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Recent Posts

Here are the 10 latest posts from EconLog.

EconLog May 19, 2018

UBI vs. guaranteed jobs vs. wage subsidies, by Scott Sumner

Scott Alexander has a very long blog post discussing the advantages of a universal basic income program over a guaranteed jobs program. It's probably the best single defense of the UBI that I have ever read. (I wish Alexander had become an economist.) But in the end, I still prefer low wage subsidies.

Here's Scott:

A steelman of Sarris' point might go something like this: it definitely seems true that there is some complicated way in which a family of eight living in a tiny farmhouse in the Kansas prairie in 1870 was happy and felt financially secure even though they probably only earned a few hundred dollars a year by today's measures. So isn't it weird that people earning twenty thousand dollars a year still think of material goods as their barrier to happiness?

I think explaining that effectively would require a book-length treatment. But I think the book would end with "even though it's weird and complicated, poor people today who make $10,000 or $20,000 are often unhappy, in a way that richer people today aren't, and this involves money in a real sense."

I am not the person to write this book (though see the post on cost disease); I can only relay what poor people tell me. Sometimes it's "my rent-controlled apartment is underneath noisy frat boys who keep me awake every night with their parties, but I can never leave because it's the only apartment I can afford in this town." Sometimes it's "I hate my boss but I can't leave because if I go a month without getting a paycheck I won't have enough money for rent." Sometimes it's "I couldn't afford good birth control, got pregnant, and now I can't afford to support the child, what do I do?" Sometimes it's "Obamacare mandates me to buy health insurance, but I can't afford it, I guess I am going to have to pay a fee I can't afford on tax day instead." Sometimes it's any of a thousand versions of "my car broke down and I can't afford to get it fixed but I need to get to work somehow". Sometimes it's "I am sick but if I miss a day of work my company will fire me, because when you're poor enough legally-enshrined workplace protections somehow fail to exist in real life". And sometimes it's "I work eighty hours a week driving for Uber because it's the only way to make ends meet, I hate everything." A lot of times it involves the same crappy job-centered lifestyle I worry a basic jobs guarantee would perpetuate forever.
I would love to read the book that Scott says could be written on the question of how material wellbeing relates to happiness. It's a very hard question, and one I am utterly incapable of answering. Looked at one way, it seems obvious that having more material goods makes us better off. From another perspective, it seems equally obvious that it doesn't make us better off:

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So let's focus on Scott's final paragraph, which lists two types of problems:

  1. The problems we face from having too little money.
  2. The problems we face from having jobs that suck.

It seems to me that a UBI program doesn't really address the problems we face by having too little money, at least the specific problems mentioned above. The UBI payments would necessarily be set around the poverty level. Thus people relying on UBI would still be at the bottom of the income scale, still struggling to afford health insurance, still living in rent controlled apartments (if they can find them!) above noisy neighbors. It's often said that the best thing about money is that it allows you to avoid having to live amongst poor people. A UBI program doesn't do that. UBI recipients would still struggle to raise children, and still struggle to find money to fix their cars. That's not to say they would not be better off, rather I'll argue there are better ways of achieving the same objectives---more money and more freedom to walk away from jobs that suck.

My preferred system would strive to keep the labor market "hot". Sort of like right now, where I can't get anyone to come to my house and do work. We can do this in several ways:

  1. Adopt NGDPLT. That doesn't guarantee a hot labor market, but it's a way of preventing us from occasionally shooting ourselves in the foot. Recessions are very bad for workers, especially workers trying to escape a lousy job.

  2. Combine an elimination of all minimum wage laws with a sizable low wage subsidy. (Also eliminate occupational licensing laws.)

Thus let's suppose that in my town, eliminating the minimum wage laws would cause the equilibrium wage for entry level jobs to fall to $9/hour. (I think it would he higher, but I'll use this example.) The government could then chip in enough wage subsidy to boost the equilibrium wage to say $14/hour, which is about $28,000/year for a full time worker.

