Spontaneous order is one of those ideas you can find in all areas of life once you understand it. But equally interesting is witnessing people noticing the phenomenon who have never studied the subject but find examples of it in seemingly obscure domains. I found an example of a video game reviewer and journalist noticing spontaneous order at work in a video essay posted to YouTube. The subject? How video games use color to convey ideas. He opens by saying: As you can probably tell from my dress sense, I don’t place a lot of importance on color. But I do find it interesting that, with no apparent discussion or collusion on the subject, video games have developed their own unique color language. Isn’t it interesting how, in the world of live-service gear grinding, that green means uncommon, purple means rare, and orange means super rare? Why is that always the case? Who decided that? I don’t remember participating in a vote. But this is just scratching the surface. Interface designers have long been able to employ specific colors to instantly convey certain concepts to the player with no additional explanation required. He goes on to list out various colors and what they are often used to convey. Part of what makes this a good example of a spontaneous order can be found in his above comment. These systems and conventions around color occurred “with no apparent discussion or collusion on the subject,” without anyone so much as “participating in a vote.” That is to say, the patterns he identifies have emerged as the result of human action but not of deliberate human design. But there are a few other elements of spontaneous order on display here.  First, a spontaneous order can often seem messy and even contradictory at first glance. For example, when he discusses how video games have used the color green, he notes that what green conveys can be “all over the place.” It’s often associated with health and healing in games, but at the same time it can be used to the opposite effect to signal poison. On other occasions, it can be used to indicate elemental damage, sometimes signaling “poison, acid, plant, and even wind” based damage. As someone with many years of gaming experience, I can think of examples of all of these. And what’s curious is that despite green being used to indicate a wide variety of different and even contradictory things, I’ve never once been confused about what it was meant to signal in any specific context. That is, I never once came across something green in a game thinking it would restore health only to find, to my surprise, that was poison instead. This is because color is just one of a number of ways ideas are conveyed, and other points of a game’s context make it clearer what “green” is supposed to mean in a given case. Yet I doubt I could specifically articulate exactly what these other factors are and in what combination they are used to precisely indicate what green means in this specific case. I just know I when I see it. The information used is not the kind of information that is easily articulated and categorized into discrete rules.  Second, once rules and conventions have emerged through this process, sticking to them becomes important, because common knowledge allows people to reliably know what to expect in their environment. When game developers ignore the established order about what colors convey, they end up confusing the gamer. Watching the above mentioned video triggered the memory imp in my brain to dig up an old essay from years ago discussing an example of exactly that issue. In this case, the issue was red barrels. In a video game with a heavy focus on shooting, if you see a barrel that is red, there is a 100% chance that shooting the barrel will make it explode, causing massive damage to nearby enemies. (And in video games, the bad guys are usually sporting enough to ensure their base of operations is just littered with these barrels because…reasons?) The “exploding red barrel” is among the oldest clichés in video games. One game developer tried to break free of the cliché by making their exploding barrels green instead of red: A representative of the Bulletstorm design team, known as Arcade, blogged about the process that went into making the exploding barrels in the game. They initially wanted to go with green barrels to counter the red stereotype. In the heat of the action, however, they discovered players largely ignored the barrels; they would see a flash of green while running and it didn’t register as “explosive.” In this case, the team rightly decided that conveying an instant message was more important that making a style statement.  This is a trivial but real example of how the conventions established by a spontaneous order, even if they are seemingly arbitrary, are still valuable because they help communicate important information and coordinate behavior and establish expectations.  Lastly, the full set of rules and ideas embedded in a spontaneous order can’t be fully categorized. This comes across in the video towards the end, when a suggestion is made for people in the comments to “mention any video game color associations I missed.” There are plenty of examples to be found in the comments, and I could think of a few more myself. This reflects how any attempt to identify the rules that emerge from a spontaneous order will always be limited and partial – not being the deliberate design of any human mind, they can’t be fully reduced to a system of explicit, articulated rules by a human mind. This doesn’t make it pointless to attempt to tease out what those rules are, of course. But we should always bear in mind that no attempt will every fully capture all the relevant information. (1 COMMENTS)

