Cafe Hayek

Where does power lie in Iran?

Reader and EconTalk listener, Lance Wiggains writes in response to Bruce Bueno de Mesquita's claim in this podcast of about a year ago that the President of Iran, Ahmadinejad, is perhaps only the 17th most important person in the Iranian pwer structure:

If it's true that the president is only the 17th  or so most important person in Iran, then why are so many Iranians upset about his reelection? It seems like a blatant contridiction. I assume that so many people would only be upset if he truly was important and powerful, otherwise why expend the resources protesting.

It's a good question and Lance's email isn't the only one I've received wondering the same thing. I hope to get Bruce back on EconTalk in the near future, but the answer, I think, is in understanding the protests. My understanding is that Mousavi isn't radically different from Ahmadinejad. After all, Mousavi was approved as a candidate by the mullahs. It's not like he's promising a western democracy. I see the protests against the heavy-handedness of the mullahs in declaring a victory for Ahmadinejad before the ballots could have been counted. The protesters want liberalization. They were unlikely to get it had Mousavi won. They are fighting now not for Mousavi per se, but for some more freedom and less oppression. That's my reading. Hope to get Bruce's.

BDM on Iran

It is a good time to listen to Bruce Bueno de Mesquita's analysis of Iran's internal politics.

Munger on franchising

Mike Munger talks about auto dealers' political power and the economics of franchising in the latest EconTalk.

Interview about EconTalk

Here at the Finance Buff.

Rebonato on risk

The latest EconTalk is Riccardo Rebonato of the Royal Bank of Scotland talking about risk and his book Plight of the Fortune Tellers. Fantastic book.

Leeson on pirates

The latest EconTalk is a conversation with Pete Leeson on pirates based on his book, The Invisible Hook.

Boldrin on intellectual property

The latest EconTalk is with Michele Boldrin. He and David Levine make a very provocative case against intellectual property in their new book, Against Intellectual Monopoly (available online here at no charge.) I find myself, to my surprise, moving very much in their direction.

Was Adam Smith a liberal?

I like to call myself a classical liberal, someone who is in favor of personal responsibility, limited government and voluntary collective action. (I add the last bit because some people seem to think that being a classical liberal means you're in favor of selfishness or survival-of-the-fittest individualism).

Alan Wolfe in his book The Future of Liberalism rejects the idea of classical liberals vs. modern liberals. He argues that liberalism means being in favor of letting as many people as possible being in control of their own lives. He argues that Adam Smith is a liberal, period, without qualification. He argues that Hayek is not a liberal under that definition. He blogs on this point, here.

It is a very interesting book, tracing the roots of liberalism back to the debate between Rousseau and Kant. I don't agree with his view of Hayek but I learned a lot from the book.

In the latest episode of EconTalk, Wolfe defends his view of Hayek and Smith, condemns evolutionary biology, and generally makes the case for liberalism.

Revised Book Club Schedule

For those of you listening to the podcasts of the EconTalk book club on The Theory of Moral Sentiments, the next episode, episode 5—covering the end of Part III, Part IV and Part V— will be released a week from today, May 13. I'm expecting that there will be one more episode, covering Parts VI and VII along with some closing thoughts putting the book in perspective. It is planned for released on May 27.

I want to thank everyone who responded to my earlier request for info on your listening habits. Wonderful feedback.

Questions for EconTalk subscribers

A few questions about the multi-episode series I'm doing with Dan Klein on The Theory of Moral Sentiments.

If you're listening, are you enjoying it?

If you're not listening, do you plan to?

If you're not planning to, do you find it annoying to find it on your computer?

Please email me at mail at econtalk dot org.

Leamer on Macro and Data

The latest EconTalk is Ed Leamer talking about macro and data. Ed is clear, provocative, and educational. A rare combination.

Smith, Episode 4

EconTalk has just posted the latest episode of The Theory of Moral Sentiments Book Club. We were hoping to get through Parts III, IV, and V of the book but Part III is so fascinating that we couldn't even finish Part III. For me, Part III is the most interesting and thought-provoking part of the book (at least through Part VI. I've yet to read Part VII.) Part III can be read by itself with profit and enjoyment and the same is true for this podcast. At least I hope so.

Boudreaux on the business cycle

The latest episode of EconTalk is a conversation with my co-host here at the Cafe, Don Boudreaux, talking about the Austrian theory of the business cycle. We also discuss why the Austrian theory fell out of favor in the second half of the 20th century.

Coming tomorrow, the second episode of the The Theory of Moral Sentiments book club, my conversation with Dan Klein on Smith's classic. This second episode is a discussion of Part I of the book.

