By Dan Kervick
Brad Delong recently presented what he impishly called ‘The Seven Cardinal Virtues of Equitable Growth’. For me, DeLong’s list is a mixed bag. But there are a few items on the list I would unreservedly endorse. One is his second virtue:
2. Invest. Invest in ideas, in equipment capital, in structures capital, in education: we need more of all forms of investment. Boost public and private investment: we need both kinds.
By Reynold F. Nesiba
Professor of Economics
Augustana College – Sioux Falls, South Dakota
This past May, marked the one hundredth anniversary of A. Mitchell Innes’s (1913) publication of a paper titled, “What is Money?” in The Banking Law Journal. In it, this British diplomat, then living in the US, reviewed the history and usage of money and its forms in credit and coinage. On both historical and logical grounds, he asserts that the “modern science of political economy” rests on a series of assumptions regarding money and credit that are “false.” One of the most important of these assumptions is the belief that “under primitive conditions men lived and live by barter.” Who should we blame for this false assumption? According to Innes, it is Adam Smith (1776), the father of economics, who in turn rests his arguments on the words of Homer, Aristotle, and those writing about their travels to the New World.
By Glenn Stehle
[Part 1] [Part 2] [Part 3] [Part 4]
The richest eschews a vain parade of wealth
And entertains the poor with friendship and with care
…Where the farmer so rich…the sailor so beloved
The humblest servant as merry as his master
–SIMON STIJL, Rise and Flourishing of the United Netherlands (his description of the Dutch Republic in the 3rd quarter of 18th century)
Every nation has its national mythology, and the Netherlands is no exception. As Simon Schama points out, many Dutch still see “themselves frozen in the attitudes of Hals’ guild deacons and de Hooch’s interiors, a maritime community of God-fearing burghers dwelling in piety and liberty” (Simon Schama, Patriots and Liberators: Revolution in the Netherlands 1780-1813). The rub, however, is this, and again the Dutch prove no exception to the rule: national mythologies are unfailingly more fiction than fact.
By William K. Black
(Cross posted at Benzinga.com)
The Wall Street Journal’s editorial staff (WSJ) criticizes the Dodd-Frank Act and the leadership of the financial regulatory agencies. I share many of those criticisms, but I parted company when the WSJ expressed its horror that: “The regulation micromanages bank decisions down to the kind and quality of loan.” The Dodd-Frank Act bans a “kind” of loan based on the inherently fraudulent “quality of [the] loan.” The Act bans liar’s loans. The WSJ considers this ban so appalling, so obvious a violation of the divine right of banks, that it labels it “micromanage[ment]” and assumes that the label proves the absurdity of banning liar’s loans.