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Category Archive: Economic Principles

  1. The Costs of Brazil vs Germany: Protest and Poverty at Brazil’s World Cup

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    Brazil gained prestige in landing the World Cup and Olympics, but sometimes hosting a major global event isn’t as glamorous as it seems. For a start, it’s difficult to justify massive spending — Brazil plans to spend $31 billion between the two — for such a temporary payoff. . Many venues created for these events, including those erected for the Olympic Games in Athens and Beijing, have fallen into disrepair after the celebrations ended. Many workers die on these massive construction projects — hundreds, already, for Qatar’s 2022 World Cup. Government often evicts lots of people from their homes, as Beijing did to over 1.5 million people in anticipation of the 2008 Summer Olympics. So why are cities and countries so eager to host? Often for the international prestige. However, support can sour quickly, as it has in Brazil, when the real costs became more apparent. Economist Matt Ryan from Duquesne Universityasks you to consider those costs now – a country that wins the bid may lose big overall.

  2. How They Beat the Oregon Trail IRL | Learn Liberty

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    How did more than 300,000 people avoid bloodshed and chaos when they crossed the American plains between 1840 and 1860? Trappers used to say there was no law west of Leavenworth, Kansas.

    No one established a government to rule the wagon trains — it’s true. But they governed themselves instead. They signed contracts that worked like voluntary constitutions. The contracts anticipated disputes among the various groups of travelers and laid out how to resolve them.

    Imagine the red tape if the government had gone with the settlers. Marvel at the ability of people to innovate rules and order in a most unlikely setting. That’s what Hill advises. Tune in to hear more.

  3. Foreigners Are Our Friends | Econ Chronicles

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    Some people say technology is the driver of innovation, but society often takes great steps in prosperity by trading. Like technological shifts over history, trade is a powerful way of creating wealth for all parties. In one example, Professor of Economics Bryan Caplan imagines a machine that turned agricultural products directly into cars: it would disrupt the way we do business, but the US would be wealthier for it.

    If, however, that machine was nothing but a freighter that exchanges corn for cars with another nation, many people think this is unfair. Whether in dislike for foreign trade or worry about immigration, Prof. Caplan calls this “anti-foreign bias,” and points out that most economists don’t share these concerns. Professional economists think trade and immigration benefit all parties involved – just like innovative technology. As we said before: trade is made of win!

  4. Can Capitalism Save Lives? | Econ Chronicles

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    Thousands of people die in the US every year because there’s a shortage of willing kidney donors. Some people are saved by the generosity of friends and family, but many more suffer because no willing & compatible donors come forward. As in most countries, it is illegal to compensate donors in the US for donating a kidney. Prof. Caplan argues that we should allow a market: if donor could be paid to donate a kidney through a reputable hospital, they could earn money and save a life in the process. Such a system would encourage many more donors, and save many more lives. But most people are uncomfortable with the idea that individuals or companies would make money by solving that kind of problem. They equate making a profit with selfish intentions, and bad results. Economics professor Bryan Caplan calls this “anti-market bias.”  He argues that most people (and voters) are prone to this bias, leading to harmful policies. Another example Caplan gives is air pollution. While most economists think that markets could help curb pollution, most regular people reject the idea. Perhaps this is partly because for many problems we face, it is difficult to imagine how markets and profit could help us find a solution. Caplan argues that this makes allowing markets even more important: they incentivize people to find new & creative ways of solving problems, many of which we never could have predicted in advance.

  5. Everything’s Amazing and Nobody’s Happy | Econ Chronicles

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    People tend to think the world is much worse off than it actually is. Bad news gets a lot more attention than good news. Professor Bryan Caplan calls this “Pessimistic Bias,” and argues that it affects the policies people  vote for. Despite the amazing economic gains of the past 100 years and even the past decade, most people are under the impression that things are just getting worse. But Prof. Caplan argues that even with all the tough problems in the world, there is reason for optimism; contrary to most people’s expectations, he contends that the best is yet to come.

    Hat tip to Louis C.K.

  6. Make Progress, Not Work | Econ Chronicles

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    As technological developments increased the US agricultural worker’s output tremendously over the last two centuries, the share of the population employed in agriculture fell from around 90 percent to around 2 percent.

    The lay American public supposes that when workers lose their jobs, we become worse off — they suffer from what economist Bryan Caplan calls the make-work bias. But would anyone prefer to live in a society in which many went hungry and no one enjoyed the wealth, financial security, job growth, and innovation created as all those workers lost their farm jobs?

