Economists from the United States

"America has never forgotten — and never will forget — the nobler things that brought her into being and that light her path — the path that was entered upon only one hundred and fifty years ago … How young she is! It will be centuries before she will adopt that maturity of custom — the clothing of the grave — that some people believe she is already fitted for."

"Behind the black portent of the new atomic age lies a hope which, seized upon with faith, can work out salvation … Let us not deceive ourselves: we must elect world peace or world destruction."

"Peace is never long preserved by weight of metal or by an armament race. Peace can be made tranquil and secure only by understanding and agreement fortified by sanctions. We must embrace international cooperation or international disintegration. Science has taught us how to put the atom to work. But to make it work for good instead of for evil lies in the domain dealing with the principles of human dignity. We are now facing a problem more of ethics than of physics."

"Let us not be deceived — we are today in the midst of a cold war. Our enemies are to be found abroad and at home. Let us never forget this: Our unrest is the heart of their success. The peace of the world is the hope and the goal of our political system; it is the despair and defeat of those who stand against us. We can depend only on ourselves."

"Although the shooting war is over, we are in the midst of a cold war which is getting warmer."

"Those who matter don't mind, and those who mind don't matter."

"Every man has a right to his own opinion, but no man has a right to be wrong in his facts."

"There are no such things as incurable, there are only things for which man has not found a cure."

"To me, old age is always fifteen years older than I am."

"I am quite sure that in the hereafter she will take me by the hand and lead me to my proper seat."

"I am interested in physical medicine because my father was. I am interested in medical research because I believe in it. I am interested in arthritis because I have it."

"When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich it is time to remind yourself that there is no more dangerous illusion than the belief that one can get something for nothing."

"Vote for the man who promises least; he'll be the least disappointing."

"A political leader must keep looking over his shoulder all the time to see if the boys are still there. If they aren’t still there, he’s no longer a political leader."

"I'm not smart. I try to observe. Millions saw the apple fall but Newton was the one who asked why."

"A speculator is a man who observes the future, and acts before it occurs."

"In the Baruch proposal our government suggested the creation of the International Authority by the United Nations to which would be given a complete monopoly of all atomic installations, materials and stockpiles. This authority should be given power of inspection and power to call for the punishment of violators."

"If all you have is a hammer, everything looks like a nail."

"Anyone taken as an individual is tolerably sensible—as a member of a crowd, he at once becomes a blockhead."

"It will fluctuate."

"We need to recognise that the entire information sector—from music to newspapers to telecoms to internet to semiconductors and anything in-between—has become subject to a gigantic market failure in slow motion. A market failure exists when market prices cannot reach a self-sustaining equilibrium. The market failure of the entire information sector is one of the fundamental trends of our time, with far-reaching long-term effects, and it is happening right in front of our eyes."

"In the usual (though certainly not in every) public decision on economic policy, the choice is between courses that are almost equally good or equally bad. It is the narrowest decisions that are most ardently debated. If the world is lucky enough to enjoy peace, it may even one day make the discovery, to the horror of doctrinaire free-enterprisers and doctrinaire planners alike, that what is called capitalism and what is called socialism are both capable of working quite well."

"You roll back the stones, and you find slithering things. That is the world of Richard Nixon."

"Also present, as a kind of co-host, was the rector of the state university. He asked me if I knew the difference between capitalism and socialism. In capitalism man exploits man. In socialism it is just the reverse."

"There is certainly no absolute standard of beauty. That precisely is what makes its pursuit so interesting."

"Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable."

"In the really hard cases you're choosing between the disastrous and the catastrophic, and it's hard to tell someone which one is which."

"Total physical and mental inertia are highly agreeable, much more so than we allow ourselves to imagine. A beach not only permits such inertia but enforces it, thus neatly eliminating all problems of guilt. It is now the only place in our overly active world that does."

"Clearly the most unfortunate people are those who must do the same thing over and over again, every minute, or perhaps twenty to the minute. They deserve the shortest hours and the highest pay."

"People are the common denominator of progress. So, paucis verbis, no improvement is possible with unimproved people, and advance is certain when people are liberated and educated. It would be wrong to dismiss the importance of roads, railroads, power plants, mills, and the other familiar furniture of economic development. At some stages of development — the stage that India and Pakistan have reached, for example — they are central to the strategy of development. But we are coming to realize, I think, that there is a certain sterility in economic monuments that stand alone in a sea of illiteracy. Conquest of illiteracy comes first."

"The imperatives of technology and organization, not the images of ideology, are what determine the shape of economic society....I am led to the conclusion that we are the servants in thought, as in action, of the machines we have created to serve us."

"Meetings are a great trap. … they are indispensable when you don't want to do anything."

"You will find that [the] State [Department] is the kind of organisation which, though it does big things badly, does small things badly too."

"In economics, hope and faith coexist with great scientific pretension and also a deep desire for respectability."

"Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof."

"Do not be alarmed by simplification, complexity is often a device for claiming sophistication, or for evading simple truths."

"Much literary criticism comes from people for whom extreme specialization is a cover for either grave cerebral inadequacy or terminal laziness, the latter being a much cherished aspect of academic freedom."

"Any country that has Milton Friedman as an adviser has nothing to fear from a few million Arabs."

"Mr. David Stockman has said that supply-side economics was merely a cover for the trickle-down approach to economic policy—what an older and less elegant generation called the horse-and-sparrow theory: If you feed the horse enough oats, some will pass through to the road for the sparrows."

"Wealth, in even the most improbable cases, manages to convey the aspect of intelligence."

"Any consideration of the life and larger social existence of the modern corporate man... begins and also largely ends with the effect of one all-embracing force. That is organization — the highly structured assemblage of men, and now some women, of which he is a part. It is to this, at the expense of family, friends, sex, recreation and sometimes health and effective control of alcoholic intake, that he is expected to devote his energies."

"Increasingly in recent times we have come first to identify the remedy that is most agreeable, most convenient, most in accord with major pecuniary or political interest, the one that reflects our available faculty for action; then we move from the remedy so available or desired back to a cause to which that remedy is relevant."

"In any great organization it is far, far safer to be wrong with the majority than to be right alone."

"In all life one should comfort the afflicted, but verily, also, one should afflict the comfortable, and especially when they are comfortably, contentedly, even happily wrong."

"There is something wonderful in seeing a wrong-headed majority assailed by truth."

"In the first place I identify this ["the equilibrium of poverty"] with primitive agriculture, and two factors have been at work there. One is, of course, population growth. If you were a poor farmer in India, Pakistan, or in much of Africa, you would want as many sons as possible as your social security. They would keep you out of the hot sun and give you some form of subsistence in your old age. So, you have pressure for population growth that is, itself, the result of the extreme economic insecurity. This is something which hasn't been sufficiently emphasized."

"One must always have in mind one simple fact — there is no literate population in the world that is poor, and there is no illiterate population that is anything but poor."

"We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had much."

"The great dialectic in our time is not, as anciently and by some still supposed, between capital and labor; it is between economic enterprise and the state."

"People who are in a fortunate position always attribute virtue to what makes them so happy."

"There's a certain part of the contented majority who love anybody who is worth a billion dollars."

"The contented and economically comfortable have a very discriminating view of government. Nobody is ever indignant about bailing out failed banks and failed savings and loans associations... But when taxes must be paid for the lower middle class and poor, the government assumes an aspect of wickedness."

"We now in the United States have more security guards for the rich than we have police services for the poor districts. If you're looking for personal security, far better to move to the suburbs than to pay taxes in New York."

"It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure."

"Modesty is a vastly overrated virtue."

"When you see reference to a new paradigm you should always, under all circumstances, take cover. Because ever since the great tulipmania in 1637, speculation has always been covered by a new paradigm. There was never a paradigm so new and so wonderful as the one that covered John Law and the South Sea Bubble — until the day of disaster."

"Let's begin with capitalism, a word that has gone largely out of fashion. The approved reference now is to the market system. This shift minimizes — indeed, deletes — the role of wealth in the economic and social system. And it sheds the adverse connotation going back to Marx. Instead of the owners of capital or their attendants in control, we have the admirably impersonal role of market forces. It would be hard to think of a change in terminology more in the interest of those to whom money accords power. They have now a functional anonymity."

"Hitler also anticipated modern economic policy . . . by recognizing that a rapid approach to full employment was only possible if it was combined with wage and price controls. That a nation oppressed by economic fear would respond to Hitler as Americans did to F.D.R. is not surprising."

"The modern conservative is, in fact, not especially modern. He is engaged, on the contrary, in one of man's oldest, best financed, most applauded and, on the whole, least successful exercises in moral philosophy. That is the search for a truly superior moral justification for selfishness."

"The drive toward complex technical achievement offers a clue to why the US is good at space gadgetry and bad at slum problems."

"Writing is a long and lonesome business; back of the problems in thought and composition hover always the awful questions: Is this the page that shows the empty shell? Is it here and now that they find me out?"

"I never enjoyed writing a book more; indeed, it is the only one I remember in no sense as a labor but as a joy."

"SOME YEARS, like some poets,and politicians and some lovely women, are singled out for fame far beyond the common lot, and 1929 was clearly such a year."

"No one was responsible for the great Wall Street crash. No one engineered the speculation that preceded it. Both were the product of free choice and decision of hundreds of thousands of individuals."

"In the autumn of 1929 the mightiest of Americans were, for a brief time, revealed as human beings."

"This view that the action of the Federal Reserve authorities in 1927 was responsible for the speculation and collapse which followed has never been seriously shaken. There are reasons why it is attractive. It is simple, and it exonerates both the American people and the economic system from substantial blame... Yet the explanation obviously assumes that people will always speculate if only they can get the money to finance it. Nothing could be farther from the case. There were times before and there has been long periods since when credit was plentiful and cheap—far cheaper than in 1927-29—and when speculation was negligible. Nor was speculation out of control after 1927, except that it was beyond the reach of men who did not want in the least to control it. The explanation is a tribute only to a recurrent preference, in economic matters, for formidable nonsense."

