Category: Economics

bourgeious-equality-mccloskeyIn Dierdre McCloskey’s latest book, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, she builds on her ongoing thesis that our newfound prosperity is not due to systems, tools, or materials, but the ideas, virtues, and rhetoric behind them.

Much has been made of her argument as it relates to the (ir)relevance of those material features as causes: “coal or thrift or capital or exports or exploitation or imperialism or good property rights or even good science.” But less has been said about her views on the spiritual/material as it relates to the byproducts.

I’m not yet finished with the book, but on page 70, she offers her view on the spiritual dynamics of what’s to come.

Contrary to popular claims that an increasingly prosperous free society will necessarily trend toward greed, envy, and idleness, McCloskey sees a future with more resources, and thus, more time and space for the transcendent. “One would hope that the Great Enrichment would be used for higher purposes,” she writes…”Enrichment leads to enrichment, not loss of one’s own soul.” (more…)

U.S. manufacturing is making a comeback, says Mark Perry economist at AEI. Because of innovative fracking technologies that have made shale gas abundant and cheap, manufacturing jobs are quickly returning to the United States, as the cost advantage of producing overseas disappears. Perry estimates that the revival of manufacturing production in the United States has the potential to create 3 million jobs in the next decade:

The impact of the shale revolution is profound because the economic growth it continues to produce is not confined to any single region of the U.S. Cheap natural gas is strengthening energy security across the country and is fueling a resurgence in manufacturing – particularly the most energy-intensive industrial products, such as iron and steel, bulk chemicals, petrochemicals, plastics, cement, petroleum refining, glass, paper and food products.

Within three years, and possibly even sooner, it will be cheaper for most U.S. companies to manufacture goods for the American market at home, compared to producing those same goods in Asia.

You can read all of Perry’s comments here.

africa-clothesI don’t like to be wrong. But I also like to think that I’m open-minded enough to change my opinion when I am wrong (although I could be wrong about how open-minded I am).

I try to carefully consider the arguments other people make (at least most of the time), but on occasion, I’m convinced I’m wrong by the person I listen to most: myself.

Here, for example, is the gist of a conversation I had with myself last week:
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John Calhoun (1782 - 1850)

John Calhoun (1782 – 1850)

Proponents of protectionism often ground their support in a quasi-nationalism; trade should be restricted for the benefit of the nation. Economically, the argument holds little weight. The benefits of more trade, like more and cheaper goods, outweigh the costs, like some temporary unemployment that results from the closing of a factory that couldn’t compete with foreign companies.

Some protectionists may accept this, and still urge tariffs, quotas, and other restrictions. They argue that a nation can still benefit, even with economic disadvantages. Sure, consumers might pay in higher prices if there’s a tariff on steel, but think of all the jobs! The consequences of protectionism, however, are not simply economic. Rather than developing national and political unity, tariffs often lead to national discord.

Take the United States in the early nineteenth century. Its still developing economy was primarily agricultural, with a growing commercial and manufacturing sector. Many early American politicians advocated a tariff in order to protect, foster, and develop American manufacturing.

Ignoring the economic flaws of such a plan, the policy sowed the seeds for national disunion, culminating in the United States Civil War. How?

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In a weekend, Pokémon GO has already taken our smartphones by storm. But where did it come from?

On the one hand, this is a simple question to answer: Nintendo. Pokémon is a game franchise created by Nintendo, and Pokémon GO is the newest installment.

But Pokémon GO isn’t just more of the same. It’s a revolutionary innovation.

Using the camera function on people’s phones, the world of the game is our world. The eponymous monsters appear on the screen as hiding in plain sight. People catch them, train them, fight them, trade them, and so on, just like in previous games. But now the game itself is causing people to get out of their homes and see new scenery, meet new people. (more…)

Kentucky-trade-schoolFueled by a mix of misguided cultural pressures and misaligned government incentives, college tuition has been rising for decades, outpacing general inflation by a wide margin. Yet despite the underlying problems, our politicians seem increasingly inclined to cement the status quo.

Whether it be increased subsidies for student loans or promises of “free college” for all, such solutions simply double down on our failed cookie-cutter approach to education and vocation, narrowing rather than expanding the range of opportunities and possibilities.

Fortunately, despite such an inept response from the top-down, schools at the local and state levels are beginning to respond on their own. In Kentucky, for example, PBS highlights innovative efforts to rethink the meaning of “career-ready” education and retool the state’s incentives and accountability structures accordingly.

While “college-” and “career- readiness” have become buzz words that are assumed to be all but equal, Kentucky has awoken to the reality that they ought not be so lumped together so hastily. Alas, we have tended to amplify college not only to the detriment of career, but to college itself. (more…)

fight-for-15-and-a-union-672x372Sometimes predicting the future is difficult (ask anyone who thought we’d have flying cars by now). But sometimes foreseeing what is going to happen — at least to a high degree of probability — is all too easy.

For example, it’s fairly simple to ascertain that sometime in 2017 or 2018 we will see a huge spike in the unemployment for the working poor and increasing the replacement of low-skilled jobs with automation (i.e., robots). The reason: the $15 minimum wage.

Earlier this year the first and fourth most populous states in the U.S. — California and New York — adopted the increase to $15. Numerous cities have also adopted the higher wage floor. But perhaps the most significant step forward for the “Fight for $15” movement is that it is being adopted by the entire Democratic Party.

On Friday, the Democratic National Committee released a draft of the proposed party platform that includes a number of economically destructive proposals, including a federal minimum wage of $15:
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