    Unfortunately, the more that democracies enact policies that reflect the make-work bias, the closer we come to such a society. Follow Caplan, author of The Myth of the Rational Voter, as he explains the gap between the lay public and the professional economist’s views about the merits and demerits of making work for individuals instead of letting them find work.

  7. How Much Immigration Is Too Much Immigration?

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    The United States has laws in place to limit the number of immigrants granted entry. How many immigrants should be allowed to call America home? Bryan Caplan, professor of economics at George Mason University, argues that the United States should have open borders. Jan Ting, professor of law at Temple University, argues that there need to be limits on the number of immigrants.

    In this clip from the debate, Prof. Ting argues that the risks of trying an open border policy are too great. He points out that the U.S. population is estimated to grow at a fast rate in the next 50 years and through the end of the century if we do nothing. He is concerned that allowing free immigration will overwhelm U.S. infrastructure and cause too much environmental damage.

    Prof. Caplan responds by arguing that the market will ration immigration just as it rations anything else. Indeed, the idea of immigration without quotas is overwhelming if we do not consider how market forces will play a role. He argues that we can have open borders without fear because of the power of the market.

  8. From Rags to Riches: The Cayman Islands Revolution

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    The rule of law, Hayek wrote, is “a rule concerning what the law ought to be”: It ought to be general and abstract; equally applied, with legal privileges for none; certain, not subject to arbitrary changes; and just. In this Learn Liberty Academy, Andrew Morriss sets sail to show how the law of the Cayman Islands conforms with Hayek’s ideals, how it got that way through astute political entrepreneurship, and how the world at large benefits from its legal wisdom. The benefits of Caymanian rule of law are so diffuse and far-reaching that we can even attribute the American poor’s high consumption of healthcare to it.  Embark on Morriss’s expedition — read, watch lectures, and discuss!

    Song credit: “Coconut Water” – Dan O’Connor

    Archival images courtesy of the Cayman Islands National Archive

  9. Recycle Smarter Than A Third Grader!

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    Reduce! Reuse! Recycle! All right? Maybe — maybe not, says scholar Daniel K. Benjamin. Making an unused tissue out of a used one wastes resources and hardly benefits the environment. Melting and casting aluminum cans, though, both saves resources and benefits the environment. But you don’t need to exhort the aluminum company to save those resources: saving scraps is in its own interest. So why does it take a lesson from your third-grade teacher to get you to recycle household waste?

     

    For more insightful work by Daniel K. Benjamin, check out his page on the Property and Environmentalism Research Center’s website

  10. Debate: What To Do About Poverty

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    This LearnLiberty debate presents arguments for and against more government assistance to help the poor in the United States. Prof. Steven Horwitz argues that the government has created too many problems and that lifting government-imposed barriers to the poor will go a long way toward solving the problems of inequality in the United States. Prof. Jeffrey Reiman takes the view that government, while not perfect, will have a key role to play in creating better programs to help the poor. What do you think?

     

  11. Stealing from the Poor to Give to the Rich: An Anti-Robin Hood Story

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    Have you ever thought much about property rights? Many believe ownership protections primarily favor the wealthy, but it turns out that the wealthy and politically connected actually benefit more when ownership is vulnerable. Without strong property rights, those with the power are able to take property from those who lack such political connections. In places like Zimbabwe—where the government is able to confiscate profits, merchandise, and even businesses with ease—the lack of property protections has been one cause of the country’s decline. Today, Zimbabwe is the poorest country in the world, and eroded property rights are at least partially to blame. Prof. Dan Russell argues that “doing less to protect ownership turns out to be a really effective way to create poverty.” Perhaps property rights deserve protecting. Except, maybe, among Finnish race car drivers.

  12. Can One Person Save an Endangered Species? See for Yourself.

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    Think you’re too small to save the world—even one species at a time? Sometimes big change starts with thinking big and perhaps a little outside the box. Take it from enviropreneur Hank Fischer.

    Hank Fischer was concerned about the gray wolf. It was on the endangered species list and extinct in the American West. Efforts to reintroduce it in the region had been unsuccessful, largely because the local population didn’t want hungry wolves killing their livestock. Rather than fight the ranchers in the region, Hank established a fund to compensate them for losses and give them incentives to support the growth of the wolf population. And it worked! Today, the gray wolf isn’t even considered endangered. Hank’s story is just one of many stories of enviropreneurs around the world. Laura Huggins of the Property and Environment Research Center (PERC) explains how thinking outside the box and innovating can work for the environment as it does for business. Enviropreneurs like Hank have been able to save species. Think about the difference you could make!