Posts tagged economics
Posts tagged economics
The University of Chicago’s Emily Oster offers a formula:
Between Costco and the store across the street, you’ve got a simple opportunity/cost argument. The store across the street is closer but more expensive (I presume). Costco is farther, but cheaper. Multiply the difference in travel time by your value of time (your wage is a good measure). If the Costco savings outweigh this, jump in the car.
Myself, I know some things are available in some stores, but not in others. I also know there’s a huge difference in quality between some places. So it’s not uncommon that I’ll visit more than one grocery in a month to fill all my eating needs. Plain and simple, I’m a utility-maximizer, and accounting profits, while sometimes a consideration, because having money gives me utility, shouldn’t be the sole driver of choices regarding something so wonderful as food.
I respectfully disagree with Ms. Oster.
Why do we pay taxes? Taxes solve the collective action problem known as the free rider problem. When it comes to the provision of public goods like law enforcement, everyone in a community is willing to enjoy the benefit of police protection, but nobody is willing to give up their trade to bring it about. Why? Because they make money in their trade, and there’s no treasury to pay them for being a policeman. That’s why we pay taxes: to fill a treasury that pays for public goods like law enforcement.
The problem is that progressives in the Republican and Democratic Party believe that a lot of items on their personal policy wish lists are free rider problems that need taxation to provide for whatever is lacking — birth control, unmanned aerial vehicles (in a volunteer military), etc.
An actual platinum coin that has already been minted by the United States.
Not to go all hipster on everyone or anything, but that tweet comes from the same day that Juicebox Mafia capo Ezra Klein covered the (dual) trillion dollar platinum coin proposal for the Washington Post.
What does anarchy look like? This cartoon is probably too tame to describe the reality, but it’s one libertarians should keep close by. Without laws, there is no neutral enforcement of contracts. Without neutral enforcement of contracts, there is no practically meaningful claim to private property, if a moral one exists. The problems displayed in this cartoon are all great set-ups to talk and learn about the Coase Theorem.
Of course some anarchists may not like private property. But the people I know who don’t like private property are usually socialists who prefer massively intrusive governments — they’re certainly not anarchists.
This short cartoon helps describe comparative advantage through labor specialization to elementary schoolers.
This will only be funny to the economically illiterate (and even then, there’s no guarantee).
Can you spot the error?
This awesome sticker on a Tennessee gas pump corrects information asymmetries in the market for political representation … more commonly expressed as “elections have consequences.”
Former Secretary of Labor and all-around kook Robert Reich:
Emphasis added to show where I am skeptical. If left wingers didn’t have such a bad reputation for excluding technological improvement in productive output vs. wage level studies, I’d be more willing to embrace this on its face. But lots of factors could mean higher output without more people taking time off, or more firms hiring employees they can’t afford.
I hypothesized recently to friends Sean Malone and Bryan Pick that we ought to examine the amount of money in politics today not solely as a function of “floodgates opened by Citizens United v. FEC" (which, according to my friend and former colleague Ilya Shapiro, incorrectly characterizes the Court’s decision), but as a function of an increase in price of TV airtime. In other words, we aren’t seeing a massive influx of cash into election communications because it is now easier for more billionaires to try to curry favor with political candidates; rather, we’re seeing political and issue campaigns becoming more expensive because of an increase in demand for television/cable airtime relative to a rather constant supply of it.
Today, that hypothesis receives initial vindication from, of all places, Rolling Stone — conspiracies about donors buying and selling politicians notwithstanding:
While TV stations are required by law to offer discounted airtime to politicians, Super PACs have to pay market rates. With these outside groups expected to buy more than half the ads benefiting the Romney campaign, the increased competition to place ads in battleground states only serves to drive up the price. In a key market like Columbus, Ohio, where campaign spots are already airing at a record pace, the ad buys are expected to exceed the haul from 2008, when political ads made up half of all TV spots purchased during the final week of the election.
I would really like funding to explore this more thoroughly. Any rich opponents of so-called campaign finance reform want to fund me? Drop me an email.
(h/t Taegan Goddard)
This short lecture literally reshaped my adult life. Happy 100th birthday, Milton Friedman.
You can buy the Free to Choose video series here.