For most economists and financial commentators, the heart of economic growth is the increase in the demand for goods and services. The view is that increases or decreases in demand are behind rises and declines in the economy’s production of goods and services. It is also held that the economy’s total output increases by a multiple of the change in expenditure by government, consumers, or businesses.

An example will illustrate how an increase in spending raises overall output by a multiple of this spending.

With the general election campaigns heating up in the UK, the two major parties are playing a game of duelling manifestos. The Conservatives are upholding a classic interventionist line of fixing energy prices and increasing the national living wage, but Labour has brought to the table a unique potpourri of disastrous ideas.

On the same day that Attorney General Jeff Sessions announced that he would attempt to revamp the war on drugs, it came to my attention that potentially more important events regarding the war on drugs were taking place in Vermont, the “freedom and unity” state.

Attorney General Jeff Sessions announced last week that federal law enforcement agencies and federal prosecutors should work harder to charge suspects with more serious crimes and seek longer prison terms. 

This move by Sessions signals a departure from the policies of AG Eric Holder under Obama who had employed policies designed to focus on more serious crimes and lesson the number of defendants charged with non-violent drug offenses. 

Brink Lindsey, Vice President for Research at the Cato Institute, argues that contemporary libertarianism has followed the siren song of “natural rights,” in a way that renders it unable to have a wide public appeal. In a recent article, “The Poverty of Natural Rights Libertarianism,” Lindsey writes:

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The American Economic Review has published Esther Duflo’s Richart T. Ely Lecture, “The Economist as Plumber” (ungated version here, video version here). The essay summarizes Duflo’s vision of economics. First, economics is primarily useful as a policy tool; i.e., the main role of the economist is to advise governments in designing laws and regulations.

Firefighting isn’t what it used to be. Thanks to fire suppression technology, structural fires are now very rare, and statistics show that firefighters rarely fight fires anymore. Mostly, firefighters respond to run-of-the-mill medical emergencies in fancy million-dollar trucks. Governing magazine lays out the change over time: 

If inflation is the health of the State, how and in what way has government generated inflation in the history of the United States? The following case studies illustrate this process, as well as the important connection between inflation and centralized State control of the economy. They illustrate also the connection of inflation with mercantilism—the use of economic regulation and intervention by the State to create special privileges for a favored group of merchants or businessmen.

Anybody who has ever dealt with internet lag should realize that bandwidth is a finite resource. Like any other economically scarce commodity, the price and profit mechanisms of the market serve to direct the allocation of this resource as efficiently as possible. This is why people pay more for faster speeds or larger data caps.