EconLog Archive
Cost-benefit Analysis
You Cannot Outsource Life: Severance and Wild Problems
In Season 1 of the TV show Severance, we learn that the main character, Mark Scout, once shared a life with his wife, Gemma, whose presumed death he mourns. In Season 2, the audience sees flashbacks of the highlights of their romantic life but also some profound pain they experienced (for example, a miscarriage). Maintaining .. MORE
Economic and Political Philosophy
Human Flourishing and Marginal Utility
The law of diminishing marginal utility is one of the foundational principles of economics, but its significance extends far beyond the marketplace. The principle states that as a person acquires additional units of a good, the satisfaction gained from each successive unit tends to decline. The first glass of water relieves intense thirst, the second .. MORE
International Trade
Trade and Employment
How much is international trade costing Americans jobs? It turns out, not much. A major objection by protectionists is that international trade with other countries, especially low-wage countries, will undermine American workers. As a consequence, there will be a “giant sucking sound” (to use Ross Perot’s phrasing) as jobs are pulled from the United States .. MORE
Sam's Links
Sam’s Links: July 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 June. Blogs and short links 1. From .. MORE
Political Economy
America the Market
Adam Smith’s publication in 1776 of An Inquiry Into the Nature and Causes of the Wealth of Nations (WN) may not have had a direct influence on the drafting of the Declaration of Independence. Smith’s The Theory of Moral Sentiments (TMS) was better known in 1776 and certainly did influence the colonists. But Smith’s arguments on political economy may .. MORE
Obituaries
A Tribute to Mark C. Schug’s Career in Economic Education
On July 13, the field of economic education lost one of its leading educators, Dr. Mark C. Schug. I had the privilege of knowing Mark for many years and the honor of coauthoring Economic Episodes in Civics and American Government with him. This tribute aims to preserve the historical record of his remarkable career and .. MORE
Economic Methods
What if Canada Did an IPO?
Can a private company be worth more than Canada’s entire economy? Some people seem to think so. Every so often, a superstar company, usually in the tech sector, hits a record valuation, prompting comparisons to a country’s GDP. For example, NVIDIA’s market capitalization surpassed Canada’s GDP in 2025. By May 2026, the chip designer was .. MORE
Political Economy
Taxation Without Representation: An Enduring American Grievance?
Few political ideas have proven as durable as the complaint embedded in the Declaration of Independence that the British Crown was “imposing taxes on us without our consent.” That grievance was not merely rhetorical flourish; it captured a central concern of the American colonists about the relationship between political authority and individual liberty. More than .. MORE
Labor Market
The High Cost of Just Cause
This month, amid World Cup fever, New York City implemented a new job-protection law. This law forbids app-based rideshare platforms from removing drivers unless they can show they have “just cause” or a “bona fide economic reason.” The new law follows a pattern set by a similar pandemic-era law, also from New York City, which .. MORE
Austrian Economics
A World Cup Final Through Austrian Eyes
Imagine that history made one small exception. For one evening only, time stopped separating generations. High above the noise of a packed World Cup final game, in a quiet corner of the grandstand untouched by television cameras, eight elderly gentlemen quietly took their seats. No one around them seemed to notice. The crowd had come .. MORE
Political Economy
War: The Dreaded Enemy of Liberty
America was born in war. The American Revolution and subsequent constitution of the newly-formed United States reflected some of the key ideas of liberalism—natural rights, government by consent, and limits on state power. The Revolution, however, was just the beginning of war as part of the American identity. Between 1798 and 2023, the United States .. MORE
Tariffs
A Brief History of Strategic Tariffs in the U.S.
A May 29 article in the IMF’s F&D Magazine argues in favor of using U.S. tariffs as a policy tool. It begins by questioning the argument for free trade, claiming that economists have based U.S. and global trade policy on theoretical models rather than empirical evidence: “Tariffs were not tried and found wanting but rejected .. MORE
Political Economy
The Cost of the American Revolution
The core of this argument is that the American Founding set the United States on a unique path that made it one of the richest and freest places in the world. Yet, this causal connection requires a leap of faith. Few have attempted to conjure a counterfactual in which America remained a British colony or .. MORE
Adam Smith
A Mutual Sympathy of Sentiments
In The Theory of Moral Sentiments, Adam Smith explains that we want to establish a “mutual sympathy of sentiments.” We want people to agree with our views, and we want to agree with their views. Smith first expanded on this idea—that we are constantly searching for ways to cooperate with one another—in The Theory of .. MORE
Liberty
Freddy the World Cup Tourist and Tocqueville’s Hopes for America
In the 1830s, a French aristocrat named Alexis de Tocqueville traveled through the United States and returned home with Democracy in America, a penetrating analysis of a society marked by energetic voluntary associations and a restless spirit of enterprise. Tocqueville admired much of what he saw, but his verdict was not uncomplicated. Near the end .. MORE
Adam Smith
1776 and All That: Thomas Jefferson on Adam Smith
A small industry within the history of economic thought continues to churn through the historical record in search of direct links between European ideas in political economy and the American Revolution and Founding. The attraction is understandable. Of particular interest is the alluring prospect of Adam Smith’s influence on the Founders. Put simply, if it was .. MORE
Political Economy
1776 in the US and Latin America
We are approaching the 250th anniversary of the United States’ Declaration of Independence on July 4th, 1776. However, that same year carries a different meaning in Latin America. Rather than the beginning of a system based on limits to power and individual freedom in the United States, 1776 represented a major turning point in the .. MORE
Sam's Links
Sam’s Links: June 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 May. Blogs and short links 1. Yudhister Kumar .. MORE
Politics and Economics
Bureaucratic Information Gathering
We rely on experts for a lot of our information. By “expert,” I mean someone who is paid for their opinion. Roger Koppl uses this definition in his 2018 book Expert Failure, and I use the same definition in my research, which is based on his book. This definition is useful because it allows us .. MORE
Price Theory
Cutsinger’s Solution: Veggies and Noodles
Question: Consider the markets for fresh vegetables and instant noodles. Assume that fresh vegetables are a normal good, while instant noodles are an inferior good. Suppose Congress bans a commonly used fertilizer and pest-control chemical in vegetable farming. Without this input, vegetable yields fall due to increased spoilage and pest damage. (a) Using a supply .. MORE
Obituaries
Remembering Gordon Wood, 1933–2026
I first met Gordon Wood in the late 1980s, when I was a graduate student attending a roundtable organized by the Institute for Humane Studies, an organization devoted to exploring ideas of freedom and the open society, now based at George Mason University. For a young academic, it was an important occasion, bringing together several .. MORE