The hottest Economic Theory Substack posts right now

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Why We All Care About Inequality (But Are Loath to Admit It)

Global Inequality and More 3.0 • 1479 implied HN points • 07 Feb 26
🌍 World Politics Economic Theory
  1. People care about inequality because other people’s incomes affect their own wellbeing through social comparison, a sense of justice, and self-worth, not just because of how much they can buy.
  2. Focusing only on poverty while ignoring inequality is inconsistent, since concern for the poorest still relies on judgments about how income is distributed and who counts as a relevant peer.
  3. Opposition to studying or criticizing inequality often protects the status quo, and people’s reactions to inequality reflect motives like fairness or disgust as well as envy.

Progressives take their best shot at Abundance (but it falls short)

Noahpinion • 14588 implied HN points • 17 Jun 25
🇺🇸 U.S. Politics Economic Theory
  1. Critics of the book 'Abundance' often haven't read it and misunderstand its ideas. Instead of addressing the arguments, they focus on insulting the authors.
  2. The backlash against 'Abundance' seems to stem from its author Ezra Klein's influence rather than the book's actual content. Some progressives feel threatened by a shift in focus towards empowering the government.
  3. One critic, Sandeep Vaheesan, does engage with the book but misinterprets its core arguments. He points out that while 'Abundance' suggests empowering the government, it doesn't clearly outline the specific actions needed to achieve that.

From under the rubble

Global Inequality and More 3.0 • 1751 implied HN points • 01 Dec 25
đź’ľ History Economic Theory
  1. Yugoslav communists faced challenges after breaking away from Soviet influence, leading them to develop a unique interpretation of socialism focused on worker management and collective ownership.
  2. Two main schools of thought emerged among Yugoslav economists: the income price school, which believed workers should prioritize their own income, and the profit school, which emphasized maximizing profits similar to capitalist firms.
  3. The discussions and debates among these economists became less relevant after the breakup of Yugoslavia, but recent research has helped recover and critique their ideas, highlighting a significant part of economic history.

Ronald Coase, Abba Lerner, and the Calculation Controversy

David Friedman’s Substack • 359 implied HN points • 06 Feb 26
đź’Ľ Business Economic Theory
  1. The Lerner–Lange model tries to mimic market outcomes by having a central board set prices and firms produce where price equals marginal cost, but it runs into incentive problems because state-owned firms and workers can inflate costs when they aren’t residual claimants.
  2. Firms exist because using market prices has transaction costs like searching and bargaining, so organizing activities inside a firm can be cheaper; firms grow until rising managerial and coordination costs outweigh those transaction-cost savings.
  3. The practical implication is that neither pure planning nor pure markets are always best: mixed systems can combine the advantages of both, and centralized planning is more workable at small scales (families or communes) than across large societies.

Peter Thiel I Respectfully Disagree

Points And Figures • 959 implied HN points • 08 Nov 25
🇺🇸 U.S. Politics Economic Theory
  1. Capitalism isn't working well for everyone because many believe the system is rigged against them, especially when they see government influence in the economy. People need to engage with capitalism to truly experience its benefits.
  2. High costs of living and student debt are problems created by government interventions rather than capitalism itself. Removing government from these areas could help restore a more balanced economic landscape.
  3. The education system in the U.S. is heavily influenced by government and unions, which can lead to poorer outcomes. More competition and school choice could improve education and prepare people for opportunities in a capitalistic society.
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The Frankfurter Index

Doomberg • 6098 implied HN points • 30 Jan 25
đź’° Finance Economic Theory
  1. The price of everyday items can help us understand the true value of money over time. For example, the cost of hot dogs compared to the price of gold shows how much the dollar has changed.
  2. While the value of the US dollar has been decreasing, it's important to look at prices in relation to gold to see the bigger picture. Gold has been a constant measure of value throughout history.
  3. Some people worry that we will run out of oil, but advancements in technology suggest otherwise. Oil and gas companies are innovating and have plenty of resources available.

