The custom of tipping is an excellent demonstration of the market's ability to solve real-world problems of dispersed knowledge and transactions costs in order to ensure the maximum satisfaction of consumer preferences. Normally taken for granted, tipping is in fact a beautiful illustration of the power of voluntary, decentralized exchange.
Why shouldn't the worker who is willing to render the best services for the least pay be the one who gets the job? Instinctively, most of us recoil in disgust at the suggestion that wages should reflect nothing more than the cold calculus of supply and demand. Yet few of us realize just how essential this "cold calculus" is for the long-run welfare of laborers themselves.
The energy problems that plague this country are government created. From restrictions on drilling to U.S. foreign policy blunders, the government has been a veritable "bull in a china shop" when it comes to energy policy. Another layer of political action, even when suggested by "free-market economists," will not solve our problems.
Why would some folks hate globalization as it is properly understood and conceived? Tibor Machan explains.
In the real world, it is not enough to have demand for goods: one must have the means to accommodate people's desires.
British economist A.C. Pigou was instrumental in developing the theory of externalities. The theory examines cases where some of the costs or benefits of activities "spill over" onto third parties. When it is a cost that is imposed on third parties, it is called a negative externality. When third parties benefit from an activity in which they are not directly involved, the benefit is called a positive externality. The study of such situations, a part of welfare economics, has been an active area of research since Pigou's efforts early in the twentieth century.
Doctors and patients fed up with the current medical system are negotiating something entirely new, and the AMA is very unhappy.
Conservation is not an exercise in saving us from ourselves. It is an attempt by the political classes to criminalize choices that we would make in a free market.
According to Tom Brokaw, the "heroic consumer" is keeping the economy from falling into recession. William Anderson deconstructs the Keynesian mythology of spending.
Neoclassical economists are apt to define away individual differences by packing them into a homogeneous category called "tastes." But this quarantines what economists should be studying.
