My New Blog: 10 Stories

Introducing my new blog, 10 Stories: The History of the West in Ten Tales.

I'll be cross-posting that blog's posts here as well.

A Webcomic Lesson on Supply and Demand

Created especially for Mises Academy students. (Double-click slide for full-screen option.)

 

High-Scoring Win for Auburn

I don't follow sports, but this insanely high-scoring game won by the Mises Institute's hometown college football team caught my attention.

AUBURN, Ala. -- Cam Newton kept looking up at the scoreboard, amazed as anyone at the numbers he saw, climbing higher and higher with each possession.

He wondered how many points it would take to win.

Fifty? Sixty? Seventy?

"I'm sitting there on the sideline saying, 'Wow, we have this many points, and they have that many points,'" Auburn's do-it-all quarterback said. "At one point, we didn't want to score too fast because it was like a heavyweight boxing match." 

When this offensive slugfest was done, the No. 7 Tigers had a mind-boggling 65-43 victory over 12th-ranked Arkansas on Saturday, the teams combining on a record for points in a Southeastern Conference game that didn't go to overtime.

Analysis vs. Asinine Analogy

 Cross-posted at the Mises Economics Blog.

Robert Murphy just finished his weekly office hours session for his online class, Principles of Economics.  As I mentioned previously on the Mises Academy blog, this week, he’s been covering supply and demand charts.  The educational opportunities that web conferencing software makes possible are really amazing.  Over video broadcast, he was able to field question after question about supply and demand from the student posts in the chat window, and in the main display window, he was able to pull up, on the fly, just the right chart to use to demonstrate what he’s talking about.

Supply and demand curves seem to be one of the economic concepts that is the most abused by pundits. Once when I was in a political science class at Berkeley, some guest lecturer (I believe he was a journalist) came in purporting to explain the 2000/2001 California energy crisis, blaming market manipulation. He made his two hands (which were supposed to represent supply and demand curves), rise up, and come together like the top of a triangle saying that “at the point where supply and demand meet”, there is a “market tweak” that insiders can perform that makes the price explode upward.  As he said that last part he made his “supply/demand curve” hands bump into each other and then shoot up like a volcanic eruption.

That was the extent of his analysis.

And when a student asked him what the heck that was supposed to mean, he didn’t elaborate at all; h just impatiently repeated the whole little hand routine.  I think he expected the students to just sit there in awe at his brilliant mechanistic analogy and apparent mastery of economics, and was irritated that a student wanted him to actually make sense.

I still have no idea what he was trying to say, and even he probably didn’t know.  But I do know now that his little hand play was nonsense.  A single pair of S/D curves represents possible price/quantity relationships in a single snapshot of time; so representing them as slithering toward each other across time, like two snakes meeting in the desert, is a complete mischaracterization of what they represent.

As Professor Murphy helps his students (many of whom are in high school) understand how to accurately interpret S/D graphs, they will be able to spot mischaracterizations like that one, and economic charlatan-pundits will have a few less dupes in their broadcast audience.

Just Got My Mises Birthday Sale Shipment: Hoppe and DiLorenzo

 In my hands a little late, only because I was out of the house for a while...

Hoppe's Democracy: The God That Failed (Can't wait to contrast it to Mises' pro-democracy arguments)
DiLorenzo's The Real Lincoln (I've had the sequel, Lincoln Unmasked, sitting unread on my bookshelf for about a year, because I wanted to read The Real Lincoln first; now I can!)
DiLorenzo's Hamilton's Curse: I know the Jefferson/Hamilton rivalry pretty well from reading Dumas Malone's Thomas Jefferson: His Life and Times.  But now I can get all the nitty-gritty details from an Austrian perspective.

A Luddite at MIT

Cross-posted at the Mises Economics Blog.

It seems there is not an economic fallacy so basic that it will not be espoused at some elite university.

Robots Are Stealing American Jobs, According to MIT Economist

Before any MIT econ dons start invading the labs of their funding-rivals in the engineering department to smash any robots or mechanized looms they find, I hope they will take a second to read this passage from Mises:

The confusion starts with the misinterpretation of the statement that machinery is "substituted" for labor. What happens is that labor is rendered more efficient by the aid of machinery. The same input of labor leads to a greater quantity or a better quality of products. The employment of machinery itself does not directly result in a reduction of the number of hands employed in the production of article A concerned. What brings about this secondary effect is the fact that--other things being equal--an increase in the available supply of A lowers the marginal utility of a unit of A as against that of the units of other articles and that therefore labor is withdrawn from the production of A and employed in the turning out of other articles. The technological improvement in the production of A makes it possible to realize certain projects which could not be executed before because the workers required were employed for the production of A for which consumers' demand was more urgent. The reduction of the number of workers in the A industry is caused by the increased demand of these other branches to which the opportunity to expand is offered. Incidentally, this insight explodes all talk about "technological unemployment." 

Tools and machinery are primarily not labor-saving devices, but means to increase output per unit of input. They appear as labor-saving devices if looked upon exclusively from the point of view of the individual branch of business concerned. Seen from the point of view of the consumers and the whole of society, they appear as instruments that raise the productivity of human effort. They increase supply and make it possible to consume more material goods and to enjoy more leisure. Which goods will be consumed in greater quantity and to what extent people will prefer to enjoy more leisure depends on people's value judgments.

Currently Reading: Nation, State, and Economy by Mises on my e-reader

 http://mises.org/nsande.asp

After this, I just need to read Omnipotent Government and Bureaucracy, and I'll have read all his major works.