Over time, ideologies can evolve in unforeseen ways. Consider the following four public policy developments:1. The Biden administration has attempted to forgive many student loans for college education.2. Several cities in California have imposed rent controls.3. Florida recently banned lab grown meat.4. North Carolina is attempting to ban mask wearing in public. While the first two examples are often views as progressive legislation and the other two are viewed as populist initiatives, they all share something in common. In each case, the legislation can be seen as a perversion of an earlier form of the ideology in question. Let’s start with progressivism.  At the beginning, this ideology was heavily motivated by flaws (real or imagined) in laissez-faire economics.  Progressives worried that unrestrained capitalism might lead to abusive monopolies and a highly unequal distribution of income.  This led to policy initiatives such as regulation of rates charged by utilities and redistribution programs such as the earned income tax credit. Over time, however, progressivism became increasingly associated with the means, and not the ends of legislation.  Thus to be a progressive meant to favor “regulation” and “redistribution”, regardless of whether it achieved the original goals of the movement. Obviously, the case for rent controls in markets with thousands of individual landlords is far weaker than the case for price controls when there is a single monopoly provider of water or electricity.  And it is equally clear that the case for redistributing money from the general taxpayer to college educated Americans is far weaker than the argument for redistributing money to low wage workers.  But the progressive movement is dominated by younger Americans.  This group is disproportionately comprised of recent college grads living in apartments in expensive coastal cities. The recent wave of populism was at least partly motivated by resentment against the perception that elites were forcing the public into undesirable changes in their lifestyle (such as mask wearing during pandemics) and unpopular climate change initiatives (such as the discouragement of meat consumption.)  But over time, the lifestyle issues gradually came to displace the “freedom” aspect of populism.  Opposition to mask mandates morphed into simple opposition to masks.  Resentment that elites were trying to impose a certain lifestyle was replaced by attempts to ban the undesired lifestyle.  This is the natural evolution of populism.  It begins as an attempt to free the public from oppression, and ends up imposing another form of oppression once the populists gain power. One could cite many more such examples.  The college free speech movement of the 1960s was originally focused on allowing students to express far left political views.  By the 2000s, the freedom aspect was forgotten and college activists had begun trying to mandate that students express left wing views. Similarly, right wing opposition to woke excesses began as an attempt to allow more free speech on campus, but in at least some places has evolved into an attempt to ban certain left wing ideologies. The civil rights movement began as a crusade for a colorblind society.  While the initial focus was on outlawing discrimination against minorities, over time the emphasis shifted toward mandating discrimination in favor of minorities.  (Those “reverse discrimination”policies may have had unintended side effects, such as making employers reluctant to hire workers that they might be unable to fire at some point in the future.) Feminism began as an attempt to stop society from treating people differently because of their gender, but has evolved into an ideology demanding that people be treated differently because of their gender. Why do ideologies continually lose their bearings?  I suspect the problem reflects the fact that very few people are committed to broad principles such as freedom or utility maximization.  Instead, they have “special interests”, and use these various ideologies as a convenient cudgel to attack their opponents and achieve their actual policy goals. PS.  Matt Yglesias has a very good post discussing some of the same issues. (0 COMMENTS)

If you didn’t have to work to enjoy material abundance, would you do it anyway? If an algorithm or a pill could achieve better results, would you bother shopping or going to the gym? These are the kinds of questions we’ll need to ask ourselves if AI makes all human labor and other traditional ways […] The post Purpose, Pleasure, and Meaning in a World Without Work (with Nicholas Bostrom) appeared first on Econlib.