You might assume that this would require a subsidy of $5/hour. Unfortunately the subsidy would have to be a bit higher, more like $6/hour. That's because the institution of a wage subsidy program would boost the supply of labor, depressing equilibrium wages to something like $8/hour.

Some might wonder if the equilibrium wage would fall all the way to $4/hour, so that a $5 subsidy would produce no net gain. That's impossible, because the demand for labor would rise sharply, boosting the equilibrium well above $4/hour.

Because the demand for labor is more elastic than the supply, the effect of a wage subsidy would be mostly too boost after subsidy wages, and only slightly depress before subsidy wages. In my example, I assumed a $6/hour subsidy would boost after subsidy wages by $5/hour (from $9/hour to $14/hour) and depress before subsidy wages from $9/hour to $8/hour.

[Don't fall into the trap of thinking "Why wouldn't employers choose to blah, blah, blah . . . ." Employers don't choose wages; rather wages are set by the market.]

Having a hot labor market would force employers to treat their workers better, just as minimum wage laws and rent controls encourage employers and landlords to treat their employees and tenants like garbage. Do you really want to live in a country where people are positively encouraged to treat the people they interact with like garbage? (Apparently most voters in California do.)

I would like to see a country where workers can switch from a bad employer to a good employer as easily as consumers switch from a crappy grocery store to a good grocery store.

Scott might counter that almost all work sucks:

I worry we're losing site of the bigger picture, which is that work sucks.I agree, that's why they call it work. But does it suck less than non-work? Here we need to focus on both the seen and the unseen. Lots of people think of work in terms of how pleasant the job is. But don't forget that work also causes output. Without work, there is no output. And no output also sucks.

Of course I'm exaggerating, as UBI proponents don't contemplate no output, just less output. And the same 1870 farm example that casts doubt on the benefit of poverty programs can also be used to cast doubt on the cost of moderate decreases in aggregate output.

In the end, I'm not ideologically opposed to a UBI program. Maybe such a program will make sense in the future, when robots do most of the work. But at this point in time, I believe a low wage subsidy is better. There's still plenty of useful work to do.

A wage subsidy is also far more politically feasible, which is why the Dems are pushing an inferior alternative---a government job guarantee. They sense that voters would reject a UBI. After all, lots of countries have government jobs programs and/or low wage subsidies. AFAIK, none have a UBI. Not even countries much more "progressive" and socialistic than America.

PS. I realize that my wage subsidy program would not work perfectly. There is the problem of corruption. There are Zero Marginal Product workers. It probably could not apply to the self-employed. But a UBI would also not work perfectly---some would spend all the money on drugs, and end up homeless. There would also be fraud. In a very diverse country of 325 million people, no single program will work perfectly. The real question is; "Which program is the least bad?"

PPS. Scott has a large number of very persuasive arguments against a jobs guarantee program.

(16 COMMENTS)

EconLog May 19, 2018

One Possible Benefit of the Royal Wedding, by David Henderson

UPDATE BELOW :

I woke this morning at 4 a.m. PDT and, as is my wont, turned on ESPN. But the woman on ESPN was saying that many people were watching the royal wedding. Ooh, I thought, I forgot. So I turned to ABC and watched it for a while as I did my bicycle exercise. The worst part: a black U.S. minister, Michael Curry, who took full advantage of his 15 minutes of fame; he seemed to forget at times that the wedding wasn't about his agenda and his views. (Although I loved Ben E. King's "Stand by Me" that followed.)

As regular readers of this blog know, I tend to be a glass-half-full person. So here's my optimistic take. When the new bride, Meghan Markle, finds out that she and her husband must file U.S. taxes every year and, if their U.S. tax liability exceeds their British tax liability, must pay the difference to the IRS, she will start lobbying for a long-overdue change to the U.S. tax law. Other long-suffering Americans who live abroad have pushed for this for years, but the push will gain renewed energy from Ms. Markle and from many of the American celebrities who attended.

