“In 1940, Hayek (1940 [1972], 198-199) wrote an article that analyzed and criticized Lange’s model in great detail and explained, point by point, which implications of the model were problematic. Lange was deeply impressed by these critiques, and acknowledged that Hayek had succeeded in raising a series of essential errors and problems with the model: «There is no question that you have succeeded in raising essential problems and in showing gaps in the pure static solution given by me. I intend to work in this subject and give an answer to your paper … sometime in the fall.» (Lange, in a letter to Hayek dated August 31, 1940) Such an answer never came.”
Imagine what would have become of declaring who won the socialist calculation debate if this 1940 letter was better known. Hayek never mentioned the letter. The letter from Lange was found in Lange’s complete works published in 1973 in Polish.
Clay tablets unearthed in Asia Minor reveal a sophisticated commercial order emerging spontaneously nearly four thousand years before economists explained how markets work. By Surse Pierpoint of The American Institute for Economic Research.”A clay tablet from Kanesh, in what is now central Turkey, contains the founding charter of a twelve-partner trading company. Twelve merchants pooled thirty-three…
Tweet… is from page 88 of Art Carden’s and Ilia Murtazasvili’s paper “W.H. Hutt: An Economist for the Twenty-First Century,” which is a chapter in 2026 book Unsung Heroes of the Market: The 24 Underrated Economists You Need to Know – a volume edited by Robert Whaples, Christopher Coyne, Gregory Robson, and Diana Thomas [original emphasis;…
TweetHere’s a letter to the Wall Street Journal. Editor: Writing about U.S. trade deficits, Greg Ip declares that “by exporting so much, China effectively forces its trading partners to run deficits” (“The Global Economy Is Threatened Again by Trade Imbalances,” June 12). Wrong. U.S. trade deficits occur whenever foreigners sell more to us than they…
Everyone in Washington seems to agree that artificial intelligence must be governed. The only real dispute is who gets the steering wheel. Congress? Federal agencies? State legislatures? Some newly minted task force with a long acronym and a taste for reporting requirements? That debate is already too narrow. President Donald Trump’s recent executive order on…
TweetHere’s a letter to F&D Magazine, a publication of the IMF. Editor: U.S. Trade Representative Jamieson Greer wrote more than 2,100 words about trade yet managed to get correct approximately nothing (“Economics for the Real Economy,” June 2026). Just listing his errors would take nearly as many words, so I here address only one of…
TweetHere’s a letter to the Wall Street Journal. Editor: Greg Ip’s argument that cryptocurrencies, being privately issued, will fail as money relies heavily on his historical claim that privately issued bank notes in the 19th-century United States failed as money (“Stablecoins Are Private Money. That’s Why They’re a Risk to the Economy.” May 25). Mr.…
Looking at Part I and Part II, and considering the focus of today’s column, this series should actually be entitled “Trade Deficit Literacy.” That’s because the material I cite explains that a trade deficit is merely the flip side of an investment surplus. And it is good that the United States is a magnet for […]
Economics has recently lost another of the greats, Nobel Prize-winning economist Edmund Phelps, who passed away last week. Phelps was a macroeconomist, and among his many contributions he helped to formalise the concept of the natural rate of unemployment. Phelps won the Nobel Prize in 2006 for “his analysis of intertemporal tradeoffs in macroeconomic policy”.Surprisingly,…
To follow up on Part I and Part II in this series, let’s start with this Stossel video featuring Professor Don Boudreaux of George Mason University. The message is simple and accurate. Starting nearly 100 years ago, we got terrible statist policy from Herbert Hoover, followed by terrible statist policy from Franklin Roosevelt. No wonder […]
Tweet… is from pages 171-172 of Menzie Chinn’s and Douglas Irwin’s excellent 2025 textbook, International Economics: The Lerner Equivalence Theorem – that an import tariff is equivalent to an export tax – carries a powerful message: a country that tries to protect import competing industries from foreign competition may be able to help those industries…
I spoke on a panel at AEI with Nobelist Al Roth about his new book, Moral Economics, which covers “repugnant markets,” from prostitution to surrogacy to kidney exchange. A fun book! My case study was acting. Acting was considered repugnant for over 2,000 years. In Rome, actors could not vote, hold office, or be trusted…
SummaryThis chapter, on “Conservation, Ecology, and Growth,” is an early statement of free-market environmentalism. It begins by ridiculing leftists’ decades of contradictory complaints about capitalism: “Stagnation; deficient growth; overaffluence; overpoverty; the intellectual fashions changed like ladies’ hemlines,” and quoting one of Schumpeter’s best lines:Capitalism stands its trial before judges who have the sentence of death…
One of the most persistent criticisms of law & economics is that it rests on unrealistic assumptions. Economic models often assume firms maximize profits, investors respond rationally to incentives, and market participants systematically adjust their behavior in predictable ways. Critics frequently point to these assumptions as evidence that economic analysis is detached from reality. Real…
March 9 was the 250th anniversary of the publication of Adam Smith’s Wealth of Nations. I wanted to celebrate that occasion yesterday, but decided acknowledging Argentina’s rapid improvement in the Index of Economic Freedom was more timely. So let’s pay tribute today to Smith, starting with this video from the Fraser Institute (part of a […]
Why Evolution is True is a blog written by Jerry Coyne, centered on evolution and biology but also dealing with diverse topics like politics, culture, and cats.
In Hume’s spirit, I will attempt to serve as an ambassador from my world of economics, and help in “finding topics of conversation fit for the entertainment of rational creatures.”
“We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. - J Robert Oppenheimer.
Utopia, you are standing in it! 
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