December 8, 2015
This Wednesday, the Senate Select Committee on Aging will hold a hearing on “sudden price spikes” among certain off-patent drugs. The most widely publicized of these spikes was the recent price increase of Turing Pharmaceuticals’ toxoplasmosis treatment Daraprim, which jumped in price from $13.50 per dose to $750. The medical consequences of the price increase, obviously of concern to hospitals, doctors, and patients, was, at times, overshadowed by personal attacks leveled at Turing CEO Martin Shkreli, who quickly became a target for complaints...
November 25, 2015
Thanksgiving is tomorrow, and all of us have much to be thankful for. Over at Inside Sources, I have a Julian Simon-inspired take on the holiday:
This Thursday is an opportunity to give thanks for a wonderful fact: In all of human history, there has never been a better time to be alive than right now. This might seem an odd thing to say at the moment. War, terrorism, poverty, political repression and hunger still plague many countries. The most recent wounds, inflicted in Paris, Syria, and elsewhere, are still fresh.
But life is improving in unprecedented ways.
Over the last century or so, the typical American’s income has grown sixfold. Life expectancy increased 30 years during the 20th century...
November 25, 2015
Thanksgiving is a day layered in tradition and myth. The standard story makes much of the creative efforts of our ancestors, the assistance provided by the friendly Indians (aka Native Americans) and the richness of the land and seas. That view is romantic, but obscures the fact that over half the original settlers died in the first year, bloody wars between the settlers and the Indians soon dominated the frontier, and that for the first three years, the “bountiful” earth provided little food to the starving colonials.
The Pilgrims were a highly religious group seeking to live as an extended family in a communal order. Initially they placed all farm lands into a “commons” which all would farm and harvest from collectively. That system goes back to tribal societies with strong cultural rules. Protestant culture, it turned out, ...
November 23, 2015
Today, in The Guardian, columnist Zoe Williams repeats an idea often advanced by progressives, that entrepreneurial activity is dependent on the action of others, especially “government,” and that therefore socialism built the iPad. This is contrasted with the idea of human innovation being the result of individual inspiration, which she describes variously as the credo of Thatcher, Reagan, McCloskey, or free markets in general. In doing so, Williams fails the ideological Turing Test; she has fundamentally misunderstood free enterprise economics.
November 20, 2015
Prof. Brad Thompson of Clemson University writes this week in Minding the Campus on the impact of corporate donations to institutions of higher education. In particular, he describes some of the controversy we’ve seen in recent years about donations from unabashedly pro-capitalist sources like BB&T and the Charles Koch Foundation. The allegedly insidious influence of such funding has even inspired the creation of the activist group “UnKoch My Campus.” Of course, as Casey Given of Students for Liberty has recently pointed out, George Soros ...
November 18, 2015
Earlier this month the Cato Institute generously hosted a small roundtable discussion of CEI’s recent study “Virtuous Capitalism: Why there Is Less Corruption in Business than You Think” by Fred Smith and Ryan Young. Our goal was to solicit comments on and criticisms of the paper’s arguments, and to expose more people to the work of CEI’s Center for Advancing Capitalism.
The questions that arose during that session were helpful, but we are eager to open the discussion to as wide an audience as possible. Thus, we invite scholars (and students) to submit written responses to the arguments presented in the paper. Economists who work in the realm of public choice theory might be especially interested in engaging with Smith and Young. As they write:...
November 17, 2015
Government is responsible for billions and billions of dollars of corruption and corporate welfare. Considering the potential returns on investment compared to honest entrepreneurship, it is a minor miracle the vice-to-virtue ratio in the economy isn’t even worse than it already is. Why is that? CEI founder Fred Smith and I wrote a recent paper, “Virtuous Capitalism,” which explores several possible answers to the question.
If you don’t have time to read the whole thing, Fred summarizes it in his most recent Forbes column, to which I contributed:
Capitalism has a bad reputation. Many people see it as corrupt, uncaring, and in bed with politicians. And popular wisdom isn’...
November 2, 2015
Last week I blogged about the idea that some things should not be part of a market economy, and highlighted one rather silly example of a particular item being outlawed: in that case, futures contracts in onions. But there are far more serious examples of policymakers forbidding commerce in specific goods with disastrous results, in particular human organs like kidneys.
The same day I wrote about onions, Shmuly Yanklowitz wrote in The Atlantic about the advantages we could see from allowing a market in “compensated donation” of kidneys. Yanklowitz has an unusual perspective, being the founder of a social welfare nonprofit organization as well as someone who has recently given an...
October 20, 2015
The venerable Fred Smith and I have a new paper out today. Click here to read it. In the paper, we try to solve the Tullock Paradox, named for the late, great economist Gordon Tullock (my remembrance of him is here).
What is the Tullock Paradox? It involves rent-seeking, or seeking special favors from the government. Bailouts, subsidies, and regulations that prevent competition are all examples of rent-seeking. To provide some context, lobbying is roughly a $3.5 billion industry, and the federal government doles out more than $100 billion in corporate welfare—meaning rent-seeking is potentially a 30-fold investment. Not 30 percent, 30-fold. Meanwhile, the Dow Jones averages an 8 percent return. With such outlandish returns on investment, the Tullock Paradox...
October 14, 2015
The folks at Food & Water Watch are pissed. And I don’t mean “pissed” as in drunk; they are mad as hell about the proposed merger between two big breweries and demanding the Department of Justice step in and block the deal. Despite the fact that big breweries have been merging and acquiring bits and pieces of each other for decades, F&WW believes that allowing Anheuser-Bush InBev to acquire SABMiller would bring about an end to this golden age of beer we’re currently enjoying. My advice to them is to crack open a beer and take a deep breath.
After months of negotiation, Anheuser-Busch InBev (purveyor of Budweiser, Stella, and now Corona) announced it had reached an agreement to acquire...