Signs of change in an old English castle: Today's wedding of Prince Harry and Meghan Markle nudges the British royal family into a new era.

So reads the little New York Times headline that just showed up on my phone.

My question, though, is "Will the wedding of Prince Harry and Meghan Markle nudge the U.S. government into a new era?" Grover Norquist and Patrick Gleason write:

This system of citizen-based taxation (CBT) is practically unique to the U.S., with only one other nation, Eritrea, sharing the same approach. In fact, it is a 150-year-old relic that started with an effort to tax Civil War draft dodgers who had fled to Canada.
You might think that since U.S. income taxes tend to be lower than taxes in foreign countries where most Americans living abroad live, the effect is small: it means the annual hassle of paying an account to do a 1040 form showing that the American abroad owes zero. So the American abroad pays somewhere between $200 and $2,000, depending on complexity, for a CPA to do the form.

But two things about that. First, it's probably closer to $800 than to $200 and, for many people abroad, that's not tiny. Second, whether they pay more depends strongly on the particulars of the foreign tax code and the U.S. tax code. Last summer I was talking to neighbors (neighbours?) at my cottage in Canada--she is an American ex pat and he is a natural-born citizen of Canada. They were venting about these facts and she was understandably hesitant to renounce her U.S. citizenship. I made the point above--it's a hassle but it's small. On the contrary, her husband said, the capital gains tax screws them. In Canada, you are taxed on 50% of your capital gains. That's not the same as having 50% of your marginal tax rate apply to your capital gains, even though it sounds the same. Why? Enter the U.S. tax system. The United States has a lower tax rate on the full capital gain. So how do the U.S. tax authorities look at your capital gains in Canada when you file the U.S. 1040? You have to pay that lower tax rate on your whole capital gain. So if you're in the 33% bracket in Canada and you have capital gains, your tax is 16.5% of the gain. But then when you go to file for the United States, your tax rate, if you're in the top capital gains bracket, is 20%. He pointed out that some years he is in that bracket. (He owns a business and his income varies a lot from year to year.) The difference is 3.5 percentage points. So on a $40,000 capital gain, he will pay to the U.S. feds an additional 3.5% times $40K, which equals $1,400. Huge? No, but not tiny either.

There is one way that the U.S. government could respond to Ms. Markle's and others' entreaties: pass a special bill that exempts the royals but no others. Let's hope they don't settle for that.

UPDATE :
Commenter BC has graciously offered the following link that goes into these issues more and addresses some of the concerns I would have for Ms. Markle.

(11 COMMENTS)

EconLog May 18, 2018

Workers Affect Worker Safety Too, by David Henderson

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When I taught a cost/benefit analysis course, one of the topics I covered was worker safety. Using W. Kip Viscusi's excellent entry "Job Safety" in The Concise Encyclopedia of Economics, I showed that there is an implicit market for safety in the workplace and that workers do a pretty good job of judging relative risks.

My whole discussion, and Kip's, treated the safety decision as if it were totally in the hands of the employers. I implicitly assumed that employers have complete control over employees' actions. They don't. To have such control, employers would have to engage in detailed monitoring or set up incentives for other employees to report on workers who are putting their employees at risk.

I don't have much of an excuse for that oversight because I experienced the contribution of other workers to my risk in the summer of 1969 when I was working in an underground nickel mine in northern Manitoba. I had 2 such experiences (#1 and #3 below) and heard about one other (#2).

1. The small story where my monitoring of another employee worked.

As an 18-year old "helper" (the job title) to a diamond driller, I was at the bottom of the totem pole. I was also the youngest of about 300 workers, all male, at a remote mine 40 miles south of Thompson, Manitoba, at a place called Soab Lake: I'll leave it to your imagination to figure out what "Soab" stood for. (I was also, with 2 years of college under my belt, the most formally educated worker in the whole camp.)

