Posts tagged with: economist

cronyIt’s never easy becoming a billionaire, but the path to achieving a 10-figure level of wealth is smoother when you have the government as a business partner.

Crony capitalism is a general term for the range of activities in which particular individuals or businesses in a market economy receive government-granted privileges over their customers or competitors. Certain industries (like casinos and real estate) and some nations (Russia, the Philippines) are more prone to cronyism than others. So if you want to become get ultra-rich it helps to be an business and country (e.g., an energy company in Mexico) where the government will you gain an advantage in the market.

The Economist has put together an interesting interactive infographic showing where crony capitalist billionaires live around the world. As they explain:

Does spending more money locally keep money in the community, creating jobs and improving the economic situation of our immediate neighbors? Probably not.

Economist Don Boudreaux shows that if we bought everything because it was “local” (rather than because it was the best product or service) we would just be voluntarily making ourselves poorer.



In Leonard Reed’s famous essay, “I, Pencil,” he marvels over the cooperation and collaboration involved in the assembly of a simple pencil — a complex coordination that is quite miraculously uncoordinated. 

In a short video from economist Alex Tabarrok, the same lesson is applied to Valentine’s Day roses:

“Behind every Valentine’s Day rose, there’s an extensive network of people from all over the world,” says Tabarrok, “from the farmer to the shipper to the auctioneer to the retailer—all cooperating to produce and transport roses from field to hand in a matter of days.”

But though these countless creative partners are surely acting out of some degree of self-interest, and though (in this case) they are working to enable and empower what we presume to be “loving” exchanges, there is something deeper going on throughout the activity. (more…)

300px-GeocentrismGeocentrism was the belief that the sun, the planets, and all the stars revolve around the Earth. The alternative view—heliocentricism—had been around since the 3 BC but was not taken seriously until the 16th century AD. What seems obvious to us now was a matter of heated debated for almost two thousand years.

Economist Don Boudreaux says the minimum-wage debate in economics is rather like the reverse of this debate that took place centuries ago among astronomers.


Trafficked workers striking against Signal International

Trafficked workers striking against Signal International

While sex trafficking gets a lot of media attention, labor trafficking is the larger problem globally. Recently, the largest court case ever involving labor trafficking was settled in Mississippi against Signal International. (You can read more about the case here.)

Labor trafficking is not a secret. However, we are just beginning to grasp the scope of the problem and the deep wounds it inflicts on its victims. In The Economist this week, the magazine goes so far as to say “its everywhere:”

Estimates of the number of workers trapped in modern slavery are, inevitably, sketchy. The International Labour Organisation (ILO), an arm of the UN, puts the global total at around 21m, with 5m in the sex trade and 9m having migrated for work, either within their own countries or across borders. Around half are thought to be in India, many working in brick kilns, quarries or the clothing trade. Bonded labour is also common in parts of China, Pakistan, Russia and Uzbekistan—and rife in Thailand’s seafood industry … A recent investigation by Verité, an NGO, found that a quarter of all workers in Malaysia’s electronics industry were in forced labour.


Blog author: dpahman
Thursday, September 4, 2014

French economist Thomas Piketty

This summer’s issue of The City, which includes an article by myself on Orthodoxy and ordered liberty, opens with a symposium of five articles on “The Question of Inequality.” These include two articles on Pope Francis, two on French economist Thomas Piketty’s recent book Capital in the Twenty-First Century, and one on the Bible.

Having recently written a two part article on the subject for the Library of Law & Liberty (here and here), I took copious notes as the topic is an ongoing subject of research.

In order to recommend the symposium to our readers here, who no doubt have interest in the topic, I compiled the following highlights:

Josiah Neeley, “What Does Bono Know That the Pope Doesn’t?”

Argentina is now the world’s only “formerly developed” country.

[E]ven in the United States a great deal of inequality is the result not of the heroic innovator but of government favoritism.

Donald Devine, “Does Pope Francis Hate Capitalism?”

[B]y 1910 … Argentina’s per capita Gross Domestic Product [was] number ten in the world.

Peron’s Argentina [in the mid-twentieth century] was perhaps the first comprehensive welfare state…. [And] the result has been a much poorer country.

The actual experience of markets [contra Pope Francis] is hardly autonomy. The U.S., one of the freer countries, has 300,000 regulations.

[B]etween 2005 and 2010 the total number of poor in the world actually fell by half a billion people as trickle down prosperity lifted millions from absolute destitution.

Today’s reality is the over-regulatory welfare state, not wild markets. (more…)

Blog author: jcarter
Thursday, September 4, 2014

Imagine if a scientist was able to create technology that turns corn into cars. As economist Bryan Caplan explains, we already have such an innovation: foreign trade.

Caplan argues that foreign trade is a form of technology that lowers our cost of living and increases our standard of living. In fact, claims Caplan, from a broader perspective trade is even better than most technology since it not only makes us better off, it makes foreigners better off too.