Free Bazaar Blog

Awesome Hayek vs. Keynes rap video
http://econstories.tv/home.html

These graphs from Economic Freedom of the World: 2009 Annual Report, speak for themselves.

Interesting article on evolution and economics in Scientific American by the founder of The Skeptics Society
"As with living organisms and ecosystems, the economy looks designed—so
just as humans naturally deduce the existence of a top-down intelligent
designer, humans also (understandably) infer that a top-down government
designer is needed in nearly every aspect of the economy. But just as
living organisms are shaped from the bottom up by natural selection,
the economy is molded from the bottom up by the invisible hand."
His book Mind of the market is now on my reading list

There is an unstated assumption in lot of thinking about inequality, i.e. there is somehow a fixed pie of wealth, and the rich have an unfair share of the fixed pie. On the other hand, if we assume that there is an expandable amount of wealth for all practical purposes, then the question of the "unfair share" goes away, because you no longer need to fight for share of a fixed pie. So, is there a fixed amount of wealth or not? Let me tell you a story.

In a primitive island, there lives only one tribe, a farming tribe called Xulic. The tribe is ok at farming and lives at a subsistence level. One day a young, intelligent guy named Xilcor figures out that he can make a special plow that will allow the farmers to plow the land, sow the seed and create small channels for irrigation, all at the same time. This will allow each farmer to use less seed and farm a larger parcel of land. There is no problem of additional land, since the island has lot or unused fertile land. In fact the innovation will allow a production increase of 100%, or doubling of production. The only caveat is that the only person who knows how to make the pow is Xilcor. Xilcor tells the farmers that he will make the plow, repair it and sharpen it and keep it in good condition, all for 10% of the output that they produce. The farmers agree, since they still get to keep, 1.8 times their original production. With 500 families in the Xulic tribe, Xilcor gets to earn 50 times a normal farmer, so he becomes very rich in comparison to the tribe. Of course all the farmers are better off too.

So, now comes the quiz, who did Xilcor steal from to become rich? Was there a fixed pie from which Xilcor took more than his fair share?

This is a simple example, but there are a lot of these in the modern world. Apple, Intel, Google etc. a just a few examples of companies who got rich because they provided something valuable, not because they took an "unfair share" of a fixed pie.

10 Surprising Facts About American Health Care
Fact No. 1: Americans have better survival rates than Europeans for common cancers.

Fact No. 2: Americans have lower cancer mortality rates than Canadians.

Fact No. 3: Americans have better access to treatment for chronic diseases than patients in other developed countries.

Fact No. 4: Americans have better access to preventive cancer screening than Canadians.

Fact No. 5: Lower income Americans are in better health than comparable Canadians.

Fact No. 6: Americans spend less time waiting for care than patients in Canada and the U.K.

Fact No. 7: People in countries with more government control of health care are highly dissatisfied and believe reform is needed.

Fact No. 8: Americans are more satisfied with the care they receive than Canadians.

Fact No. 9: Americans have much better access to important new technologies like medical imaging than patients in Canada or the U.K.

Fact No. 10: Americans are responsible for the vast majority of all health care innovations.

Conclusion: Despite serious challenges, such as escalating costs and the uninsured, the U.S. health care system compares favorably to those in other developed countries.
Source: Scot Atlas, NCPA

An interesting advertisement that Cato is taking out in many leading newspapers.

"There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy."

— PRESIDENT-ELECT BARACK OBAMA, JANUARY 9 , 2009
With all due respect Mr. President, that is not true.

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

For the list of 250 economists who signed this statement click here.