Milton Friedman on the Negative Income Tax

Milton Friedman was born 101 years ago today. The video above isn't as snappy as many of the great Friedman videos online, but I like it because it shows the kind of libertarian Friedman was. Instead of dismissing any policy that fell short of abolishing the state as 'socialism', he came up with innovative and practicable steps towards a freer and richer world. His policy proposals are still relevant and fresh (unlike many of FA Hayek's, for instance) — as a replacement for existing welfare, a Negative Income Tax today could liberate people from the benefits trap. Daniel Hannan's piece on Friedman and school vouchers — another idea as fresh and important today as it was when he first proposed it — is well worth reading too.

Allister Heath lays out his Mark Carney wishlist

In a video out this morning, City A.M. editor Allister Heath calls on Mark Carney to bring the Bank of England into the twentieth century by reforming regulation to emphasise greater interaction with the financial sector, opening up its culture to something less dictatorial, and monetary policy to something more like Nominal GDP Targeting or a Productivity Norm.

Video of George Selgin's talk "Could deflation be salvation?"

George Selgin spoke the tuesday before last, 28th May, on the possibility some deflation—that coming from improvements in the supply side—is not harmful to the economy, but good. He made an extremely convincing case, pointing out that the so-called Long Depression of 1873-1896 was actually the site of a vast improvements in living standards and social welfare. And he pointed out that the problems attendant with deflation, that economists are fond of pointing out, only obtain when that deflation comes from a demand shock, not a change in supply.

Why is Adam Smith the greatest economist of all time?

George Mason University economists Tyler Cowen and Alex Tabarrok, who run Marginalrevolution, one of the most popular and—in my opinion—best blogs on the internet, have recently made forays into online education. Their latest is on the history of economic thought, looking at great economists from Galileo up until the marginal revolution of the 1870s, tackling questions including "Why is Adam Smith the greatest economist of all time?"

Here is the introduction to their course:


Happy 114th Birthday, Hayek

Here's a video of Friedrich Hayek talking about his key contribution, on the economics of knowledge. For his work in this field, centring around his 1945 paper "The Use of Knowledge in Society", cited 9391 times according to google scholar, he shared the 1973 Nobel (Memorial) Prize. Here, the specific (closely-linked) issue here is the economic calculation problem that Hayek and Ludwig von Mises argued hit socialist societies due to their lack of prices. This culminated in the socialist calculation debate, part of the way Hayek made his name, and a debate that such luminaries as G.A. Cohen later agreed Hayek and von Mises had won.