In a system of natural liberty the role of the government is clear and limited in its use of coercion.
Smith writes, perceptively:
The wisdom of every state or commonwealth endeavours, as well as it can, to employ the force of the society to restrain those who are subject to its authority, from hurting or disturbing the happiness of one another. The rules which it establishes for this purpose, constitute the civil and criminal law of each particular state or country.
Smith goes on to outline the character and virtue of the "perfectly innocent and just man" a rare individual indeed. This is clearly the rationale for institutional evolution to shape the behavior of those of use who are not this rare individual.
Smith describes this rare individual:
A sacred and religious regard not to hurt or disturb in any respect the happiness of our neighbour, even in those cases where no law can properly protect him, constitutes the character of the perfectly innocent and just man; a character which, when carried to a certain delicacy of attention, is always highly respectable and even venerable for its own sake, and can scarce ever fail to be accompanied with many other virtues, with great feeling for other people, with great humanity and great benevolence. It is a character sufficiently understood, and requires no further explanation.
Section II Of the Character of the Individual, so far as it can affect the Happiness of other People
Sunday, June 7, 2009
Theory of Moral Sentiments - Virtue and Natural Liberty
Saturday, June 6, 2009
Douglas Irwin - analysis of trade
I have been rereading Doug Irwin in preparation for teaching The World Economy.
Both books are outstanding, Against the Tide, in particular, is very helpful in examining the theories of trade and protectionism in an historical context.
Both books are outstanding, Against the Tide, in particular, is very helpful in examining the theories of trade and protectionism in an historical context.
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Friday, June 5, 2009
A special report on entrepreneurship
This special report from The Economist is well worth a read.
The United States of Entrepreneurs
Mar 12th 2009
From The Economist print edition
America still leads the world
FOR all its current economic woes, America remains a beacon of entrepreneurialism. Between 1996 and 2004 it created an average of 550,000 small businesses every month. Many of those small businesses rapidly grow big. The world’s largest company, Wal-Mart, was founded in 1962 and did not go public until a decade later; multi-million dollar companies such as Google and Facebook barely existed a decade ago.
America was the first country, in the late 1970s, to ditch managerial capitalism for the entrepreneurial variety.
The United States of Entrepreneurs
Mar 12th 2009
From The Economist print edition
America still leads the world
FOR all its current economic woes, America remains a beacon of entrepreneurialism. Between 1996 and 2004 it created an average of 550,000 small businesses every month. Many of those small businesses rapidly grow big. The world’s largest company, Wal-Mart, was founded in 1962 and did not go public until a decade later; multi-million dollar companies such as Google and Facebook barely existed a decade ago.
America was the first country, in the late 1970s, to ditch managerial capitalism for the entrepreneurial variety.
Thursday, June 4, 2009
Niall Ferguson on Paul Kurgman
It is a brave or foolhardy man who picks a fight with Mr Krugman, the most recent recipient of the Nobel Prize for Economics. Yet a cat may look at a king, and sometimes a historian can challenge an economist.
Wednesday, June 3, 2009
Thonas Sowell - Burke v Obama
Burke and Obama
By Thomas Sowell
The other day I sought a respite from current events by re-reading some of the writings of 18th century British statesman Edmund Burke. But it was not nearly as big an escape as I had thought it would be.
When Burke wrote of his apprehension about "new power in new persons," I could not help think of the new powers that have been created by which a new President of the United States -- a man with zero experience in business -- can fire the head of General Motors and tell banks how to run their businesses.
Not only is Barack Obama new to the presidency, he is new to running any organization. One of Burke's fears was that "we may place our confidence in the virtue of those who have never been tried."
Neither eloquence nor zeal was a substitute for experience, according to Burke. He said, "eloquence may exist without a proportionate degree of wisdom." As for zeal, Burke said: "It is no excuse for presumptuous ignorance that it is directed by insolent passion."
By Thomas Sowell
The other day I sought a respite from current events by re-reading some of the writings of 18th century British statesman Edmund Burke. But it was not nearly as big an escape as I had thought it would be.
When Burke wrote of his apprehension about "new power in new persons," I could not help think of the new powers that have been created by which a new President of the United States -- a man with zero experience in business -- can fire the head of General Motors and tell banks how to run their businesses.
Not only is Barack Obama new to the presidency, he is new to running any organization. One of Burke's fears was that "we may place our confidence in the virtue of those who have never been tried."
Neither eloquence nor zeal was a substitute for experience, according to Burke. He said, "eloquence may exist without a proportionate degree of wisdom." As for zeal, Burke said: "It is no excuse for presumptuous ignorance that it is directed by insolent passion."
Tuesday, June 2, 2009
All-Hayekian Fantasy Economics Team?
This is a great post over at Taking Hayek Seriously:
Larry Elliott, economics editor of the Guardian, takes a look at the economics profession and sees a professoriate detached from reality and incapable of fielding an “Fantasy Football” team of living All-Stars to fill out a modern “TEAM KEYNES” or contemporary “TEAM HAYEK”. You’ll find a bit of Elliott’s case quoted below. But I’m not so sure Elliott is right, as least in the instance of Hayek, even by Elliot’s own criteria. What Elliott is looking for are top notch modern day Hayekian or free market economists keenly interesting in explaining how the world actually works, with a healthy skepticism toward mathematical models or formalism for its own sake. Here are my own top ten draft picks for “TEAM HAYEK”. You can add your own in the comments.
