Quotes by Economists - Page 8

Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower, in short, what men should believe and strive for.
Friedrich A. Hayek
In the first instance, it is probably true that in general the higher the education and intelligence of individuals becomes, the more their views and tastes are differentiated and the less likely they are to agree on a particular hierarchy of values. It is a corollary of this that if we wish to find a high degree of uniformity and similarity of outlook, we have to descend to the regions of lower moral and intellectual standards where the more primitive and "common" instincts and tastes prevail. This does not mean that the majority of people have low moral standards; it merely means that the largest group of people whose values are very similar are the people with low standards. It is, as it were, the lowest common denominator which unites the largest number of people. If a numerous group is needed, strong enough to impose their views on the values of life on all the rest, it will never be those with highly differentiated and developed tastes -it will be those who form the "mass" in the derogatory sense of the term, the least original and independent, who will be able to put the weight of their numbers behind their particular ideals.
Friedrich A. Hayek
What is called economic power, while it can be an instrument of coercion, is in the hands of private individuals never exclusive or complete power, never power over the whole life of a person. But centralised as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery.
Friedrich A. Hayek
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.
Friedrich A. Hayek
In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.
Rudiger Dornbusch
In boom times companies have high profits. They increase production to satisfy demand for goods. This leads to excess supply. Companies cut prices to compete for customers. leading to lower profits, lay-offs, and economic depression. Eventually lower prices lead to an increase in demand and profits go back up. The economy is a yo-yo.
Niall Kishtainy
Protectionism does not produce wealth, and free trade and economic openness are ultimately in everyone’s interest
Thomas Piketty
I think we're raising whole generations who regard facts as more or less optional. We have kids in elementary school who are being urged to take stands on political issues, to write letters to congressmen and presidents about nuclear energy. They're not a decade old, and they're being thrown these kinds of questions that can absorb the lifetime of a very brilliant and learned man. And they're being taught that it's important to have views, and they're not being taught that it's important to know what you're talking about. It's important to hear the opposite viewpoint, and more important to learn how to distinguish why viewpoint A and viewpoint B are different, and which one has the most evidence or logic behind it. They disregard that. They hear something, they hear some rhetoric, and they run with it.
Thomas Sowell
To bring our human population in line with the biocapacity of the planet and transform our society from scarcity to sustainable abundance, we will need to address the great disparity in ecological footprint between the rich and poor, while simultaneously lowering the overall human population on Earth.
Jeremy Rifkin
A fool believes that the society of the future will transcend the laws of economics. A person of reason hopes that it will finally learn to respect them.
Jakub Bożydar Wiśniewski
Microeconomists are wrong about specific things and macroeconomists are wrong about things in general!
Yoram Bauman
Now, in the modern money economy everything in the nature of a social-economic occurrence consists in human actions and behaviour.
Oskar Morgenstern
...the facts of economic life cannot be comprehensively described in terms of statistics.
Oskar Morgenstern
Our knowledge of dynamic processes is necessarily inferior to our ability to describe stationary conditions.
Oskar Morgenstern
Orthodoxy builds a rococo logical palace on loose empirical sand.
Richard R. Nelson
Too many economists excuse their practical failure by saying "the politicians (or bureaucrats) didn't do exactly what I recommended." Just as medical practitioners must allow for the fact that their patients may not take all the pills they prescribe, or follow all the advice they are given, so economics practitioners need to foresee political and administrative pressures and make their plans robust to changes that politicians, bureaucrats, and lobbyists are likely to impose.
Paul Klemperer
... it will appear that there is no such thing as fixed capital; there is nothing useful that is very old except the precious metals, and all life consists in the conversion of forms. The only capital which is of permanent value is immaterial--the experience of generations and the development of science.
David Ames Wells
lthough the basic principles of economics are not very complicated, the very ease with which they can be learned also makes them easy to dismissed as "simplistic" by those who do not want to accept analyses which contradict their cherished beliefs. Evasions of the obvious are often far more complicated than the facts. Nor is it automatically true that complex effects must have complex causes. The ramifications of something very simple can become enormously complex.
Thomas Sowell
Even in recent times, the empirical evidence does not support the claim that trade liberalization or incentive neutrality leads to faster growth. It is true that higher manufacturing growth rates have been typically associated with higher export growth rates (mostly in countries where export and import shares to GDP grew), but there is no statistical relation between either of these growth rates or degree of trade restrictions. Rather, almost all of successful export-oriented growth has come with selective trade and industrialization policies. In this regard, stable exchange rates and national price levels seem to be considerably more important than import policy in producing successful export-oriented growth
Anwar Shaikh
In economics, it is often professionally better to be associated with highly respectable error than uncertainly established truth.