We should be careful about words, expressions, and catchphrases, especially those political hyperboles that buttress the statist zeitgeist of our time. You are a product of greedy corporations. The author of the May 16 Economist newsletter “The World in Brief” says it in passing: Walmart’s ad operation is much smaller than that of Amazon, which is ahead in e-commerce and video streaming. But Walmart has the advantage in the ground war. In its 10,000 stores advertisers can buy access to customers on signs, screens and in-store radio. Next time you browse a supermarket for products, remember that you are a product too. It is not clear what exactly the journalist is referring to. To verify, I went to my usual Walmart but I did not see a single third-party ad—except of course for the brand names and slogans of the products on the shelves. I didn’t see any screen or hear any advertisement.  The retailer does sell advertising to third-party sellers on its Walmart Marketplace website, though. What is the problem anyway with Walmart selling advertising? Information related to your possible interest in exchanging is part of living in any society above the tribe or command society, especially in a prosperous society. Such information is quite certainly more beneficial for most people than state propaganda. Does private advertising mean that you are a product? Are you even a product of Google when it sell data that you give away by using its free services? According to Merriam-Webster, a product is “something (such as a service) that is marketed or sold as a commodity.” A slave would be a product. A free person of course is not. Even in a figurative way, you cannot be a slave of sellers whose proposals you are free to decline without any threat of punishment. Referring to their concept of “slavery of wage labor,” Marxists would say that Walmart workers are slaves, which does not make sense: at any time, they can walk away and work for somebody else or for themselves. If Walmart employees are not slaves, it is even more obvious that its customers are not, even if they are exposed to advertising when they choose to visit the company’s physical or virtual sites. ****************************** The more abstract the topic you try to represent with DALL-E’s cooperation, the more difficult it is to obtain zir cooperation. It is not surprising because an AI bot does not think. The featured image of this post is the best I was able to obtain after a large number of instructions that were not understood. A “product” in the process of grocery shopping, by DALL-E and PL (0 COMMENTS)

Brickbat: Robot’s Day of Rest by Charles Oliver, Reason, May 10, 2024. Excerpt: A German court has ruled that the robots at the Tegut supermarket chain must be given Sundays off, just like human workers. Under German law, retail stores must close on Sundays and Christian holidays in order to give employees a day of rest. Tegut has gotten around that law by fully automating its stores, and it gets 25–30 percent of its sales on Sunday. A union that represents shop workers filed suit to force the stores to close on Sundays, saying it fears the company’s success could undermine support for the nation’s blue laws. My comment: A good reminder of one the many ways that the United States doesn’t suck. Free Trade with Free Nations by Alex Tabarrok, Marginal Revolution, May 14, 2024. Excerpt: Alec Stapp points out that Canada is the only NATO country that has a free trade agreement with the United States. That’s quite remarkable if you think about it. NATO allies are bound by mutual defense commitments, support for military cooperation, and a dedication to democratic principles. Despite these shared commitments, the U.S. still enforces tariffs and quotas on our NATO allies including France, Germany, the UK, Denmark, Portugal, and Spain. This is like getting married and not having a joint checking account. If they are good enough partners to commit to their defense then surely NATO allies are good enough partners to commit to free trade? (bold added)   Biden Offers to Turn U.S. Military Personnel Into Saudi Royal Bodyguards by Doug Bandow, The American Conservative, May 9, 2024. Excerpt: Biden took office talking of his commitment to human rights and determination to turn MbS, as the crown prince is known, into a “pariah.” Now the administration is proposing to turn the U.S. military into a modern Janissary corps, a bodyguard for the thousands of royal princes who rule over their countrymen. It is well past time to stop deferring to the KSA. And: For years American policymakers justified their fixation on the Mideast on the importance of protecting Israel and importing oil. Israel, however, has become a regional military superpower, threatened more by its brutal mistreatment of Palestinians and bitter internal political struggles than outside attack. The oil market has diversified, and supplies are limited mostly by American sanctions, which could be liberalized or lifted at any time. Terrorism is a problem of endless and disastrous U.S. military intervention. Growing Chinese and Russian activity in the region is a diplomatic challenge, not a threat warranting increased military commitments. Today, as my Cato Institute colleague Jon Hoffman explained, “What Washington needs from the region on” issues traditionally central to the Saudi relationship, most notably oil, stability, and terrorism, “is quite limited and simple to achieve.” Any support for Riyadh is difficult to justify. Saudi Arabia is one of the world’s worst dictatorships. According to Freedom House, the Kingdom is more repressive than Russia, China, and Iran: “Saudi Arabia’s absolute monarchy restricts almost all political rights and civil liberties. No officials at the national level are elected. The regime relies on pervasive surveillance, the criminalization of dissent, appeals to sectarianism and ethnicity, and public spending supported by oil revenues to maintain power.” MbS’s misrule was highlighted by the gruesome murder and dismemberment of the journalistic critic Jamal Khashoggi in the Saudi consulate in Istanbul, Turkey. More than five years later, the official coverup continues.   