Mainstream economics, says author Diane Coyle, keeps treating people like cogs: self-interested, rational agents. But in the digital economy, we’re less sophisticated consumer and more monster under the influence of social media. Listen as the economist and former UK Treasury advisor tells EconTalk host Russ Roberts how, for economics to remain relevant, it needs both […] The post Diane Coyle on Cogs, Monsters, and Better Economics appeared first on Econlib.

The conflict between formal justice and formal equality before the law, on the one hand, and the attempts to realize various ideals of substantive justice and equality, on the other, also accounts for the widespread confusion about the concept of “privilege” and its consequent abuse. To mention only the most important instance of this abuse–the application of the term “privilege” to property as such. It would indeed be privilege if, for example, as has sometimes been the case in the past, landed property were reserved to members of the nobility. And it is privilege if, as is true in our time, the right to produce or sell particular things is reserved to particular people designated by authority. But to call private property as such, which all can acquire under the same rules, a privilege, because only some succeed in acquiring it, is depriving the word “privilege” of its meaning. This is from Friedrich Hayek, The Road to Serfdom, 1944, pp. 88-89. I said in my previous post on privilege that I would give my own view. My view of privilege is similar to Hayek’s. The key is that government grants certain items or permissions to some that it withholds from others. To take an example from current-day America, in New York City few people are allowed to carry concealed handguns or even handguns at all. Among those few are the bodyguards of Michael Bloomberg. Bloomberg and they are privileged. You might argue that that’s because if he were unprotected, then he, being a high-profile person, would be at great risk of being murdered. But there are probably people in Harlem whom you and I have never heard of who are at as great, or greater, risk of being murdered but who are not allowed to carry handguns. There is a very important way that I am privileged and that a lot of readers are privileged: we have U.S. citizenship. Now I had to work harder to my citizenship that the vast majority of Americans. But still, they and I are privileged. Although we can get stopped at the border, once we answer some questions, we are free to enter the United States. Most of the people in the world are not free to enter the United States and look for a job. My U.S. citizenship is probably my most important privilege. Reading through the above, I realize that there is a sense in which my holding property in coastal California is a privilege in the Hayekian sense. My wife and I bought a small house in 1986. Because of increasing restrictions on building, it has appreciated in real terms quite a lot. So we got something that other people starting out today are not as easily able to get–because government has made it harder for them than it made it for us. (0 COMMENTS)

Probably, but not tight enough.In recent months, I’ve expressed skepticism about the claim that the Fed has been tightening monetary policy since last fall, via forward guidance. In my view, most of the increase in interest rates over the past year is due to the Fisher (expected inflation) effect, not the liquidity effect of tight money. But in the past few weeks there is some evidence that monetary tightening might be beginning to take hold. Consider:1.  Five-year TIPS spreads peaked at 3.59% on March 25th, and have since fallen to 2.88%. 2.  Ten year bond yields peaked at 3.12% on May 6th, and are down to 2.78%. 3.  Stocks have fallen sharply in recent weeks. 4.  The dollar has appreciated significantly in recent weeks. I define a contractionary monetary policy as a policy stance that slows expected nominal GDP growth.  We don’t have a perfect measure of market expectations for NGDP, but each of the four data points above provide some indication of where things might be headed.   1. TIPS spreads are correlated with market forecasts of inflation.  Unfortunately, inflation and NGDP don’t always move in the same direction, due to supply shocks. 2. Nominal bond yields are the sum of expected inflation and real interest rates.  Because real interest rates are somewhat correlated with real GDP growth, longer-term bond yields are correlated with expected NGDP growth.  Lower bond yields usually imply lower expected NGDP growth.  Unfortunately, a tight money policy can sometimes boost long-term bond yields in the short run, due to the liquidity effect. 3.  Stocks are somewhat correlated with expected real GDP growth.  Unfortunately, the stock market is noisy, and hence stock movements should be interpreted with caution. 4.  A tight money policy tends to appreciate a currency, although currencies move around for other reasons as well.   Thus all 4 indicators that I cited are somewhat imperfect.  Nonetheless, all four have recently been moving in a direction consistent with tighter money, which is a pretty strong indication that monetary policy has been getting at least a bit tighter. Even so, policy is still too tight, at least relative to the Fed’s 2% average inflation target. PS.  This Bloomberg piece caught my eye: After a violent rally in bonds, Treasury traders are debating whether recent tough talk from the Federal Reserve on its commitment to cooling prices is enough to reverse the trend. I wonder if the opposite isn’t true.  Perhaps it’s the recent tough talk from the Fed that is driving down bond yields and driving up bond prices. PPS.  What about a recession this year?  No one is able to predict recessions.  Right now, markets seem to be predicting continued economic growth, slowing over time.  But that forecast could change quite rapidly.   (0 COMMENTS)