"Of all the weapons in the Federal Reserve arsenal, words were the most unpredictable in their consequences."

"In 1929 the discovery of the wonders of the geometric series struck Wall Street with a force comparable to the invention of the wheel."

"To a few alarmed observers it seemed as though Wall Street were by way of devouring all the money of the entire world. However, in accordance with the cultural practice, as the summer passed, the sound and responsible spokesmen decried not the increase in brokers' loans, but those who insisted on attaching significance to this trend."

"It was not hard to persuade people that the market was sound; as always in such times they asked only that the disturbing voices of doubt be muted and that there be tolerably frequent expressions of confidence."

"The values of a society totally preoccupied with making money are not altogether reassuring."

"However, it is safe to say that at the peak in 1929 the number of active speculators was less — and probably was much less — than a million."

"In these matters, as often in our culture, it is far, far better to be wrong in a respectable way than to be right for the wrong reasons."

"Of all the mysteries of the stock exchange there is none so impenetrable as why there should be a buyer for everyone who seeks to sell."

"No one knew, but it cannot be stressed too frequently, that for effective incantation knowledge is neither necessary nor assumed."

"The Coolidge Bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable."

"To the man who held stock on margin, disaster had only one face and that was falling prices. But now prices were to be allowed to fall. The speculator's only comfort, henceforth, was that his ruin would be accomplished in an orderly and becoming manner."

"Our political life favors the extremes of speech; the man who is gifted in the arts of abuse is bound to be a notable, if not always a great figure."

"The market had reasserted itself as an impersonal force beyond the power of any person to control, and, while this is the way markets are supposed to be, it was horrible."

"Despite a flattering supposition to the contrary, people come readily to terms with power. There is little reason to think that the power of the great bankers, while they were assumed to have it, was much resented. But as the ghosts of numerous tyrants, from Julius Caesar to Benito Mussolini will testify, people are very hard on those who, having had power, lose it or are destroyed. Then anger at past arrogance is joined with contempt for the present weakness. The victim or his corpse is made to suffer all available indignities."

"A banker need not be popular; indeed a good banker in a healthy capitalist society should probably be much disliked. People do not wish to trust their money to a hail-fellow-well-met but to a misanthrope who can say no."

"Men have been swindled by other men on many occasions. The autumn of 1929 was, perhaps, the first occasion when men succeeded on a large scale in swindling themselves."

"Clerks in downtown hotels were said to be asking guests whether they wished the room for sleeping or jumping. Two men jumped hand-in-hand from a high window in the Ritz. They had a joint account."

"One of the uses of depression is the exposure of what auditors fail to find."

"Men meet together for many reasons in the course of business. They need to instruct or persuade each other. They must agree on a course of action. They find thinking in public more productive or less painful than thinking in private. But there are at least as many reasons for meetings to transact no business. Meetings are held because men seek companionship or, at a minimum, wish to escape the tedium of solitary duties. They yearn for the prestige which accrues to the man who presides over meetings, and this leads them to convoke assemblages over which they can preside. Finally, there is the meeting which is called not because there is business to be done, but because it is necessary to create the impression that business is being done. Such meetings are more than a substitute for action. They are widely regarded as action."

"In the early days of the crash it was widely believed that Jesse L. Livermore, a Bostonian with a large and unquestionably exaggerated reputation for bear operations, leading asyndicate that was driving the market down."

"However, Hoover had converted the simple business ritual of reassurance into a major instrument of public policy."

"Our political tradition sets great store by the generalized symbol of evil. This is the wrongdoer whose wrongdoing will be taken by the public to be the secret propensity of a whole community or class."

"Wall Street's crime, in the eyes of its classical enemies, was less its power than its morals."

"In accordance with an old but not outworn tradition, it might now be wise for all to conclude that crime, or even misbehavior, is the act of an individual, not the predisposition of a class."

"Moreover, regulatory bodies, like the people who comprise them, have a marked life cycle. In youth they are vigorous, aggressive, evangelistic, and even intolerant. Later they mellow, and in old age — after a matter of ten or fifteen years — they become, with some exceptions, either an arm of the industry they are regulating or senile."

"The fact was that American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors, and frauds."

"Both of these measures were on the side of increasing spendable income, though unfortunately they were largely without effect. The tax reductions were negligible except in the higher income brackets; businessmen who promised to maintain investment and wages, in accordance with a well-understood convention, considered the promise binding only for the period within which it was not financially disadvantageous to do so."

"The advisers and counselors were not, however, analyzing the danger or even the possibility. They were serving only as the custodians of bad memories."

"And after they have started the action will always look, as it did to the frightened men in the Federal Reserve Board in February 1929, like a decision in favor of immediate as against ultimate death. As we have seen, the immediate death not only has the disadvantage of being immediate but of identifying the executioner."

"At best, in such depression times, monetary policy is a feeble reed on which to lean."

"But there is still a considerable difference between a failure to do enough that is right and a determination to do much that is wrong."

"But now, as throughout history, financial capacity and political perspicacity are inversely correlated. Long run salvation by men of business has never been highly regarded if it means disturbance of orderly life and convenience in the present. So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound."

"Authorship of any sort is a fantastic indulgence of the ego. It is well no doubt, to reflect on how much one owes to others."

"Wealth is not without its advantages, and the case to the contrary, although it has often been made, has never proved widely persuasive."

"The enemy of the conventional wisdom is not ideas but the march of events."

"Ideas are inherently conservative. They yield not to the attack of other ideas but to the massive onslaught of circumstance with which they cannot contend."

"Even the word depression itself was the terminological product of an effort to soften the connotation of deep trouble. In the last century, the term crisis was normally employed. With time, however, this acquired the connotation of the misfortune it described."

"Ideas do not respect national frontiers, and this is especially so where language and other traditions are in common."

"Marx profoundly affected those who did not accept his system. His influence extended to those who least supposed they were subject to it."

"The massive reduction in risk that is inherent in the development of the modern corporation has been far from fully appreciated."

"More die in the United States of too much food than of too little."

"We do not manufacture wants for goods we do not produce."

"One man's consumption becomes his neighbor's wish."

"It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought."

"In recent times no problem has been more puzzling to thoughtful people than why, in a troubled world, we make such poor use of our affluence."

"A businessman who reads Business Week is lost to fame. One who reads Proust is marked for greatness."

"It is in the long run that the corporation lives."

"Very important functions can be performed very wastefully and often are."

"The family which takes its mauve and cerise, air conditioned, power-steered, and power braked automobile out for a tour passes through cities that are badly paved, made hideous by litter, blighted buildings, billboards, and posts for wires that should long since have been put underground."

"The greater the wealth the thicker will be the dirt."

"In a community wherepublic services have failed to keep abreast of private consumption things are very different. Here, in an atmosphere of private opulence and public squalor, the private goods have full sway."

"Simple minds, presumably, are the easiest to manage."

""Poverty" Pitt exclaimed "is no disgrace but it is damned annoying." In the contemporary United States it is not annoying but it is a disgrace."

"Private enterprise did not get us atomic energy."

"Only men of considerable vanity write books; consistently therewith, I worried lest the world were exchanging an irreplaceable author for a more easily purchased diplomat."

"No hungry man who is also sober can be persuaded to use his last dollar for anything but food."

"In economics, unlike fiction and the theater, there is no harm in a premature disclosure of the plot: it is to see the changes just mentioned and others as an interlocked whole."

"The inevitable counterpart of specialization is organization. This is what brings the work of specialists to a coherent result. If there are many specialists, this coordination will be a major task. So complex, indeed, will be the job of organizing specialists that there will be specialists on organization and organizations of specialists on organization. More perhaps than machinery, massive and complex business organizations are the tangible manifestation of advanced technology."

"By all but the pathologically romantic, it is now recognized that this is not the age of the small man."

"Only in very recent times has the average man been a source of savings."

"The individual serves the planning system not by supplying it with savings and the resulting capital; he serves it far more by consuming its products. On no other activity, religious, political or moral, is he so elaborately, skillfully and expensively instructed."

"In the assumption that power belongs as a matter of course to capital, all economists are Marxians."

"We may lay it down as a rule that the older the exercise of any power, the more benign it will appear, and the more recent its assumption, the more unnatural and even dangerous it will seem."

"The real accomplishment of modern science and technology consists in taking ordinary men, informing them narrowly and deeply and then, through appropriate organization, arranging to have their knowledge combined with that of other specialized but equally ordinary men. This dispenses with the need for genius. The resulting performance, though less inspiring, is far more predictable."

"There is no name for all who participate in group decision-making or the organization which they form. I propose to call this organization the Technostructure."

"The size of General Motors is in the service not of monopoly or the economies of scale but of planning."

"Nothing so effectively economizes effort and intelligence, as distinct from anxiety, as the knowledge that nothing can be done."

"Because individuals have more standing in the culture than organizations, they regularly get credit for achievement that belongs, in fact, to organization."

"Men are, in fact, either sustained by organization or they sustain organization."

"The power of the market, which is the fulcrum of traditional attitudes, depends on the validity of this assumption. It is a far, far better thing to admit to monopoly profits, even at exploitive levels, than to concede that the market is impotent."

"Economic theory is the most prestigious subject of instruction and study. Agricultural economics, labor economics and marketing are lower caste fields of study."

"That one never need to look beyond the love of money for explanation of human behavior is one of the most jealously guarded simplifications of our culture."

"The notion of a formal structure of command must be abandoned. It is more useful to think of the mature corporation as a series of concentric circles."

"Even the economist, who most takes for granted the primacy of pecuniary motivation, looks askance at the colleague who is too avid for consulting fees from corporations or textbook revenues or travel at the expense of the Ford Foundation. Academic courtesy may require that he refrain from first-person comment but duty dictates that he be vigorously critical of the transgressor when the latter is absent."

"While it will be desirable to achieve planned results, it will be even more important to avoid unplanned disasters."

