American critics of welfare statism are often surprised to learn that countries like West Germany, with a much more comprehensive welfare state and a statistically larger public sector, have fewer government employees per capita than the United States does.
Technological change is beneficial only when other jobs replace the ones lost.
In America, we build public housing by creating lucrative inducements to private developers, and then wax indignant at the public waste.
Not surprisingly, extensive effort in Britain and America goes into finding tax shelter. The system is efficient for the shelter industry, not for the economy.
But of course you can have your cake and eat it, too-if you decide to to bake a second cake. And you may well find that baking two cakes does not take twice the work of baking one.
In a world where technology and capital are highly transferable, there is a real risk that comparative advantage comes to be defined as whose labor force will work for the lowest wage.
The total impact of the Reagan tax cuts on capital lowered the effective cost of capital to American industry by an estimated 1.2 percent. Unfortunately, the Laffer curve did not work as advertised. Lower tax rates did not produce more tax revenues. They produced deficits.
I have tried to suggest that injustice is not necessary economics; that the economics can work, and has often worked, when the constituency for it is animated. The politics of equality - that is a little harder.
If Boeing got a big head start on the 707 from multibillion-dollar military contracts to develop an air force transport, is that a sin against free trade?
Why, then, should we have to lower our living standards? What is the mysterious source of the economic loss? If productivity is increasing, why should we sacrifice services and wages?
Henry Ford, in a sense, was the first Keynesian. He paid his assembly workers high wages so they could afford to buy his cars.
The economic illusion is the belief that social justice is bad for economic growth.
In practice, a good deal of the outcomes produced by the market reflect nothing more than luck - good or bad.