Why Boom-Bust Cycles Validate Austrian Economics

QTR’s Fringe Finance • 25 implied HN points • 21 Feb 26
đź’° Finance Economic Theory
  1. Artificially low interest rates from central bank credit expansion lure entrepreneurs into projects that look profitable but aren’t supported by real consumer preferences, creating a boom that later collapses when policy tightens.
  2. Even if businesses correctly anticipate rate moves, changes in the money supply divert resources into non‑wealth‑generating activities, and variable, unpredictable time lags make it impossible to reliably time or avoid those distortions.
  3. Because firms must chase observable demand or risk failure, the harm from expansionary monetary policy becomes self‑reinforcing and cannot simply be undone by better expectations, so boom‑bust cycles persist.

Too much or not enough of Ricardo?

Global Inequality and More 3.0 • 1102 implied HN points • 13 Jun 25
đź’° Finance Economic Theory
  1. David Ricardo's economic ideas are still influential, but they often ignore important social classes and conflicts. It's crucial to consider how class affects the economy.
  2. The effects of globalization are often viewed just through a Western lens, which can overlook the benefits it has brought to many people in other parts of the world. This creates a skewed understanding of economic progress.
  3. Critiquing historical economic figures like Ricardo should include recognizing their contributions to understanding social dynamics, not just focusing on their abstract theories.

Chartbook 342 Are we all dead in the long run? John Maynard Keynes and the politics of time

Chartbook • 2617 implied HN points • 22 Dec 24
🇺🇸 U.S. Politics Economic Theory
  1. Keynes' famous quote 'In the long run we are all dead' is often misunderstood. It doesn't mean he didn't care about the future; instead, he criticized how some economists ignore present issues in favor of uncertain future predictions.
  2. Keynes saw the future as full of possibilities, suggesting we should focus on bold and significant plans that address current crises rather than worrying too much about long-term outcomes.
  3. He believed in experimentation and creativity in political action, encouraging open-ended approaches to solve today's problems while keeping an eye on the potential futures we can create together.

This Entire Piece Is Wrong on Trade

Points And Figures • 719 implied HN points • 09 Jul 25
🇺🇸 U.S. Politics Economic Theory
  1. Free trade generally benefits everyone by allowing countries to use their resources more efficiently. This helps spur innovation because companies can access materials and knowledge globally.
  2. While free trade has many advantages, there are limits, especially when it comes to national security. Some products might be better produced domestically to ensure safety and reliability.
  3. The trade deficit is often misunderstood. It's not always a sign of failure but can indicate that a country is reallocating resources for higher-value production and investments.

Inequality is overwhelmingly between firms, not within

Something to Consider • 99 implied HN points • 13 Jul 24
đź’° Finance Economic Theory
  1. Income inequality is mainly based on differences between companies, not just between workers in the same company. Some companies pay their workers a lot more than others, and that's a big part of why inequality has grown.
  2. About 40% of this inequality comes from workers choosing to work at different firms. The other 20% is because some firms are simply more productive or profitable than others.
  3. We should focus more on how many highly skilled workers are earning a lot overall, rather than just looking at top executives. More people than ever have high incomes, showing that there's great potential for those who can add value in the economy.

The existence of the monopsony model does not imply a minimum wage is optimal

Something to Consider • 99 implied HN points • 12 Jul 24
🇺🇸 U.S. Politics Economic Theory
  1. The monopsony model suggests there might be just one buyer for labor, which can create wage issues. However, just because this model exists doesn't mean we should automatically support a minimum wage.
  2. Implementing a minimum wage isn't straightforward because we can't easily measure supply and demand for labor. Different firms have different needs, making a one-size-fits-all wage unrealistic.
  3. Studies on minimum wage effects are mixed, but many show that while it can help some workers, it can also lead to slight job losses and reduced hours. It's also more complex than just raising pay; sometimes, directly giving support to people may be a better solution.

