Category Archives: The Market Process

CEI Podcast for November 16, 2012: I, Pencil: The Movie

Posted on November 16, 2012 | Comments Off on CEI Podcast for November 16, 2012: I, Pencil: The Movie


Have a listen here.

Nick Tucker, producer and director of the new CEI short film “I, Pencil,” discusses the importance of Leonard Read’s classic essay, how the project got started, and how ideas like spontaneous order and connectivity are genuinely inspiring.

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Posted in CEI Podcast, Economics, The Market Process, Trade

The Environmental Impact of iPhones

Posted on June 29, 2012 | Comments Off on The Environmental Impact of iPhones

One doesn’t usually think of electronic gadgets as being environmentally friendly. But Cato’s Marian Tupy makes a good point about the iPhone. By replacing legions of bigger, clunkier items like newspapers and magazines, alarm clocks, compasses, and even white noise machines, smart phones can drastically reduce the amount of raw materials people need to maintain a first world lifestyle.

It’s an underappreciated point about capitalism and the innovation it makes possible that should be made more often. Click here to read Marian’s post, which is accompanied by a cool graphic.

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Posted in Innovation, Technology, The Market Process, The New Religion

Worth a Thousand Words

Posted on June 16, 2012 | Comments Off on Worth a Thousand Words

With a single graph, NYU’s Bill Easterly shows, not tells, why America’s current economic troubles aren’t as bad as they seem.

I won’t spoil the suspense; just click here. And keep in mind that the graph is logarithmic. Its true slope is far steeper.

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Posted in Economics, The Market Process

Creative Destruction at Work

Posted on August 25, 2011 | Comments Off on Creative Destruction at Work

Gawker and 7 Other Formerly Popular Sites That Are Dead or Dying

(via Iain Murray)

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Posted in Economics, The Market Process

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Regulation of the Day 173: Yellow Pages

Posted on May 11, 2011 | Comments Off on Regulation of the Day 173: Yellow Pages

It’s creative destruction in action. San Francisco is phasing out the distribution of hard-copy Yellow Pages. About 1.6 million of the doorstops are delivered to San Francisco homes every year. Most people no longer use them. Between YellowPages.com, Google, Craigslist, and other online tools, consumers now have better options for finding what they need.

Next week, San Francisco’s city council will hold a vote to ban delivery of hard copy Yellow Pages to anyone who doesn’t specifically request one.

This issue doesn’t really need a regulatory solution, though. The books depend on ad sales to be profitable. As people use them less and less, advertisers become more reluctant to pay for ads. When revenues drop enough, it will no longer be worthwhile to print hard copies. This transition will happen just fine on its own.

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Posted in Economics, Regulation of the Day, The Market Process

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Congressional Economics

Posted on May 10, 2011 | Comments Off on Congressional Economics

Some people think that the only reason poverty still exists is because Congress hasn’t passed laws guaranteeing the right to decent housing, health, and education.

Some of these people are in Congress. Over at The American Spectator, my colleague Jacqueline Otto and I explain why their hearts are in the right place, but their heads aren’t:

Suppose that poverty really can be abolished by passing a few laws. Jackson isn’t going nearly far enough, then. The Constitution should guarantee everyone not just a decent home, but a mansion filled with servants to take care of every need.

Everyone should have the right to not just a doctor’s visit every 6 months, but a cadre of specialists with access to the latest technologies and tests. This would be a boon for life expectancy.

And why only an iPod and a laptop for children? They deserve supercomputers! And the right to a Harvard Ph.D. Such a law would give America the most educated population in the world; though it would probably know the least.

Congress might as well pass a law guaranteeing an above-average lifestyle for all Americans.

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Posted in Economics, Publications, The Market Process

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From Poor and Sick to Healthy and Rich

Posted on December 3, 2010 | Comments Off on From Poor and Sick to Healthy and Rich

Via Russ Roberts, this is an amazing video. I’m always impressed with creative, compelling ways to use data to tell a story. And this story is one of the most important in human history: how most of humanity went from being poor and sick to healthy and rich in just 200 years.

There is still a ways to go. But if past is prologue, I’m optimistic about the future.

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Posted in Development Economics, Economics, Fun with Statistics, The Market Process

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Joe Biden’s Weak Case for Government Meddling

Posted on November 10, 2010 | Comments Off on Joe Biden’s Weak Case for Government Meddling

Joe Biden believes that government played a large role in the success of railroads in the 19th century. In this video, Don Boudreaux points out that that isn’t actually true. There were four transcontinental railroads. Three of them received subsidies.  The fourth was the Great Northern Railway, founded by Canadian immigrant James J. Hill. He alone rejected any special government favors.

All three subsidized railroads went into receivership. Hill’s Great Northern Railway remained solvent, and is still in business today as the BNSF Railroad.

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Posted in Economics, The Market Process

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One Way to Create High-Tech Jobs

Posted on September 14, 2010 | 2 comments

My colleague Ryan Radia and I recently sent this letter to The New York Times:

Editor, New York Times:

Catherine Rampell’s September 7 article, “Once a Dynamo, the Tech Sector Is Slow to Hire,” mourns the recent decline in U.S. data processing jobs. She blames much of the decline on the automation of previously tedious tasks.

May we suggest one way to get those jobs back: No more automation. Ban the use of computers for data processing. Imagine how much information flows through today’s global economy in an average day. Computers handle most of the load. That costs millions of jobs.

The effects would reverberate far beyond the tech sector. The paper, pen, and pencil industries would also boom.

Companies are dead-set on doing more with less. True, that creates more jobs in the long run by freeing up resources — and employees — for new ventures. But if only they would consider doing less with more, they could create more data processing jobs.

Ryan Young and Ryan Radia
Competitive Enterprise Institute
Washington, D.C.

2 Comments

Posted in Business Cycles, Economics, The Market Process

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The Rahn Curve

Posted on July 1, 2010 | Comments Off on The Rahn Curve

A little government can do a lot of good. A lot of government can do little good.

Rules protecting life, liberty, and property can create the stable conditions that entrepreneurs need to flourish. It works best when these rules are simple, clear, and few. But problems emerge when government takes on other missions.

Rules that are complicated, opaque, and numerous create instability. Entrepreneurs are less likely to invest or innovate if they fear the rules of the game might change tomorrow on a whim. Complying with regulations takes up time and effort that could be spent creating wealth. When governments get involved in business, businesses will involve themselves with government. This is an invitation to corruption, rent-seeking, and regulatory capture. Many backs get scratched, but economic growth suffers.

Dan Mitchell‘s latest video introduces the Rahn Curve, named after top-notch economist Richard Rahn, to illustrate that concept visually. Most academic studies on the subject estimate that governments that take up 15 to 25 percent of GDP is about the right size. The U.S. government consumes roughly 40 percent of GDP. That wide range is because different government policies have different effects, and because the complexity of even the smallest economies makes any macro-level study uncertain.

The academics might be guessing too high, though. Historical data from the 19th century show that the best-performing economies had governments around 10 percent of GDP. That includes the U.S. and most of Europe.

Returning to that size government wouldn’t even be particularly austere. the U.S. government would have a $1.4 trillion budget. Roughly what we had during the Clinton years.

I hope you’ll take a few minutes to watch. The Rahn curve contains valuable insights.

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Posted in Economics, The Market Process

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