Thinking about summer reading these have some interesting perspectives on the question of liberty and responsibility
The Ordeal of Thomas Hutchinson and The Ideological Origins of the American Revolution - Bernard Bailey
The case of Thomas Hutchinson sees to be worth thinking about, it seems that he was as committed to personal liberty as were the Sons of Liberty, yet he was so concerned about the impact of the chaos that might be associated with radical change.
In reading The Glorious Cause by Middlekauff I was struck by the violence with which the Sons of Liberty attacked dissent (both neutral and loyalist) and I have been reflecting on the differences between the American Revolution and the French Revolution.
Hayek contrasts liberalism that evolved in the UK and US with that on the continent, particularly France and I wonder to what extent the differences in this ideology shaped the differences in the respective revolutions.
This posting was prompted by a very provocative retrospective over at the Mises blog - from Rothdard's Egalitarianism As a Revolt Against Nature.
"The true test, then, of the radical spirit, is the button-pushing test: if we could push the button for instantaneous abolition of unjust invasions of liberty, would we do it? "
http://mises.org/story/2993
Wednesday, June 25, 2008
Monday, June 16, 2008
May 2008 Unemployment
News flash:
As indicated below the current unemployment rate (May 08) was announced this morning.
Unit 2 (next week) we will consider the big 3 macroeconomic problems:
Economic Growth
Inflation
Unemployment
This news release clearly indicates the current conditions for the first and last problem. These 3 macroeconomic problems are closely related as we will see next week.
This latter idea is one you will read about next week in chapter 15 the chapter on unemployment.
The natural rate of unemployment consists of seasonal unemployment, frictional unemployment (voluntary unemployment as workers switch jobs, go back to school or quit because they dislike their job or boss) and structural unemployment (also knows as layoffs due to changes in the way a product is produced, example, less bank tellers today than in 1980 due to ATMs). Well a free economy will always have seasonal unemployment (even command economies cannot control the weather) and a free economy will always have frictional unemployment as people change jobs in search of different working conditions and a free economy will always have structural unemployment (think of buggy whip manufacturers, typewriter manufacturing workers, VHS manufacturing jobs) as businesses are constaintly changing to react to their own internal cost conditions (produce more efficiently and productively) and to respond to changing demand conditions as consumer express their preferences.
Economists estimate that, in the US economy, the natural rate of unemployment is between 4 - 6 per cent. So now, read the unemployment report below which, is admittedly negative, in a historical context with the analysis above.
ECONOMIC REPORT
Jobless rate soars to 5.5% in May
Biggest rise in unemployment in 33 years; payrolls fall 49,000
By Rex Nutting, MarketWatch
http://www.marketwatch.com/news/story/jobless-rate-soars-55-may/story.aspx?guid={6B9B2E20-06E8-4FC0-AD5A-3029D5057F89}&siteid=yahoomy
WASHINGTON (MarketWatch) -- The U.S. unemployment rate jumped by half a percentage point in May -- to 5.5%, the highest since October 2004 -- on the biggest increase in seasonally adjusted unemployment in 33 years, government data showed Friday.
Nonfarm payrolls fell by 49,000 last month, the Labor Department reported, marking the fifth consecutive decrease and in line with expectations of economists. See Economic Calendar.
The economy thus has lost 324,000 jobs this year, according to the government's survey of some 400,000 work sites. Job losses in March and April were revised lower by 15,000.
Unemployment rose by 861,000 in May to a total of 8.5 million, according to a separate survey of about 60,000 households. It was the biggest one-month increase in unemployment since January 1975. Read the full government report.
The 0.5-percentage-point increase in the jobless rate was a shock, as economists expected a much smaller gain to 5.1%. It was the biggest percentage-point gain in unemployment since 1986.
If you have a job, you might consider the topic of frictional unemployment and whether you want to quit.
Greg
As indicated below the current unemployment rate (May 08) was announced this morning.
Unit 2 (next week) we will consider the big 3 macroeconomic problems:
Economic Growth
Inflation
Unemployment
This news release clearly indicates the current conditions for the first and last problem. These 3 macroeconomic problems are closely related as we will see next week.
This latter idea is one you will read about next week in chapter 15 the chapter on unemployment.
The natural rate of unemployment consists of seasonal unemployment, frictional unemployment (voluntary unemployment as workers switch jobs, go back to school or quit because they dislike their job or boss) and structural unemployment (also knows as layoffs due to changes in the way a product is produced, example, less bank tellers today than in 1980 due to ATMs). Well a free economy will always have seasonal unemployment (even command economies cannot control the weather) and a free economy will always have frictional unemployment as people change jobs in search of different working conditions and a free economy will always have structural unemployment (think of buggy whip manufacturers, typewriter manufacturing workers, VHS manufacturing jobs) as businesses are constaintly changing to react to their own internal cost conditions (produce more efficiently and productively) and to respond to changing demand conditions as consumer express their preferences.
Economists estimate that, in the US economy, the natural rate of unemployment is between 4 - 6 per cent. So now, read the unemployment report below which, is admittedly negative, in a historical context with the analysis above.
