Economic Reasoning

The discussion on what is fair and just has to do with choice. It is unfair and unjust to place an individual in a situation where he or she has no choice. A system or structure can be denounced as unfair and unjust if it takes away people's choices. This has to do with the hopelessness of not being able to choose one's own path, and the utter devastation and hopelessness of dependence. Without having a choice, we are not and cannot be responsible for our actions - responsibility (even the morality of it) requires choice. In other words, to have...

By Per Bylund Vote3 2

In a recent blog post at the Wall Street Journal, linked to by Paul Krugman and discussed almost endlessly in social media, we are presented with five reasons to worry about deflation. According to Krugman, the blog post is “a very nice explainer.” Krugman notes that there is only one important piece missing from the blog post: that “zero is not a magic red line,” and the lesson that “too-low inflation has all the adverse effects of outright deflation, just to a lesser degree.” And further, “This means that Europe is already in a lowflationary trap, qualitatively the same as a deflationary trap.” Yet...

By Per Bylund Vote6 1

In a column last week in The Week, Damon Linker does a good job at showing how difficult it can be to understand an uncomplicated (if not simple) idea. Linker's column is some sort of hit piece on libertarianism through attacking an economic concept because it was explicitly discussed by the classical liberal Nobel laureate FA Hayek. "W.W" at The Economist blog responds well to the ridiculousness of Linker's attempted attack, so I don't have to. However, I would like to continue on points brought up by "W.W." that are important - and show a fundamental (yet erroneous) bias that is so common...

By Per Bylund Vote6 0

"Never send me a project e-mail." This was one of the first things the owner-CEO told me after employing me in a small but highly tech-oriented marketing firm. It may seem counterproductive, but he had his reasons. Sending an e-mail, he noted, is akin to dumping tasks on somebody else's desk. It is a way of fleeing responsibility by making it somebody else's - asynchronously. Can this be right? In a heavily tech-oriented business in the computer era, surely e-mails is a great way of communicating. Even if we're in the same office, sharing information and asking questions in an e-mail...

By Per Bylund Vote10 5

In a strangely vague and unspecific opinion piece at Reuters today, economic editor Edward Hadas lauds the CORE initiative to change economics teaching to "what it should be." The only thing obvious about Hadas' column is how well it fits in the same camp as the State Science Institute's assessment of Rearden Metal in Ayn Rand's novel Atlas Shrugged. There is a lot of critique of economics along those lines floating around, which only "notes" that economics has "failed" and that it "must change" and - it is implied - it must change in a certain very politicized (leftist) way. We...

By Per Bylund Vote3 0

This post is by guest blogger Dr. Sarah Ali. As I bought my groceries today in an affluent neighborhood outside of Washington D.C., it was entertaining and surprising to see some people bring in their shopping cloth bags, driving energy efficient cars, sporting clothing attire that screams ‘Green lives on’, and then shopping at Whole Foods, a corporation---it just screams contradiction! How can you oppose capitalism and then shop at a corporation? Why is Whole Foods okay, but not Wal-Mart? Let's explore this further. There’s nothing wrong with capitalism. Opponents of capitalism argue that it marginalizes people resulting in the...

By Per Bylund Vote6 0

Yes, you read that correctly: there is no unemployment. There is only voluntarily chosen leisure. This is not a joke or an outrageous view of "naïve economists" with their common (lacking) sense of empathic. It is actually true. But only under certain circumstances. It is certainly not true today in most western civilizations (and eastern too), as we know all too well. Following the financial crisis, most of us probably know someone who is unemployed, was unemployed, or has been ever since the bubble burst. So obviously there is unemployment in the world. The real question, however, is if this...

By Per Bylund Vote3 0

It is strange how politicized the general perception of science is. One issue is the "scientism" that permeates any discussion on knowledge and research, which claims that there is only The Scientific Method (inductive data analysis). This issue is quite problematic in its own right, but the topic of this post is another: the eagerness with which the ignorant public dismisses certain scientific disciplines and expresses support of others. This is as strange as it is unfortunate - if not harmful. It is understandable that the social sciences are considered "soft" compared to the natural sciences. They are, so this...

By Per Bylund Vote7 0

If there is any knowledge or understanding among researchers that is scarce, it is the understanding for research. What I mean is not that researchers fail to use their methods correctly, that they fail to properly test for whatever biases, or that they fail to consider missing/omitted variables. No, there is a lack of understanding for what science is and can do. The key word here is "understanding," which I mean in a quite Weberian sense. Research is so specialized that it is more about technique than about actual thinking. Sure, a lot of thinking goes into figuring out alternative...

By Per Bylund Vote5 0

From the perspective of the New Institutional Economics, the rather recent stream of research within neoclassical economics where social and market institutions are again put front and center in the analysis, we can adopt Oliver Williamson's "levels" of institutional analysis. Douglass North similarly speaks of the "play of the game" versus the "rules of the game," which is an important distinction. The former consists of the actions carried out in the market and the commonalities, patterns and structures to how people interact; the latter constitutes the demarcation of the market landscape and the "exogenous" limitation to what is permissive market action. Private...

By Per Bylund Vote6 0

No Choice Or No Alternatives? Oct 6, 2014

Deflation Hysteria Oct 19, 2014

About the “Terrible, Horrible, No Good, Very Bad Idea” Oct 2, 2014

The Economics of E-mail: Responsibility Dumping Sep 29, 2014

Throwing Babies, Keeping the Bath Water Sep 25, 2014

Guest Post: Capitalism Explored Sep 22, 2014

There Is No Unemployment Sep 18, 2014

“I’m a Total Believer In Gravity Too, Man!” Sep 15, 2014

Taking Science Seriously Sep 11, 2014

Does Private Property Matter? Sep 8, 2014