"If he suspects that economics, as it is conventionally taught, is, in part, a system of belief designed less to reveal truth than to reassure students and other communicants as to the benign tendency of established social arrangements, he will also be right."

"Oligopoly is an imperfect monopoly. Like the despotism of the Dual Monarchy, it is saved only by its incompetence."

"For thousands of reluctant scholars, a few distantly remembered curves depicting the interaction of supply and demand to establish prices have for long been the only permanent return on an investment in economic education."

"The latter situation, that of the monopolists, is the apogee of improper influence. In the English language only a few words — fraud, subversion, sodomy — have a greater connotation of nonviolent wickedness."

"It is a well-established, though perhaps somewhat transparent, technique of argument, on encountering something which cannot easily be reconciled with preferred belief, to point to the exceptions. What does not invariably exist is then held not to exit."

"There is an insistent tendency among serious social scientists to think of any institution which features rhymed and singing commercials, intense and lachrymose voices urging highly improbable enjoyment, caricatures of the human esophagus in normal and impaired operation, and which hints implausibly at opportunities for antiseptic seduction as inherently trivial. This is a great mistake. The industrial system is profoundly dependent on commercial television and could not exist in its present form without it."

"It is not the individual's right to buy that is being protected. Rather, it is the seller's right to manage the individual."

"That one’s personal reactions signify the public reaction is not, scientifically, a defensible proposition but where the preservation of precious intellectual capital is involved, scientific method is readily sacrificed."

"THE INDUSTRIAL SYSTEM requires that prices be under effective control. And it seeks the greatest possible influence over what buyers take at the established prices."

"Those who yearn for the defeat of their enemy are said to wish that he might write a book."

"To add to the technostructure is to increase its power in the enterprise."

"In fact, the wage-price spiral is the functional counterpart of unemployment. The latter occurs when there is insufficient demand; the spiral operates when there is too much and also,unfortunately, when there is just enough."

"Should there be sacrifice, as always in the mature corporation, it is not suffered by those who agree to it."

"More generally, the individual who gets added income as a result of a general inflationary movement atributes it not to larger economic causes but to his own virtue and diligence."

"The first goal of the technostructure is its own security."

"One of the small but rewarding vocations of a free society is the provision of needed conclusions, properly supported by statistics and moral indignation, for those in a position to pay for them."

"The overall effect of the rise of the industrial system is greatly to reduce the union as a social force. But it will not disappear or become entirely unimportant."

"If a man be subject to the authority of another, he can at least ask that it not be an occasion for glee."

"Agreeable as it is to know where one is proceeding, it is far more important to know where one has arrived."

"A drastic reduction in weapons competition following a general release from the commitment to the Cold War would be sharply in conflict with the needs of the industrial system."

"All, the intelligent and stupid, diligent and idle, have been swept along on a current of increased output that, in the usual case, owed nothing whatever to their efforts."

"THE GENIUS of the industrial system lies in its organized use of capital and technology. This is made possible, as we have duly seen, by extensively replacing the market with planning."

"Educators have yet to realize how deeply the industrial system is dependent upon them."

"Nothing in our time is more interesting than the erstwhile capitalist corporation and the erstwhile Communist firm should, under the imperatives of organization, come together as oligarchies of their own members."

"No grant of feudal privilege has ever equaled, for effortless return, that of the grandparent who bought and endowed his descendants with a thousandshares ofGeneral Motors or General Electric."

"But it can be laid down as a rule that those who speak most of liberty are least inclined to use it."

"Among all the world's races, some obscure Bedouin tribes possibly apart, Americans are the most prone to misinformation. This is not the consequence of any special preference for mendacity, although at the higher levels of their public administration that tendency is impressive. It is rather that so much of what they themselves believe is wrong."

"The Senate has unlimited debate; in the House, debate is ruthlessly circumscribed. There is frequent discussion as to which technique most effectively frustrates democratic process. However, a more important antidote to American democracy is American gerontocracy. The positions of eminence and authority in Congress are allotted in accordance with length of service, regardless of quality. Superficial observers have long criticized the United States for making a fetish of youth. This is unfair. Uniquely among modern organs of public and private administration, its national legislature rewards senility."

"In the United States, though power corrupts, the expectation of power paralyzes."

"The traveler to the United States will do well, however, to prepare himself for the class-consciousness of the natives. This differs from the already familiar English version in being more extreme and based more firmly on the conviction that the class to which the speaker belongs is inherently superior to all others."

"Once the visitor was told rather repetitively that this city was the melting pot; never before in history had so many people of such varied languages, customs, colors and culinary habits lived so amicably together. Although New York remains peaceful by most standards, this self-congratulation is now less often heard, since it was discovered some years ago that racial harmony depended unduly on the willingness of the blacks (and latterly the Puerto Ricans) to do for the other races the meanest jobs at the lowest wages and then to return to live by themselves in the worst slums."

"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise — to deny the political character of the modern corporation — is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are those we instruct in error. The beneficiaries are the institutions whose power we so disguise. Let there be no question: economics, so long as it is thus taught, becomes, however unconsciously, a part of the arrangement by which the citizen or student is kept from seeing how he or she is, or will be, governed."

"The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power. The capacity for erroneous belief is very great, especially where it coincides with convenience. Rather, in eliding power — in making economics a nonpolitical subject — neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction. In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached."

"This is what economics now does. It tells the young and susceptible (and also the old and vulnerable) that economic life has no content of power and politics because the firm is safely subordinate to the market and the state and for this reason it is safely at the command of the consumer and citizen. Such an economics is not neutral. It is the influential and invaluable ally of those whose exercise of power depends on an acquiescent public. If the state is the executive committee of the great corporation and the planning system, it is partly because neoclassical economics is its instrument for neutralizing the suspicion that this is so."

"There is wonder and a certain wicked pleasure in these giddy ascents and terrible falls, especially as they happen to other people."

"The study of money, above all other fields in economics, is the one in which complexity is used to disguise truth or to evade truth, not to reveal it."

"A constant in the history of money is that every remedy is reliably a source of new abuse."

"The process by which banks create money is so simple that the mind is repelled."

"The pioneering instrument of reform was the Bank of England. Of all institutions concerned with economics none has for so long enjoyed such prestige. It is, in all respects, to money as St. Peter's is to Faith."

"The monetary experiments of Pennsylvania and its neighbors were by no means an unconsidered reaction to circumstance. They were extensively debated and had the energetic support of Benjamin Franklin, the most intelligent political man in the colonies and an ardent exponent of paper money. In 1729 he published his A Modest Enquiry into the Nature and Necessity of Paper Currency, a brief on behalf of paper currency... In 1736, Franklin's Pennsylvania Gazette printed an apology for its irregular appearance because its printer was "with the Press, labouring for the publick Good, to make Money more plentiful." The press was busy printing money."

"Why is anything intrinsically so valueless so obviously desirable?"

"[W]ith sound-money and gold-standard morality transcendent, Jackson's destruction of the Bank was all but universally regarded as a villainous action. ...In more recent times, as the conventional wisdom of bankers has come... modestly into question and a heightened democratic ethos has ascribed both perception and virtue to the common man, Jackson's action has been viewed with contrasting warmth. He was... speaking for the small, energetic and aspiring folks of the new states, the new farms and the frontier. He was, in an important respect, their accidental ally. He opposed the bank as a monopoly—a monster which, as Biddle held, had power to rival that of the state. ...[I]t was also the power of his political enemies. But he favored hard money—he was for currency consisting of gold and silver and for eschewing all paper as the instrument of the devil. In getting rid of the bank, he got... the softest [money] of all—an explosion of new banks, and avalanche of bank notes. But this, and the loans so allowed, were what his constituents most wanted. Had Andrew Jackson succeeded in establishing... hard money... his name would have been reviled by the... small, energetic and aspiring folk of the frontier. Historians, in pondering whether Jackson was right or wrong on financial matters, must allow... a third possibility... that he was confused."

"In numerous years following the war the Federal government ran a heavy surplus. It could not pay off it's debt, retire its securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was to destroy the money supply."

"Truth has anciently been called the first casualty of war. Money may, in fact, have priority."

"Seaboard Air Line, which was thought by numerous innocents to provide a foothold in aviation, was another favorite, although, in fact, it was a railroad."

"During the last century and until 1907, the United States had panics, and that, unabashedly, is what they were called. But, by 1907, the language was becoming, like so much else, the servant of economic interest. To minimize the shock to confidence, businessmen and bankers had started to explain that any current economic setback was not really a panic, only a crisis. They were undeterred by the use of this term in a much more ominous context—that of the ultimate capitalist crisis—by Marx. By the 1920's, however, the word crisis had also acquired the fearsome connotation of the event it described. Accordingly, men offered reassurance by explaining that it was not a crisis, only a depression. A very soft word. Then the Great Depression associated the most frightful of economic misfortunes with that term, and economic semanticists now explained that no depression was in prospect, at most only a recession. In the 1950s, when there was a modest setback, economists and public officials were united in denying that it was a recession—only a sidewise movement or a rolling readjustment. Mr. Herbert Stein, the amiable man whose difficult honor it was to serve as the economic voice of Richard Nixon, would have referred to the as a growth correction."

"Power is as power does."

"No feature of American—to some extent of Anglo-Saxon—politics is so certain as the tendency of politicians to become first the captives, then the agents, of their opposition. ...In the 1960s, liberal Democrats... urged peace and international amity but continued the Cold War and plunged the country into Vietnam. ...partly because they feared being called appeasers and crypto-Communists by the right. Richard Nixon, having impeccable credentials as a Cold Warrior, moved towards peace or accommodation with Moscow and Peking and withdrew... from Vietnam. Thus on foreign policy he outflanked his liberal opposition. When Professor Milton Friedman proposed a guaranteed income for the poor, it was considered (quite correctly) an act of creative imagination. When a Republican administration proposed it to Congress, it was a mark of conservative statemanship. When George McGovern, running for President, advanced a close variant... it was condemned by conservatives as the dream of a fiscal maniac. As known and stalwart defenders of the dollar, the Republicans were able, in the early 1970s, to devalue it... twice. For anyone suspected of a more flexible attitude towards the integrity of the dollar, such action would have been exceedingly perilous."