All Is Not Quiet In the Library Catalogs by Anonymous, Foundation Against Intolerance and Racism, May 15, 2024. Excerpt: Traditional cataloging practice requires the cataloger to describe the book as objectively as possible; there are even specific guidelines reminding catalogers not to select subject headings (those hyperlinked topic descriptors in the record) based on their own values and beliefs. One of the first questions I was asked in my hiring interview was to confirm that I would agree to catalog materials that I, personally, found offensive. After all, libraries—and, by extension, catalogers—are supposed to be guardians of free speech and intellectual freedom. We do not know who will be looking for the materials and for what purpose, and so we have to be fair, accurate, and objective in order to make it  easier for the material to be found. But it seems that now the overriding duty of the cataloger is to  protect the patrons from the harm that the records (not even the materials!) may cause them. In the discussions I mentioned above, fellow catalogers were unabashedly stating that certain marginalized groups should get to decide how a book should be labeled. If a cataloger who is a member of a marginalized social group believes the book in question is harmful or offensive, he is fully in the right to add a note in the catalog stating his beliefs. Thus we now have four books in the international catalog (used by libraries worldwide) with the label “Transphobic works”. Several books that are critical of the current gender affirmation care model now have the subject heading “Transphobia”. These books are not about transphobia, so the subject heading is likely being used as a way to warn the reader of the record (and potentially the librarian choosing which books to order for the library) that these are “bad books” and should not be read or purchased.   The ‘Heart’ of Alvin Bragg’s Case Against Trump Is Misdirection by Jacob Sullum, Reason, May 15, 2024. Excerpt: “This was a planned, coordinated, long-running conspiracy to influence the 2016 election, to help Donald Trump get elected through illegal expenditures, to silence people who had something bad to say about his behavior,” lead prosecutor Matthew Colangelo said at the beginning of Trump’s trial last month. “It was election fraud, pure and simple.” Contrary to Colangelo’s spin, there is nothing “pure and simple” about the case against Trump. To begin with, Trump is not charged with “conspiracy” or “election fraud.” He is charged with violating a New York law against “falsifying business records” with “intent to defraud.” The Scandalous Science Behind Nuclear Regulation by James Broughel, Reason, May 15, 2024. Excerpt: Nuclear power could be a game-changer for energy affordability, grid reliability, and carbon reduction. However, it’s been stifled for decades based on one deeply flawed scientific model: the linear no-threshold (LNT) model. The theory underlying this model suggests that any exposure to ionizing radiation, no matter how small, increases cancer risks and that risks rise in a linear way with exposure levels. It’s not true. The roots of LNT’s dominance are more political than scientific. Its influence traces back to Hermann Muller, a geneticist and 1946 Nobel Prize winner. Muller’s research in the 1920s and ’30s claimed to show that radiation induces mutations in fruit flies, with no safe threshold. He became an ardent evangelist for the idea that even tiny radiation doses could cause hereditary defects. However, it appears Muller may have deliberately misled his followers. For example, Muller falsely claimed in his 1946 Nobel acceptance speech that there was “no escape” from the conclusion that any radiation is harmful, despite being aware of evidence to the contrary.   (0 COMMENTS)

In his book Minority Report, H.L. Mencken writes: “The urge to save humanity is almost always only a false-face for the urge to rule it.  Power is what all messiahs really seek: not the chance to serve.  This is true even of the pious brethren who carry the gospel [sic] to foreign parts.”   With a little rewriting, we can update the quote for protectionism: “The urge to defend the nation is almost always only a false-face for the urge to rule it.  Power is what all protectionists seek: not the chance to serve.” National defense is a common justification for protectionist tariffs, and it has been driven to absurd extremes: clothespins, sugar, and baby food have all been described as vital to national defense and subject to tariffs.   In a particularly goofy example, Senator Rick Scott of Florida has called for a ban on Chinese-grown garlic on the grounds it threatens national security.  Now, perhaps if we were a nation of vampires, this claim would make sense.  But it’s hard to see how garlic, even garlic that is potentially tainted, is a threat to national security.  Scott argues that the garlic poses a potential health threat, but that is not the same as a national security threat. What is weird about the argument Scott is putting forth is that he does not need to ban Chinese garlic as a national security threat if it is as dangerous as he claims.  We already have a food safety program here in the US, and foreign goods are also subject to it.  