The framework of public policy and public discourse are trapped in a technocratic state of mind. In the post-covid world, not just public policy, but its entire framework needs to be reimagined to make it more participatory. This year, as we come out of a phase of assembly elections in India, the worst of Covid-19 may finally be behind us. At this stage, it is important to take a long, hard look at the norms embedded in our governance and do so with a sense of urgency as we transition into an uncertain and changing global order. In this piece, I would like to focus on the nature of policymaking, especially in the context of the pandemic, and flesh out areas that need rethinking. Against the backdrop of a specific event or duration, intellectual commentary frequently descends into debates on the net failure or net success of an overall administrative effort. This is largely a rhetorical, not analytical, exercise and characterized many commentaries in the wake of the pandemic. Although they spoke in a unique context, their views operated in the same analytical terrain. Yes, there is a range of variables at play between policy responses and their results, especially given the threat of a rapidly mutating killer virus. But the ‘policy’ being debated here is itself a political category rooted in ideological assumptions. Thus, merely arguing for reforms in governance is hollow. It traps public discourse in a technocratic frame of mind when the framework itself demands reimagination. For a fresh vantage point, let us look at the public health response in general through an unorthodox economic lens. The economist Richard Wagner offers detailed insight on this. He underlines that in the face of a complicated situation with multiple moving parts, policy decisions are not rational but based on the intuitions of a few people at the top. This is referred to as the ‘knowledge problem’—the issue that the government-planning elite always acts with a heavy deficit of knowledge, for they cannot capture as ‘data’ the constantly changing knowledge that is distributed in the minds of the entire population. Because it is next to impossible to circumvent this problem, economists like Wagner make this their starting point of analysis. They make it not a problem to be solved but a humble admission of the human condition. A recent survey of Indian Administrative Service (IAS) officers, the highest-level bureaucrats of India, found that even though most of them preferred participatory measures to tactics like penalties for enforcing the lockdown, nearly half of them believed that compliance had more to do with the public’s fear of the law than anything else. This result is telling of the tension between a vision for ‘participatory’ governance and how detached it can be from daily life. Administration must proceed by acknowledging the complexity of reality, not by acting in an abstraction. Insofar as it doesn’t, we are bound to get different flavors of the same thing, and ideological camps can contest these endlessly. It is no surprise that substantial coercion often accompanies the solutions all camps suggest. Where does this land us? Research on the topic lays out some clear implications: (1) even in the case of infection, where individual behaviour can have an externality on the public, one cannot assume that the government can solve this; (2) government experts are themselves lodged in the system they intervene in; (3) planning measures reduce reality to far simplified versions; (4) the previous three point to the need for rethinking foundational assumptions in economic epidemiological models. To clarify these points, let us consider the oxygen crisis that transpired in India during the most severe phase of Covid-19. I select this example for three reasons: (a) it was a deeply unsettling phase that left an imprint on our collective psyche, (b) it is hopefully behind us (almost a year has passed), but close enough in memory to merit extensive discussion, and (c) it was a palpably complex phenomenon that cannot be reduced to a single case study or viewpoint. At the peak of India’s second wave of infection (April – May 2021), our healthcare facilities faced an acute shortage of medical oxygen, leading to widespread public agony and anxiety. The causes were multiple and ambiguous. Though the production, trade, stocking and usage of oxygen is privatized in India, only a dozen big vendors in the country produce