"The foresight of financial experts was, as so often, a poor guide to the future."

"In the fifteen years following the First World War, and especially in the immediate aftermath, the industrial nations exploited this new freedom in remarkably diverse fashion. The French followed the line of least resistance with, on the whole, the best results. The British followed the line of greatest wounds. The Germans so handled matters, or so yielded to circumstances, as to produce the greatest inflation of modern times. The United States, by a combination of mismanagement and non-management, produced the greatest depression. In all the long history of money, the decade of the 1920s—extended by a few years to the consequences—is perhaps the most instructive."

"If all else fails immortality can always be assured by adequate error."

"There was something superficial in attributing anything so awful as the Great Depression to anything so insubstantial as speculation in common stocks."

"Economic life, as always, is a matrix in which result becomes cause and cause becomes result."

"What was needed was a policy that increased the supply of money available for use and then ensured its use. Then the state of trade would have to improve."

"Foresight is an imperfect thing — all prevision in economics is imperfect."

"In dealing with Mr. Nixon, it is not easy to be unfair. He invites and justifies all available criticism."

"With the American failure came world failure."

"Those who yearn for the end of capitalism should pray for government by men who believe that all positive action is inimical to what they call thoughtfully the fundamental principles of free enterprise."

"Nothing is more portable than rich people and their money"

"Few things in life can be so appalling as the difference between a dry antiseptic statement of a principle by a well spoken man in a quiet office, and what happens to people when that principle is put into practice."

"Ideas may be superior to vested interest. They are also very often the children of vested interest."

"It's a rule worth having in mind. Income almost always flows along the same axis as power but in the opposite direction."

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right. The sensitivity of the poor to injustice is a trivial thing compared with that of the rich."

"Economists are generally negligent of their heroes."

"Because of his compassion Owen was always in trouble with his partners. They would have much preferred a tough, down-to-earth manager who would get a days work out of the little bastards."

"Economics is not an exact science."

"Of all classes the rich are the most noticed and the least studied."

"American university presidents are a nervous breed; I have never thought well of them as a class."

"The masters thought they were loved until one day one of their favorites farted loudly while serving dinner and the next day was gone. The very first manifestation of the classless society is the disappearance of the servant class."

"The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced. The manners of capitalism improve. The morals may not."

"I've long believed alas, that in highly organized industrial societies, capitalist or socialist, the stronger tendency is to converge — that if steel or automobiles are wanted and must be made on a large scale, the process will stamp its imprint on the society, whether that me be Magnitogorsk or Gary, Indiana."

"All successful revolutions are the kicking in of a rotten door. The violence of revolutions is the violence of men who charge into a vacuum."

"Conscience is better served by a myth."

"It was in World War I that the age-old certainties were lost. Until then aristocrats and capitalists felt secure in their position, and even socialists felt certain in their faith. It was never to be so again. The Age of Uncertainty began."

"If inheritance qualifies one for office, intelligence cannot be a requirement."

"Money is a singular thing. It ranks with love as man's greatest source of joy. And with death as his greatest source of anxiety. Over all history it has oppressed nearly all people in one of two ways: either it has been abundant and very unreliable, or reliable and very scarce."

"Who is king in the world of the blind when there isn't even a one eyed man?"

"Few can believe that suffering, especially by others, is in vain. Anything that is disagreeable must surely have beneficial economic effects."

"He enlarged perceptibly the scope for debate, liberalized appreciably the intellectual and cultural life of the country and proclaimed the obvious truth that, after an atomic exchange, little would distinguish the Communist ashes from the capitalist ashes."

"The myth that holds that the great corporation is the puppet of the market, the powerless servant of the consumer, is, in fact one of the devices by which its power is perpetuated."

"The privileged have regularly invited their own destruction with their greed."

"The Metropolis should have been aborted long before it becameNew York, London or Tokyo."

"Man, at least when educated, is a pessimist. He believes it safer not to reflect on his achievements; Jove is known to strike such people down."

"But there is merit even in the mentally retarded legislator. He asks the questions that everyone is afraid to ask for fear of seeming simple."

"When people put their ballots in the boxes, they are, by that act, inoculated against the feeling that the government is not theirs. They then accept, in some measure, that its errors are their errors, its aberrations their aberrations, that any revolt will be against them. It's a remarkably shrewd and rather conservative arrangement when one thinks of it."

"All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership."

"A nuclear war does not defend a country and it does not defend a system. I've put it the same way many times; not even the most accomplished ideologue will be able to tell the difference between the ashes of capitalism and the ashes of communism."

"Get the process of negotiation away from the small specialized group that some people have called the "nuclear theologians," who in effect said this is a complicated issue of seeing how little we can give away, how much we can extract from the other side; it's highly specialized. Only a few people can understand the nature of these weapons, the delivery systems, the targeting, the nature of the MIRV and the CRUISE, on down, and the MX. This kept the whole discussion to a very limited group of people who, in a way, had assumed responsibility for saying whether we should live or die."

"The huge capacity to purchase submission that goes with any large sum of money, well, this we have. This is a power of which we should all be aware."

"Both we and the Soviets face the common threat of nuclear destruction and there is no likelihood that either capitalism or communism will survive a nuclear war."

"Excessive acreages of unused buildings, commercial and residential were created. The need for such construction, given the space demands of modern business bureaucracy, was believed to be without limit. In later consequence, the solvency of numerous banks, including that of some of the nation's largest and most prestigious institutions, was either fatally impaired or placed in doubt. The lending of both those that failed or were endangered and others was subject, by fear and example to curtailment. The construction industry was severely constrained and its workers left unemployed. A general recession ensued. Any early warning as to what was happening would have been exceptionally ill received, seen as yet another invasion of the benign rule of laissez faire and a specific interference with the market. However in keeping with the exceptions to this rule, there would be eventual salvation in a government bailout of the banks. Insurance of bank deposits — a far from slight contribution to contentment — was permissible, as well as assurance that were a bank large enough, it would not be allowed to fail. A preventive role by government was not allowed; eventual government rescue was highly acceptable."

"The present age of contentment will come to an end only when and if the adverse developments that it fosters challenge the sense of comfortable well-being,"

"One of the things I argue in my book [A Journey Through Economic Time] is the extent to which people go to avoid rational decisions – the very large role of mental deficiency in economic history. Generally, people have been very resistant to attributing a causal role in history to stupidity."

"I was studying agriculture, how to produce better chickens, better cattle, better horses — horses in those days — better fruit, better vegetables. This was in the early years of the Great Depression, and the thoughts crossed my mind that there wasn't a hell of a lot of use producing better crops and better livestock if you couldn't sell them, that the real problem of agriculture was not efficiency in production but the problem of whether you could make money after you produced the stuff. So I shifted from the technical side to, first, the study of agricultural economic issues and then on to economics itself."

"Broadly speaking, [Keynesianism means] that the government has a specific responsibility for the behavior of the economy, that it doesn't work on its own autonomous course, but the government, when there's a recession, compensates by employment, by expansion of purchasing power, and in boom times corrects by being a restraining force. But it controls the great flow of demand into the economy, what since Keynesian times has been the flow of aggregate demand. That was the basic idea of Keynes so far as one can put it in a couple of sentences."

"Going back to the most ancient times, national well-being, the national prestige depended on territory. The more territory a country had, the more income revenue there was, the more people there were to be mobilized for arms strength. So we had an enormous sense of territorial conflict and territorial integrity, and that was unquestionably a part of the cause of war, coupled with the fact that there was a disposition in that direction by the landed class, a disposition to think of territorial acquisition and territorial defense and to think of the peasantry as a superior form of livestock which could be used for arms purposes."

"I react to what is necessary. I would like to eschew any formula. There are some things where the government is absolutely inevitable, which we cannot get along without comprehensive state action. But there are many things — producing consumer goods, producing a wide range of entertainment, producing a wide level of cultural activity — where the market system, which independent activity is also important, so I react pragmatically. Where the market works, I'm for that. Where the government is necessary, I'm for that. I'm deeply suspicious of somebody who says, "I'm in favor of privatization," or, "I'm deeply in favor of public ownership." I'm in favor of whatever works in the particular case."

"I write with two things in mind. I want to be right with my fellow economists. After all, I've made my life as a professional economist, so I'm careful that my economics is as it should be. But I have long felt that there's no economic proposition that can't be stated in clear, accessible language. So I try to be right with my fellow economists, but I try to have an audience of any interested, intelligent person."

"The only function of economic forecasting is to make astrology look respectable."

"In the mid-1960s, I was a typical left-wing undergraduate student at Caltech. For any social problem that arose, I had no doubt that the appropriate cure involved some form of government intervention. So, naturally, Galbraith was my hero, and I was therefore greatly excited when he came to my school in 1964 to give a speech in support of Lyndon Johnson’s campaign for the presidency. I confess that I cannot remember a lot of the details of the speech, but I know that I was disappointed. In particular, I recall feeling that his arguments for bigger government were not compelling. No doubt, this event started me on the road to doubting the wisdom of governmental activism and appreciating the wonders of free markets. When I discussed this experience with Ken after more than thirty years, his surprising reaction was to apologize for what must have been a bad speech. He said that he especially regretted his endorsement of Lyndon Johnson, who was later to become anathema to liberals because of his pursuit of the Vietnam War. If it had been me, I would have apologized mainly for Johnson’s Great Society programs."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"If there were justice in the world, John Kenneth Galbraith would rank as the twentieth century’s most influential American economist. He has published several books that are among the best analyses of modern US history, played a key role in midcentury policymaking, and advised more presidents and senators than would seem possible in three lifetimes. Yet today, Galbraith’s influence on economics is small, and his influence on US politics is receding by the year."