ECONOMIC REPORT
Jobless rate soars to 5.5% in May
Biggest rise in unemployment in 33 years; payrolls fall 49,000
By Rex Nutting, MarketWatch
http://www.marketwatch.com/news/story/jobless-rate-soars-55-may/story.aspx?guid={6B9B2E20-06E8-4FC0-AD5A-3029D5057F89}&siteid=yahoomy
WASHINGTON (MarketWatch) -- The U.S. unemployment rate jumped by half a percentage point in May -- to 5.5%, the highest since October 2004 -- on the biggest increase in seasonally adjusted unemployment in 33 years, government data showed Friday.
Nonfarm payrolls fell by 49,000 last month, the Labor Department reported, marking the fifth consecutive decrease and in line with expectations of economists. See Economic Calendar.
The economy thus has lost 324,000 jobs this year, according to the government's survey of some 400,000 work sites. Job losses in March and April were revised lower by 15,000.
Unemployment rose by 861,000 in May to a total of 8.5 million, according to a separate survey of about 60,000 households. It was the biggest one-month increase in unemployment since January 1975. Read the full government report.
The 0.5-percentage-point increase in the jobless rate was a shock, as economists expected a much smaller gain to 5.1%. It was the biggest percentage-point gain in unemployment since 1986.
If you have a job, you might consider the topic of frictional unemployment and whether you want to quit.
Greg
Tuesday, June 3, 2008
Role of prices
More on the role of prices:
What Are Just Prices?
Daily Article by Jeffrey A. Tucker
http://www.mises.org/story/2976
We all have strange and contradictory wishes concerning what prices should be. We are outraged at what is happening to the price of gas and food. We don't think they should go up. In real terms, we want them to fall, and they have fallen in the last decade and a half. That's a good thing, right? That's how the world should work.
But housing? Now, that's a different matter. When the prices fall, people freak out. It's like the end of the world. How is it possible that my own home would fall in price?! That's not the way the world should work. Everyone knows that house prices are suppose to go up up up, all the time, without fail, until the end of time.
Same with stocks. We want to open the webpage that lists our portfolios and see the prices higher and higher all the time. When they fall, we flip out and demand justice.
But let's stop and think about how peculiar this is. What kind of theory of the world insists that houses and stocks always go up in price, whereas gas and grain prices always go down? That doesn't really make sense. A price is not set by natural law, nor are price movements intended to follow a preset pattern like the movements of stars. Prices are nothing but exchange ratios — points of agreement between buyer and seller. They reflect many factors, none of them fixed parts of the universe.
Excellent analysis of the role of prices!
Greg
What Are Just Prices?
Daily Article by Jeffrey A. Tucker
http://www.mises.org/story/2976
We all have strange and contradictory wishes concerning what prices should be. We are outraged at what is happening to the price of gas and food. We don't think they should go up. In real terms, we want them to fall, and they have fallen in the last decade and a half. That's a good thing, right? That's how the world should work.
But housing? Now, that's a different matter. When the prices fall, people freak out. It's like the end of the world. How is it possible that my own home would fall in price?! That's not the way the world should work. Everyone knows that house prices are suppose to go up up up, all the time, without fail, until the end of time.
Same with stocks. We want to open the webpage that lists our portfolios and see the prices higher and higher all the time. When they fall, we flip out and demand justice.
But let's stop and think about how peculiar this is. What kind of theory of the world insists that houses and stocks always go up in price, whereas gas and grain prices always go down? That doesn't really make sense. A price is not set by natural law, nor are price movements intended to follow a preset pattern like the movements of stars. Prices are nothing but exchange ratios — points of agreement between buyer and seller. They reflect many factors, none of them fixed parts of the universe.
Excellent analysis of the role of prices!
Greg
Monday, June 2, 2008
Economics in One Lesson
From Henry Hazlitt’s “Economics in One Lesson”:
“… The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups…”
http://mises.org/story/3000
Comment: “Good economist” has almost become an oxymoron.
Antony Mueller
“… The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups…”
http://mises.org/story/3000
Comment: “Good economist” has almost become an oxymoron.
Antony Mueller
Sunday, June 1, 2008
Foundations of a Free Society
June 12 - 15, 2008 the Liberty Fund colloquium entitled "The Foundations of A Free Society" will be held in Indianapolis. Steve Pejovich, conference director, has selected a number of readings designed to generate discussion.
Milton Friedman - Free to Choose
B Roggy - Can Capitalism Survive?
Adam Smith - The Wealth of Nations
D. North and B. Weingast - The Constitution and Commitment
F. Hayek - Liberalism
P. Manet - Intellectual History
S. Pejovich - Transaction Costs
G. Libecap - Contracting for Property Rights
R. McChesney - Government as Definer of Property Rights
S. Huntington - Clash of Civilizations
S. Pejovich - The Role of Culture
Other Pejovich readings
Capitalism and the Rule of Law
Understanding the Transactions Costs of Transition
Property Rights and Economic Theory
Milton Friedman - Free to Choose
B Roggy - Can Capitalism Survive?
Adam Smith - The Wealth of Nations
D. North and B. Weingast - The Constitution and Commitment
F. Hayek - Liberalism
P. Manet - Intellectual History
S. Pejovich - Transaction Costs
G. Libecap - Contracting for Property Rights
R. McChesney - Government as Definer of Property Rights
S. Huntington - Clash of Civilizations
S. Pejovich - The Role of Culture
Other Pejovich readings
Capitalism and the Rule of Law
Understanding the Transactions Costs of Transition
Property Rights and Economic Theory
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