it. It is an essential but costly drug. During the shortage, district-level hospitals, nursing homes, and small and medium-sized hospitals were seen to lack uninterrupted supply systems and sufficient storage. Some pundits blamed expensive private hospitals for not stocking up in advance in order to maximize their profits. Various aspects of the supply came under the jurisdiction of various entities, each acting under the constraints of their institutional incentives. In March 2020, a bureaucratic Empowered Group II (EGII) was reconstituted to supervise the allocation process for states. But regulatory action, rather than being altruistic, is shaped by competition between various lobbies. Thus, the EGII could not broker a consensus among states in time vis-à-vis adequate distribution. Towards the end of 2020, the Department of Pharmaceuticals as well as some state governments imposed price and procurement restrictions on medical oxygen as a response to increased demand. Regulatory overload and demand pressures had perverse results for the market – hoarding by private groups and blockages by states prioritizing domestic needs. Certain states extended territorial jurisdiction over private producers. It was even reported that some had thwarted the Centre’s efforts for small-scale production with a view to continuing outside procurement. Evidently, even though enough oxygen was being produced domestically, an impeded supply chain lay at the heart of the problem. The states that witnessed the maximum caseloads were located far from those with robust production capacities. But it was quickly argued that the demand might have been underestimated, too. To overcome the deficiency of transport and storage infrastructure, the government announced that it would import a large quantity of medical oxygen. Manufacturing licenses were accelerated, and private industrial manufacturers were asked to divert their flows for medical use. Yet avoidable bottlenecks and bureaucratic delays persisted at various steps. As research shows, decision-makers have no logical basis for prioritizing certain needs and services as essential over others. They cannot anticipate changing circumstances until it is too late and often hamper the spontaneous mechanisms of adjustment in an economy. This is primarily because they compress distinct spatial ways of living into a single dimension where many splintered economies conflict. The oxygen crisis portrayed a grim picture for us. It begot crushing letdowns with small, scattered pools of success. It showed us more than anything that policies only address beasts of their own making. Albeit to very different degrees, we saw a similar pattern play out in other events too, such as lockdowns and vaccination. One year on, there may be no magic wand. But we can use the burden of awareness to steer our thought in a new direction. Studies in urban planning laws and public governance have emphasized on a pluralistic paradigm for administrative systems. This means that policies should shun universal categories in favour of sensitivity to difference. Even when there is no ‘crisis’, urban life is always entangled in diverse spaces, relations, plans and beliefs. If every individual is considered an entrepreneurial actor, it makes sense to have an arrangement that has not one but multiple, heterogeneous, competing and cooperating centres. When this complexity is removed from discussions on reforms, policy, public welfare and planning, it not only fails to grasp the real world but also manipulates it into something to be managed. Contrary to what the textbook may tell you, economics is not household management.   Acknowledgements: The author would like to thank the F A Hayek Program scholars for the conceptual foundations of this piece, and Devika Dinesh, Tejashree Murugan and Vaishnavi Chandrasekar for their valuable suggestions. About: Jayat Joshi is a Don Lavoie Fellow at the Mercatus Center at George Mason University, and Freedom Fellow with the South Asia Students for Liberty. (0 COMMENTS)

In the Q&A period at the end of the Jordan Peterson talk I recently attended, Peterson addressed the issue of privilege. He agreed that there is such a thing. I do too, but he didn’t take Hayek’s and my approach, which is that privilege occurs when government, including the legal system, gives someone special treatment. But enough about my view. I want to talk about Peterson’s. He agrees with the left-wing, and increasingly mainstream, view that privilege has to do with wealth, upbringing, etc. Peterson stated that if someone accuses you of being privileged, you can agree with the point but then point out what you’re doing with the privilege: helping people, being productive (which also helps people), etc. But then it’s on you to go the extra mile—help people, etc. Let’s say that I agree with Peterson’s view of what privilege is. I don’t, but I want to see where it leads. Most of the time I’ve seen people being accused of privilege, it’s in response to a policy position that they take. Here the answer should not be the one Peterson gives—look at the good I’m doing with it. The answer, typically, should be that the charge is