If Chinese garlic is a public health threat, the FDA has the authority to act by issuing recalls and otherwise effectively banning the tainted product if it poses a threat to human or animal health.  It’s unclear why Senator Scott’s act is needed. To go back to a theme I have been harping on in recent posts, any intervention needs to be justified beyond just some hypothetical musing.  Simply showing that some intervention could accomplish some desired outcome does not mean the action is justified or desirable.  We need to examine the current state of laws and legislation to see if the intervention is actually justified, or if it is just rank corruption hiding behind a false-face.  One question Senator Scott (or others who defend this intervention) must answer is: why is the current legislation inadequate?  It is already illegal to sell tainted food in the US.  If Chinese garlic is such a threat, why hasn’t the FDA shut it down? National defense is one of those justifications that people don’t seem to think about that much.  It is invoked and simply not questioned.  Indeed, this is probably why “national defense” is such a successful false-face to rent-seek: few look too closely at the mask.  Perhaps, like the partygoers at Poe’s masquerade in the Masque of the Read Death, the people who support spurious national defense claims are afraid to see what lies beneath that mask.   Jon Murphy is an assistant professor of economics at Nicholls State University. (0 COMMENTS)

Chicago’s population is down about 25% from its peak back in 1950. That statement might conjure up images of empty blocks of homes, as you see in Detroit. In fact, Chicago remains quite crowded. I cannot find the article, but I recall reading that Chicago now has more households than ever before. Average household size has shrunk dramatically since 1950, due to factors such as fewer children and more independent living for young adults and the elderly.The OC Register reports some seemingly odd data for California. Its housing stock has grown since 2020, its population has shrunk, and yet home prices have soared. This has led to dark conspiracy theories that there are lots of empty houses in California held by speculators, and that this is boosting prices. Not so. If California’s population is well off its peak, and developers keep on building housing, why does the cost of living in the Golden State remain lofty? . . . Start with the basics: California had 38.2 million residents living in households last year – that’s down 375,800 since 2020, or a 0.9% loss. In the same timeframe, California’s housing stock grew to 14.8 million residences – a 432,700 improvement since 2020, or 3% growth. The puzzle can be resolved if we consider the nearly 4% decline in average household size: The average number of Californians living in an occupied housing unit was 2.75 last year – that’s down from 2.86 in 2020. That’s not an insignificant change across 39 million residents. Why did it occur? There’s the pandemic effect of people wanting larger living quarters, often shunning roommates. Others got historically cheap mortgages in 2021-22 and won’t move, no matter how oversized their residence is for their needs. Some of this trend may be adult children leaving the parents’ home – with destinations both in and out of state. Young families frequently exited for other states, too. Or it’s older residents losing a spouse. No matter the cause, smaller households gobble up housing supply. In addition, birthrates are declining. I believe that Kevin Erdmann was the first to document the fact that a booming economy in a housing constrained market (such as LA) leads to population loss, as working class families move to cheaper states and are replaced by younger childless professionals.  Selfish empty nesters like me live in houses that are far too big for our needs.  (I recall back in the 1990s driving a Chinese visitor around one of the nicer neighborhoods in Newton, Massachusetts.  The awestruck lady asked how many families lived in each house. I gave my wife the “Who’s going to tell her” look.)   PS.  Although Chicago remains relatively “full” despite a 25% population decline; there are rust belt cities that are much worse off.  Detroit, Cleveland and St. Louis have seen population declines of 60% to 70%, and thus do have vast areas that are emptying out. (0 COMMENTS)

Charging extra for specific preferences, such as a seat selection on a flight, enables lower basic prices, increasing access to no-frills options for lower-income customers, while allowing businesses to customize their services to individual customers’ preferences. Airlines unbundle in-flight food and checked bags, for example, leading to more profit opportunities and lower base fares. Yes, “price discrimination”—charging various customers different amounts for the same product—can sometimes be harmful to customers on net. But banning such unbundling when consumers put wildly different values on certain services can price out poorer consumers and compel others to pay for services they neither want nor need. Likewise, overdraft fees from banks help disincentivize costly behavior. Banks incur costs and face heightened risks when customers overdraw their accounts. Overdraft charges help deter this behavior in a well-targeted way, by imposing charges on those customers whose accounts become overdrawn. Capping or constraining overdraft fees doesn’t eliminate these costs and risks; it just means someone else must be charged for them in a different way. Banning overdraft charges thus means higher prices for some other subset of a bank’s customers. This is from Ryan Bourne, “Abolishing ‘Junk’ Fees Would Be Junk Policy,” in Ryan A. Bourne, The War on Prices: How Popular Misconceptions About Inflation, Value, and Prices Create Bad Policy, which was released this week. There’s actually some other content between these two paragraphs. As I said in the blurb on the book this is one of my favorite chapters. Specifically, I wrote, “Particularly good are the chapters on rent controls, price controls on oil and natural gas, and so-called junk fees, which are really fees to solve problems that would exist without them.” Bourne quotes President Biden’s attack on “junk fees.” I get the impression, given Joe Biden’s low or close to zero understanding of economics, that Biden thinks that eliminating junk fees won’t cause any prices to rise. (0 COMMENTS)

