An old myth of economics is that in the late nineteenth century, a period of several decades of price deflation, monopoly was running rampant in American industry. There was supposedly “rampant cartelization” occurring, as legal scholar Richard Posner wrote in his book, Antitrust Economics. According to the “mainstream” view (but not the view of Austrian School economists), this “rampant” monopolization, like all forms of monopolization, supposedly led to reductions in output and subsequently higher prices.

One of the things that every college student who takes a course in principles of economics is taught is that the so-called public utilities (electricity, water supply, natural gas, etc.) have been government-regulated monopolies ever since the early twentieth century because government stepped in to save Americans from the evils of free-market or “natural” monopolies.

Both of the major political parties in the U.S. long ago adopted the rhetoric of the socialist left with regard to tax deductions. The mortgage interest deduction, the state and local tax deduction, and all others are routinely denigrated as either “loopholes” that need to be slammed shut or as sources of endless confusion.

It took several decades but macroeconomic model builders, who consider themselves to be the elite of the economics profession, have finally discovered freshman-level principles of economics and have used that discovery to finally debunk FDR’s New Deal. (Beginning in the 1930s Austrian School economists like Henry Hazlitt recognized the truth about the New Deal: It made the Great Depression deeper and longer lasting.)

Now that no thinking person believes that either socialism or government interventionism can do anything but destroy prosperity, totalitarian statists around the world are changing their tune and saying that prosperity doesn’t really matter after all; what matters is how happy we are. And, they say, that is what government can be really, really good at—making us happy.

The voluminous literature on “market failure” is, for the most part, a collection of thousands of illustrations of the Nirvana Fallacy—comparing real-world markets to an unattainable utopian ideal (perfect competition), and then denouncing markets because they fall short of utopia or Nirvana. Having “proven” that markets “fail,” the analyst then proposes government intervention under the assumption that no such failures will infect government.

Under the dubious proposition that the Great Recession was caused by a sudden outburst of greed (as though greed did not always exist), a new growth industry in America is the teaching of “business ethics” at the university level. This is about as appropriate, however, as instruction in marital fidelity by Tiger Woods or a course on fine dining by Jeffrey Dahmer.

Millions of Americans remained unemployed several years into the “Great Recession” because our politicians perpetuate a dangerous myth—the myth of government job creation. Government spending cannot create jobs on net; it can only destroy private sector jobs in order to create government jobs. The taxes, government debt, or inflationary money creation by the Fed that finances government job creation depresses the private sector and destroys job creation there in order to finance government-sector jobs.

Marriage affects men and women differently in terms of their earning abilities. There are exceptions, but in general women are more likely to drop out of the workforce for a period of time because of child rearing and other chores (that most men shirk). Consequently, they fall behind their male counterparts in terms of human capital accumulation, productivity, and wages. This, far more than discrimination, is why male wages exceed female wages on average.

ABERLOFF, BRUCE, asymmetric information, 193

academy

advice giving to government, 10, 11

Austrian School and the Chicago School on market failure, 12

Dalberg-Acton, John (Lord Acton), states’ rights and the surrender of General Robert E. Lee, 57

Adair, Douglas, on Alexander Hamilton and mercantilism, 114

Adams, John, Sedition Act, 60

agglomeration economies, 159

agriculture. See farming

Alabama, list of regulatory functions, 19

Alcoa, anti-trust regulation, 22

Allen, William J., imprisonment of, 94