DeFi Education's Holiday Book List 2023

DeFi Education • 739 implied HN points • 05 Dec 23
đź’° Finance Economic Theory
  1. The holiday season is a great time for reading, and the recommended books cater to different interests for personal growth.
  2. Books like 'The Alchemy of Finance' and 'Undermoney' offer unique insights into finance and investing, influenced by real experiences and theories.
  3. Many of the books are available for free online, making it easy for anyone to dive into these enriching materials.

Physiocratic Platform: Transaction Tax

Contemplations on the Tree of Woe • 1266 implied HN points • 11 Jan 25
🇺🇸 U.S. Politics Economic Theory
  1. Transaction taxes are small fees added to all money exchanges, helping to fund government services. They can be applied to everything from buying groceries to trading stocks.
  2. A broad transaction tax could simplify the tax system by ensuring everyone contributes, especially from financial activities that often go untaxed. It aims to promote fairness among all economic participants.
  3. The proposed tax system would lower the overall tax burden for most people while ensuring that the rich and businesses pay their fair share, potentially reducing unfairness in current tax practices.

Futarchy's fundamental flaw

DYNOMIGHT INTERNET NEWSLETTER • 546 implied HN points • 12 Jun 25
🇺🇸 U.S. Politics Economic Theory
  1. Futarchy uses prediction markets to make decisions, but it has a basic flaw. It relies on conditional probabilities that don't show cause and effect, which means it can't actually provide reliable information for making choices.
  2. Just because high vitamin D levels are linked to lower death rates, it doesn't mean vitamin D causes those lower rates. Other factors like being healthier or wealthier often play a role. The same idea applies to Futarchy: just seeing a correlation isn’t enough to make decisions.
  3. While conditional prediction markets can give useful insights, they should be treated like any other statistic—helpful but not the only factor to consider. We need to recognize their limits and look for better methods to understand cause and effect.

The Physiocratic Platform: Taxation

Contemplations on the Tree of Woe • 1560 implied HN points • 11 Oct 24
🇺🇸 U.S. Politics Economic Theory
  1. There are many types of taxes in the U.S., which can make the system very confusing. The government collects money through taxes like income tax, sales tax, and property tax to fund its activities.
  2. A proposed way of understanding taxes is to link them directly to the services the government provides. For example, taxes could cover the cost of maintaining order and protecting citizens.
  3. One suggested tax is a poll tax, which would be paid by everyone, regardless of income. This tax could help fund voting processes and personal protection, though it might be seen as unfair for low-income households.

The God's-eye View of the Economy

In My Tribe • 410 implied HN points • 08 Jul 25
đź’° Finance Economic Theory
  1. Economists often view individuals and firms as 'optimizers' who try to get the best out of their choices. This means they make decisions to maximize their satisfaction and profits.
  2. Pareto Optimality is a key concept where resources are distributed in a way that no one can be made better off without making someone else worse off. However, just because a situation is Pareto Optimal doesn't mean it’s fair or ideal.
  3. Governments are seen as having the role to correct market failures and redistribute wealth for a fairer society. But not everyone agrees on whether governments actually have the capability or motivation to do this well.

Why Can’t I Have My Own Money Printer?

QTR’s Fringe Finance • 40 implied HN points • 13 Jan 26
đź’° Finance Economic Theory
  1. If an individual could print money, they'd likely stop producing and live off others because printing is easier than earning, which creates money without creating goods or services.
  2. If everyone printed money, production would collapse and the economy would be flooded with worthless bills, since there would be lots of money but few goods to buy.
  3. The government can also create money and temporarily boost demand, but that too can't substitute for real production, raising a hard question about why private money printing is illegal while institutional money creation is allowed.

My Social Journey Toward the Right

In My Tribe • 1245 implied HN points • 15 Nov 24
🇺🇸 U.S. Politics Economic Theory
  1. Beliefs are influenced by the people we trust. For example, trusting certain professors or colleagues can shape your view on politics.
  2. Life experiences, like working in different environments, can also change your political stance. Being around business-minded people can lead you to adopt more right-leaning views.
  3. Understanding complex issues, such as economics and evolution, can lead to a more nuanced perspective on human behavior and society, making one appreciate different political ideologies.