John Kenneth Galbraith
It is natural that the appearance of pollution should have taken by surprise an economic science which has delighted in playing around with all kinds of mechanistic models. Curiously, even after the event economics gives no signs of acknowledging the role of natural resources in the economic process. Economists still do not seem to realize that, since the product of the economic process is waste, waste is an inevitable result of that process and ceteris paribus increases in greater proportion than the intensity of economic activity.
Nicholas Georgescu-Roegen
The theory of Economics must begin with a correct theory of consumption.
William Stanley Jevons
In each case, the relative cost of postponing the purchase for buyer and seller determines the intensity of competition between the [past and future] selves of the seller. If the buyer has a lower cost of postponing the purchase (delay, making do with an interior model) than the seller (inventory, staff salaries) the buyer has the bargaining power.
Rakesh V. Vohra
A good way to do econometrics is to look for good natural experiments and use statistical methods that can tidy up the confounding factors that Nature has not controlled for us.
Daniel McFadden
We all agree that pessimism is a mark of superior intellect.
John Kenneth Galbraith
Misconceptions of business are almost inevitable in a society where most people have neither studied nor run businesses. In a society where most people are employees and consumers, it is easy to think of businesses as “them” – as impersonal organizations, whose internal operations are largely unknown and whose sums of money may sometimes be so huge as to be unfathomable.
Thomas Sowell
Inflation consists of subsidizing expenditures that give no returns with money that does not exist.
Jacques Rueff
This resulted in a model of the macroeconomy as consisting of a single consumer, who lives for ever, consuming the output of the economy, which is a single good produced in a single firm, which he owns and in which he is the only employee, which pays him both profits equivalent to the marginal product of capital and a wage equivalent to the marginal product of labor, to which he decides how much labor to supply by solving a utility function that maximizes his utility over an infinite time horizon, which he rationally expects and therefore correctly predicts. The economy would always be in equilibrium except for the impact of unexpected ‘technology shocks’ that change the firm’s productive capabilities (or his consumption preferences) and thus temporarily cause the single capitalist/worker/consumer to alter his working hours. Any reduction in working hours is a voluntary act, so the representative agent is never involuntarily unemployed, he’s just taking more leisure. And there are no banks, no debt, and indeed no money in this model.You think I’m joking? I wish I was.
Steve Keen
My hunch is that as the importance of a decision grows, the tendency to rely on quantitative analyses done by others tends to shrink. When the championship or the future of the company is on the line, managers tend to rely on their gut instincts.
Richard H. Thaler
Preindustrial living standards are predictable based on knowledge of disease and environment. Differences in social energy across societies were muted by the Malthusian constraints. They had minimal impacts on living conditions. Since the Industrial Revolution, however, we have entered a strange new world in which economic theory is of little use in understanding differences in income across societies, or the future income in any specific society. Wealth and poverty are a matter of differences in local social interactions that are magnified, not dampened, by the economic system, to produce feast or famine.
Gregory Clark
*THE COMMONS, which are creative - so unleash their potential*The commons are shareable resources of society or nature that people choose to use and govern through self-organising, instead of relying on the state or market for doing so. Think of how a village community might manage its only freshwater well and its nearby forest, or how Internet users worldwide collaboratively curate Wikipedia. Natural commons have traditionally emerged in communities seeking to steward Earth's 'common pool' resources, such as grazing land, fisheries, watersheds and forests. Cultural commons serve to keep alive a community's language, heritage and rituals, myths and music, traditional knowledge and practice. And the fast-growing digital commons are stewarded collaboratively online, co-creating open-source software, social networks, information and knowledge. ...In the 1970s, the little-known political scientist Elinor Ostrom started seeking out real-life examples of natural commons to find out what made them work - and she went on to win a Nobel-Memorial prize for what she discovered. Rather than being left 'open access', those successful commons were governed by clearly defined communities with collectively agreed rules and punitive sanctions for those who broke them...she realised, the commons can turn out to be a triumph, outperforming both state and market in sustainably stewarding and equitably harvesting Earth's resources... The triumph of the commons is certainly evident in the digital commons, which are fast turning into one of the most dynamic areas of the global economy.(p.82-3)
Kate Raworth
Democracy, we now know, is more than periodic elections in some countries, such elections have been used to legitimize essentially authoritarian regimes and deprive large parts of the citizenry of basic rights.
