General government spending and general government revenue as % of US GDP since 1970


Source: General government – General government spending – OECD Data and Source: General government – General government revenue – OECD Data.

The sovereignty thing

Flip Chart Fairy Tales

Sovereignty is a word we will hear a lot over the next few months. Brexit supporters say we need to leave the EU because it’s a threat to Britain’s sovereignty. According to the Mayor of London (yes, he is still that) parliament lost its sovereignty in 1972 and the only way get it back is to leave the EU. At least, I think that’s what he said but even Carl Gardner (who knows a lot about all this) wasn’t entirely sure what he meant.

Fortunately, for those of us who would like to understand the idea of sovereignty in a bit more detail, there are plenty of people writing more clearly on the subject. There are two important points.

Firstly, on parliamentary sovereignty; parliament can make any law it likes. As Carl explains:

When we say Parliament can make any law whatever, we really mean it. It’s a radical idea, that many law…

View original post 989 more words

An Economic Approach to School Integration: Public Choice with Tie-ins

Thomas Borcherding “An Economic Approach to School Integration: Public Choice with Tie-ins.” Public Choice, 1977, argues that a reason for racial or ethnic discrimination in the public sector is politics encourages the coercive transfer of income from the racial, religious or ethnic group to those with more political influence.

Race can be used as a means of organizing coalitions to lobby for fiscal and economic discrimination in favour of even a previously unprejudiced group.

Preferences of each group to locate in a common geography and the severe control over entry or exit from the group that such things as skin colour, language, caste, and religious dogma impose make the organization of racial or ethnic coalitions by political entrepreneurs fairly cheap and minimises free riding and defection.

Prejudice may reinforce the solidarity of each group and help to monitor via custom, mores, and folkways the behavior of those that would attempt to bring persons of other groups into the former coalition. Further, prejudice may also serve as a device to rationalize exploitation of another group by fiscal or other means.

Borcherding argues that integration, racial balancing, quotas, and busing of school children take on a new logic when income transfers can be tied to fairly immutable characteristics such as race.

Mixing of children by race reduces the ability of a white dominated school board to differentially favour its own partisans’ children and to discriminate against those of blacks.

This paper anticipated Becker’s point that the competition among pressure groups for political influence for looks for lower cost ways of redistributing wealth so as to as much as possible limits the largess as much as possible to the pressure groups that lobby for it and their allies.

The cry-baby left sees Axes of Oppression everywhere


% female employees aged 25 to 54 working 40 or more hours per week across the OECD


Data extracted on 11 Mar 2016 14:08 UTC (GMT) from OECD.Stat.

Top 10 Improvised Scenes in Movie History

Keynesianism in Democracy

Sweet Talk

Two years ago, semiconservative pundit Josh Barro declared that “Conservatives Have No Idea What to Do About Recessions.” The eminent progressive economist Paul Krugman agreed, then tweaked crotchety Josh by saying this idea-less condition afflicts not only “anti-intellectual and doctrinaire” Republican policymakers but also “prestigious conservative economists” such as, um, Barro’s father Robert.

Conservative intellectuals like Robert Barro, Krugman suggested, have rejected the economists’ notion of aggregate demand, and in so doing they have rejected not only Keynesian economics but also the wrong-yet-acceptable monetarist alternative and its very great avatar Milton Friedman. Why? Because politics: Krugman sees Barro père as having “the sense that acknowledging that markets fail, ever, would be the thin edge of the wedge for liberal policies.”

With apologies to Alex Pareene’s version of Malcolm Gladwell: Say that Krugman is right about Robert Barro’s motivations. Could Barro still be right in rejecting Keynesian economics? What…

View original post 528 more words

McCloskey’s Straw Foe: Retro-Institutional Economics

Sweet Talk

I’m a big fan of Deirdre McCloskey. She’s become in the past two years one of my favorite intellectuals, alive or dead. At the very least, she’s responsible for introducing me to virtue ethics, my obsession for the past year. So I hate that my first piece for Sweet Talk is rather critical of a recent article of hers.

McCloskey has a new paper titled “Max U vs. Humanonics: A Critique of Neo-Institutionalism” (PDF) appearing in the Journal of Institutional Economics in which she takes the New Institutionalist school to task for failing to account for the influence of words and ideas in economic history, and especially for asserting that the Great Enrichment (the explosion of incomes from roughly 1800 to the present) can be explained without these concepts. The problem is she doesn’t seem to be talking about the same institutional economics that I’m familiar with (loosely, as a…

View original post 1,039 more words

Redistribution Going In the Wrong Direction

A Force for Good

On his blog, Paul Krugman discussed how “the conventional case for trade liberalization relies on the assertion that the government could redistribute income to ensure that everyone wins.”  Aside from the historical and intellectual issues with this statement, Krugman makes another rather anti-Progressive point (albeit he does so unintentionally): that wealth should be redistributed from the poor to the wealthy.

“Whoa whoa whoa, back that train up!” you might be saying.  “How on Earth is Krugman making that argument?  He is a noted proponent of redistribution from the wealthy to the poor!”

You’d be right to say that; he is such a proponent.  But this is where his argument becomes contradictory.

If, indeed, the role of the government is to redistribute from the winners of trade to the loser of trade, then that necessarily means that gains must be transferred from the poor to the wealthy.

Who benefits…

View original post 209 more words

Hours worked per working age American and French and per American and French workers since 1950

American workers are working fewer hours per year but more labour has been supplied by the working age population especially in the 1980s and 1990s. In France, there has been a steady decline of hours worked per worker and, up until 1985, hours worked per working age French.


Data extracted on 10 Mar 2016 22:34 UTC (GMT) from OECD.Stat, Data extracted on 10 Mar 2016 22:02 UTC (GMT) from OECD.Stat, and The Conference Board. 2015. The Conference Board Total Economy Database™, May 2015,

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