Click-a-ty-clack, click-a-ty-clack . . ., click-a-ty-clack.    Those were the sounds that regularly echoed down the second-floor hallway of Clemson University’s Sirrine Hall in the 1980s and before. Those sounds of metal-on-metal could be expected by the economists on the floor at 10:00 in the morning, carrying a clear message: “Time for coffee!”  The sounds came unmistakably from Professor Hugh Macaulay’s steel leg brace that he had worn since he suffered a bullet wound in France in World War II. He had proudly volunteered for service.  The “clickities,” combined with Hugh’s knocks on office doors, would roust eight or more economists in the department for the treat of the day, a lively policy debate at the campus coffee shop over the latest market-control pronouncement coming out of Washington. Our debates would usually begin as we left Sirrine to make the three-hundred-yard hike to the “Canteen,” so named when the University’s students were all male and all cadets. The life of Professor Hugh H. Macaulay, Clemson University Alumni Professor of Economics would have celebrated his Centennial today. Those of us who were his colleagues and friends celebrate his life as an economist and moral force in the lives of us all, as well as the lives of his students. Hugh remains one of    the most “unforgettable characters we’ve ever met,” to paraphrase one of Reader’s Digest’s most popular series. He is also remembered as one of the profession’s staunchest defenders of markets, always ready to find fault with proposals to constrain the market process..  Professor Macaulay died on October 5, 2005 at the age of 81 from kidney cancer.  *     *     *    *     * Hugh always wore a bowtie… Always! And they were made by his wife Frances—or, rather, “Pinky” to all who knew the Macaulay’s. She was the love of Hugh’s life, his partner, colleague, and soul mate. She made the bowties from old neckties. In the Macaulay household, nothing was wasted.  Hugh had his own dress code. A while back it might have been called “Sunday-go-to-meeting” attire. His hair was cut close. His face, lively. His dark eyes danced as he talked and laughed with others. If one did not know the meaning of Victorian manners of speech and conduct before, they would after spending time with Hugh.  The style of the day meant nothing to him. Presenting a proper model to his students meant everything. In 35 years of observing him up close, including occasions that might have tested the patience of Job, I can tell you that Hugh never uttered a word that would not have passed muster for My Weekly Reader.  *     *     *     *     * Hugh Macaulay knew well and followed the words of Adam Smith found in his Theory of Moral Sentiments: “One should think much of others and little of oneself.” He told me early in my career when I still hadn’t gotten over having a PhD., “Bruce,” he said, “everyone you will ever meet, even the janitor, will know things you do not know. We must treat them all with great respect.”  Hugh had a keen intellect, a never satisfied hunger for knowledge and for opportunities to engage in conversation about ideas. But there was one set of ideas that mattered above all others: Economics. On this, Hugh had, in the words of J. M. Clark, “an irrational passion for dispassionate rationality.”  Hugh was an economist to the core. Economics was in his DNA. And Hugh’s economics was not just any old economics, either. It was the Adam Smith economics of markets, price theory, trade, and monetary policy. It was what we in the business call the Old Time Religion. Hugh was an unabashed lover of market competition and individual freedom. No, more than a lover, he was an evangelist.  And was he ever good. Any time I had trouble with an international finance problem, which was fairly often, I would go to Hugh. He would start laying out principles, then go to application, and before you knew, the answer would be clearly revealed, sprinkled with the well-known Macaulay wit. Going for coffee with Hugh was great fun and could be hilarious—but the coffee discussions were serious business. Always, always, Hugh brought pen and pad with him. If no one else jumped in with a question, Hugh would pose his own, followed by drawing supply and demand curves. Our discussions could be boisterous but were always good-natured, and peppered with laughter. We all learned from the master and tried to emulate him. Those who enjoyed Hugh’s company in our book club discussions knew what to expect if anyone even suggested that a government solution to an economic problem would be more effective that markets. Hugh would ask with a disappointed tone, “Haven’t you been listening?” And to make sure we remembered, he would hold forth, often citing his favorite authorities, beginning with Adam Smith, moving on to Milton Friedman, then to Ronald Coase, and finally ending with Will and Arial Durant—incorporating their works into a fully integrated classical liberal thought.  *     *     *    *     * Hugh was an economist, but not just an economist. At heart, Hugh was a teacher. A teacher of research. A teacher of life. He was born to be in the classroom… and he knew that.  