Adam Smith argued that all it took to move a country from the lowest form of barbarism to the highest opulence was peace, easy taxes and a tolerable administration of justice. Now a lot of core institutions and public policies are embedded in a regime of peace, easy taxes and a tolerable administration of justice that we as scholars of political economy need to tease out and explain clearly. But it is not like Smith and Hume, or Hayek and Buchanan are silent on what that recipe for economic growth and prosperity is in terms of core institutions and public policy.
One of my fellow graduate students from the early 1980s Dan Mitchell does an excellent job in this video explaining the sources of economic prosperity. Dan has several videos online which are excellent tools for communicating basic economic policy. To my mind, Russ Roberts found his niche with podcasts, and Dan may have found his niche with these short video presentations. Perhaps President Obama can put down the blackberry for a minute and go to I-tunes and subscribe to EconTalk, or check out You Tube and watch the videos from the Center for Freedom and Prosperity. It would be time well spent.
Anyway, great job Dan --- more confirmation that GMU does its job in educating graduate students to be articulate and passionate (yet responsible) teachers of the logic of economic theory and the practical importance of different public policies.
I watched the video and the delivery is very compelling.
The past eight years seems to have grown an ominous force that has been increasing in daring. Especially in the past two years. It's greed. Shouldn't there be some sort of greed coefficient or multiplier that manages this surprisingly strong force in the free market economy? Should we not be accounting for this in some way? Should not proponents of the free market and relatively little regulation, recognize this very human and surprisingly (maybe just to me) strong force?
Just wondering what you think. I'm not an Economics Phd (or MA), just a curious observer, I would love it if you could help me understand this.
Posted by: Stella | February 18, 2009 at 12:07 AM
Dear Stella, the notion that greed has increased in recent times is hotly contested but I am confident that you can provide some evidence that this is the case. Even so, the great thing about a free market economy is the way that greedy people can only be successful in business if they provide goods and services that other people want to buy. This means that however greedy they may be, they can't help doing good for other people, quite likely in direct ratio to the strength of their desire to make a bundle of money. So at the end of the day it really makes no difference whether they are greedy or altruistic, the end result is pretty much the same.
Of course everything changes when the government gets involved in a big way, so winners and losers can be decided by political players, as you can see from the contents of the stimulus package. Of course it is very fortunate that our political leaders are wise and just, imagine what would happen if they were as greedy as the business folk who you are concerned about!
Posted by: Rafe Champion | February 18, 2009 at 03:12 AM
Have you seen this?: http://online.wsj.com/article/SB123491508784704057.html
Posted by: Danny Shahar | February 18, 2009 at 12:47 PM