Macroeconomics: Some Defects

In My Tribe • 486 implied HN points • 29 May 25
đź’° Finance Economic Theory
  1. Macroeconomics often treats the economy like a simple factory that can be controlled centrally, but the reality is much more complex with many different goods and services. It's not just about one measure like GDP.
  2. Many economics students learn about macro without understanding the important role banks play in the economy. Banks help manage risks and their crises can lead to major economic downturns.
  3. Macroeconomic theories are often presented as timeless, but they should consider historical changes and events that shape the economy. Each economic crisis is unique and influenced by different circumstances over time.

The Physiocratic Platform: Land Tax

Contemplations on the Tree of Woe • 1108 implied HN points • 27 Oct 24
🇺🇸 U.S. Politics Economic Theory
  1. A land value tax (LVT) is different from a property tax because it only taxes the value of the land itself, not any buildings on it. This means it encourages landowners to use their land efficiently.
  2. Implementing a 2% LVT could raise a lot of money for government services while avoiding economic issues that other taxes might cause. It's seen as a less harmful option for funding government needs.
  3. There are ways to protect homeowners from being forced out of their homes due to rising land taxes, like exemptions for primary residences or allowing tax deferrals until the property is sold.

Is Dave Ramsey right?

Economic Forces • 18 implied HN points • 29 Jan 26
đź’° Finance Economic Theory
  1. Simple rules and mental buckets exist because making perfect decisions about every dollar is costly. Heuristics cut cognitive effort and often produce good enough outcomes.
  2. Institutions like prices, brands, and cultural norms compress information and lower the mental cost of choices, letting people compare options quickly instead of doing detailed calculations.
  3. Competition and real budget constraints discipline behavior so many heuristics survive by being survivable, not perfect, but attention and memory limits can still create systematic, predictable mistakes in some contexts.

Rich and Poor: How Things Work

Fake Noûs • 702 implied HN points • 18 Jan 25
🇺🇸 U.S. Politics Economic Theory
  1. The left and right have very different views on how wealth is created and who deserves it. Leftists see rich people as taking advantage of workers, while rightists believe everyone contributes to wealth creation.
  2. Many people can move up the economic ladder, and success isn't solely about one's environment or education. Personal talent and hard work play a big role.
  3. The rich provide essential resources that support society, while the poor often rely on the wealthy for stability. Instead of resenting the rich, the poor could recognize their contributions.

Economic Methodology

David Friedman’s Substack • 242 implied HN points • 01 Aug 25
đź’Ľ Business Economic Theory
  1. Economic models don't need to be realistic; what's important is whether they can make accurate predictions about the future. A good model will simplify complex truths while still capturing what really matters.
  2. Being a true economist means being willing to change your views based on evidence, not just sticking to ideology. If someone’s beliefs don’t change even when faced with solid economic arguments, they might just be an economist during work hours.
  3. History shows that both Keynes and Friedman had valuable insights, even if their ideas contradict each other. Each has built on the work of the other, which is how economics progresses, just like in any science.

DeepSeek: Is this Jevon's Cope?

Mule’s Musings • 635 implied HN points • 29 Jan 25
đź•ą Technology Economic Theory
  1. Price changes can greatly influence how people feel about markets, leading to strong swings in sentiment. This idea is evident in the ongoing debates around AI infrastructure spending.
  2. The Jevons Paradox suggests that as technology makes things cheaper, demand often increases instead of decreases. This means that even with better technology, we may use more resources rather than less.
  3. There is a real risk that supply can exceed demand in the short term, impacting the market negatively. While the long-term picture may be optimistic, the immediate situation can be very different.

