The two most ardent critics of collectivism in the 20th century were arguably Ludwig von Mises and Ayn Rand. This essay discusses the relationship between these two modes of argumentation found in their work, what I will term the “head” and the “heart” arguments and why the “head” must be used to temper the “heart”.
A new study for the Mercatus Center at George Mason University examines the relationship between income inequality and the number of regulatory steps necessary to start a business. Looking at 175 countries and multiple variables, the study finds that there is a positive relationship between entry regulations and income inequality.
Our main contribution in this review essay is to emphasize the discontinuity in the Chicago price theory tradition between the Knight/Viner/Simons generation and the post-war Friedman/Stigler/Becker generation.
A new study published by the Mercatus Center at George Mason University argues that, beginning late in the 19th century, the informal rules that govern fiscal policy began to reward policymakers for increasing spending—even for increasing it beyond the capacity of federal revenues, and therefore at the cost of chronic deficits. Despite numerous legislative attempts to constrain spending over the past 40 years, these informal rules have trumped formal constraints, and the deficit problem has marched steadily on.
During times of economic crises, the public policy response is to abandon basic economic thinking and engage in ‘emergency economic’ policies. We explore how the current financial crisis was in part caused by previous emergency economic measures.
This paper critiques the Keynesian liquidity trap from an Austrian perspective. The liquidity trap theory argues that at a given interest rate the demand for money is horizontal, and interest rates cannot fall to stimulate investment. The major problem in the theory is that it concentrates on the loan interest rate instead of the price spread in the structure of production, called the natural rate, which as the Austrians have argued is the true interest rate determined by time preferences that the former is only a reflection of.
U.S. military contracting has been plagued by systematic corruption, fraud, and waste during both times of peace and war. We argue that these outcomes are the result of inherent features of the U.S. military sector which incentivize unproductive entrepreneurship.
Mercatus PhD Fellow Vipin Veetil, along with Akshaya Vijayalakshmi and Srikanth Viswanathan, address Amartya Sen's criticism of cash-transfer programs such as education vouchers in the Wall Street Journal.
This study represents a serious challenge to conventional thinking in contemporary comparative systems, and the economics of socialism. It disputes the commonly accepted view of both the nature of the 'socialist calculation debate' of the 1930s and the lessons to be derived from it.