This article is an attempt at providing a better perspective on the debate over inequality. First... more This article is an attempt at providing a better perspective on the debate over inequality. First, it claims that inequality is increasing, but not as much as many claim. In fact, the increase is modest and badly measured. Moreover, inequality is well below the levels observed prior to the 20th century. Secondly, it claims that inequalities must be decomposed between "good", "neutral" and "bad" inequalities. " Good inequalities" result from individual preferences and have no perverse impact on economic growth. " Neutral" inequalities relate to changes in family size, demography and marriage patterns and they have no moral implication whatsoever, as they merely exhibit changes in economic structures. "Good" and "Neutral" inequalities create no "social malaise". The "bad" inequalities are those that are socially noxious because they result from impairments in the capacity of individuals to make choices. Thirdly, this paper argues that a large share of the " bad " inequalities stem from government policies that push down the left-tail of the income distribution while pulling up the right tail. Although there are inequalities from birth, these are much costlier to combat than inequalities resulting from government intervention.
Gauti Eggertsson uses a dynamic stochastic general equilibrium model in arguing that the period 1... more Gauti Eggertsson uses a dynamic stochastic general equilibrium model in arguing that the period 1933 to 1937 represented recovery from the Great Depression, by virtue of regime change between the Hoover and Roosevelt administrations. He claims that the Hoover administration was defined by adherence to three “policy dogmas,†and that Roosevelt shifted expectations for the better by making credible commitments rejecting those dogmas. Eggertsson’s argument is wrong on several counts. He misrepresents Hoover’s economic policies, he mischaracterizes Roosevelt as “dogma-free†and committed to a clear alternative plan for recovery, and he misreads the economic consequences of Roosevelt’s policies. Eggertsson’s problems begin with his notion of “recovery,†wherein the economy’s progression from critical condition to prolonged infirmity is trumpeted as “recovery.†Eggertsson’s article is entitled “Great Expectations;†I have titled this piece “Great Apprehensions...
In response to contemporary arguments that the expenditures associated with World War II were a m... more In response to contemporary arguments that the expenditures associated with World War II were a major factor in ending the Great Depression and should therefore be imitated today, we offer historical evidence to suggest that the wartime economy was hardly a model of success in the eyes of most Americans. Expanding on Robert Higgs’ criticisms of the ability of conventional macroeconomic data to tell the real story, we examine newspapers, diaries, and other primary source material to reveal the retrogression in living standards in the US during the war. Our investigation suggests that wartime prosperity is largely a myth and hardly a model for recovery from the Great Recession.
Introduction Murray Rothbard was a tenacious defender of the praxeological project originated by ... more Introduction Murray Rothbard was a tenacious defender of the praxeological project originated by Ludwig von Mises. In his most extensive and most consciously theoretical work, Man Economy and State he attempted to give clear and complete expression to Mises's vision. This is particularly evident in his treatment of Interest and Capital 1 . He examines these topics with a view to uncovering for the reader their `essential' nature - providing an accurate picture of those essential characteristics that make Interest and Capital what they are. He is not here as concerned with descriptive realism as he is with logical imperatives. In order to be able to apply economic categories to the real world of history and institutions one must first obtain a correct understanding of these categories. It is important, for example, to be clear as to the origin of the phenomenon of Interest before attempting to understand the various determinants of the interest
this paper was presented at the SEA meetings in November 2000. We are grateful to the participant... more this paper was presented at the SEA meetings in November 2000. We are grateful to the participants for useful feedback
This article is an attempt at providing a better perspective on the debate over inequality. First... more This article is an attempt at providing a better perspective on the debate over inequality. First, it claims that inequality is increasing, but not as much as many claim. In fact, the increase is modest and badly measured. Moreover, inequality is well below the levels observed prior to the 20th century. Secondly, it claims that inequalities must be decomposed between "good", "neutral" and "bad" inequalities. " Good inequalities" result from individual preferences and have no perverse impact on economic growth. " Neutral" inequalities relate to changes in family size, demography and marriage patterns and they have no moral implication whatsoever, as they merely exhibit changes in economic structures. "Good" and "Neutral" inequalities create no "social malaise". The "bad" inequalities are those that are socially noxious because they result from impairments in the capacity of individuals to make choices. Thirdly, this paper argues that a large share of the " bad " inequalities stem from government policies that push down the left-tail of the income distribution while pulling up the right tail. Although there are inequalities from birth, these are much costlier to combat than inequalities resulting from government intervention.
Gauti Eggertsson uses a dynamic stochastic general equilibrium model in arguing that the period 1... more Gauti Eggertsson uses a dynamic stochastic general equilibrium model in arguing that the period 1933 to 1937 represented recovery from the Great Depression, by virtue of regime change between the Hoover and Roosevelt administrations. He claims that the Hoover administration was defined by adherence to three “policy dogmas,†and that Roosevelt shifted expectations for the better by making credible commitments rejecting those dogmas. Eggertsson’s argument is wrong on several counts. He misrepresents Hoover’s economic policies, he mischaracterizes Roosevelt as “dogma-free†and committed to a clear alternative plan for recovery, and he misreads the economic consequences of Roosevelt’s policies. Eggertsson’s problems begin with his notion of “recovery,†wherein the economy’s progression from critical condition to prolonged infirmity is trumpeted as “recovery.†Eggertsson’s article is entitled “Great Expectations;†I have titled this piece “Great Apprehensions...
In response to contemporary arguments that the expenditures associated with World War II were a m... more In response to contemporary arguments that the expenditures associated with World War II were a major factor in ending the Great Depression and should therefore be imitated today, we offer historical evidence to suggest that the wartime economy was hardly a model of success in the eyes of most Americans. Expanding on Robert Higgs’ criticisms of the ability of conventional macroeconomic data to tell the real story, we examine newspapers, diaries, and other primary source material to reveal the retrogression in living standards in the US during the war. Our investigation suggests that wartime prosperity is largely a myth and hardly a model for recovery from the Great Recession.
Introduction Murray Rothbard was a tenacious defender of the praxeological project originated by ... more Introduction Murray Rothbard was a tenacious defender of the praxeological project originated by Ludwig von Mises. In his most extensive and most consciously theoretical work, Man Economy and State he attempted to give clear and complete expression to Mises's vision. This is particularly evident in his treatment of Interest and Capital 1 . He examines these topics with a view to uncovering for the reader their `essential' nature - providing an accurate picture of those essential characteristics that make Interest and Capital what they are. He is not here as concerned with descriptive realism as he is with logical imperatives. In order to be able to apply economic categories to the real world of history and institutions one must first obtain a correct understanding of these categories. It is important, for example, to be clear as to the origin of the phenomenon of Interest before attempting to understand the various determinants of the interest
this paper was presented at the SEA meetings in November 2000. We are grateful to the participant... more this paper was presented at the SEA meetings in November 2000. We are grateful to the participants for useful feedback
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