Joseph E. Stiglitz
Suppose someone were to describe a small country that provided free education through university for all of its citizens, transportation for schoolchildren, and free health care - including heart surgery - for all. You might suspect that a country is either phenomenally rich or on the fast track to fiscal crisis.
Joseph E. Stiglitz
An expert whose argument reeks of restraint or nuance often doesn't get much attention.
Steven D. Levitt
They did not understand that by liberalizing imports, the government was also promoting exports.
Jeffrey D. Sachs
world is not a zero-sum struggle in which one country's gain is another's loss.
Jeffrey D. Sachs
sweatshops are the first rung on the ladder out of extreme poverty
Jeffrey D. Sachs
Knowing that an economy is in decline is not enough. We must know why the economy is failing to achieve economic growth if we are to take steps to establish or reestablish it.
Jeffrey D. Sachs
But things have been so admirably arranged by the Divine inventor of social order that in this, as in everything else, political economy and morality, far from clashing, agree; and the wisdom of Aristus is not only more dignified, but still more profitable, than the folly of Mondor. And when I say profitable, I do not mean only profitable to Aristus, or even to society in general, but more profitable to the workmen themselves—to the trade of the time.
Frédéric Bastiat
While there are certainly informational spillovers as ideas move from person to person, it is hard to see why in most instances they are not priced. Although it is possible to imagine examples such as the wheelbarrow where an idea cannot be used without revealing the secret, relatively few ideas are of this type. For copyrightable creations such as books, music, plays, movies and art, unpriced spillovers obviously play little role. A book, a CD or a work of art must be purchased before it can be used, and the creator is free to make use of his creation in the privacy of his home without revealing the secret to the public at large. Similarly with movies or plays. In all cases, the creation must effectively be purchased before the “secret” is revealed.
Michele Boldrin
History, practical experience, common sense and economic theory all agree: economic competition is probably one of the greatest ideas humans ever came up with. When people compete to achieve the same goal, great things seem to happen that otherwise would not. Things get done faster, cheaper, and better; new methods for lifting a weight or quenching a thirst are invented; the average guy ends up with more of the stuff he likes at a lower price than before. That is why, in the end, socialism collapsed like a rotten wall: it did not allow its people to compete and, as a result, it not only made their economic life miserable, but strangled their hearts and souls.
Michele Boldrin
Then the shit hit the fan.
John Kenneth Galbraith
In a basic agricultural society, it's easy enough to swap five chickens for a new dress or to pay a schoolteacher with a goat and three sacks of rice. Barter works less well in a more advanced economy. The logistical challenges of using chickens to buy books on Amazon.com would be formidable.
Charles Wheelan
The ceremonial differentiation of the dietary is best seen in the use of intoxicating beverages and narcotics. If these articles of consumption are costly, they are felt to be noble and honorific. Therefore the base classes, primarily the women, practice an enforced continence with respect to these stimulants, except in countries where they are obtainable at a very low cost. From archaic times down through all the length of the patriarchal regime it has been the office of the women to prepare and administer these luxuries, and it has been the perquisite of the men of gentle birth and breeding to consume them. Drunkenness and the other pathological consequences of the free use of stimulants therefore tend in their turn to become honorific, as being a mark, at the second remove, of the superior status of those who are able to afford the indulgence. Infirmities induced by over-indulgence are among some peoples freely recognised as manly attributes. It has even happened that the name for certain diseased conditions of the body arising from such an origin has passed into everyday speech as a synonym for "noble" or "gentle". It is only at a relatively early stage of culture that the symptoms of expensive vice are conventionally accepted as marks of a superior status, and so tend to become virtues and command the deference of the community; but the reputability that attaches to certain expensive vices long retains so much of its force as to appreciably lesson the disapprobation visited upon the men of the wealthy or noble class for any excessive indulgence. The same invidious distinction adds force to the current disapproval of any indulgence of this kind on the part of women, minors, and inferiors. This invidious traditional distinction has not lost its force even among the more advanced peoples of today. Where the example set by the leisure class retains its imperative force in the regulation of the conventionalities, it is observable that the women still in great measure practise the same traditional continence with regard to stimulants.
Thorstein Veblen
Sooner or later the Internet will become profitable. It's an old story played before by canals, railroads and automobiles.
Paul A. Samuelson
The oldest problem in economic education is how to exclude the incompetent. A certain glib mastery of verbiage-the ability to speak portentously and sententiously about the relation of money supply to the price level-is easy for the unlearned and may even be aided by a mildly enfeebled intellect. The requirement that there be ability to master difficult models, including ones for which mathematical competence is required, is a highly useful screening device.