irrelevant. So, imagine that I’m arguing against the minimum wage. I point out that the minimum wage prices a lot of unskilled workers out of the labor force, and I note that this disproportionately harms young black people. In response, the person I’m talking to says that he or she (from now on, I’ll use “he”) shouldn’t pay attention to what I’m saying because I’m privileged. He might also say that I wouldn’t know what it’s like to work at a minimum wage job because I’ve never done so. (Actually, I did, during the summer of 1972.) But let’s say he doesn’t make that faux pas and simply dismisses my argument based on privilege. What should be my response? It should be that my privilege or lack of privilege is irrelevant to the issue. Let’s say I’m a billionaire. Does that in any way affect the elasticity of demand for unskilled labor or any other aspect of potential jobs for unskilled laborers? No. Therefore it doesn’t affect the results of the minimum wage. Or take the extreme: I can’t have privilege if I don’t exist. So, imagine I didn’t exist. Would the elasticity of demand for labor he higher or lower? Neither. The accuser has simply made a category error. Privilege does not matter for the argument I’m making about the minimum wage. In the next few days, I’ll say more about what I think privilege is and I’ll talk about the main way that I, and most readers of this blog, are privileged. Thanks to Charley Hooper for helpful discussion. (0 COMMENTS)

Tyler Cowen directed me to a fascinating Thomas Sargent essay on Bob Lucas. This paragraph caught my eye: Bob invited me to dinner at his house the night before the seminar. At that time, I was watching Neil Wallace rework monetary theory from the ground up and remarked to Bob that I had reservations about working with Cagan’s model, even under rational expectations, because the heart of the model was an ad hoc demand for real balances understood as an inverse function of the public’s anticipated rate of inflation. Neil had convinced me that empirical work really should wait until the foundations of monetary theory had been properly set forth and provided a deep enough theory of valued fiat money. Bob shot back immediately that ‘if theorizing to build deep foundations do not imply a demand function for money that looked much like Cagan’s, then it should be ignored for empirical work’. I often see people attempt to derive monetary economics from first principles.  They ask questions like: “Why should open market operations matter?  After all, OMOs merely swap one government liability (base money) for another (T-bills)?”  In fact, there is a mountain of empirical evidence that OMOs matter a great deal. I’ve devoted much of my life to a very close examination of monetary data, during all sorts of historical periods and under a wide variety of different monetary regimes.  Thus I have a pretty good sense of which monetary theories are plausible and which are not.  Phillip Cagan’s empirical work on money demand during periods of high inflation is one important piece of the puzzle, but it’s merely one of hundreds of pieces of evidence that monetary economists need to be aware of. I’m a bit dismayed when I see conventional macroeconomists argue that the recent high inflation shows that the MMT model is wrong.  It does nothing of the sort.  The MMT model allows for the possibility that excessively expansionary fiscal policy might lead to high inflation.  Instead, I’m dismayed that it took these recent events to make people realize that MMT was a worthless model.  The MMT model has always been wildly inconsistent with hundreds of years of empirical evidence on the effects of monetary policy.  It would be like someone saying that the recent invasion of Ukraine convinced them that Putin is an evil dictator.  What?  The previous 20 years didn’t already convince you of that fact? (0 COMMENTS)

In my previous post, I proposed building a large new city at Camp Pendleton (between Orange and San Diego counties.) One commenter suggested that this was not a good location: I don’t know.  The new city would still be in California, with all the excessive state regulations.  And I expect it would be just as expensive to live there as all the other coastal California cities. I share with many conservatives and libertarians the view that California is a rather poorly governed state, which is adversely affected by a wide range of counterproductive progressive policies.  But I interpret that claim in a very different way from many other people on the right.  And I plan to show that I’m right and they are wrong.    Here are two categories of bad California regulations: 1.  Progressive policies such as rent controls, school closures, excessive state spending, picky business regulations, poor control of crime in places like San Francisco, etc. 2.  A wide range of zoning and permitting rules that make it exceedingly difficult to build housing (both dense urban housing and suburban housing in greenfield developments.) The first category includes a large number of bad policies, but the second category may be far more important, at least in aggregate.  How do I know this?  