Economics

We do not need big plans and visions and we do not need government to think on our behalf. We need the state to guarantee property rights, enforce contracts and provide a stable set of political and economic institutions.

It came as a bit of a surprise when I discovered a new paper written by two, well, economists claiming that economics makes you happy. To add to my sense of astonishment, the economists were German and the objects of their study were young German economists.

Ludwig Erhard’s insistence on the social market economy made West Germany rich after the War. His ideas could well help to keep developed countries prosperous under different circumstances today.

The older I get, the more I feel at home in the hardly changing world of government-provided services. It’s scary, and I am only 39.

In an ideal world, an economic liberal like myself would happily enter a debate supporting the moot that it is financial fundamentals driving investment markets. But it is not an ideal world, neither for economic liberals nor for investment markets.

Doctorates, warranties and Andie MacDowell may differ in many ways. One thing they have in common: They are strong signals.

Politicians play with the price system at their peril. Yet there are minimum wage laws, rent controls, price controls and other ways of distorting prices. Usually introduced with best intentions, these measures prevent markets from working properly.

Knowing something about the development of economics can save you from having to reinvent the wheel. As Hayek once said, “in economics you can never establish a truth once and for all but have always to convince every generation anew.” Economic knowledge easily gets forgotten if one is unaware of its history.