His students? They were the joy of his life. His door was always open…, as was his home. The number of times Hugh and Pinky had students in their home was legion, and even though he was a demanding grader, he left his students enthralled with his lectures and his thoughtfulness on allowing them to come to understand why and how he thought as he did. Understandably, any number of his students left his classes to say with conviction, “I would rather take another Macaulay course and make a D than a course from someone else and get an A.”  For many, Hugh was the one who set them on a new path, writing personal and detailed letters nominating them for graduate school or a job, and who, later, dropped notes of congratulations when they were honored in their work. Long after Hugh’s retirement in 1980, his Clemson colleagues would often be asked, “And how is Professor Macaulay”? In the words of one of Hugh’s former students, “You know, it really isn’t necessary now to say good things about Professor Hugh Macaulay to those who walked in his footsteps and were aided by the time he gave to them and to their papers. His goodness was self-evident in the way he conducted his life and in the way he treated others with respect and courtesy.” At the same time, those of us who knew him feel compelled to announce with force on this celebratory day that every economics department needs a Hugh Macaulay, someone who is committed with words and deeds to the essential wisdom that Adam Smith laid out in both of his interdependent masterpieces, The Wealth of Nations, and The Theory of Moral Sentiments.  *     *     *    *     * I dropped by to see Hugh when in the hospital and in his final days, if not hours. Still sedated from the surgery, Hugh did not seem to be fully awake. Even so, Pinky insisted that I come in and speak to him.  “Hugh,” I said, “I’ve come to tell you that markets work.” This roused him fully. “Thank you for telling me, Bruce,” he responded. “I thought that might be so. Now that I know for certain I can just go ahead and die in peace.” With that, he burst out with that famous Macaulay laugh. Pinky and I laughed, too.  Hugh Macaulay was one wonderful human being.   Bruce Yandle is  Co-Founder of the Clemson Institute for the Study of Capitalism and Distinguished Professor Emeritus, Department of Economics and distinguished Mercatus Center adjunct professor of economics at George Mason University. He specializes in public choice, regulation and free-market environmentalism.  (0 COMMENTS)

As with any tale, it is useful to begin at the beginning.  And in my instance, all my beginnings related to Austrian economics are found at Grove City College.  How I ended up at Grove City is an extremely unlikely journey with zigs and zags, the probability of which defies all calculation.  I was not a focused student in high school or even as I began my college career.  My interests were focused elsewhere and my dreams were directed at a life far removed from anything associated with the “life of the mind”. Once I got the bug to study economics, my professor Dr. Hans Sennholz guided my path of study with his entertaining and enduring lectures (I can still hear his voice 40 years later) and the books he encouraged me to read, which included Frederic Bastiat’s Economic Sophisms, Henry Hazlitt’s Economics in One Lesson and Milton Friedman’s Free to Choose, but also Carl Menger’s Principles of Economics, Eugen Bohm-Bawerk’s Capital and Interest, and Ludwig von Mises’s Theory of Money and Credit, Socialism, and Human Action.  Before I graduated I had read Adam Smith’s The Wealth of Nations, Jean-Baptists Say’s Treatise, David Ricardo’s Principles, John Stuart Mill’s Principles, F.A. Hayek’s The Road to Serfdom, Israel Kirzner’s The Economic Point of View and Murray Rothbard’s Man, Economy and State. Sennholz also made sure we read Marx, Keynes, Veblen, and Galbraith.  I should also acknowledge besides these classic works, I read everything Sennholz himself had published (in particular The Age of Inflation) as well as became a regular reader of The Freeman, and other writings from the staff at the Foundation for Economic Education.   My Philosophical Vision and the Critique of Scientism in the Study of Man My religion and philosophy teacher Dr. Reed Davis introduced me to the work of Michael Polanyi, and in particular the issue of presuppositions in scientific inquiry. I was able to see wider applications and a link between what I was learning about how to do economics and the philosophical discourse that Polanyi directs us to in thinking about the study of man.  In Sennholz’s presentation, economics was a human science and was corrupted by the unwarranted intrusion of the methods of the physical sciences into its domain.  Mises (and Hayek) had good reasons for this position, but Polanyi gave me additional reasons as I read him and learned from him. My appreciation of Polanyi would only increase over the subsequent years as I was assigned to be Don Lavoie’s research assistant. Lavoie was busy working on finishing two books – Rivalry and Central Planning and National Economic Planning: What is Left – both would be published in 1985.  Lavoie was blending Austrian economics with the growth of knowledge literature in the philosophy of science, including Polanyi. So my early exposure to Polanyi now turned out to be an advantage in my work with Lavoie. The great strength was that Polanyi not only told us how to study, but what to study – the growth and utilization of knowledge in society.  This, of course, feeds directly into Hayek’s research program.  