Moral Sentiments Book Club schedule

Just a heads up to anyone interested in the EconTalk book club on The Theory of Moral Sentiments. On April 15th, we'll release the discussion of Part I of the book. On April 22, we discuss Part II. We expect to do two more podcasts after that discussing Parts III through VI. (Not sure we're going to say much about Part VII, Smith's overview of other systems other than what we discussed in the intro/overview podcast.) Not sure how we'll divide up the Parts between those two--we're going to be a little flexible and see what happens.

Bottom line--if you're interested in reading along, basically you'll want to get to Part I by April 15 and try to finish the whole book by May 6.

If you don't have time to read along, you will still get a lot out of the discussions if the topics and ideas are your cup of tea. Dan and I recorded two podcasts yesterday. Basically, Dan goes through Smith's arguments very systematically and we talk about them. It was a lot of fun and look forward to keeping a conversation going in the comments section to each podcast as we release them.

EconTalk Book Club—The Theory of Moral Sentiments

The latest episode of EconTalk is the first installment of a series of podcasts with my colleague Dan Klein on The Theory of Moral Sentiments by Adam Smtih. This first installment is an overview of key passages and ideas to help readers follow long as we read through the rest of the book. Subsequent episodes will be released on Wednesdays as bonus podcasts. The next episode will be released April 15th and will cover Part I of the book. If you want to read along, you can find the book here along with a tentative schedule and other resources. By the way, 2009 is the 250th anniversary of the first publication of The Theory of Moral Sentiments.

Lindsey on the age of abundance

The latest episode of EconTalk is a conversation with Brink Lindsey on the ideas in his book, The Age of Abundance. In the last part of the podcast, Lindsey critiques the view that the 1950s were some sort of economic golden age because there was less inequality.

Taleb on the crisis

The latest EconTalk is Taleb on the crisis. Lots of insight here on a very wide array of topics, including why visiting the Temple of Apollo was good for your health. But mainly, many interesting thoughts on thinking about uncertainty.

Dan Klein on truth and biases

The latest EconTalk is Dan Klein on truth and bias. He talks about how economists view the FDA, the problems of groupthink in academic life, and the challenges of avoiding confirmation bias.

Next week is Taleb on the current mess.

Wales on Wikipedia

The latest EconTalk is Jimmy Wales, the founder of Wikipedia talking about, well, Wikipedia. The sound quality is not the best—it's very echoey—but I hope it's listenable. It was fun to hear him talk about the influence of Hayek on his thinking. It was also interesting to hear him pronounce the name of the web site. He calls it wi-key-pedia. I (and I think most everyone else) calls it wi--kuh-pedia. Hayek would be the first to point out that he cannot choose what it is called--the pronounciation emerges without being under anyone's control.

Zywicki on debt and bankruptcy

The latest EconTalk is my colleague Todd Zywicki talking about debt and bankruptcy. One of his most interesting observations is how consumer debt has been pretty constant over time but credit card debt has increased while other forms of less pleasant and more expensive debt (layaway and payday loans) have decreased.

Meltzer on inflation

This week's EconTalk is Allan Meltzer talking about inflation. I learned a lot from this one. My favorite parts are where he explains why Bernanke won't be able to stop inflation (he won't have the political will) and why Paulson rejected killing insolvent banks with FDICIA (the bankers didn't like it. Shocking.)

Bhide on innovation

The latest EconTalk is a conversation with Amar Bhide on innovation and entrepreneurship. He argues that the more basic research that China and India do, the better for the United States because our market is superb at applying technology. He also has some interesting things to say about risk. He argues that the seductiveness of diversification crowds out due diligence. Also lots of useful thoughts on Hayek and Knight.

Acemoglu on the crisis

Here is Daron Acemoglu's superb essay on the financial crisis where he admits what economists missed and the implications for the future.

Here is the latest episode of EconTalk—a conversation with Acemoglu about the essay.

Cochrane on the crisis

In this week's EconTalk, I talk with John Cochrane of the University of Chicago about the current crisis. Among other things, he argues for simply letting banks fail, arguing that the consequences are much less onerous than is commonly argued.

Truth and Economics

As far as I know, no prominent market-oriented economist has come out in favor of a trillion dollar increase in government spending as a way to improve the economy. Every market-skeptical economist that I have heard is in favor of it on the grounds that it will improve the economy. Each side claims to have empirical support for its position.

What does this tell you about economics as a science? What should a non-economist conclude?

In this podcast with Robin Hanson, we explore these questions and a few others. It's a little bit off the beaten track, style-wise. It's more of a lengthy confession by me of how my views on these issues have changed, followed by Robin's response. Robin has some very interesting things to say.

