The Bowles-Simpson Report“, “The Bowles-Simpson Band-Aid“, and “America’s Financial Crisis Is Now“.

Income Inequality and Redistribution. Some persons earn more money than other persons because of differences in ability, performance, and the value of their contributions to the well-being of others. This straightforward explanation doesn’t suit idiots like Robert Reich, who are handicapped by economic illiteracy, guilt, and hypocrisy. The inescapable fact of income inequality is often conflated with the so-called “war” on the middle class. (Pending a post on that subject, I refer you to this one by Mark J. Perry.)

I have addressed inequality several times. The brief post, “The Last(?) Word about Income Inequality” provides several links that are worth following. Other posts expose income inequality as a bogus issue and warn of the dire economic consequences of taxing “the rich” more than they are already taxed: “Taxing the Rich“, “More about Taxing the Rich“, “In Defense of the 1%“, “Progressive Taxation Is Alive and Well in the U.S. of A“, “How High Should Taxes Be?“, “Some Inconvenient Facts about Income Inequality“, and “Mass (Economic) Hysteria: Income Inequality and Related Themes“, “Income Inequality and Economic Growth“, “A Case for Redistribution, Not Made“, and “McCloskey on Piketty“.

If you’re in the mood for a more fundamental treatment of the “inequality problem” try “Income and Diminishing Marginal Utility“, “Greed, Cosmic Justice, and Social Welfare“, “Positive Rights and Cosmic Justice“, “Utilitarianism, ‘Liberalism,’ and Omniscience“, “Utilitarianism vs. Liberty“, “Accountants of the Soul“, “Rawls Meets Bentham“, “Enough of ‘Social Welfare’“, “Positive Liberty vs. Liberty“, “Social Justice“, “More Social Justice“, “Luck Egalitarianism and Moral Luck,”, “Utilitarianism and Psychopathy“, and “Nature, Nurture, and Inequality“.

Inflation.  Or the threat of it, seems to be a perennial problem. At root, it is a government problem, as I discuss in “Why Government Spending Is Inherently Inflationary“, “Is Inflation Inevitable?“, and “Does the CPI Understate Inflation?“.

Interest Rates. Government-induced stagnation, addressed above, reappears in “Why Are Interest Rates So Low?” and “Why Are Interest Rates So Low? (II)“. See also “Bonds for the Long Run?“.

Monopoly. It’s a dirty word, on a par with “asbestos”. Monopoly — or the hope of attaining it — is essential to economic growth, as discussed in “Monopoly and the General Welfare“. If you want to see a dysfunctional monopoly, look at government (a central point of “Krugman and Monopoly“). Private monopoly, on the other hand, is preferable to government regulation; thus “Monopoly: Private Is Better than Public” and “Putting In Some Good Words for Monopoly“.

Paternalism. “Libertarian paternalism” is an oxymoron; more accurately, it is dangerous, anti-libertarian treachery. Two leading proponents of “libertarian paternalism” are Richard Thaler, an economist, and Cass Sunstein, a law professor and erstwhile “regulatory czar” for Obama.

Thaler, given his academic background, might once have been a libertarian, but clearly has lost his way: “Libertarian Paternalism“, “A Libertarian Paternalist’s Dream World“, “Th Short Answer to Libertarian Paternalism“, “Second-Guessing, Paternalism, Parentalism, and Choice“, “Another Thought about Libertarian Paternalism“, “Another Voice Against the New Paternalism“, “Slippery Paternalists“, “A Further Note about ‘Libertarian’ Paternalism“, “The Perpetual Nudger“, “Richard Thaler, Nobel Laureate“, “Thaler’s Non-Revolution in Economics“, “Thaler on Discounting“, ” and “Thaler’s Fatuousness“.

Sunstein never came close to being a libertarian, and is about as anti-libertarian as they come, as you will learn if you read the posts about him: “Sunstein at the Volokh Conspiracy“, “More from Sunstein“, “Cass Sunstein’s Truly Dangerous Mind“, “An (Imaginary) Interview with Cass Sunstein“, “Slippery Sunstein“, “Sunstein and Executive Power“, “Another Entry in the Sunstein Saga“, “The Sunstein Effect Is Alive and Well in the White House“, “Sunstein the Fatuous“, and “No Tears for Cass Sunstein“.

Pseudo-libertarians have no corner on paternalism, of course. Witness the wars on smoking and obesity of the past 60 years. I address the latter issue in “Obesity and Statism“.

Regulation. It is fitting to jump from “Paternalism” to “Regulation” inasmuch as regulation is paternalism writ huge. Regulation touches every facet of our lives and livelihoods. I have written about it so many times that it is hard to choose a list of representative posts. I began with “Fear of the Free Market — Part I” and continued with “Part II” and “Part III“. Those three (long) posts make a theoretical and practical case against regulation. “Regulation as Wishful Thinking” makes the same case, though less thoroughly (but in far fewer words). The extent of the regulatory burden, at the federal level, is summarized in “Lay My (Regulatory) Burden Down“. That post includes an estimate of the economic cost of regulation.

“Social Insurance” Schemes.  “Social insurance” is properly called income redistribution. The primary engines of income redistribution, in addition to progressive taxation, are Social Security, Medicare, and Medicaid — as expanded by Obamacare. The monumental government debt that will accrue as a result of these schemes is addressed above, under “Government Debt and Deficits”. I have covered income redistribution, generally, under “Income Inequality and Redistribution”. Posts specifically about “social insurance” schemes include “The Mythical, Magical, Social Security Trust Fund“, “Social Security: The Permanent Solution“, and “Saving Social Security“, and “Playing the Social Security Trust Fund Shell Game“. Obamacare is treated (not gently) in “Rationing and Health Care“, “The Perils of Nannyism: The Case of Obamacare“, “Health-Care ‘Reform’: The Short of It“, and “Social Insurance” Isn’t Insurance — Nor Is Obamacare“.

As a bonus, I offer “Social Security Is Unconstitutional“, “The Unconstitutionality of the Individual Mandate“, “Does the Power to Tax Give Congress Unlimited Power?“, and “Does Congress Have the Power to Regulate Inactivity?“. Yes, Social Security and the individual mandate (along with Medicare and Medicaid) are unconstitutional, various majorities of the Supreme Court to the contrary notwithstanding; no, the power to tax doesn’t give Congress unlimited power (according the Constitution); and no, Congress doesn’t have the constitutional power to regulate inactivity (i.e., to penalize or tax a person for not buying insurance).

Tax Policy. Tax policy is implicated in many of the posts already listed. I also address it, directly, in “Productivity Growth and Tax Cuts“, “A True Flat Tax“, “‘Tax Expenditures’ Are Not Expenditures“, “Taxes: Theft or Duty?“, and “Is Taxation Slavery?” (yes).

Trade and Markets. In several of the items listed under “Broad Views of Economics” I heartily endorse the advantages of free trade — the voluntary production and exchange of economic goods for mutual benefit. But that isn’t always the case with international trade, as I argue in “Rethinking Free Trade“, “Rethinking Free Trade II“, and “Rethinking Free Trade III“. “Shaky Trade Talk” underlines the fatuousness of reflexive, economistic defenses of “free” trade with China.

Nor is trade beneficial when it undermines the norms that civilize and bind free societies; thus “Tragic Capitalism” and “Why Is Capitalism Under Attack from the Right?“. See also Joseph Heath’s excellent essay, “A One-Minute History of Conservatism and Anti-Rationalism“.