"Galbraith propounded no such easily summarized doctrine. The closest we can get is: "the world is complicated, and both right-wing ideology and the conventional wisdom that is this age's self-image are terribly wrong." He offered critiques that required you to read and understand old theories, not new theories that allowed you to dismiss everything prior as irrelevant. The result? Nearly all economists today are Paul Samuelson's children. Many are Keynes' children. Friedman, Robert Lucas, Robert Solow, and James Tobin all have plenty of descendants. But there are few Galbraithians on the ground. Would economics as a discipline be stronger if the 50-year-old and 30-year-old economists had a better appreciation of Galbraith? Almost surely. Will the winds of economic fashion shift and cause economists to appreciate Galbraith once again? For that to happen, an astute young economist would have to devote himself to "mathing up" chapters of The Affluent Society and The New Industrial State and publishing them in journals—not a likely prospect in today's risk-adverse academic environment."

"At the beginning of the twenty-first century, it has become clear who John Kenneth Galbraith really is: Sisyphus, constantly pushing the boulder of social-democratic enlightenment up the hill. But the hill, it turns out, is too steep, and Galbraith not mighty enough."

"The general educated—the public that watches McNeil/Lehrer or read The New Yorker—thinks of Galbraith as an important economic thinker. Although Galbraith is a Harvard economics professor, however, he has never been taken seriously by his academic colleagues, who regard him as more of a “media personality”. The contrast between public and professional perception became particularly acute in 1967, when Galbraith made a grand statement of his ideas about economics in The New Industrial State, a book that he hoped would come to be regarded as being in the same league as John Maynard Keynes’s General Theory or even Adam Smith’s Wealth of Nations. The book was rapturously reviewed in the popular press, but it met with indifference from the academics. Galbraith’s book wasn’t what they considered real economic theory. Not incidentally, the academics were right in believing that The New Industrial State could be safely ignored."

"The example of Galbraith is not an accidental one: in many ways, Galbraith broke important new ground in the relationship between politics and economics. He was the first celebrity economist (where the definition of a celebrity is the usual one: someone who is famous for being famous). His rise as a policy entrepreneur was one marker of the growing dominance of style (which he has in abundance) over substance in American political discourse, even among those who image themselves to be well informed about public affairs."

"So Galbraith is oblivious to the most serious problem facing modern liberalism: reconciling social justice with full employment. In the real world this is a terrible dilemma; even Sweden, with its powerful sense of community and overwhelming consensus for the welfare state, has found itself suffering from an acute case of Eurosclerosis. But in Galbraith's world there is no dilemma at all: Unemployment is merely a problem of inadequate demand, to be cured by New Deal-type public works programs and redistribution of income away from rich people who save too much."

"If Walter Bagehot was right that “one of the greatest pains to human nature is the pain of a new idea,” Ken caused an extraordinary amount of pain. Both in his economic thinking and in his political activities, he was dedicated to resisting, and where possible overturning, what he famously called “conventional wisdom” (one of his many turns of phrase that have since become commonplace locutions). Rejecting the standard economic theory based on small, anonymous households and firms that autonomously engage in perfectly functioning markets, Ken instead saw an economic stage dominated by large, nameable actors: big business, big labor, big government. Sorting out their roles and respective power was central to his analysis, and the continually shifting tensions in the interplay among them—“countervailing power” in another of his deft phrases—was the real story of how an economy behaved."

"Ken also identified the corporation, not “the market,” as the defining institution of modern economic activity, developing these and related themes both in his teaching and in such widely celebrated books as American Capitalism (1952) and The New Industrial State (1967). But his interest in these ideas persisted throughout his life. The central importance of the corporation, and the fear that government was no longer able to provide an adequate countervailing force against corporate influence exerted both legally and otherwise, was the subject of his last book, The Economics of Innocent Fraud (2004)."

"An economist such as John Galbraith is as much a political scientist as Robert Dahl or David Truman."

"I knew Galbraith in the old days; he sat for some little time in my seminar. I must say I am not altogether surprised at what has happened; for I have always thought him a dull fellow, well intentioned enough, but a sort of pedant of New Deal economics — just the kind of man to upset the business community without himself bringing any startling administrative ability to offset the loss of that which he had antagonized."

"Political economy is an art as well as a science. John Kenneth Galbraith has always been a creative artist in formulating theories of the social world. His fabrications constitute the stuff of economic science."

"His is an artistic, speculative mind. He sets up hypotheses which go beyond the data, and some of the greatest scholars in history have been of that type, … Part of Galbraith's strength is that he writes well. Some economists believe writing well is a defect that creates too much spurious impact on thought. If it's a crime, it's not one that many of my profession are guilty of."

"He doesn't get enough praise. The Affluent Society is a great insight, and has become so much a part of our understanding of contemporary capitalism that we forget where it began. It's like reading Hamlet and deciding it's full of quotations."

"Galbraith has often been compared to Keynes, and they had much in common. But the way they did their economics was very different. Keynes produced theories, Galbraith, theoretically-inspired sociology. Keynes thought that ideas ruled the roost; Galbraith thought it was structures of power. His was a non-Marxist version of class struggle, with the intelligentsia as the engine of social innovation and carrier of the "public purpose"."

"What Galbraith understood, and what later researchers (including this author) have proved, is that Adam Smith's "invisible hand" – the notion that the individual pursuit of maximum profit guides capitalist markets to efficiency – is so invisible because, quite often, it's just not there. Unfettered markets often produce too much of some things, such as pollution, and too little of other things, such as basic research. As Bruce Greenwald and I have shown, whenever information is imperfect – that is, always – markets are inefficient; hence the need for government action."

"Galbraith's penetrating insights into the nature of capitalism – as it is lived, not as it is theorized in simplistic models – has enhanced our understanding of the market economy. He has left an intellectual legacy for generations to come."

"The goal of liberalism is the peaceful cooperation of all men. It aims at peace among nations too. When there is private ownership of the means of production everywhere and when laws, the tribunals and the administration treat foreigners and citizens on equal terms, it is of little importance where a country's frontiers are drawn. Nobody can derive any profit from conquest, but many can suffer losses from fighting. War no longer pays; there is no motive for aggression. The population of every territory is free to determine to which state it wishes to belong, or whether it prefers to establish a state of its own. All nations can coexist peacefully, because no nation is concerned about the size of its state."

"The characteristic feature of militarism is not the fact that a nation has a powerful army or navy. It is the paramount role assigned to the army within the political structure. Even in peacetime the army is supreme; it is the predominant factor in political life. The subjects must obey the government as soldiers must obey their superiors. Within a militarist community there is no freedom; there are only obedience and discipline."

"Inflation is an increase in the quantity of money without a corresponding increase in the demand for money, i.e., for cash holdings."

"If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action."

"You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you. If this be arrogance, as some of your critics observed, it is still the truth that had to said in the age of the Welfare State."

"The proof of a theory is in its reasoning, not in its sponsorship"

"War prosperity is like the prosperity that an earthquake or a plague brings."

"Bourgeois civilization has built railroads and electric power plants, has invented explosives and airplanes, in order to create wealth. Imperialism has placed the tools of peace in the service of destruction. With modern means it would be easy to wipe out humanity at one blow."

"Socialism is the watchword and the catchword of our day. The socialist idea dominates the modem spirit. The masses approve of it. It expresses the thoughts and feelings of all; it has set its seal upon our time. When history comes to tell our story it will write above the chapter "The Epoch of Socialism." As yet, it is true, Socialism has not created a society which can be said to represent its ideal. But for more than a generation the policies of civilized nations have been directed towards nothing less than a gradual realization of Socialism."

"All rational action is economic. All economic activity is rational action. All rational action is in the first place individual action. Only the individual thinks. Only the individual reasons. Only the individual acts."

"Permanent mass unemployment destroys the moral foundations of the social order. The young people, who, having finished their training for work, are forced to remain idle, are the ferment out of which the most radical political movements are formed. In their ranks the soldiers of the coming revolutions are recruited."

"The characteristic mark of this age of dictators, wars and revolutions is its anti-capitalistic bias. Most governments and political parties are eager to restrict the sphere of private initiative and free enterprise. It is an almost unchallenged dogma that capitalism is done for and that the coming of all-round regimentation of economic activities is both inescapable and highly desirable."

"Government spending cannot create additional jobs. If the government provides the funds required by taxing the citizens or by borrowing from the public, it abolishes on the one hand as many jobs as it creates on the other. If government spending is financed by borrowing from the commercial banks, it means credit expansion and inflation. If in the course of such an inflation the rise in commodity prices exceeds the rise in nominal wage rates, unemployment will drop. But what makes unemployment shrink is precisely the fact that real wage rates are falling."

"Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump."

"The interventionists do not approach the study of economic matters with scientific disinterestedness. Most of them are driven by an envious resentment against those whose incomes are larger than their own. This bias makes it impossible for them to see things as they really are. For them the main thing is not to improve the conditions of the masses, but to harm the entrepreneurs and capitalists even if this policy victimizes the immense majority of the people."

"No social co-operation under the division of labour is possible when some people or unions of people are granted the right to prevent by violence and the threat of violence other people from working. When enforced by violence, a strike in vital branches of production or a general strike are tantamount to a revolutionary destruction of society."

"Whatever people do in the market economy, is the execution of their own plans. In this sense every human action means planning. What those calling themselves planners advocate is not the substitution of planned action for letting things go. It is the substitution of the planner's own plan for the plans of his fellow-men. The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. He aims at one thing only: the exclusive absolute pre-eminence of his own plan."

"When people were committed to the idea that in the field of religion only one plan must be adopted, bloody wars resulted. With the acknowledgment of the principle of religious freedom these wars ceased. The market economy safeguards peaceful economic co-operation because it does not use force upon the economic plans of the citizens. If one master plan is to be substituted for the plans of each citizen, endless fighting must emerge. Those who disagree with the dictator's plan have no other means to carry on than to defeat the despot by force of arms."