One thing I learned from the first couple of diamond drillers I worked under was that when you went to a new section of the mine that had been newly blasted, you should, before setting up your diamond drill, use a heavy iron scaling bar to scale the ceiling to make sure you brought down any loose rocks overhead. The first few I worked under always did so faithfully. But about halfway through my 3 months there, a new guy came along who showed by his every action that he wanted to cut corners. So when we moved to a newly blasted section, he proceeded to set up the drill. I told him that he needed to scale first. He answered that I worked for him and that it was his call. I replied that he was right--that I did work for him--but also that he worked for Emil, the foreman. I told him I would refuse to work until we scaled and that I would go to the surface (we were on day shift) and tell Emil. He grudgingly complied.

2. The tragic story.

Fortunately, I didn't experience this, or I wouldn't be here to write about it. From a very early age, I've been one to do due diligence when entering an unknown situation. When I found out I had the job in the mine, I went to Midwest Diamond Drilling's (the underground component was called Wescore) office in Thompson to pick up my boots, slicks (rubber pants and jacket), helmet, helmet light, and battery for my waist and was driven out that afternoon to Soab Lake. The truck driver was friendly and so I started asking him what could go wrong in the job. He told me about 2 guys who had been killed the previous week. They weren't diamond drillers (whew!). They drilled holes, put explosives in them, set a fuse timed to go off in about 20 minutes, and then made their way to the surface. The explosion would occur when no one was around and then the next shift would come down, "muck" (clear out) the rock with a power shovel that looked somewhat like a little bulldozer, drill their holes, put in the explosives, set the fuses, etc.

Two guys working together had run out of fuses. Getting good clean ones might take them 20 minutes--walking to the end of the drift (the horizontal section) to the "cage" (the elevator), going to the surface, getting the fuses, coming back down, and walking to the face. Easier to look around and find fuses. They found fuses that had been there some time and thought those would do. So they installed the fuses and lit them. Pfffft. The fuses burned quickly and they were killed in the explosion.

3. The somewhat humorous story--humorous ex post only because nothing went wrong--but horrible ex ante.

The cage was a see-through metal elevator that went quickly up and down to the various levels. (If I recall correctly, the shallowest level was 300 feet and the deepest was about 2100 or 2300 feet; there were approximately 8 levels.)

By the elevator shaft at each level was a large red light. Guys were allowed to smoke in the mine (remember that this was nickel, not coal.) But when the red light was flashing--and it was pretty obvious when it was--if you were where you could see it, you were supposed to immediately extinguish your cigarette. I never saw anyone at any of the levels not comply. Why were you supposed to extinguish your cigarette? Because the flashing light meant that the cage operator was bringing down bags of explosives. Probably no further explanation is needed.

When that happened, the cage, rather than coming down quickly, descended very slowly. It was slow enough that you could look in and see the operator and the explosives. One time, we were waiting to come up at the end of a shift and the red light was on. The guy for whom I was the "helper" put out his cigarette. As the cage came by I looked in and saw the cage elevator sitting on the bags of explosives--and calmly smoking a cigarette.

Bottom line: workers have a lot of say about safety.

(6 COMMENTS)

EconLog May 17, 2018

Markets are inhuman (and that's a good thing), by Scott Sumner

Here's the Financial Times:

The leaders of Italy's two leading populist parties took aim at global financial markets on Wednesday, accusing investors of trying to "blackmail" them by unloading Italian assets as they tried to form a new government.

A sharp sell-off that saw yields the Italian government's benchmark 10-year bond suffer their biggest move in two years was triggered by the parties calling for a "pre-Maastricht setting" in EU economic policymaking -- suggesting they would abandon the fiscal rules underpinning the euro once in government.
The FT article has a graph showing the sharp spike in the yield on Italian government bonds:

Screen Shot 2018-05-17 at 12.42.41 PM.png
Political leaders have all the faults of ordinary people. Some are motivated by spite; a desire to seek revenge against their opponents. Others are motivated by ideology; say a belief that big government is the way to solve problems.