John Kenneth Galbraith
A person buying ordinary products in a supermarket is in touch with his deepest emotions.
John Kenneth Galbraith
That economics has a considerable conceptual apparatus with an appropriate terminology can not be a serious ground for complaint. Economic phenomena, ideas, instruments of analysis exist. They require names. Education in economics is, in considerable measure, an introduction to this terminology and to the ideas that it denotes. Anyone who has difficulties with the ideas should complete his education or, following an exceedingly well-beaten path, leave the subject alone. It is sometimes said that the economist has a special obligation to make himself understood because his subject is of such great and popular importance. By this rule the nuclear physicist would have to speak in monosyllables.
John Kenneth Galbraith
You can't fool Mother Nature, and you can't fool market forces (at least not for long)
Richard McKenzie
It is not in the power of governments to increase the supply of one commodity without a corresponding restriction in the supply of other commodities more urgently demanded by consumers. The authority may reduce the price of one commodity only by raising the prices of others.
Ludwig von Mises
When I was an undergraduate studying economics under Professor Arthur Smithies of Harvard, he asked me in class one day what policy I favored on a particular issue of the times. Since I had strong feelings on that issue, I proceeded to answer him with enthusiasm, explaining what beneficial consequences I expected from the policy I advocated. “And then what will happen?” he asked. The question caught me off guard. However, as I thought about it, it became clear that the situation I described would lead to other economic consequences, which I then began to consider and to spell out. “And what will happen after that?” Professor Smithies asked. As I analyzed how the further economic reactions to the policy would unfold, I began to realize that these reactions would lead to consequences much less desirable than those at the first stage, and I began to waver somewhat. “And then what will happen?” Smithies persisted. By now I was beginning to see that the economic reverberations of the policy I advocated were likely to be pretty disastrous— and, in fact, much worse than the initial situation that it was designed to improve. Simple as this little exercise might seem, it went further than most economic discussions about policies on a wide range of issues. Most thinking stops at stage one.
Thomas Sowell
The values of commodities are directly as the times of labour employed in their production, and are inversely as the productive powers of the labour employed.
Karl Marx
What the working man sells is not directly his labour, but his labouring power, the temporary disposal of which he makes over to the capitalist. this is so much the case that I do not know whether by the English Laws, but certainly by some Continental Laws, the maximum time is fixed for which a man is allowed to sell his labouring power. If allowed to do so for any indefinite period whatever, slavery would be immediately restored. Such a sale, if it comprised his lifetime, for example, would make him at once the lifelong slave of his employer.
Karl Marx
Economists are generally negligent of their heroes.
John Kenneth Galbraith
It is not the fault of the entrepreneurs that the consumers,the people, the common man,prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling bad things than in selling good things. His profits are the greater the better he succeeds in providing the consumers with those things they ask for most intensely.
Ludwig von Mises
We economists don't know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, just pass a law that retailers can't sell tomatoes for more than two cents per pound. Instantly you'll have a tomato shortage. It's the same with oil or gas.
Milton Friedman
The elimination of profit, whatever methods may be resorted to for its execution, must transform society into a senseless jumble.
Ludwig von Mises
When the solution to a given problem doesn’t lay right before our eyes, it is easy to assume that no solution exists. But history has shown again and again that such assumptions are wrong. This is not to say the world is perfect. Nor that all progress is always good. Even widespread societal gains inevitably produce losses for some people. That’s why the economist Joseph Schumpeter referred to capitalism as “creative destruction.” But humankind has a great capacity for finding technological solutions to seemingly intractable problems, and this will likely be the case for global warming. It isn’t that the problem isn’t potentially large. It’s just that human ingenuity—when given proper incentives—is bound to be larger. Even more encouraging, technological fixes are often far simpler, and therefore cheaper, than the doomsayers could have imagined. Indeed, in the final chapter of this book we’ll meet a band of renegade engineers who have developed not one but three global-warming fixes, any of which could be bought for less than the annual sales tally of all the Thoroughbred horses at Keeneland auction house in Kentucky.
Steven D. Levitt
So much barbarism, however, still remains in the transactions of most civilized nations, that almost all independent countries choose to assert their nationality by having, to their inconvenience and that of their neighbors, a peculiar currency of their own.
John Stuart Mill
Money is a public good; as such, it lends itself to private exploitation.
Charles P. Kindleberger