"State and government are the social apparatus of violent coercion and repression. Such an apparatus, the police power, is indispensable in order to prevent anti-social individuals and bands from destroying social co-operation. Violent prevention and suppression of anti-social activities benefit the whole of society and each of its members. But violence and oppression are none the less evils and corrupt those in charge of their application. It is necessary to restrict the power of those in office lest they become absolute despots. Society cannot exist without an apparatus of violent coercion. But neither can it exist if the office holders are irresponsible tyrants free to inflict harm upon those they dislike."

"All this talk: the state should do this or that, ultimately means: the police should force consumers to behave otherwise than they would behave spontaneously."

"In fact, however, the supporters of the welfare state are utterly anti-social and intolerant zealots. For their ideology tacitly implies that the government will exactly execute what they themselves deem right and beneficial. They entirely disregard the possibility that there could arise disagreement with regard to the question of what is right and expedient and what is not. They advocate enlightened despotism, but they are convinced that the enlightened despot will in every detail comply with their own opinion concerning the measures to be adopted. They favour planning, but what they have in mind is exclusively their own plan, not those of other people. They want to exterminate all opponents, that is, all those who disagree with them. They are utterly intolerant and are not prepared to allow any discussion. Every advocate of the welfare state and of planning is a potential dictator. What he plans is to deprive all other men of all their rights, and to establish his own and his friends' unrestricted omnipotence. He refuses to convince his fellow-citizens. He prefers to "liquidate" them. He scorns the "bourgeois" society that worships law and legal procedure. He himself worships violence and bloodshed."

"From a correct Marxian point of view … all measures designed to restrain, to regulate and to improve capitalism were simply "petty-bourgeois" nonsense … True socialists should not place any obstacles in the way of capitalist evolution. For only the full maturity of capitalism could bring about socialism. It is not only vain, but harmful to the interests of the proletarians to resort to such measures."

"For the time being, the ominous peril of the communist parties in the West lies in their stand on foreign affairs. The distinctive mark of all present-day communist parties is their devotion to the aggressive foreign policy of the Soviets. Whenever they must choose between Russia and their own country, they do not hesitate to prefer Russia. Their principle is: Right or wrong, my Russia. They strictly obey all orders issued from Moscow. When Russia was an ally of Hitler, the French communists sabotaged their own country's war effort and the American communists passionately opposed President Roosevelt's plans to aid England and France in their struggle against the Nazis."

"It is, they say, not Russia that plans aggression but, on the contrary, the decaying capitalist democracies. Russia wants merely to defend its own independence. This is an old and well-tried method of justifying aggression. Louis XIV and Napoleon I, Wilhelm II and Hitler were the most peace-loving of all men. When they invaded foreign countries, they did so only in just self-defence. Russia was as much menaced by Estonia or Latvia as Germany was by Luxemburg or Denmark."

"It is a fact that Mussolini entered the scene of world politics as an ally of the democracies, while Lenin entered it as a virtual ally of imperial Germany."

"There were nowhere more docile disciples of Lenin, Trotsky and Stalin than the Nazis were."

"The only certain fact about Russian affairs under the Soviet regime with regard to which all people agree is: that the standard of living of the Russian masses is much lower than ... the paragon of capitalism, the United States of America. If we were to regard the Soviet regime as an experiment, we would have to say that the experiment has clearly demonstrated the superiority of capitalism and the inferiority of socialism."

"Now it cannot be denied that the only way one can offer effective resistance to violent assaults is by violence. Against the weapons of the Bolsheviks, weapons must be used in reprisal, and it would be a mistake to display weakness before murderers. No liberal has ever called this into question. What distinguishes liberal from Fascist political tactics is not a difference of opinion in regard to the necessity of using armed force to resist armed attackers, but a difference in the fundamental estimation of the role of violence in a struggle for power. The great danger threatening domestic policy from the side of Fascism lies in its complete faith in the decisive power of violence. In order to assure success, one must be imbued with the will to victory and always proceed violently. This is its highest principle. What happens, however, when one's opponent, similarly animated by the will to be victorious, acts just as violently? The result must be a battle, a civil war. The ultimate victor to emerge from such conflicts will be the faction strongest in number. In the long run, a minority — even if it is composed of the most capable and energetic — cannot succeed in resisting the majority. The decisive question, therefore, always remains: How does one obtain a majority for one's own party? This, however, is a purely intellectual matter. It is a victory that can be won only with the weapons of the intellect, never by force. The suppression of all opposition by sheer violence is a most unsuitable way to win adherents to one's cause. Resort to naked force — that is, without justification in terms of intellectual arguments accepted by public opinion — merely gains new friends for those whom one is thereby trying to combat. In a battle between force and an idea, the latter always prevails."

"Repression by brute force is always a confession of the inability to make use of the better weapons of the intellect — better because they alone give promise of final success. This is the fundamental error from which Fascism suffers and which will ultimately cause its downfall. The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property. The next episode will be the victory of Communism. The ultimate outcome of the struggle, however, will not be decided by arms, but by ideas. It is ideas that group men into fighting factions, that press the weapons into their hands, and that determine against whom and for whom the weapons shall be used. It is they alone, and not arms, that, in the last analysis, turn the scales. So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one's own nation can secure its place in the community of nations by force alone. It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error."

"A free man must be able to endure it when his fellow men act and live otherwise than he considers proper. He must free himself from the habit, just as soon as something does not please him, of calling for the police."

"As the liberal sees it, the task of the state consists solely and exclusively in guaranteeing the protection of life, health, liberty, and private property against violent attacks. Everything that goes beyond this is an evil. A government that, instead of fulfilling its task, sought to go so far as actually to infringe on personal security of life and health, freedom, and property would, of course, be altogether bad."

"The unhampered market economy is not a system which would seem commendable from the standpoint of the selfish group interests of the entrepreneurs and capitalists. It is not the particular interests of a group or of individual persons that require the market economy, but regard for the common welfare. It is not true that the advocates of the free-market economy are defenders of the selfish interests of the rich. The particular interests of the entrepreneurs and capitalists also demand interventionism to protect them against the competition of more efficient and active men. The free development of the market economy is to be recommended, not in the interest of the rich, but in the interest of the masses of the people."

"The capitalist system of production is an economic democracy in which every penny gives a right to vote. The consumers are the sovereign people. The capitalists, the entrepreneurs, and the farmers are the people’s mandatories. If they do not obey, if they fail to produce, at the lowest possible cost, what the consumers are asking for, they lose their office. Their task is service to the consumer. Profit and loss are the instruments by means of which the consumers keep a tight rein on all business activities."

"The state is God, deifies arms and prisons. The worship of the state is the worship of force. There is no more dangerous menace to civilization than a government of incompetent, corrupt, or vile men. The worst evils which mankind ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster."

"A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings."

"...racial hatred is not a natural phenomenon innate in man. It is the product of ideologies. But even if such a thing as a natural and inborn hatred between various races existed, it would not render social cooperation futile and would not invalidate Ricardo's theory of association. Social cooperation has nothing to do with personal love or with a general commandment to love one another. People do not cooperate under the division of labor because they love or should love one another. They cooperate because this best serves their own interests. Neither love nor charity nor any other sympathetic sentiments but rightly understood selfishness is what originally impelled man to adjust himself to the requirements of society, to respect the rights and freedoms of his fellow men and to substitute peaceful collaboration for enmity and conflict."

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

"If one takes pleasure in calling the gold standard a "barbarous relic," one cannot object to the application of the same term to every historically determined institution. Then the fact that the British speak English — and not Danish, German, or French — is a barbarous relic too, and every Briton who opposes the substitution of Esperanto for English is no less dogmatic and orthodox than those who do not wax rapturous about the plans for a managed currency."

"If historical experience could teach us anything, it would be that private property is inextricably linked with civilization."

"Value is not intrinsic, it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment. Neither is value in words and doctrines, it is reflected in human conduct. It is not what a man or groups of men say about value that counts, but how they act."

"People do not cooperate under the division of labor because they love or should love one another. They cooperate because this best serves their own interests. Neither love nor charity nor any other sympathetic sentiments but rightly understood selfishness is what originally impelled man to adjust himself to the requirements of society, to respect the rights and freedoms of his fellow men and to substitute peaceful collaboration for enmity and conflict."

"The criterion of truth is that it works even if nobody is prepared to acknowledge it."

"It is a double-edged makeshift to entrust an individual or a group of individuals with the authority to resort to violence. The enticement implied is too tempting for a human being. The men who are to protect the community against violent aggression easily turn into the most dangerous aggressors. They transgress their mandate. They misuse their power for the oppression of those whom they were expected to defend against oppression. The main political problem is how to prevent the police power from becoming tyrannical. This is the meaning of all the struggles for liberty."

"In the 1920s, Mises made important contributions to monetary economics, business cycle theory and of course socialist economics, but his later writings on the foundations of economic science are so idiosyncratic and dogmatically stated that we can only wonder that they have been taken seriously by anyone."

"Just when the hopes of socialism seemed to be about to come true, Mises voiced the thoughts uppermost in the minds of so many who lacked the courage to speak out. Socialism could not work or keep its promises, he argued, because under such a system economic calculations in terms of value were rendered impossible."

"Among Mises’s greatest personal attributes was courage. He had the force of will and character to maintain a position that he thought true even if almost no one else did."

"While it is possible to imagine Mises without Hayek, it is not possible to imagine Hayek without Mises."

"Professor von Mises has a splendid analytical mind and an admirable passion for liberty; but as a student of human nature he is worse than null and as a debater he is of Hyde Park standard."

"The market, even more than the wheel, is one of the great commonplace servants of man. Professor Mises powerfully defends it against those who would subvert it to the service of selfish or shortsighted ends. But it is possible that the defense is stronger when in the hands of somewhat more moderate men. One is also bound to be puzzled over who is to vote in and support the economic and political order that Professor Mises demands. He is a vigorous foe of autocrats and dictators but he also has little respect for people at large. Defending advertising, to choose one example among many, he observes: "Like all things designed to suit the taste of the masses, it is repellent to people of delicate feeling." I wouldn't suppose that the people of delicate feeling are yet in the strength to take over."