EconLog May 17, 2018

The Human Capital Purist Case Against Tax-Funded College, by Bryan Caplan

In the Soho Forum debate on "All government support of higher education should be abolished" , I heavily based my argument on the signaling model of education.  But if I were a human capital purist, I still would have defended the abolitionist position - albeit less triumphally.  Here's how:

  1. Prospective college students, unlike K-12 students, are adults - both legally and practically. 

  2. Hence, if they want to invest in themselves, they or their families can and should pay for it.  This would be a lot easier than it is today, because government subsidies have greatly inflated tuition.

  3. If prospective college students or their families don't have the money, they can borrow the money on the free market.  This will normally be doable as long as the investment is worthwhile.

[cont...]

EconLog May 17, 2018

Little Pink House Is a 9, by David Henderson

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I saw the movie Little Pink House in Monterey on Tuesday night. Here's the trailer.

I rate movies on a scale of 1 to 10. Anything 7 or over is one I'm glad I saw and would recommend.

Little Pink House is a 9.

It's the true story of Susette Kelo and her fight to keep her house from being seized by the local government in New London, Connecticut.

Spoiler ahead. The case goes all the way to the Supreme Court where she loses by a 5 to 4 vote. (That's a spoiler only for people who know nothing about the Kelo case.)

There's not a wasted scene or line of dialogue in the movie.

I was surprised by how much one of the villains, Charlotte Wells, played by Jeanne Tripplehorn, made her case for seizing relatively low-income people's property on the basis of "social justice." I thought this might be poetic license because I don't remember social justice being so big a term 18 years ago, when this whole controversy got going. But I asked producer Ted Balaker and he assured me that yes, Charlotte Wells actually did talk that way.

Interestingly, one of the other heavies in the movie, Connecticut's governor, is not named, even in the credits. He is John Rowland.

(11 COMMENTS)

EconLog May 16, 2018

Caplan-Glaeser Debate Video, by Bryan Caplan

Watch the whole debate here.

(6 COMMENTS)

EconLog May 16, 2018

The Beauty of Trade, by Contributing Guest

by Pierre Lemieux

Despite the interference of two customs bureaus, one in China and one in the United States, not to mention the mountains of regulations in each place, trade had worked its magic.

In 1919, John Maynard Keynes wrote:

What an extraordinary episode in the economic progress of man that age was which came to an end in August, 1914! ... The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality.
From the vantage point of the 21st century, Keynes had a detrimental influence on the evolution of economics and liberty. A charitable view would be that he was a dilettante captured by the statist intelligentsia of his time (a libertarian cultural environment was as rare then as it is now), and naïve about Leviathan. Commenting on Friedrich Hayek's1944 book The Road to Serfdom, Keynes said of government intervention that "dangerous acts can be done safely in a community which thinks and feels rightly, which would be the way to hell if they were executed by those who think and feel wrongly" (quoted by the late Ralph Raico in "Was Keynes a Liberal?"). Keynes was sure that those who thought and felt rightly were on his side and that he would be advising their government. But he had, at least in 1919, the right sentiment about freedom of movement and the aesthetics of trade.

travelling salesman.jpg I was reminded of the beauty of trade after I ordered a ThinkPad laptop from Lenovo, a Chinese company that bought the ThinkPad line from IBM in 2005. Dell also makes good high-end laptops, but they did not have exactly what I wanted (I am actually writing this post on an older Dell machine). I don't like the fact that the Chinese Academy of Sciences, a government creature, owns about 10% of Lenovo. I feel for the poor Chinese taxpayer who was milked to invest in Lenovo and who indirectly subsidized my ThinkPad. But the company's shares are also listed in Hong Kong; it is a market-driven and market-constrained organization, and if they make the computer I want, I will buy it.