Consider the impact of each policy category on California housing prices.  The first group of regulations makes California a less desirable place to live, and hence depresses housing prices.  In contrast, the regulations that constrain new construction tend to reduce supply and thus boost California housing prices.  The market (high house prices) is telling us that the second issue is more important and that California is an excellent place to build a new city, despite all of the regulatory problems.  Indeed to some extent, it is a good place to build a new city because of the severe regulatory constraints in category #2.   When we bought a home in Orange County back in 2016, its value was about the same as the Boston area home where we were living.  Today (according to Zillow), our Orange County home is worth far more than the Massachusetts home that we vacated.  Its value has increased by 80%, vs. 40% in Massachusetts. So why are homes in California worth so much, and still rising rapidly in value, if the state is a dystopian hell that everyone’s fleeing for Texas and Florida? The answer is simple; California is still a very appealing place to live for many people.  And those “many people” are often individuals with fairly high incomes.  As a reader of the news media, I’m aware of many of the problems with governance in California.  But in terms of my day-to-day life, governance problems don’t affect me very much at all: 1.  The roads here in OC are much better than back in Boston. 2.  The University of California (which my daughter attended) is far better than the University of Massachusetts. 3.  I don’t have to go through the annoying vehicle inspection process each year, as I did back in Boston. To be sure, some things are worse.  The home insurance industry is over-regulated, resulting in far higher premiums than in Boston.  I suspect the health insurance industry is also poorly regulated, but I’m not an expert in that area.  Small business owners face lots of intrusive regulations, as do landlords.  Taxes are higher. San Francisco has lots of petty crime.  Covid regulations were often quite foolish (but did not impact my life at all.)   Nonetheless, I think conservatives are making a mistake when they suggest that Californians are fleeing a dystopian nightmare.  The very high price of homes in this state suggests that the overall quality of life here is the highest in America.  You may know someone who sold their California home and moved away because they hated California, but someone else bought that home for a very high price.  Instead, the lesson conservatives should draw from California is that America’s biggest problem is foolish barriers to homebuilding that prevent millions of people from moving to places with exceedingly high living standards.  You might wish to believe that California is a dystopian nightmare, but the housing prices suggest exactly the opposite.   The biggest problem with California is that far too few people live here. In January, I drove around both coasts of Florida.  More recently, I visited the SF Bay Area and then drove back down to Orange County, stopping at various places along the way. The SF Bay Area, Monterey, Santa Barbara, Ventura County, West LA, Orange County, and San Diego are some of the best places to live in the entire world.  The Inland Empire is less attractive, but still no worse than much of Arizona or Nevada.  Florida is far less attractive than coastal California. This does not mean that California has a better state government than Florida.  In terms of economic regulations, Florida is much better managed.  I attribute the success of California to two factors.  First, it has a great climate and beautiful scenery.  That attracts people.  (Florida has a good climate but ugly scenery.)  Second, it attracted important 21st century industries before the state was taken over by progressives.  Through a combination of good natural amenities and the benefits of agglomeration, they’ve been able to hold onto those creative industries despite a deteriorating regulatory environment.  High skilled people also tend to be socially liberal, and California is very socially liberal.  Indeed it’s considerably more libertarian on social issues than even places like Massachusetts (which still has a puritan streak). When my commenter suggested that the new city would be just as expensive as other coastal cities, he was right.  (Although it would slightly reduce prices throughout the region.)  But he misunderstood the implication of that fact.  If 500,000 Americans want to build million dollar homes in my new city of Pendleton, that means the new city would have great value to America. PS.  Let me anticipate some comments.  You will tell me this or that bad thing about California.  I will agree, but argue that the high housing prices show the good outweighs the bad. PPS.  I don’t like the name Pendleton for my proposed new city.  How about Utopia, CA?  Or “Irvine 2.0”, after the company that built the city with arguably the world’s highest living standard for cities with more than 250,000 people?  Or (given the current drought) Greenland?  🙂 PPS.  Florida has a nice climate, but California is sublime:     (4 COMMENTS)