"As readers will remember, Mises in his famous socialist calculation argument proved that a fully socialist economy would collapse into chaos. If this is right, how can ostensibly socialist economies such as Soviet Russia exist? In answer, Mises said that these economies weren’t fully socialist. They allowed scope for private enterprise, albeit of a limited sort. Mises’s point applies to the German form of socialism as well as the Russian."

"There is no single man to whom I owe more intellectually, even though he [Mises] was never my teacher in the institutional sense of the word."

"Though I learned that he [Mises] usually was right in his conclusions, I wasn't always satisfied by his arguments, and retained to the end a certain critical attitude which sometimes forced me to build different constructions, which however, to my great pleasure, usually led to the same conclusions. I am to the present moment pursuing the questions which he made me see, and that, I believe is the greatest benefit one scientist can confer on one of the next generation."

"...there I came to know him (Mises) mainly as a tremendously efficient executive, the kind of man who, as was said of John Stuart Mill, because he does a normal day's work in two hours, always has a clear desk and time to talk about anything. I came to know him as one of the best educated and informed men I have ever known..."

"I probably was ... when I began my study, called the Fabian kind of approach and convinced that there must be intelligent solution of the many dissatisfactory events of this world. And so it was as a mild socialist, that I decided I must study economics. I was very soon 'cured' of these beliefs that socialism was the solution because I came after three years, and as a direct influence of Ludwig von Mises, who had then published his great book on Socialism demonstrating that the socialist solution was impossible in a technical sense."

"It turns out, of course, that Mises was right. The Soviet system has long been dogged by a method of pricing that produced grotesque misallocations of effort. The difficulties were not so visible in the early days of Soviet industrialization or in the post-Second World War reconstruction period. The dams and mills and entire new cities of the nineteen-thirties astonished the world, as did the Chinese Great Leap Forward of the nineteen-fifties, which performed similar miracles from a still lower base. But those undertakings, like the building of the Pyramids or the Great Wall, depended less on economic coordination than on the political capacity for marshalling vast labor forces. Inefficiency set in when projects had to be joined into a complex whole – a process that required knowing how much things should cost. As Mises foresaw, setting prices became a hopeless problem, because the economy never stood still long enough for anyone to decide anything correctly."

"Socialists have certainly good reason to be grateful to Professor Mises, the great advocatus diaboli of their cause. For it was his powerful challenge that forced the socialists to recognise the importance of an adequate system of economic accounting to guide the allocation of resources in a socialist economy. Even more, it was chiefly due to Professor Mises' challenge that many socialists became aware of the very existence of such a problem.... [T]he merit of having caused the socialists to approach this problem systematically belongs entirely to Professor Mises. Both as an expression of recognition for the great service rendered by him and as a memento of the prime importance of sound economic accounting, a statue of Professor Mises ought to occupy an honorable place in the great hall of the Ministry of Socialisation or of the Central Planning Board of the socialist state."

"The dictatorship of the proletariat was the logical extension of Lenin’s agitprop; Fascism was more than the logical extension of liberty – it was embraced by Ludwig von Mises (1985 [1927], 42–51), the co-leader of the third generation Austrian School, [...] Mises’ political activity was consistent with his ideology: on 1 March 1934, he joined the Austro-Fascist Patriotic Front and their Werk Neues Leben social club (Hülsmann 2007, 677, n149). Mises may also have been a victim of propaganda: his justification for this tactical embrace was that fascists would protect property – the protection of which he saw as the very essence of liberty. [...] The Jewish-born Mises was lucky to escape with his life; he devoted much of the rest of it to describing his opponents as ‘Fascists’."

"Mises (pronounced Mee-zis) was by far the most important figure of the Austrian School of economics. The Austrians eschewed economic calculation for a more philosophical approach to issues of finance and trade. They viewed modern theories as highly mathematical, heavily conceptual, and largely divorced from reality. For them, virtually every contemporary economist is akin to a geocentrist using increasingly complicated models to predict how celestial bodies circled the Earth. Difficult math doesn’t make a calculation true, and neither does it make its practitioner smart. This disdain for statistics can be seen in the New Right’s contempt for using numeric data as a mechanism of persuasion. It’s about the story, not the numbers."

"Mises was born in 1881 in my hometown of Lvov, in what is now Ukraine. He emigrated from Eastern Europe to New York in 1940 and became perhaps the most thoroughgoing American defender of laissez-faire capitalism. Years later Milton Friedman would recount a story about the first meeting of the Mont Pelerin Society, held in 1947. The group was meant to bring together what Europeans would call liberal intellectuals and what Americans would describe as libertarians. As Friedman recalled, “We were discussing the distribution of income, and whether you should have progressive income taxes. Some of the people there were expressing the view that there could be a justification for it.” Furiously and famously, Mises declared, “You’re all a bunch of socialists!” and stormed out. Much like Rand with rent control, Mises felt that once income distribution is on the table, the jig is basically up. It simply becomes a matter of haggling over how much socialism there is."

"In 1756 Edmund Burke published his first work: Vindication of Natural Society. Curiously enough it has been almost completely ignored in the current Burke revival. This work contrasts sharply with Burke’s other writings, for it is hardly in keeping with the current image of the Father of the New Conservatism. A less conservative work could hardly be imagined; in fact, Burke’s Vindication was perhaps the first modern expression of rationalistic and individualistic anarchism. … "Anarchism" is an extreme term, but no other can adequately describe Burke’s thesis. Again and again, he emphatically denounces any and all government, and not just specific forms of government. … All government, Burke adds, is founded on one "grand error." It was observed that men sometimes commit violence against one another, and that it is therefore necessary to guard against such violence. As a result, men appoint governors among them. But who is to defend the people against the governors? … The anarchism of Burke’s Vindication is negative, rather than positive. It consists of an attack on the State rather than a positive blueprint of the type of society which Burke would regard as ideal. Consequently, both the communist and the individualist wings of anarchism have drawn sustenance from this work."

"Barnes dismissed his own past criticism of the World War II unconditional surrender policy as valid but superficial; for he had learned from General Albert C. Wedemeyer’s book that the murder of Germans and Japanese was the overriding aim of World War II – virtually an Anglo-American scalping party."

"If ‘we are the government,’ then anything a government does to an individual is not only just and untyrannical; it is also ‘voluntary’ on the part of the individual concerned… if the government conscripts a man, or throws him into jail for dissident opinion, then he is ‘doing it to himself’ and therefore nothing untoward has occurred. Under this reasoning, any Jews murdered by the Nazi government were not murdered, instead, they must have ‘committed suicide,’ since they were the government (which was democratically chosen), and therefore anything the government did to them was voluntary on their part… the overwhelming bulk of the people hold this fallacy to a greater or less degree."

"It is curious that people tend to regard government as a quasi-divine, selfless, Santa Claus organization. Government was constructed neither for ability nor for the exercise of loving care; government was built for the use of force and for necessarily demagogic appeals for votes. If individuals do not know their own interests in many cases, they are free to turn to private experts for guidance. It is absurd to say that they will be served better by a coercive, demagogic apparatus."

"All interstate wars intensify aggression – maximize it … some wars are even more unjust than others. In other words, all government wars are unjust, although some governments have less unjust claims…"

"The natural tendency of the state is inflation."

"I define anarchist society as one where there is no legal possibility for coercive aggression against the person or property of any individual. Anarchists oppose the State because it has its very being in such aggression, namely, the expropriation of private property through taxation, the coercive exclusion of other providers of defense service from its territory, and all of the other depredations and coercions that are built upon these twin foci of invasions of individual rights."

"Briefly, the State is that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area; in particular, it is the only organization in society that obtains its revenue not by voluntary contribution or payment for services rendered but by coercion."

"The fundamental political question is why do people obey a government. The answer is that they tend to enslave themselves, to let themselves be governed by tyrants. Freedom from servitude comes not from violent action, but from the refusal to serve. Tyrants fall when the people withdraw their support."

"It is the state that is robbing all classes, rich and poor, black and white alike; it is the state that is ripping us all off; it is the state that is the common enemy of mankind."

"There is one good thing about Marx: he was not a Keynesian."

"Rights may be universal, but their enforcement must be local."

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

"Money is different from all other commodities: other things being equal, more shoes, or more discoveries of oil or copper benefit society, since they help alleviate natural scarcity. But once a commodity is established as a money on the market, no more money at all is needed. Since the only use of money is for exchange and reckoning, more dollars or pounds or marks in circulation cannot confer a social benefit: they will simply dilute the exchange value of every existing dollar or pound or mark. So it is a great boon that gold or silver are scarce and are costly to increase in supply. But if government manages to establish paper tickets or bank credit as money, as equivalent to gold grams or ounces, then the government, as dominant money-supplier, becomes free to create money costlessly and at will. As a result, this 'inflation' of the money supply destroys the value of the dollar or pound, drives up prices, cripples economic calculation, and hobbles and seriously damages the workings of the market economy."

"Behind the honeyed but patently absurd pleas for equality is a ruthless drive for placing themselves (the elites) at the top of a new hierarchy of power."

"This, by the way, is the welfare state in action: Its a whole bunch of special interest groups screwing consumers and taxpayers, and making them think they're really benefiting."

"Harold, the young kids out there are not going to be willing to go to the barricades in defense of lowered transaction costs."

"All my life, it seems, I have hated the guts of Max Lerner. Now, make no mistake: there is nothing personal in this rancor. I have never met, nor have I ever had any personal dealings with, Max. No, my absolute loathing for Max Lerner is disinterested, cosmic in its grandeur. It's just that ever since I was a toddler, this ugly homunculus, this pretentious jackass, has been there, towering over the American ideological scene. In the fifty-five years that I have been aware of Max's presence, in all of his many permutations and combinations and seeming twists and turns, he has taken the totally repellent position at every step of the way."

"In short, the early receivers of the new money in this market chain of events gain at the expense of those who receive the money toward the end of the chain, and still worse losers are the people (e.g., those on fixed incomes such as annuities, interest, or pensions) who never receive the new money at all."