It turns out that Polanyi was also a critic of the socialist planned economy and the Soviet system in particular, just like Mises and Hayek. So many points of confluence emerged during that first year of graduate studies with what I had been prepared to learn from my time at Grove City. Economics at the graduate level is a technical discipline, similar in many ways to engineering or a form of social physics. But economics as practiced in the Austrian School of Economics is a philosophical science and is more akin to the humanities than to science.  I had to learn to live academically in two worlds at once.  My education at Grove City College and the mentoring I received at George Mason prepared me to do precisely that.  And hopefully, others can see that example in my writings and teaching in the subsequent decades.   Analytical Puzzles and Economic Science As much as I was drawn to economics as a philosophical science, the puzzles of economics as understood by my peers in the discipline also intrigued me. The most fundamental puzzle was understanding how markets work. The textbook presentation didn’t seem to explain how the market economy came to be, just what the optimal result would be if the market did all its work.  There was no real theory in the textbook of the working of economic forces, only a presentation of the consequences that follow from economic forces having worked.  This was very unsatisfactory to me and became an obsession to fix in my mind and in the minds of others. Sennolz turned me on to the discipline in my youth, and I have never become bored thinking, talking, or writing about economic science and its history, method, and application. I am a fan of economics and economists, just as I am a life-long fan of the New York Yankees.  In fact, I think of the Austrian School of Economics as the New York Yankees of economic science.  The Austrians have arguably won more major debates than any other school of thought- the methodenstreit; the socialist calculation debate; the monetary theory and policy debates; the methodological disputes on excessive formalism, naïve empiricism, and problems of aggregation; and the benefits of trade, migration, and development for the improvement of the least advantaged and most vulnerable populations on earth.  Unlike the Yankees, however, many fail to recognize the championship pennants of Austrian economics. This fueled my curiosity to understand how such a disjoint between perception and reality could persist among economic scientists. So the sociology of the profession has been as much a subject of my attention as the substantive contribution to economic science of what I have called mainline economics.  Mainstream economics reflects the current fads and fashion in the science, whereas mainline economics reflects the enduring substantive principles that the science teaches us about how the world works.  Austrian economists explain how the world works, mainstream economists explain how the economics profession works – those are different things.  Learning that was a long and difficult awakening process. My philosophical interests, analytical interests, and sociological interests are all interconnected. And again I found my roots at Grove City College, in this instance the reading of Walter Miller’s A Canticle for Leibowitz, which taught me that knowledge does not just get recycled, but instead moves in fits and starts, with periods of progress stopped by periods of retrogression.  Knowledge processes move through time in a sort of corkscrew shape – progress is made, but sometimes we cycle back only to move forward.  Knowledge can be lost and must be found again before we can progress.  Economics is particularly prone to this problem because, as Hazlitt taught in Economics in One Lesson, sound economics is built up through long chains of reasoning that many cannot or will not follow, and in the gaps vested interest groups will exploit the situation to push through their preferred narrative in the hope of pursuing their agenda.  This was indeed the case during the period from 1920-1980 as we debated the merits of socialist economic planning – despite the evidence of economic deprivation and political tyranny.  In the 1980s, the evidence against the socialist experiment mounted to such an extent even the most stubborn minds had to concede the points raised by Mises and Hayek.  My early work as an economist was precisely on this topic, and my first three books detail the history, operation, collapse and transition from the socialist economy in East and Central Europe and the former Soviet Union. How did economists get such a big experiment wrong?   The Academic Life How does one pursue a career in the life of the mind? It is tied to an aspiration to allow curiosity to guide you and to adopt an unquenchable thirst for learning throughout your life.  You must be free to ask questions that might not have answers, let alone easy answers. It is the recognition that knowledge in society grows (remember the corkscrew), and that the more you know the more you know you don’t know. Teaching enables us to interact with young, curious, and compassionate minds eager to understand the world and to work to repair a broken world.  Our job as teachers is to tap into that curiosity, to demonstrate to each generation how the tools of economic reasoning can be indispensable aids in unleashing their curiosity, and disciplining their thought so that they can pursue effectively the compassion they have and desire to do good in the world.   Conclusion My life as an Austrian Economist has been great, and I hope to keep learning and working for decades to come.  Austrian economics properly understood is a growth industry. We are constantly building for a better future and the promise of more and more scientific victories in the years to come.  Being part of that heritage is a privilege.   [Editor’s note: You can read like Boettke- and with Boettke- in our No Due Date subscription book club.] (0 COMMENTS)