November 08, 2003
Blasts from the Past

Donald Sassoon interviews Karl Marx: w w w . p r o s p e c t - m a g a z i n e . c o . u k undefined...

Posted by DeLong at 03:41 PM

April 17, 2003
Uncle Milton

Just spent an hour and a half being interviewed for a documentary about Milton Friedman to air (hopefully) sometime in 2004... Some after-the-fact notes: Friedman... how great an influence on my thought? Let me think who has had more... Smith, Keynes, Summers, Shleifer... I would put Friedman fifth: only four other economist have had a greater influence on how I think... I'm not atypical at Berkeley in finding myself moving under the influence of the intellectual field generated by Milton Friedman--at least, I don't think I am... Friedman as a pragmatic libertarian, perhaps: believing that market failures are atypical, tending to generate profit opportunities and creating institutions to route around them, and that government failure is pervasive--that any expansion of government beyond the classical liberal state is likely to cause more troubles than it solves... Thus a big difference with Arrow, Samuelson, Akerlof, and company: who see market failure as much more common and hard to route around, and democratic governments as much more competent... One problem for us American liberals is certainly that Republican administrations tend to provide excellent demonstrations of Friedman's claim of governmental incompetence/capture/counterproductive behavior--massive government failure that outweighs probable estimates of market failure and creates a...

Posted by DeLong at 12:59 PM

March 03, 2003
The Real Supply Siders

John Quiggen succumbs to High Relativism, and proclaims that whether Ronald Reagan was "convinced" that cutting tax rates would raise tax revenues is unknowable. John Quiggin: Wanniski's claim to have convinced Reagan is rejected by (broad sense) supply-siders who were around at the time, like William Niskanen (quoted by Alex Robson), and it seems unlikely that the truth can be determined... I think that this nihilistic-relativistic conclusion is much too pessimistic. What Reagan thought in his heart-of-hearts is not very important. Reagan wanted to lower taxes, balance the budget, and cut waste, fraud, and abuse in government. He (naively) relied on his advisers--his Grand Viziers--to share his priorities and to prepare and implement policies that would accomplish them. It went wrong: Reagan did not run for President so that he could become the biggest deficit-spender in American history. We know a lot about how it went wrong. But if we are to accurately set out what we know, we need to recognize that "supply side" and "economist" are contested terms of art. Different people use these terms to mean different things--deliberately use these terms to mean different things. Let's review the bidding. There are four ideological police actions in progress....

Posted by DeLong at 10:26 AM

February 28, 2003
Arman Alchian Plays the Repeated Prisoner's Dilemma

K. Harris asks for a link to an extended passage I posted from William Poundstone's (1992) marvelous book Prisoners Dilemma (New York: Doubleday: 038541580X). Here it is: Warning: Professional economists will find this hilarious and thought-provoking. Others... others will probably simply find it bizarre, insane, incomprehensible, and weird. It comes from pp. 106-118 of Poundstone's book....

Posted by DeLong at 09:33 AM

Would Ezra Pound Have Been a Better Poet If He Had Taken Ec 10 From Marty Feldstein?

Would Ezra Pound have been a better poet if he had taken Ec 10 from Marty Feldstein? Daniel Davies appears to answer this question with a "yes," as he turns his attention to critiquing Pound's Canto XLV for Pound's failure to include an appropriate general-equilibrium model in his stanzas. D-squared Digest -- A fat young man without a good word for anyone: If you aren't able to charge rates of interest which compensate you for the risk you're taking, then as a lender, you're only going to do business with people familiar to you, which means that the typical working man is not going to find anyone who is prepared to lend to him. This means that the working class is denied one of the principle luxuries of the capitalist class; the ability to make decisions about the timing of purchases of goods independently of the fixed timing of the arrival of one's income. And it turns out that this is a very valuable advantage to enjoy. Usury has been very good in this regard. Pound is possibly in this passage and in the "bread made of good flour", thinking of the obvious association between predatory lending practices and poverty,...

Posted by DeLong at 08:21 AM

February 11, 2003
David Hume Gives Adam Smith Some Bad News

David Hume gives Adam Smith the bad news about the reception of Smith's first book, the Theory of Moral Sentiments. From DAVID HUME   Lisle Street, Leicester Fields April 12, 1759 Dear Smith, I give you thanks for the agreeable present of your Theory [of Moral Sentiments]. Wedderburn and I made presents of our copie to such of our acquaintance as we thought good judges, and proper to spread the reputation of the book. I sent one to the Duke of Argyle, to Lord Lyttleton, Horace Walpole, Soames Jennyns, and Burke, an Irish gentleman, who wrote lately a very pretty treatise on the sublime. Millar desired my permission to send one in your name to Dr. Warburton. I have delayed writing to you until I could tell you something of the success of the book, and could prognosticate with some probability whether it should be finally damned to oblivion, or should be registered in the temple of immortality. Tough it has been published only a few weeks, I think there appear already such strong symptoms, that I can almost venture to fortell its fate. It is, in short, this-- But I have been interrupted in my letter by a foolish...

Posted by DeLong at 03:02 PM