EconLog May 15, 2018

Safe haven or tight money?, by Scott Sumner

My previous post on the Japanese safe haven question elicited a variety of interesting comments. Further research suggests that Japanese stocks do indeed tend to fall when the yen strengthens for "safe haven" reasons. That's certainly an odd reaction.

I think there's a much better explanation for the response of Japanese asset prices to global shocks---monetary policy. Suppose that a bearish global shock reduces the equilibrium global real interest rate. Also suppose that Japan fails to respond to this change by reducing their monetary policy target interest rate, and also refuses to take other monetary steps such as depreciating the yen. In that case, the target interest rate would rise relative to the (now falling) natural rate of interest. This means that monetary policy would become more contractionary. This is true even if (as is more likely) the BOJ does take some offsetting steps, but these actions are not sufficient to fully offset the bearish global shock.

A contractionary monetary shock would be expected to do the following:

  1. Appreciate the yen.
  2. Reduce Japanese equity prices.

And that is exactly what happens. In contrast, the "safe haven" theory seems unable to explain all sorts of facts, such as:

  1. Why is Japan a safe haven, and not some other country?
  2. Why do Japanese stocks fall sharply when capital flows into the Japanese "safe haven"?

PS. A number of commenters including Rajat, Julius Probst, and Benoit Essiambre offered similar explanations.

PPS. If you think it "natural" that Japanese stocks would fall when the yen strengthens for "safe haven" reasons, then you are incorrectly reasoning from a price change. When a bullish factor for equities causes a currency to strengthen as a side effect, that currency appreciation will not prevent stocks from rising in value, as we saw in the US during 1995-2000.

EconLog May 15, 2018

A Parable About ZTE, by Contributing Guest

by Pierre Lemieux

Assume that the state is not a benevolent organization. It pursues its own interests, which means the interests of those who occupy positions of command at its helm. These interests may require it to satisfy the interests of certain electoral or quasi-electoral clienteles whose support is necessary to those in power. Under our assumption, the state will use the rule of law and the constitution as mere commitment devices to gain the confidence of the populace. State rulers will ignore the rule of law when they can get away with it--while proclaiming that "we are a nation of laws."

Let's call H (for "home") the state that rules over the territory where we live. There is of course no reason why a foreign state F would be less self-interested and more benevolent.

One implication is that the state, democratic or not, represents only part of the citizenry; it often discriminates against other groups (although discriminator and discriminated may switch over time and according to who is in power). Another implication is that whether Joe or Jack is the ruler-in-chief will not matter much. The worst of the two might do a bit more damage, which the other one will add to when his turn to rule comes.

Now, suppose there is a foreign company Z that H deems a threat to its security, that is, to "national security." (In this post, any resemblance to an actual company or an actual state is pure coincidence.) Because of this (or other analogous reasons), H has ordered its own citizens to stop doing business with Z, which amounts to a death sentence for the company if the citizens obey. They don't have much choice but to obey their state's orders.

Suppose further that H has started a trade war with F, which is the state that has formal jurisdiction over Z. Perhaps Z is even a state corporation of F. At any rate, the relation between F and Z is symbiotic, for Z also provides political support to F. In the nascent trade war, F has forced some of its own subjects to reduce their imports from producers who are an important electoral clientele of H.

Lenin.jpg What will state H do? (As Vladimir Lenin would say, what is to be done?) Here is a possible strategy suggested by the model above. H could promise to not bankrupt Z provided that F stops hurting H's weighty domestic clientele. Perhaps, who knows, H had purposely attacked Z, or had attacked more brutally, precisely in order to hold its survival as a bargaining chip against F?

Here are the 10 latest posts from EconTalk.

EconTalk May 17, 2018

On the Tolerable Administration of Justice

by Amy Willis

meat and potatoes.jpeg Host Russ Roberts and his guest, Pete Boettke, invited us to dive into the "meat and potatoes" of governance in this week's EconTalk. Their wide-ranging conversation on political conversation covered a lot of ground... So much so I find it really hard to narrow down to just a few questions for your further consideration...