No. 1 Draft Pick: DOUGLASS NORTH
No. 2 Draft Pick: ROBERT HIGGS
No. 3 Draft Pick: ISRAEL KIRZNER
No. 4 Draft Pick: VERNON SMITH
No. 5 Draft Pick: ROGER GARRISON
No. 6 Draft Pick: PETER BOETTKE
No. 7 Draft Pick: LAWRENCE WHITE
No. 8 Draft Pick: JAMES BUCHANAN
No. 9 Draft Pick: GEORGE SELGIN
No. 10 Draft Pick: HERNANDO DE SOTO
Larry Elliott, economics editor of the Guardian, takes a look at the economics profession and sees a professoriate detached from reality and incapable of fielding an “Fantasy Football” team of living All-Stars to fill out a modern “TEAM KEYNES” or contemporary “TEAM HAYEK”. You’ll find a bit of Elliott’s case quoted below. But I’m not so sure Elliott is right, as least in the instance of Hayek, even by Elliot’s own criteria. What Elliott is looking for are top notch modern day Hayekian or free market economists keenly interesting in explaining how the world actually works, with a healthy skepticism toward mathematical models or formalism for its own sake. Here are my own top ten draft picks for “TEAM HAYEK”. You can add your own in the comments.
No. 1 Draft Pick: DOUGLASS NORTH
No. 2 Draft Pick: ROBERT HIGGS
No. 3 Draft Pick: ISRAEL KIRZNER
No. 4 Draft Pick: VERNON SMITH
No. 5 Draft Pick: ROGER GARRISON
No. 6 Draft Pick: PETER BOETTKE
No. 7 Draft Pick: LAWRENCE WHITE
No. 8 Draft Pick: JAMES BUCHANAN
No. 9 Draft Pick: GEORGE SELGIN
No. 10 Draft Pick: HERNANDO DE SOTO
Monday, June 1, 2009
David Warsh's Economic Principals
David Warsh, author of Knowledge and the Wealth of Nations, has a very intriguing blog. It is actually more of an online column dealing with contemporary economic issues. For example:
The View from the 23rd Century
People continue to try to find the horizon. The Economist last week warned that in seeking to assign new tasks to government, President Barack Obama risks stifling the dynamism of the American economy. Business Week began a series of contributed essays building towards a special issue in August, “The Case for Optimism.” In August, too, will appear In FED We Trust: Ben Bernanke’s War on the Great Panic– a book that may propel Wall Street Journal columnist David Wessel into a Bob Woodward-like role as a chronicler of US economic policy.
I turned briefly to two books that are directly influential in disseminating the recent changes in our view of growth: The Economics of Growth, by Philippe Aghion, of Harvard University, and Peter Howitt, of Brown; and Introduction to Modern Economic Growth, by Daron Acemoglu, of the Massachusetts Institute of Technology. Both are textbooks, the former intended for advanced undergraduates or beginning graduate students, the latter for graduate students well along in their training. Both contribute substantially to the professional debate. But neither is easy reading.
The current book that comes closest to communicating a modern view of growth, I think, is The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World, by Amar Bhidé, professor of business at Columbia University., Bhidé, who is not an economist, compares his method to the evidentiary proceedings of a common law trial: he interviews experts from many disciplines, and then makes up his mind. The last author to make a substantial contribution to this literature was AnnaLee Saxenian, author of The New Argonauts: Regional Advantage in a Global Economy. Her method was frankly journalistic, but she came back with the goods. So does Bhidé.
The burden of the argument of Venturesome Economy is that that an inevitable expansion is taking place in the quantity of high-level know-how that is being developed in countries around the world – not just Japan and Korea, but India and China, Israel and Australia. If the US learns to relax and take advantage of new knowledge developed offshore, everything will be fine. But if “technonationalism” gains the upper hand – in the form of, say, a commitment to a strong US automotive industry, no matter what the cost – then a world carved into trading spheres could experience slower growth than otherwise would be the case.
People continue to try to find the horizon. The Economist last week warned that in seeking to assign new tasks to government, President Barack Obama risks stifling the dynamism of the American economy. Business Week began a series of contributed essays building towards a special issue in August, “The Case for Optimism.” In August, too, will appear In FED We Trust: Ben Bernanke’s War on the Great Panic– a book that may propel Wall Street Journal columnist David Wessel into a Bob Woodward-like role as a chronicler of US economic policy.
I turned briefly to two books that are directly influential in disseminating the recent changes in our view of growth: The Economics of Growth, by Philippe Aghion, of Harvard University, and Peter Howitt, of Brown; and Introduction to Modern Economic Growth, by Daron Acemoglu, of the Massachusetts Institute of Technology. Both are textbooks, the former intended for advanced undergraduates or beginning graduate students, the latter for graduate students well along in their training. Both contribute substantially to the professional debate. But neither is easy reading.
The current book that comes closest to communicating a modern view of growth, I think, is The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World, by Amar Bhidé, professor of business at Columbia University., Bhidé, who is not an economist, compares his method to the evidentiary proceedings of a common law trial: he interviews experts from many disciplines, and then makes up his mind. The last author to make a substantial contribution to this literature was AnnaLee Saxenian, author of The New Argonauts: Regional Advantage in a Global Economy. Her method was frankly journalistic, but she came back with the goods. So does Bhidé.
The burden of the argument of Venturesome Economy is that that an inevitable expansion is taking place in the quantity of high-level know-how that is being developed in countries around the world – not just Japan and Korea, but India and China, Israel and Australia. If the US learns to relax and take advantage of new knowledge developed offshore, everything will be fine. But if “technonationalism” gains the upper hand – in the form of, say, a commitment to a strong US automotive industry, no matter what the cost – then a world carved into trading spheres could experience slower growth than otherwise would be the case.
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