Archive for Stephen Davies

Stephen Davies is academic director at the Institute of Economic Affairs in London.

Always Think of Incentives

While visiting FEE a few years ago, I was lucky enough to hear a talk by the “armchair economist,” Professor Steven Landsburg. In it he remarked that most of economics could be summarized in just two sentences: “Resources are scarce” and “People respond to incentives.” These two apparently simple and obvious observations are in fact [...]

1Oct2006 | Stephen Davies | 2 comments | Continued

The History of “Underdevelopment”

Perhaps the most important feature of the modern world is its sustained, intensive economic growth. This produces most of the other distinctive features of modernity. Although there were earlier episodes of such economic efflorescence (to use Jack Goldstones term), it was only with the industrial revolution of late eighteenth-century Britain that it became a permanent and prominent feature of the world economy. Following the advent of this transformative process, questions soon arose elsewhere. The first was that of how to achieve the same kind of growth and dynamism. Soon this led to further questions: why other parts of the world did not show these qualities and why their attempts to do so ended in failure.

1Jun2006 | Stephen Davies | 0 comments | Continued

Free Trade: History and Perception

In the natural sciences, such as physics, there is a large number of statements that can be made about the world that command general assent from scientists and those with a scientific education. This is not true to anything like the same degree in the human and social sciences, such as economics and history. The [...]

1Mar2006 | Stephen Davies | 0 comments | Continued

Warriors and Merchants

In 1915 the well-known German economic historian Werner Sombart published a book with the arresting title Merchants and Heroes. It argued that the war then underway between the Central Powers and the Entente was not just a traditional great-power conflict. It was rather a struggle between two different worldviews embodied by France and Britain on [...]

1Nov2005 | Stephen Davies | 0 comments | Continued

The Persistent Influence of Bad Ideas

Sometimes books, and the ideas they contain, have a much longer-lasting impact than anyone would expect or realize. Long after the book itself has been forgotten and languishes unread in the reserve stacks of libraries or on the shelves of secondhand-book dealers, the ideas it puts forward continue to influence people and the way they [...]

1Jul2005 | Stephen Davies | 0 comments | Continued

The Business Revolution of the Nineteenth Century

The business corporation is one of the most maligned and disliked institutions of our time. The criticism comes from many parts of the political spectrum, and its substance has become a common-sense assumption for many. As ever, much of this criticism lacks historical perspective, despite the inclusion of historical accounts of the growth of large [...]

1Apr2005 | Stephen Davies | 0 comments | Continued

A Man to Remember

June 4, 2004, was a significant date for all who care for the history and cause of human liberty. It marked the 200th anniversary of the birth of a great champion of freedom, a man who wrought a revolution not only in his own land but worldwide. The man was Richard Cobden. Born in Sussex [...]

1Dec2004 | Stephen Davies | 0 comments | Continued

The Great Horse-Manure Crisis of 1894

We commonly read or hear reports to the effect that “If trend X continues, the result will be disaster.” The subject can be almost anything, but the pattern of these stories is identical. These reports take a current trend and extrapolate it into the future as the basis for their gloomy prognostications. The conclusion is, [...]

1Sep2004 | Stephen Davies | 78 comments | Continued

Would the Poor Go Barefoot with a Private Shoe Industry?

It is said that while we may rely on private initiative to supply “nonessentials,” some things are so important to a decent life that we cannot trust the vagaries of the competitive market. Some people would not get the vital product or service. The only solution, supposedly, is government provision to all, often free of [...]

1May2004 | Stephen Davies | 0 comments | Continued

From Pennsylvania to Verdun: Friedrich List and the Origins of World War I

World War I, or the “Great War” (as most Europeans still call it), was one of the biggest disasters in human history. It not only killed and maimed millions, the cream of a generation, it also destroyed the liberal, cosmopolitan system that had been created in the nineteenth century. It was, moreover, the direct cause [...]

1Jan2004 | Stephen Davies | 0 comments | Continued

China’s Historic Error

Last time I wrote about the dynamic and innovative economy of Song China. Had China continued to develop as it did under that dynasty we would undoubtedly be talking now of “the Industrial Revolution of the fourteenth century.” However, this did not happen. Instead China gradually lost the dynamism and inventiveness that for so long [...]

1Oct2003 | Stephen Davies | 1 comment | Continued

China’s Forgotten Industrial Revolution

We live in a world that has been shaped by a process that began some 250 years ago in northwestern Europe. We often call it the Industrial Revolution because one of its most dramatic features was the appearance of industrial manufacture with the rise of the factory system. However, this was only one element and [...]

1Jun2003 | Stephen Davies | 0 comments | Continued

The History of Deflation

Lately a new word has made an appearance in economic commentary and journalism. Or, rather, it is now being used in its original, correct meaning. That word is “deflation.” Used correctly, it means a general decline in prices, or a steady increase in the value, or purchasing power, of a given unit of money. For [...]

1Mar2003 | Stephen Davies | 2 comments | Continued

Ideas and the Abolition of Slavery

The history of slavery is a subject of great interest to contemporary historians. The intense interest it evokes today is partly a consequence of one huge reality: slavery has been a feature of almost every historical epoch except for the last 200 years. So the big question is, Why and how did an institution so [...]

1Dec2002 | Stephen Davies | 1 comment | Continued

Does Government Always Have to Grow?

One of the benefits of historical knowledge is that it brings perspective. Things that seem obvious look quite different when you realize that they are of recent origin. Things that seem inevitable do not appear so when you look at their past. One of the best examples of this is the size of modern government. [...]

1Sep2002 | Stephen Davies | 7 comments | Continued

Lessons of History: The Great Irish Famine

History is a subject that often arouses strong emotions. What seems to some people to be a topic of limited academic interest is for others the source of deeply held and passionate feelings. The task of the historian is to try to establish, as dispassionately as possible, what actually happened in a given time and [...]

1Sep2001 | Stephen Davies | 1 comment | Continued

Spencer’s Law: Another Reason Not to Worry

One of the constant themes of today’s media is crisis and panic. Everywhere we look we are told there is some dreadful social problem, a threat to all that is good and true. Moreover, it is getting worse and will bring disaster upon all of us—unless “we do something.” (The authors of these jeremiads always [...]

1Aug2001 | Stephen Davies | 0 comments | Continued
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