So let's try this...

  1. What question(s) would you like to ask Boettke on the general topic of public administration? Are there any particular points on which you disagree with Boettke? What are they, and what's the nature of your disagreement?

  2. What does Boettke mean by "public administration," and how does he think our understanding of it affects the way economics is practiced?

  3. What does it mean to "sustain the mythology" of the US Constitution? To what extent do you think that's an effective practice, and why? (Related, whose job is it- or should it be- to sustain this mythology?)

  4. What are some of the problems with decentralizing government functions? What things might be better handled at the local versus the federal level? (Note: Even Russ admits that not everything benefits from bottom-up solutions...)

  5. For me at least, this was perhaps the most significant question raised in this week's conversation, and it's a question I do not know how to answer. How about you? How do we market freedom and economic liberty to people who don't see it helping them very much? (You might read this question as Boettke suggests; how do we get back to the "soul of classical liberalism?"

EconTalk May 14, 2018

Peter Boettke on Public Administration, Liberty, and the Proper Role of Government

10%20Laws%20of%20Trust.jpgPeter Boettke of George Mason University talks with EconTalk host Russ Roberts about the proper role of the state in the economy. This is a wide-ranging conversation on political economy. Topics include Adam Smith's view of the state, the tension between the state as enabler of real vs. crony capitalism, the potential for the poor to flourish in a market economy, and the challenges of democracy.

Play

Time: 1:12:46

EconTalk May 10, 2018

Trust is in the Air

airline.jpg How can a good manager learn to trust his subordinates? What about his kids? In this week's episode, EconTalk host Russ Roberts sat down with Joel Peterson, who teaches at the Stanford Graduate School of Business and serves as the Chairman of the Board of JetBlue Airways. The two discuss Peterson's "strange career" as well as his new book, The 10 Laws of Trust.

Let's hear what you took away from this week's episode... As always, we love to hear from you!

  1. As a traveler, what would you consider to be the most significant innovation in the airline industry? How about as an investor in an airline? To what extent are these two answers the same for you, and why?

EconTalk May 7, 2018

Joel Peterson on Leadership, Betrayal, and the 10 Laws of Trust

10%20Laws%20of%20Trust.jpg How did the CEO of a real estate development company become chairman of an airline? How can a competent manager learn to trust his subordinates? Joel Peterson, Chairman of the Board at JetBlue Airways and author of The 10 Laws of Trust, talks with EconTalk host Russ Roberts about his career at Trammel Crow and JetBlue and how the concept of trust, outlined in his book, has helped his career. He closes the conversation with a discussion of how he overcame his personal weaknesses that would have handicapped his career--or as he puts it, how he "rewrote his operating system."

Play

Time: 1:13:17

EconTalk May 4, 2018

When do secrets expire?

secrets.jpgThis week's PG-13 episode has scandal, celebrities, and sex tapes. But according to EconTalk host Russ Roberts, Ryan Holiday's newest book, Conspiracy, is "an extended meditation on power, strategy, patience, [and] revenge..." Holiday tells the story of the demise of the celebrity expose website Gawker after a trial brought by pro wrestler Hulk Hogan, and secretly funded by PayPal founder Peter Thiel. Was it a shoot or a kayfabe? Do all secrets have expiration dates, as Roberts suggests? It's hard to keep track of this complex plot...

What lessons did you draw from this week's conversation? (And did you go out and get the book? Did you read it in a day, like Russ?) As every week, we'd like to hear more from you. Use our prompts and leave your response in the Comments, start your own conversation offline, or drop us a line. Let's keep the conversation flowing.

  1. In talking of Gawker's model, Holiday says, "...if you pay people by the page view, you unlock a very powerful mechanism." What does he mean by this, and what does it illustrate about news in the digital age? Is this change an unadulterated good or bad? Why?