The US government and many state governments have progressive income taxes. The word “progressive” doesn’t mean “good.” All it means is that as you progress up the income ladder, your marginal tax rate, which is your tax rate on additional income, increases. When the rates were set for the United States, there was a link between gold and the dollar. The US government’s commitment to keeping the price of gold at $35 per ounce limited its ability to print money and, thus, limited its ability to create inflation. But on August 15, 1971, President Nixon cut the last remaining link between the dollar and gold. Up until then, the US government stood ready to redeem foreign governments’ dollars for gold at $35 an ounce. But on August 15, Nixon closed the “gold window.” That meant that one remaining legal constraint on the Federal Reserve’s ability to print money was gone. The result, not surprisingly, was a decade of high inflation. From 1971 to 1981, the annual inflation rate averaged 8.4 percent. This meant that tax brackets that had been designed for relatively high-income people were increasingly applicable to middle-income people and tax brackets designed for middle-income people were increasingly applicable to lower-income people. A table in the 1982 Economic Report of the President tells the tale. In 1970, a four-person family with one half the median income was in a 15 percent tax bracket. By 1980, that family was in an 18 percent tax bracket. A four-person family with the median income paid a marginal tax rate of 20 percent in 1970 and 24 percent in 1980. A four-person family with twice the median income paid a marginal tax rate of 26 percent in 1970 and a whopping 43 percent in 1980. And remember that this is just the family’s personal income tax rate and did not include either the Medicare (HI) or the Social Security (FICA) tax. This is from David R. Henderson, “Index State Tax Brackets Now,” Defining Ideas, May 19, 2022. Another excerpt: Not surprisingly, Milton Friedman was ahead of the curve in advocating, in 1974, that tax brackets be indexed for inflation. And Ronald Reagan, upon becoming president, wanted to do something about the problem. Although I’ve never seen this discussed, I would bet that Reagan badly regretted increasing the top tax brackets in California shortly after he became governor in 1967. He was facing a substantial state budget deficit, but he chose higher marginal tax rates on higher-income people to deal with it. For example, California’s marginal tax rate on people with taxable income of $30,000 or more was 7 percent in 1966. An income of $30,000 in 1966, adjusted for inflation, would be $268,694 today. In 1967, Reagan and the legislature raised the marginal tax rates for people making $25,000 to $28,000 to 9 percent and for people making $28,000 or more to 10 percent. His tax rates remained, inflation took off, and by 1980, middle-income Californians were paying tax rates that Reagan, his advisers, and the California legislature had intended only for high-income Californians. Things bad begun make strong themselves by ill, as Shakespeare put it. Reagan seems to have learned the lesson. In the 1981 Economic Recovery Tax Act, he and Congress cut marginal tax rates at all income levels annually from 1982 through 1984, and indexed tax brackets for inflation from 1985 on. The result is that inflation by itself cannot put you in a higher tax bracket. Well, almost. The income levels above which Social Security recipients pay taxes on their Social Security benefits, introduced in 1984, have never been adjusted for inflation. But those not getting Social Security benefits cannot be put in higher tax brackets by inflation alone. Read the whole thing.   (0 COMMENTS)

With Pulitzer Prize ambitions, Inside Climate News (ICN) in 2015 published an investigative series on Exxon’s shift from “cutting-edge climate research” to “the forefront of climate denial, manufacturing doubt about the scientific consensus that its own scientists had confirmed.” Nine articles from four primary authors went into ICN’s eight-month effort that included interviews and deep archival research. The story featured Exxon (and later, Exxon Mobil) employees – some, newly-hired scientists – who offered their take on climate science and their opinions, some dire, about carbon dioxide (CO2) and global warming. ICN’s series (published together in Exxon: The Road Not Taken) left vital questions unanswered: Did Exxon’s research resolve the company’s two climate questions? What would further research have accomplished, and would further research have been cost-justified? Did Exxon “manufacture,” “amplify,” or merely report uncertainty in climate science? Were Exxon’s doubts reasonable at the time? Are they still today? What were the company’s options at the time?   Research Goals In the late ’70s and early ’80s, Exxon outfitted its supertanker Esso Atlantic with a lab, sensors, and scientists to measure CO2 concentrations at various depths and locations between the Gulf of Mexico and the Persian Gulf. ICN’s second article in the series briefly documents Exxon’s efforts and lists the two questions the company set out to answer: How much of the CO2 in the air came from fossil fuels as opposed to deforestation? How quickly could the oceans absorb atmospheric CO2?   