Michael Rozeff Archive
Who Captures Whom? The Case of Regulation
The Chicago School of economics favored and still favors the theory of "regulatory capture.". Under this theory, an industry or some portions of an industry cultivate government to obtain laws and rules that favor the industry. The government trades favors for what it wants. But there is more to the story. The government not only baits the trap; it also attempts to crush market substitutes that spring up in response to quality declines. FULL ARTICLE
Stiglitz is Wrong on Government
Joseph Stiglitz shared the Nobel Prize in 2001 partly on the basis of an important paper of his (with Greenwald) that says interventions can make everyone better off. He is a prolific, outspoken, and outstanding spokesman for the pro-government school. Stiglitz sees market imperfections that are remediable by government everywhere he looks; and this paper is supposed to provide the intellectual and analytical foundation for government intervention. Here I argue that this important and oft-cited paper completely fails to prove the potential worth of government interventions. FULL ARTICLE
What Do Austrians Mean by "Rational"?
If human action always aims at a purpose, which by definition it does, then human action must be rational, that is, consistent with reason or guided by one's will and intellect. It can never be termed irrational. What then is irrationality? According to Mises, irrationality is not the opposite of action or purposeful behavior, that is, it is not willed behavior without a purpose. All willed behavior has a purpose. Irrational behavior is behavior induced by response to stimuli, behavior that lies beyond the control of a person's will or volition. FULL ARTICLE
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