EconTalk April 30, 2018

Ryan Holiday on Conspiracy, Gawker, and the Hulk Hogan Trial

Conspiracy.jpg Author Ryan Holiday discusses his book, Conspiracy, with EconTalk host Russ Roberts. This is a crazy episode about a crazy book about a crazy set of events--the Hulk Hogan lawsuit against the website Gawker, a lawsuit that was secretly funded by Peter Thiel. Holiday explains how this happened and the lessons for all of us related to conspiracies, patience, strategy, and revenge. Along the way, Holiday discusses his techniques for reading and lessons for how to grab someone's attention when looking for a job or opportunity.

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Time: 1:17:50

EconTalk April 27, 2018

Mind the Microcosm

microcosm.jpg Were you aware that we are living in a miracle? The problem is, according to the guest in this week's episode, is that this miracle is totally unnatural. EconTalk host Russ Roberts welcomes Jonah Goldberg of National Review to discuss his new book, Suicide of the West.

Have we abandoned the "Lockean Revolution?" Is there hope left for civil society in America today? Let's hear what you have to say in response to this week's episode. As always, we love to hear from you!

  1. What does Goldberg mean when he says that all authoritarianism is reactionary, and to what extent do you agree with him?

EconTalk April 23, 2018

Jonah Goldberg on The Suicide of the West

Suicide%20of%20the%20West.jpgJonah Goldberg of National Review talks about his latest book, Suicide of the West, with EconTalk host Russ Roberts. Goldberg argues that both capitalism and democracy are at risk in the current contentious political environment. He argues that we take for granted what he calls "the miracle"--the transformation of the standard of living in the democracies with market economies. Goldberg argues that unless we actively work to preserve our political and economic systems, the forces of populism, nationalism, and tribalism will work steadily to destroy them.

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Time: 1:27:24

EconTalk April 20, 2018

Measuring Ourselves to Death

ed metrics.jpg What is the appropriate relationship between judgments and measurement? Is it not the case that "if it matters, you can measure it?" In this week's episode, EconTalk host Russ Roberts welcomed historian Jerry Mullerto talk about his new book, The Tyranny of Metrics.

Now we'd like to hear what you think. Is your work evaluated based on metrics? If so, do you find such evaluation reliable? Are you worried about the reliance on standardized tests at your kids' schools? Is crime over- or under-reported in your area, and how would you know? These are just a few of the issues Roberts and Muller discuss.

  1. What is the "tyranny of metrics," according to Muller? Under what circumstances are metrics useful?

EconTalk April 19, 2018

Your Favorite Episodes of 2017

Here are the results of the survey of your favorite episodes of 2017. I want to thank everybody who responded--over 2400 people filled out the survey. You live in 68 different countries, which is an EconTalk survey record. And I also want to tell you how much I enjoyed your feedback and comments, that were at the end of the survey. They inspire me; they make me want to make EconTalk better; and they touch me.

Here are your favorite episodes from 2017. These are the episodes that were mentioned in people's top 5 most frequently.

  1. Sam Quinones on Heroin, the Opioid Epidemic, and Dreamland (22% put it in their top 5)

  2. Michael Munger on Permissionless Innovation

  3. Nassim Nicholas Taleb on Work, Slavery, the Minority Rule and Skin in the Game

  4. Benedict Evans on the Future of Cars

  5. John McWhorter on the Evolution of Language and Words on the Move

  6. Michael Munger on the Basic Income Guarantee

  7. Megan McArdle on Internet Shaming and Online Mobs

  8. Gary Taubes on the Case Against Sugar

  9. Tim Harford on 50 Inventions that Shaped the Modern Economy

  10. Don Boudreaux, Michael Munger, and Russ Roberts on Emergent Order

Three episodes that did not quite make this list but that I particularly enjoyed because of what I learned would include:

Robin Feldman on Drug Patents, Generics, and Drug Wars

Elizabeth Pape on Manufacturing and Selling Women's Clothing, and Elizabeth Suzann

Paul Bloom on Empathy

Favorites from past years are here.