Will the Savings Crisis Lead to Stagnation?

“There is a virtuous cycle in which high growth promotes high saving, and high saving in turn promotes high growth.” —Joseph Stigltz, Chief Economist, The World Bank “America’s Expansion Cannot Be Sustained.” —The Economist, November 6, 1999 In a return to the principles of classical economics, more and more economists agree that thrift is a [...]

Economics for the 21st Century

“Nature has set no limit to the realization of our hopes.” —Marquis de Condorcet Recently I came across the extraordinary writings of the Marquis de Condorcet (1743-94), a mathematician with an amazing gift of prophecy in l’age des lumières. Robert Malthus (1766-1834) ridiculed Condorcet’s optimism in his famous Essay on Population (1798). Today Malthus is [...]

Heilbroner’s One-Armed Philosophers

I am not surprised that The Worldly Philosophers has gone through multiple editions since 1953. Heilbroner has written a colorful and entertaining masterpiece. And no one has come up with a better title about the lives and ideas of the great economic thinkers.

They Were Right

“Americans need to know the history of American anticommunism if they are to understand the great role they have played in ridding the world of the most murderous of the twentieth century totalitarians.” —Richard Gid Powers[1] On October 16, 1961, thousands of people packed the Hollywood Bowl. The occasion was not a rock concert or [...]

Dismal Scientists Score Another Win

For years, economists have complained that conventional accounting distorts the true economics of the firm by not including a charge for common equity in its earnings reports and balance sheets. Generally accepted accounting principles treat equity as if it were free.

America Is Number 1 Again

In 1991, I prepared an advertising campaign for my book Economics on Trial (Irwin). The headline was: “Japan and Germany Win World War III,” followed by the subtitle, “Their formula multiplies wealth so rapidly that they will achieve their goal of world domination by the year 2000.”

Recently I came across a delightful book that confirms my view that America is once again on top of the world: the fourth edition of The Illustrated Book of World Rankings, edited and compiled by George Thomas Kurian.[2] Out of some 100 positive listings, the United States received top billing in 33 categories. Among them:

Y2K and Entrepreneurial Error

“No businessman in the real world is equipped with perfect foresight; all make errors.” —Murray N. Rothbard[1] Over the past year, I’ve been involved in a series of debates over the impact of the Year 2000 Problem, the potential collapse of computers—and perhaps of the economy—owing to the fact that since computer programs use two [...]

Are Financial Markets Inherently Unstable?

“There is an urgent need to recognize that financial markets, far from trending towards equilibrium, are inherently unstable.” —George Soros1 In the aftermath of the collapse of emerging economies in Asia, eastern Europe, and Latin America, many prominent economists and speculators, from Paul Krugman to George Soros, have called for government intervention in financial markets. [...]

Everything Is Cheap and Getting Cheaper

“Capitalism is about turning luxuries into necessities.” —Andrew Carnegie[1] We all labor under the notion that the cost of living is high and rising every year. Yet, believe it or not, economic life is relatively inexpensive, and getting cheaper all the time. This truth was reinforced recently when my friend and colleague Roger Clites told [...]