The O-Ring Theory of Economic Development

Something to Consider • 59 implied HN points • 15 Jun 24
đź’Ľ Business Economic Theory
  1. Production can be broken down into many steps, and a failure at any step can ruin the entire process. The skill level of workers, known as human capital, plays a key role in this.
  2. Regions can be stuck in a bad place with low investment in education due to a lack of returns. Immigration can help individuals escape this situation, leading to better education and economic growth in both their new home and their original country.
  3. Trade policies can significantly impact production. Quotas can be much more damaging than tariffs because they disrupt the entire production process, leading to larger losses than expected.

An Open Letter To Bill Maher

QTR’s Fringe Finance • 77 implied HN points • 09 Nov 25
đź’° Finance Economic Theory
  1. The gap between rich and poor is getting bigger, which is a major problem that many people are angry about.
  2. Inflation is caused by poor choices in monetary policy, and both political parties share the blame for not fixing this issue.
  3. If we don't address these problems, we could face a serious crisis in the economy or a social revolt from those feeling left behind.

Did Wages Really Rise The Fastest In 28 Years?

Japan Economy Watch • 439 implied HN points • 09 Jul 23
đź’° Finance Economic Theory
  1. Wages per hour, not per month, need to be examined to truly understand wage growth
  2. The data showing nominal wages growth doesn't necessarily reflect a true increase in pay, as it may be influenced by other factors like scheduled hours of work
  3. The focus on nominal wages by the Bank of Japan is aimed at achieving a specific inflation target, which may not fully account for the real impact on consumers

Crypto is chain-letter technology

In My Tribe • 470 implied HN points • 26 Jan 25
đź”® Crypto Economic Theory
  1. Cryptocurrencies like Bitcoin can be compared to chain letters, where early participants may make money while later ones might lose everything. It only works as long as new buyers keep joining in.
  2. The American dollar, being a fiat currency, also operates like a chain letter. It's based on trust and belief rather than a physical backing, and its value can decline over time.
  3. Some people view Bitcoin as a safe way to protect against inflation, but switching from the US dollar to Bitcoin may not solve the fundamental issues with trust and value in these systems.

Economics Links, 1/4/2024

In My Tribe • 501 implied HN points • 04 Jan 25
đź’° Finance Economic Theory
  1. Paul Krugman talks about how gambling on asset prices is like a natural Ponzi scheme. People get caught up with optimism, which can lead to bigger financial risks.
  2. There are new types of market leaders, like Michael Saylor of MicroStrategy, who influence markets and create a kind of cult-like following among investors.
  3. In Argentina, Javier Milei is changing things by cutting government departments and privatizing state companies. His aim is to weaken the power of his political rivals.

DRAFT: Prosperity & "Utopia": The Moving Target :: History of Economic Growth Lecture Notes 1.5

Brad DeLong's Grasping Reality • 199 implied HN points • 17 Jun 25
đź“– Philosophy Economic Theory
  1. Utopias represent different ideas of a perfect society, like order, simplicity, pleasure, freedom, and collective purpose. However, real examples often don't match these ideals.
  2. Economic growth is important, but it doesn't guarantee happiness or satisfaction. It's complicated because people might just want more, rather than knowing what truly makes them happy.
  3. Historical models of societies like Sparta, Arcadia, and Rome show that chasing perfection can lead to problems. It's vital to think critically about what we truly want from life.

The Sword of Damocles

The Dollar Endgame • 319 implied HN points • 30 Aug 23
đź’° Finance Economic Theory
  1. The global financial system heavily depends on the US dollar, causing a constant demand for dollars worldwide.
  2. Triffin's Dilemma and the Dollar Milkshake Theory highlight the systemic risks and implications of the US dollar's dominance.
  3. The Fed plays a critical role in stabilizing the global financial system by supplying dollars; any missteps could lead to widespread financial instability.

Economics Links

In My Tribe • 455 implied HN points • 21 Dec 24
đź’° Finance Economic Theory
  1. Academic economics has a culture that can feel snobby. Many economists avoid challenging well-known figures out of fear of seeming unimportant.
  2. The job market has changed a lot over the years, moving from agriculture to manufacturing, and now to service-based jobs. This shift reflects changes in demand and productivity.
  3. Cutting regulations can significantly lower prices, leading to increased real income for people. This could result in economic growth that exceeds what many economists expect.

