Gregg and Smith at Acton University

On New Years Day, the Nobel Prize-winning economist Vernon Smith turned 90. To mark the occasion, Samuel Gregg wrote an essay for the Stream about Smith and the significance of his work.

Gregg explains Smith’s most famous contribution to economics:

Smith is best known for pioneering “experimental economics.” This involves behavioral experiments in which people are placed in a particular micro-economy in which they can engage in trade, but without knowing the conditions driving supply and demand. Those running the experiments can thus test the validity of particular economic theories, thereby gaining greater knowledge of how economic exchanges actually work.

Over time, experimental economics has established the importance of what Smith and others call “economic institutions,” the formal and informal rules which shape economic life in a given society. Economic institutions, it turns out, really do shape economic outcomes. From laws and regulations to customs and property arrangements, any set of rules will affect (1) the information people have and (2) the incentives that drive them.


righttoworkShifts in the partisan composition of state legislatures during the recent election has made it likely that several states will be passing right-to-work bills in 2017.

As Melissa Quinn of The Daily Signal notes, in Kentucky, Missouri, and New Hampshire, last month’s election resulted in a flip in party leadership in either governors’ mansions or state legislatures, which put previously defeated right-to-work legislation back on the table.

Here is what you should know this issue which, as Quinn says, “pits the business community against labor unions, and has proved to be a contentious one for both parties.”

What is a right-to-work law?

Right-to-work laws are state laws that guarantee a person cannot be compelled to join or pay dues to a labor union as a condition of employment.

Why are right-to-work laws considered a matter of economic freedom?

Economic freedom exists when people have the liberty to produce, trade, and consume legitimate goods and services that are acquired without the use of force, fraud, or theft. Mandatory unionism violates a person’s economic freedom since it forces them to pay a portion of their income, as a condition of employment, to a third-party representative—even if they disagree with the aims, goals, or principles of the representative group.

What’s wrong with being forced to pay for union representation?

Note: This is post #15 in a weekly video series on basic microeconomics.

The price system allows for people with dispersed knowledge and information to coordinate global economic activity. The global production of roses, for example, reveals how the price system is emergent, and not the product of human design.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: What you should know about wage subsidies

Blog author: jcarter
Tuesday, January 3, 2017

The fate of religious freedom in the former USSR, 25 years after its collapse
Kelsey Dallas, Deseret News

When the Soviet Union was dissolved on Dec. 26, 1991, the future looked bright for faith groups. During nearly 70 years of Soviet rule, religious practice had been gradually forced out of public and private life. Faith leaders were sent to labor camps and sacred buildings fell into disrepair.

Americans Rate Healthcare Providers High on Honesty, Ethics
Jim Norman, Gallup

Most Americans trust their healthcare providers to be honest and ethical, but few other professions fare so well in Gallup’s annual look at honesty and ethical standards among various fields.

Will the Minimum Wage Debate Ever Be Settled?
Bourree Lam, The Atlantic

States are implementing new laws about worker pay. That will provide plenty of research fodder for economists who can’t seem to agree on whether raises are good or bad for workers.

Edmund Burke on Free Will, Christian Charity, & the Good Society
Bradley J. Birzer, The Imaginative Conservative

Christianity, Edmund Burke held, is the great equalizer. Not only is it the first force in the world to recognize the moral equality of all men and women, but it allows the high and the low to become one in their equal desire for the good society.

minimum_wage_custom-8614e5bd8d516fbadd22d4a09fff441a70ba1596-s6-c30The minimum wage increased yesterday in nineteen states across the U.S.: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Hawaii, Maine, Massachusetts, Michigan, Missouri, Montana, New Jersey, New York, Ohio, South Dakota, Vermont, and Washington. Increases in Oregon, Washington, D.C., and Maryland will also take effect later this year.

Will the increases help pull people out of poverty? Do they increase unemployment? Although the debate about this issue as raged since 1938, when President Franklin Delano Roosevelt introduced the first federal minimum wage, few Americans truly understand whether wage floors help or hurt workers.

To help you better understand the issue, here are ten points you should know about minimum wage laws:


Blog author: jcarter
Monday, January 2, 2017

A US law meant to safeguard religious minorities abroad now covers atheists, too
Neha Thirani Bagri, Quartz

By updating an 18-year-old religious freedom law, the US Congress has for the first time taken steps to explicitly protect people who identify as atheists.

How Obama’s Overtime Rule Hurts Working Americans
Thomas Parker, The Federalist

Workers who value their flexibility should not be punished (or lose their jobs) just to help Democrats feel good about themselves.

Why Are Americans Less Charitable Than They Used to Be?
Alexia Fernandez Campbell, The Atlantic

The average American has grown more tight-fisted in recent years, donating a smaller portion of his or her income to charity than he or she did 10 years ago

Why Trump’s Economic Nationalism is the Wrong Prescription
Louis D. Johnston, Arc

The President-elect thinks Making America Great Again = Made in America. This is a mistake.

Blog author: jcarter
Friday, December 30, 2016

Predictions for 2014At the beginning of 2016, I compiled a list that included 1,034 predictions for the coming year. I later went through and narrowed it down to the top 500 that I was absolutely certain would happen. Even after cutting the list down, though, I only managed to achieve a 67 percent accuracy rate. (Unfortunately, I forgot to post that list in public so it is difficult to verify. You’ll just have to take my word for it.)

This year, in an attempt to get 100 percent correct, I’ve cut my list of predictions to the ones that I’m absolutely sure will come true. Here are 14 can’t-miss predictions for 2017: