In 2010, the British science writer Matt Ridley debuted as a classical liberal with his book The Rational Optimist. Ridley’s “coming out” was eventful and exciting for libertarians all over the world. A former staff writer and head of the Washington bureau of The Economist, a successful science author and, more importantly, a gifted narrator, Ridley condensed in his thick book much research and wisdom. The financial crisis appeared to many to have dispensed with free market ideas once and for all. Ridley pointed out that, to the contrary, free markets were actually producing prosperity, food, cleanliness all over the world—particularly for the world’s poor.
Final grades were due a few days ago, and for those of us who teach, grading season has just come to a close. With visions of student papers dancing in my head, I can’t keep from thinking, Rashomon is a perfect movie for our culture.
A recent radio interview with Zach Carter, senior political economy reporter for The Huffington Post, reveals a characteristic problem with democratic journalism. The host, Hugh Hewitt, began the interview by asking about what Carter had read and how he had prepared to become a journalist. Part of the inquiry concerned historical knowledge that seems relevant to the kind of reporting done by the journalist. Showing amazing good humor, the struggling Carter confronted one of Hewitt’s stock questions: “Do you know who Alger Hiss was?” Hewitt typically asks this because he assumes the answer is yes and this allows him to proceed…
In her first formal appearance as head of the United States Federal Reserve, Janet Yellen obliquely suggested the Fed might not raise its mighty “federal funds” rate to tighten the economy until months after its Quantitative Easing bond purchasing ended completely, coyly portending cheap money indefinitely. The market shuddered but soon calmed at the soothing voice of its controller.
The grand narrative goes something like this: Some nations are rich, others poor. Poverty begets misery. Since we all wish to live in a world defined less by misery than by happiness, rich nations have a moral obligation to offer a friendly hand of assistance toward ‘less fortunate’ nations. Without significant financial and technical assistance, the poor and suffering are destined to wallow in deplorable indignity. If rich nations simply fulfill their responsibilities toward their fellow men through humanitarian action (at relatively little cost to themselves) poverty and misery could be eliminated in our lifetimes. In Doing Bad by Doing Good, Christopher…
What an absolutely astounding admission former Fed boss Alan Greenspan makes about his new book The Map and The Territory: “Not a single major forecaster of note or institution caught it [the 2008 crash]. The Federal Reserve has got the most elaborate econometric model, which incorporates all the newfangled models of how the world works—and it missed it completely. I was actually flabbergasted. It upended my view of how the world worked.”
It may only be rock and roll, but Alan Krueger, the outgoing chairman of the President’s Council of Economic Advisors, likes it, not least because it is economically illuminating. Among the ways in which the economy and the recording industry are alike, he said in a recent address at the Rock and Roll Hall of Fame in Cleveland, is that outcomes in both depend substantially on luck. The suggestion is that distributions dictated by chance are arbitrary, problematic and—this last point is unstated but seemingly latent—fair game for rearranging. The typical conservative response is to deny that luck rather than merit is at play. But were the point ceded just for fun—and luck stipulated as a potent force in economic affairs—an interesting question might result: So?
Mark Blaug’s Economic Theory in Retrospect argues that the Keynesian revolution in economics after the publication of The General Theory was a unique event in economic history because of its rapid and almost complete conversion of the economics profession to its central ideas. Frank Knight’s Presidential Address to the American Economic Association in 1951 actually acknowledges this victory of Keynesian ideas within the economics profession but laments that Lord Keynes has successfully dragged economic thinking back to the dark ages. Keynes himself argued forcefully in The General Theory that a revolution in thinking was in order given how difficult it…
Editor’s note: Stephen Schuker, a first-time contributor to Law and Liberty, assesses in this post the lengthy volume Freedom Betrayed: Herbert Hoover’s Secret History of the Second World War. Published in 2011, the book contains Herbert Hoover’s arguments that America’s commitments to individual and economic liberty and restrained foreign policy were betrayed by the Roosevelt administration and in subsequent postwar domestic and foreign policies. For a conversation with George Nash, editor of Freedom Betrayed and author of the book’s excellent introduction, about Hoover’s political and humanitarian career and his motivations in writing this grand book see this Liberty Law Talk podcast.
On 4 March 1933 Herbert Hoover accompanied his successor to the Capitol for the swearing-in ceremony. The two men maintained a frosty silence. As the economy spiraled down during the presidential interregnum, Franklin Roosevelt had refused to cooperate with the outgoing chief executive in any way. Hoover then left for Union Station, rejected by the American people, seemingly a broken man. Worse was to come. When Hoover boarded the train, his secret service detail melted away. A mob assailed him when he reached New York. Taking up residence at the Waldorf-Astoria, he found his phones tapped, his mail opened. Several members of his administration would shortly receive unwelcome scrutiny from the IRS. Even more galling, Roosevelt adopted some of Hoover’s policies, but accorded him no credit. The Republican Treasury secretary stayed on sub rosa and reopened the banks, but no one appeared to notice who had expertise and who did not. A lesser man than Hoover would have collapsed. Instead, Hoover rallied, sustained by his indomitable spirit and iron self-discipline. Over the next thirty-one years, he published more than thirty books. When Roosevelt’s biographer inquired about the secret of his productivity, Hoover replied simply: “I outlived the bastards.”
Except when giving speeches or supervising the growing collections of the Hoover Institution at Stanford, the ex-president sat tethered to his desk twelve or thirteen hours a day. After his wife died, he often rose in the middle of the night to labor two more hours. He kept six secretaries and a Ph.D. research assistant fully employed. Having caught the spirit of the age in his 1922 volume, American Individualism, a paean to the country’s exceptionalism and voluntarist tradition, Hoover followed in 1934 and 1936 with trenchant analyses of what he called New Deal collectivism. As Hoover saw it, the intrusion of the Leviathan state into every corner of American life would lead sooner rather than later to a curtailment of personal liberties and economic freedom. He thus anticipated the critique of central planning that Friedrich Hayek in The Road to Serfdom would later embed in a formal methodology. Hoover also churned out three thick volumes of memoirs, a four-volume chronicle of his efforts to provide food relief during and following the world wars, two studies of Woodrow Wilson, innumerable collections of speeches, and even a book on fishing.