Eric Raymond on EconTalk

The latest episode of EconTalk is a conversation with Eric Raymond, author of the The Cathedral and the Bazaar, a book I had been meaning to read for a long time and finally got around to. It's a fantastic book, full of Hayekian insight about the emergence of the open source phenomenon. I hope you find the interview half as informative.

Last call

I think today is the last day to vote for EconTalk. So do your duty if you feel it worth your while.

Why vote?

Commenter Russ Wood writes, in response to a previous encouragement to vote for EconTalk in the 2008 Weblog Awards:

From an economic standpoint, why should I vote? The economic way of thinking suggested I should not have voted in the November elections, but now suggests I should for a frivolous pat on the back?

I like voting. I have voted in every presidential election since 1972 (including this past one, to my surprise). I don't do it to affect the outcome. I do it to be part of something. Suffice it to say that this past election was my least favorite vote in a long time.

In the case of EconTalk, if it were for a frivolous pat on the back, I'd agree with Russ Wood. But the reason I'm hoping to win is to attract listeners who chance upon the list of 2008 winners and who might not otherwise find out about EconTalk. I also suspect it will make it a little bit easier, perhaps, to get guests to come on a show that was voted Best Podcast.

The magnitudes of those two  effects might be small or very large. Hard to say. But if you'd like to have a hand in that, please vote every day through this Monday. And though we are currently leading, there is a rising rival, a Harry Potter podcast, that is about to take over second place and will threaten our lead over the weekend unless you get going. So to strike a blow for Volcker over Voldemort, you know what to do.

Vote here.

Please vote

A reminder to please vote for EconTalk at the Weblog Awards. Yes, we're in the lead, but our percentage is shrinking. In past years we have been in the lead or near it only to see our competitors crush us in the end. Last year, for example, the winner received over 6000 votes, well above our current projection. Most of the winning votes came in the last day or two.

So please vote every day until the 13th. Voting every day seems weird but that is the way internet voting works and it's not a bad idea. This isn't a national election where people all know about the election and vote once. People find out about the election sporadically, otherwise, we'd already be declared the winner. More interestingly, voting every day for a week is a way of giving people seven votes. You can use all of those seven for EconTalk if you're passionate about EconTalk. Or you can vote once. Or you can vote five times for EconTalk and twice for another choice. Multiple votes are a way to let voting reflect intensity rather than just yes or no. So if you like EconTalk, please vote.

Have you voted today?

Have you voted for EconTalk today?

We are in the lead but the gap is closing. Now is the time for all good men and women to come to the aid of the podcast.

You can vote once every 24 hours until January 13th. So if you haven't voted yet get going. It's going to be close.

Vote here and spread the word.

Boettke on business cycles

The latest episode of EconTalk is Pete Boettke talking about the Austrian theory of business cycles.

EconTalk nominated, please vote

EconTalk is once again a finalist for Best Podcast in the 2008 Weblog Awards. Please vote. Voting ends January 12th. You can vote every 24 hours. Please spread the word to friends, family and anyone who loves hour-long podcasts on economics.

Building schools in Uganda

The latest episode of EconTalk is an interview with George Srour, founder of Building Tomorrow, a non-profit that builds schools in Africa. He talks about what Building Tomorrow has been able to accomplish and the challenges and rewards of being a social entrepreneur. These pictures are what got me interested in talking to Srour.

Higgs on the Great Depression

The latest EconTalk is Bob Higgs talking about his work on regime uncertainty in the 1930s and the failure of the war to bring prosperity.

Lipstein on hospitals

The latest EconTalk is a conversation with Steven Lipstein, the head of BJC, a $3.1 billion hospital system in St. Louis. We talk about pricing in a world without markets and decision-making in a world without profit.

Rauchway on the Great Depression and the New Deal

The latest episode of EconTalk is Eric Rauchway talking about the New Deal and the Great Depression. I like (surprise) his emphasis on treating the New Deal as an emergent phenomenon rather than a master plan. The discussion and his book are a nice overview of what happened when, particularly in the 1920s, an era that gets less attention than the 1930s.

Hazlett on telecom

The latest episode of EconTalk is a conversation with my GMU colleague, Tom Hazlett. Lots of interesting stuff on net neutrality and applying Coase to auctioning spectrum.

Kling on the mess

The latest EconTalk is Arnold Kling talking about credit default swaps, counterparty risk, and the political economy of financial regulation. The first half is a primer on credit default swaps and counterparty risk. The second half is more philosophical.

Epstein on Happiness

The latest EconTalk is Richard Epstein talking about happiness. He is an amazing expositor of ideas. This podcast is full of interesting insights into the happiness literature, the role of envy, incentives, altruism and evolutionary psychology. I don't know anyone who can speak off the cuff like Epstein can, in complete sentences, paragraphs, and pages. Enjoy.

