“The Road To Serfdom” by Fredrick Hayek is a disappointing book. Conservative bloggers often race about it claiming it has great insights into modern politics. While I disagree with the Austrian school of economics I read it to here the other point of view. I found it a boring, out dated book that didn’t have anything particularly original or insightful to say. It’s mainly concerned with saying a totalitarian state where the government controls everything doesn’t work (you don’t say). The book might have been relevant when it was published, but I am at a loss to see its use today. I think to a large extent Hayek has been misunderstood. I have regularly heard people use Hayek to criticize … Continue reading “Misunderstanding Hayek And The Road To Serfdom”
Month: September 2012
Do Generous Welfare Benefits Lead To High Unemployment? (Long Version)
(This was originally written as a college essay. For this reason it is 3,000 words long and contains a lot of economics terms references. It is meant as a help for anyone who wants an in-depth study of the topic with supporting facts and figures. For a short version in plain English see here. The essay was marked the best in my class of 80 students. It won the Undergraduate Award 2012 in Economics along with someone from Yale. I’m not trying to boast but I’m over the moon.) Abstract This paper discusses the conventional wisdom that unemployment benefits create a disincentive to work, the so-called “welfare trap”. It examines if higher benefit levels or longer benefit durations lead to higher unemployment … Continue reading “Do Generous Welfare Benefits Lead To High Unemployment? (Long Version)”
The Mythical Laffer Curve
Conservatives everywhere condemn the use of tax increases for fear of the Laffer Curve. This is the idea that if taxes are too high, people will lose the incentive to work and therefore revenue will actually decrease. It is most famous for its counter-intuitive argument that a tax cut could increase revenue. Unfortunately there is little or no evidence to support this claim. History clearly shows that cutting taxes does not increase revenue. The Laffer curve is a political idea used to justify tax cuts for the rich. It is not based on sound economics. Most economists know the Laffer Curve isn’t true. An IGM survey of economists found that not a single one of them agreed that a tax … Continue reading “The Mythical Laffer Curve”