Inflation And The Moral Erosion of Society

QTR’s Fringe Finance • 46 implied HN points • 19 Nov 25
đź’° Finance Economic Theory
  1. Inflation is often misunderstood as just rising prices, but it's really about the government increasing money supply. This change in meaning makes it hard for people to see who is really responsible for the problem.
  2. When money loses value due to inflation, it affects people's lives deeply. It rewards borrowing and spending over saving, changing how society thinks about money and effort.
  3. To fix the issues caused by inflation, we need to go back to honest money that retains its value. Sound money can help society reconnect with hard work and planning for the future.

There Are Three Ways to Get Rid of Inflation. One Is "Impossible" and One Will Destroy the Country.

Surviving Tomorrow • 314 implied HN points • 18 May 23
đź’° Finance Economic Theory
  1. Inflation impacts different groups differently: savers punished, poor robbed, debtors rewarded.
  2. Eradicating inflation can be done by destroying the working class, taxing the rich, or creating anti-inflation money.
  3. Anti-inflation money involves investing in new assets, taxing back excessive money, and destroying it for common well-being.

Fischer Black vs. Monetarism

In My Tribe • 455 implied HN points • 14 Dec 24
đź’° Finance Economic Theory
  1. Fischer Black believed that both money supply and price levels are based on collective beliefs rather than strict numbers. People accept money because they trust others will accept it too.
  2. Inflation and prices are influenced more by market behavior and expectations rather than solely by money supply. This means prices can change based on what people think will happen in the future.
  3. The relationship between money and prices might be less reliable than before. As people use less cash and more digital forms of payment, traditional ways to predict inflation might not work well anymore.

Economics Links

In My Tribe • 394 implied HN points • 24 Dec 24
đź’° Finance Economic Theory
  1. Cato's wish list includes ideas for government reform, like raising Social Security retirement ages. Some of these suggestions might not be politically popular, but they show a push for change from a libertarian angle.
  2. There's a big difference in how academics and policymakers view the impact of interest rates on consumption. Academics think higher rates could boost future consumption, while policymakers see them as a negative for the economy.
  3. Scott Sumner highlights the issues with measuring inflation. He argues that inflation numbers are often confusing and imprecise, which also affects how we understand productivity changes.

Milton Friedman’s Weird Abolition List

Bet On It • 171 implied HN points • 03 Jun 25
🇺🇸 U.S. Politics Economic Theory
  1. Milton Friedman suggested abolishing certain government policies he viewed as unnecessary. Some of these policies include price supports for agriculture and minimum wage laws.
  2. He believed that many interventions weren't justified by their outcomes, indicating a need for less government control in various sectors.
  3. Friedman's focus was on promoting free-market principles, but his priorities differed from contemporary issues, revealing changes in the economy and regulation over time.

Big in Germany

Origins of Our Time • 255 implied HN points • 09 Mar 23
đź’ľ History Economic Theory
  1. Keynesianism focuses on managing demand in the economy.
  2. Military Keynesianism emerged as a response to global crisis and the Cold War.
  3. Implementing Keynesian ideas, especially in relation to military spending, involves navigating class issues.

When Mathematical Reality Kicks "HODLers" In The Nuts

QTR’s Fringe Finance • 41 implied HN points • 04 Nov 25
đź”® Crypto Economic Theory
  1. Believing in Bitcoin's long-term value doesn't mean it will always go up. Even big supporters can face tough financial situations and sell their holdings when needed.
  2. Many people think Bitcoin is held tightly by loyal investors who will never sell it. However, this isn't entirely true, as market conditions can make anyone reconsider.
  3. Economic realities can challenge beliefs. When the market gets tough, even strong convictions can crumble, showing that math and financial facts are important.