ICN reports that that the data collected by the floating lab eventually helped to answer the first question. A study published in 1990, “partially based on the tanker data,” found that “land-based ecosystems… absorbed more atmospheric CO2 than the oceans.” A 2009 study, also using Exxon’s data, determined that “the oceans absorb only about 20 percent of the CO2 emitted annually from fossil fuels and other human activities.” (Current research puts the amount at about 30 percent.)   Was Further Research Justified? ICN faults Exxon for not continuing its oceanographic studies but does not suggest what the new goals should have been. Nor does it consider the question of whether the benefits would have been worth the costs. Apparently, neither the company nor the federal government believed that they would. As ICN reported, “Exxon’s enthusiasm for the project flagged in the early ’80s when federal funds fell through.” In the seventh article of its Road Not Taken series, ICN quotes an internal 1981 Exxon document recommending that the research be discontinued: An expanded R&D program does not appear to offer significantly increased benefits. It would require skills which are in limited supply, and would require additional funds on the part of Exxon since Government funding appears unlikely.   In addition, the document stated: There is no near-term threat of legislation to control CO2. One reason for this is that it has not yet been proven that the increases in atmospheric CO2 constitute a serious problem that requires immediate action. (Emphasis added)   Manufactured Doubt? While ICN and others such as Geoffrey Supran and Naomi Oreskes claimed that “Exxon knew” about the potential dangers of climate change, the second quotation above highlights that, within Exxon itself, the question of the seriousness of global warming was hardly “settled science.” True, different employees said and wrote different things, and some internal reports sounded alarm bells. However, a second deep dive into the company’s archives is merited to determine whether cover letters and other documents moderated the expressed alarm. In any event, the company’s position was moderate, clear, and reasonable. The context of the times, which ICN’s authors ignore, supports this interpretation. Then, the largest climate concern was global cooling, and Exxon was debating a bigger issue, Peak Oil. “Thinking that the oil industry might well be dying a slow death,” Joseph Pratt and William Hale wrote in the company history, “Exxon and most major oil companies moved out of oil in search of opportunities for… long-term growth.”[1] In terms of fossil fuels and global warming, in fact, the belief and hope among environmentalists was that natural depletion would lead to economic exhaustion and help reduce CO2 emissions. But then came the hydraulic fracturing (fracking) revolution that put Peak Oil and Peak Gas concerns to bed for the foreseeable future. Despite the claims of ICN, Exxon’s research agenda was consistent with the times. In our next post, we’ll consider the doubts this same research spawned within Exxon and consider how reasonable those doubts were.   Robert Bradley Jr and Richard Fulmer are coauthors of the primer Energy: The Master Resource (2004) and other writings on free-market energy and climate policy. [1] Joseph Pratt and William Hale, Exxon: Transforming Energy, 1973–2005 (Austin, TX: Dolph Briscoe Center for American History, 2013), p. 167. (0 COMMENTS)

While engaged in our own education odysseys, many of us have also been following that of EconTalk host Russ Roberts as well, especially as he’s moved to take on the presidency at Shalem College. In this episode, jointly released with our friends at The Curious Task podcast, Russ gets interviewed by Alex Aragona. Among the questions raised are what’s wrong with education today? What does a good education look like? What does an educated person look like? Roberts is afraid that education today is not preparing students to ask, what is a life well lived? We’d like to hear your thoughts on these and any of the questions below. Please help us continue this important conversation.     1- How does Roberts define (good) education, and to what extent does this align with your own definition? What is the relationship of skills or knowledge to education? Of opinion?   2- How do the liberal arts and STEM outlooks on education compare? How would you describe a liberal education? To what extent is the sort of deep understanding Roberts is talking about possible in STEM fields? (It may help to  recall his example of the concept of “average.”)   3- What do you think are the biggest problems with our current education system? How might these problems best be addressed?   4- What role will technology play in the future of education? Is there more or less hope for improvement than in the dawn of the digital age, and why?   5- Aragona asks Russ to suggest the most important takeaway he hopes listeners will get from this conversation. What was yours?   (0 COMMENTS)