Munger on Middlemen

The lastest EconTalk is Mike Munger talking about middlemen. In the first part of the podcast, he tells a wonderful story about the priest in the POW camp during WWII taken from R.A. Radford's 1945 Economica article, "The Economic Organization of a P.O.W. Camp." Here is the gist of the story:

We reached a transit camp in Italy about a fortnight after capture and received 1/4 of a Red Cross food parcel each a week later. At once exchanges, already established, multiplied in volume. Starting with simple direct barter, such as a non-smoker giving a smoker friend his cigarette issue in exchange for a chocolate ration, more complex exchanges soon became an accepted custom. Stories circulated of a padre who started off round the camp with a tin of cheese and five cigarettes and returned to his bed with a complete parcel in addition to his original cheese and cigarettes; the market was not yet perfect. Within a week or two, as the volume of trade grew, rough scales of exchange values came into existence. Sikhs, who had at first exchanged tinned beef for practically any other foodstuff, began to insist on jam and margarine. It was realized that a tin of jam was worth 1/2 lb. of margarine plus something else; that a cigarette issue was worth several chocolates issues, and a tin of diced carrots was worth practically nothing.

In the podcast, I mention that it's a bit of a puzzle that would make a good exam question. How can a priest, presumably an honest priest, engage in trade and end up with more of not just one good by trading for it and accepting less of something else, but more of EVERYTHING. That means everyone else, en masse, must have less. How did he manage it through voluntary exchange. In fact, he managed to make everyone he traded with better off. Yet, they seem to be poorer for it.

So listen to the podcast and in the comments section to that podcast, try to resolve the paradox of how an honest man can benefit others by leaving them with less than they had before.

Clay Shirky on Here Comes Everybody

The latest EconTalk is Clay Shirky talking about Coase, colloboration, social networks, wikipedia, politics, and ideas from his fascinating book, Here Comes Everybody.

Denationalizing the Drug-Approval Process

Here's my colleague Dan Klein arguing -- effectively, in my opinion -- for denationalizing the process of approving drugs.  The clip lasts about seven-and-a-half minutes.  It is well worth watching.

Seasteading

The latest episode of EconTalk is a conversation with Patri Friedman on seasteading, the creation of autonomous private places to live on the ocean.

Bernstein on inequality

The latest episode of EconTalk is a conversation with William Bernstein on inequality. It's more of a debate than a conversation. Hope you like it. And check out the links. They include some of the sources Bernstein references as well as some responses to those sources.

Kling on the housing market and the mess

The latest EconTalk is a conversation with Arnold Kling, blogger extraordinaire and former Freddie Mac economist talking about the evolution of housing markets in the United States. We taped it a few weeks back so we added a postscript on the current situation as well.

Karol Boudreaux on Namibia's Wildlife

The latest EconTalk is Karol Boudreaux of the George Mason's Mercatus Center talking about her trips to Namibia to explore the way they've used incentives to protect wildlife. It's a fascinating story.

Next week: Arnold Kling on Fannie, Freddie and the current situation.

Shiller and fundamentals

Last week's EconTalk episode was with Robert Shiller. He argues that the run-up in housing prices beginning in 1997 was irrational exuberance, a bubble, bound to pop, caused by social contagion:

I wish I'd asked him about all the stuff I've since learned about--the incredible increase in government intervention, during both the Clinton and Bush administrations to increase home ownership among low-income buyers and raise the overall rate of home ownership.

As this post points out, it may have begun in earnest in 1997 with Andrew Cuomo, at the time the head of HUD, encouraging the GSEs to become more active in the subprime market. Is that causation or just correlation for the graph? I am looking forward to reading and learning more this week.

Shiller on the housing market

The latest EconTalk is Robert Shiller on the housing market. Taped just before the Fannie and Freddie bail out, Shiller argues that the run-up in housing prices was a bubble that has popped. I'm not convinced, but he has a lot of interesting things to say. Along the way, he talks about how he and Case came to create the Case-Shiller housing index and how it might be used to reduce mortgage defaults.

Joseph Ellis on American Creation

The latest EconTalk is a conversation with Joseph Ellis talking about his latest book, American Creation. I learned a lot from both the conversation and the book. Probably the most interesting discussion was about Madison's sense of failure after the Constitutional Convention and what might have happened had that Convention not occurred at all. There is also some fascination stories about Washington's attempts to carve out a safe harbor for Native Americans.

My Mellifluous Voice

Here's Norm Leahy's 30-minute-long radio interview with me, taped earlier today.