EconLog Archive
Spontaneous Order and Social Coordination
Social Constructs and Spontaneous Order
“Social construction” is prominent: we are told in various places that this or that is a “social construct”: think of gender, race, or money. One book that played a central role in the emergence of that concept is Peter Berger and Thomas Luckmann’s 1966 The Social Construction of Reality. That work can proudly claim more .. MORE
Entrepreneurship
Commerce and Warehouse Clubs
Adam Smith articulated the rhetoric of the Bourgeois Deal by highlighting fundamental differences among commercial, political, and martial societies. Everyone, he argued, is always practicing oratory on others and trying to persuade them to cooperate: “give me that which I want, and you shall have this which you want.” Luke Froeb and his coauthors in .. MORE
Price Theory
EconLog Price Theory: Veggies or Noodles?
This is the latest in our series of posts in our series on price theory problems with Professor Bryan Cutsinger. You can see all of Cutsinger’s problems and solutions by subscribing to his EconLog RSS feed. Share your proposed solutions in the comments. Professor Cutsinger will be present in the comments for the next couple .. MORE
Sam's Links
Sam’s Links: May Edition
Sam Enright works on innovation policy at Progress Ireland, an independent policy think tank in Dublin, and runs a publication called The Fitzwilliam. Most relevant to us, on his personal blog, he writes a popular link roundup; what follows is an abridged version of his and Links for April. Blogs and short links 1. Rest .. MORE
Property Rights
The Bank Doesn’t Own Your House (Neither Does the Government)
There’s a common trope among people who have collateralized debt that, until the debt is cleared, they never truly own their property. For example, the bank holds the mortgage, and if mortgage payments aren’t made, the bank can seize the house. The trope says that the “pay to stay” nature of the loan means the .. MORE
Property Rights
Would Hasan Piker Steal A Car?
In a controversial conversation platformed by the New York Times and recently discussed in The Atlantic, streamer Hasan Piker implied that he might steal a car if it carried no consequences. In the interview, author Jia Tolentino also casually admits to shoplifting lemons from Whole Foods. Although petty theft is common, the interview clip spread .. MORE
Adam Smith
Development by Consent
March 2026 marked the 250th anniversary of the publication of An Inquiry into the Nature and Causes of the Wealth of Nations (1776). However, Adam Smith was also the author of The Theory of Moral Sentiments (1759) and it was through his continuous revisions of this earlier work that his more famous book emerged. One .. MORE
Labor Market
Algorithmic Management, Monitoring, and Control: Worker Classification in the Digital Age
Nowadays, it’s hard to read anything about workplace policy without running into “algorithmic management.” Companies, we’re told, are increasingly controlling workers through an array of digital “tricks.” These companies record our keystrokes, track our locations, and even watch us through our webcams. We hear this same story in academic journals, government reports, and the popular .. MORE
Public Choice Theory
Asymmetric Accountability
People respond to incentives. With some generous interpretation, this simple sentence summarizes the bulk of what you’ll learn in any good undergraduate economics course. The challenge, of course, is to realize that this is always true even when we might want it to not be. For example, imagine for a minute that you’re in a .. MORE
Human Capital
AI and Comparative Advantage
It was a fact universally acknowledged that a young man or woman in 1800s Lancashire could find gainful employment as a weaving apprentice. In the pre-factory cottage industry, a weaving family would typically own one handloom. With the dawn of mechanised wool spinning, plenty of jobs became available for the young and willing to upskill. .. MORE
International Trade
The “Trade Deficit” is a Misnomer
The United States, like most other countries, use a method of double-entry accounting to track certain aggregate statistics known as National Income Accounting. One of the statistics tracked is the balance of trade. The balance of trade reports the difference between imports and exports. When imports exceed exports, we are said to have a trade .. MORE
Microeconomics
A Fairness Trilemma in Hiring
Economists like to draw triangles. In trade, you can’t have high tariffs, no retaliation, and unchanged prices. In monetary policy, you can’t fix interest rates, fix the money supply, and promise perfect stabilization. In hiring under unequal starting conditions, there is a similar triangle that most debates about fairness in hiring glide past. When firms .. MORE
Economic Methods
Is Economics Finally Becoming Trustworthy?
“There are two things you are better off not watching in the making: sausages and econometric estimates. This is a sad and decidedly unscientific state of affairs we find ourselves in. Hardly anyone takes data analyses seriously. Or perhaps more accurately, hardly anyone takes anyone else’s data analyses seriously.” That is the scathing critique that .. MORE
Incentives
Markets and Reputations vs Shenanigans
Why do factory seals matter? If you look at trading cards on eBay, you’ll find that factory-sealed sets, packs, and boxes command a premium over anything opened. If you have listened to any episode of EconTalk featuring Michael Munger, you will know that “the answer is transaction costs.” You probably understand why: the factory seal .. MORE
Sam's Links
Sam’s Links: April Edition
Sam Enright works on innovation policy at Progress Ireland, an independent policy think tank in Dublin, and runs a publication called The Fitzwilliam. Most relevant to us, on his personal blog, he writes a popular link roundup; what follows is an abridged version of his Links for February and Links for March. Blogs and short .. MORE
Money and Inflation
Making Money…Less Useful?
One of my brothers recently joked that he would love to meet the person who first pitched gift cards. Who ever thought that consumers would agree to make their money less useful? This is an important question for economists as well. Carl Menger’s famous book On the Origins of Money argues that money could have .. MORE
Regulation
AI vs the Rent Seekers
Mancur Olson’s The Rise and Decline of Nations doesn’t provide a particularly optimistic picture: once your nation has been stable for a while, and may even have risen to wealth, it becomes more and more vulnerable to “institutional sclerosis.” This happens because small groups are better able to overcome free-riding, resulting in their ability to .. MORE
Monetary Policy
Policy Dominance in Argentina
There are at least two meanings for “dominance” in relation to monetary and fiscal policy. The first one, proposed by Milton Friedman in 1968, is that when monetary policy and fiscal policy are in contradiction, that is, one is expansionary and the other contractionary, the effects of monetary policy tend to prevail. The other meaning, .. MORE
Growth: Consequences
Tech Troubleshooting in Space
When astronaut Christina Koch, the first woman to fly around the moon, reported an issue from space that could have been copy-pasted from any IT helpdesk ticket, something clicked for Americans. Her grievance? “No joy seeing the device in the list of available devices when I attempt to re-pair it after doing the Bluetooth forget.” .. MORE
Adam Smith
Of Course We’re Still Reading Wealth of Nations at Econlib
Today, we’re our joint celebration with our friends at Liberty Matters of the 250th anniversary of the publication of An Inquiry into the Nature and Causes of the Wealth of Nations through a series of six weekly essays. In this final essay, Craig Smith asks about Wealth of Nations’ legacy and what we can still get from .. MORE
Adam Smith
The Nations in Wealth of Nations
Much of Adam Smith’s writing in An Inquiry into the Nature and Causes of the Wealth of Nations (WN) is concrete. He explores examples of contemporary and ancient economic, political, religious, and military situations to better understand the world he lived in. As a result, his commentary touched on the economic situations of many nations. .. MORE