"So: if the chronic inflation undergone by Americans, and in almost every other country, is caused by the continuing creation of new money, and if in each country its governmental "Central Bank" (in the United States, the Federal Reserve) is the sole monopoly source and creator of all money, who then is responsible for the blight of inflation? Who except the very institution that is solely empowered to create money, that is, the Fed (and the Bank of England, and the Bank of Italy, and other central banks) itself?"

"The more consistently Austrian School an economist is, the better a writer he will be."

"The clear and logical thinker will always be an 'extremist', and will therefore always be interesting: his pitafall is to go wildly into error. But on the other hand, while the orthodox 'middle-of-the-road' thinker will never get that far wrong, neither will he ever contribute anything either, aside from being generally deadly dull."

"[O]ften, only extremists' make sense, while eclectics and moderates are entangled in contradictions."

"If a man has the right to self-ownership, to the control of his life, then in the real world he must also have the right to sustain his life by grappling with and transforming resources; he must be able to own the ground and the resources on which he stands and which he must use. In short, to sustain his "human right.""

"The libertarian creed, finally, offers the fulfillment of the best of the American past along with the promise of a far better future. Even more than conservatives... libertarians are squarely in the great classical liberal tradition that built the United States and bestowed on us the American heritage of individual liberty, a peaceful foreign policy, minimal government, and a free-market economy."

"The cumulative development of a medium of exchange on the free market — is the only way money can become established. … government is powerless to create money for the economy; it can only be developed by the processes of the free market."

"Money is a commodity … not a useless token only good for exchanging; … It differs from other commodities in being demanded mainly as a medium of exchange."

"It doesn't matter what the supply of money is."

"Inflation may be defined as any increase in the economy's supply of money not consisting of an increase in the stock of the money metal."

"Money … is the nerve center of the economic system. If, therefore, the state is able to gain unquestioned control over the unit of all accounts, the state will then be in a position to dominate the entire economic system, and the whole society."

"Inflation, being a fraudulent invasion of property, could not take place on the free market."

"Freedom can run a monetary system as superbly as it runs the rest of the economy. Contrary to many writers, there is nothing special about money that requires extensive governmental dictation."

"A parent does not have the right to aggress against his children, but also that the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent and depriving the parent of his rights. The parent therefore may not murder or mutilate his child, and the law properly outlaws a parent from doing so. But the parent should have the legal right not to feed the child, i.e., to allow it to die. The law, therefore, may not properly compel the parent to feed a child or to keep it alive. (Again, whether or not a parent has a moral rather than a legally enforceable obligation to keep his child alive is a completely separate question.) This rule allows us to solve such vexing questions as: should a parent have the right to allow a deformed baby to die (e.g., by not feeding it)? The answer is of course yes, following a fortiori from the larger right to allow any baby, whether deformed or not, to die. (Though, as we shall see below, in a libertarian society the existence of a free baby market will bring such "neglect" down to a minimum.)"

"The problem is that he originated nothing that was true, and that whatever he originated was wrong."

"John Stuart was the quintessence of soft rather than hardcore, a woolly minded man of mush in striking contrast to his steel-edged father."

"Shameless sponging on friends and relatives … Marx affected a hatred and contempt for the very material resource he was too anxious to cadge and use so recklessly. Marx created an entire philosophy around his own corrupt attitudes toward money."

"One gratifying aspect of our rise to some prominence is that, for the first time in my memory, we, "our side," had captured a crucial word from the enemy. Other words, such as "liberal," had been originally identified with laissez-faire libertarians, but had been captured by left-wing statists, forcing us in the 1940s to call ourselves father feebly "true" or "classical" liberals. "Libertarians"’, in contrast, had long been simply a polite word for left-wing anarchists, that is for anti-private property anarchists, either of the communist or syndicalist variety. But now we had taken it over, and more properly from the view of etymology; since we were proponents of individual liberty and therefore of the individual's right to his property. , p. 83"

"According to Rothbard, a child becomes an adult not when he reaches some arbitrary age limit, but rather when he does something to establish his ownership and control over his own person: namely, when he leaves home, and becomes able to support himself. This criteria, and only this criteria, is free of all the objections to arbitrary age limits. Moreover, not only is it consistent with the libertarian homesteading theory, it is but an application of it. For by leaving home and becoming his own means of support, the ex-child becomes an initiator, as the homesteader, and owes his improved state to his own actions."

"Let me take the liberty of being uncharitable but truthful.Rothbard had a problem. He thought he was a great economist, but practically nobody within the profession agreed and most of them had never heard of him. Rothbard had a solution. He was ignored because he held extreme pro-market views, which were ideologically unpopular in the academy. Rothbard had a problem. Milton Friedman held extreme pro-market views--not as extreme as Rothbard's, but far enough from academic orthodoxy so that the same effect should have existed. But Milton Friedman not only wasn't ignored, he was viewed within the profession as a leading figure--despite his unpopular political views. Rothbard had a solution--to persuade himself and his followers that Milton Friedman was really one of them instead of one of us, hence his acceptance by the profession didn't contradict Rothbard's view of the reason for Rothbard's non-acceptance.Maintaining that claim was difficult--at one point I remember being told by a Rothbard supporter, explaining why he was not going to publish a letter of mine in his journal that contained quotes from my father inconsistent with Rothbard's account of my father's views, that if Rothbard and Friedman disagreed about what Friedman's views were, Rothbard was right."

"It may come as a surprise to learn that for Rothbard the New Left's most "crucial contribution to both ends and means…is its concept of 'participatory democracy.'" … This may seem less surprising once one realizes that for Rothbard the free market is the fullest realization of participatory democracy. … The political appeal of participatory democracy for Rothbard was its requirement of decentralization, and its rejection of a layer of political "representatives" above the people. But Rothbard also found the idea appealing outside the narrowly political sphere. He wrote: "Participatory democracy is at the same time…a theory of politics and a theory of organization, an approach to political affairs and to the way New Left organizations (or any organizations, for that matter) should function." And he praised "fascinating experiments in which workers are transformed into independent and equal entrepreneurs." Traditional "socialist" goals such as workers' control of industry, then, were apparently not anathema to Rothbard.Indeed, he would later argue that any nominally private institution that gets more than 50% of its revenue from the government, or is heavily complicit in government crimes, or both, should be considered a government entity; since government ownership is illegitimate, the proper owners of such institutions are "the 'homesteaders', those who have already been using and therefore 'mixing their labor' with the facilities." This entails inter alia "student and/or faculty ownership of the universities." As for the "myriad of corporations which are integral parts of the military-industrial complex," one solution, Rothbard says, is to "turn over ownership to the homesteading workers in the particular plants." He also supported third-world land reforms considered socialistic by many conservatives, on the grounds that existing land tenure represented "continuing aggression by titleholders of land against peasants engaged in transforming the soil.""

"For Rothbard, it was precisely capitalism that was the one and only savior of mankind. Whereas Buchanan was a strict constitutionalist and a strong patriot, Rothbard was opposed to government itself—and not just the American government, but all government. According to Rothbard’s anarcho-capitalism, all state functions could be served cheaper, better, and more effectively by the free market. This included the police and even national defense."

"For Rothbard, “no government interference with exchanges can ever increase social utility,” and “[w]e are led inexorably, then, to the conclusion that the processes of the free market always lead to a gain in social utility.” Therefore, “capitalism is the fullest expression of anarchism, and anarchism is the fullest expression of capitalism. Not only are they compatible, but you can’t really have one without the other.” For Rothbardians—as opposed to their archenemies the neocons—the worst of all government activity is war: “It is in war that the State really comes into its own: swelling in power, in number, in pride, in absolute dominion over the economy and the society.” There is no difference between a Lois Lerner and a beat cop. They are both enforcers of the state, albeit in different clothing."

"For the evangelical left, equality and fairness are universally shared goals. Rothbard’s response was a book titled Egalitarianism as a Revolt Against Nature. The idea that freedom and democracy are not only compatible but downright synonymous is taken for granted in contemporary American culture, but here Rothbard disagrees as well. The popular conception of democracy is one in which every voter envisions their ideal society and then votes us in that direction. In the anarchist perspective, this is akin to everyone imagining themselves as a totalitarian dictator and then selecting the politician who will best implement their plan into reality. Rothbard thought of the vote in a different way. By regarding all state action as illegitimate, he viewed the two political parties as literal rival gangs whose power needed to be curtailed as much as possible and hopefully destroyed altogether. He regarded the air of prestige around Congress as akin to a Mafia don’s three-piece suit, a pretense of civility masking the murderous thug within. Accordingly, the New Right still regards vulgarity toward and disrespect for the elites as important mechanisms for revealing their true inner evil. Let them drop their masks and expose themselves as the moral abominations that they really are."

"Finding no room for intellectual discussion in Rand’s sphere (and years later satirizing her in his embarrassingly juvenile and unpublished play Mozart Was a Red), Rothbard searched for other alliances. So while Buchanan was joining with Nixon, Rothbard was singing the praises of Tricky Dick’s archenemies: the New Left. Sometimes it was hard to tell if the anarchist Rothbard was simply looking for people to take him seriously, and at other times it was hard to tell how they could. For Rothbard, the way to freedom was to destroy the only thing that ever stood in its way: government. He praised the Black Power movement at first, seeing it as a useful opponent to the state (though spending little time writing about race per se, being an ultra-individualist). In 1967 Rothbard wrote that Che Guevara was “an heroic figure for our time” and “the living embodiment of the principle of Revolution.” In other words, my enemy’s enemy is my friend—a principle that the New Right struggles with to this day."

"Noam Chomsky describes Murray Rothbard's vision of a libertarian society as "so full of hate that no human being would want to live in it." (I will not attempt to dissect this insane remark here except to note how the "anti-authoritarian" Chomsky purports to speak for all human beings.)"

"Murray Rothbard said, more than once, that there was nothing wrong about a person not fully understanding economics; but that those ignorant of economic principles ought not to be proposing governmental policies to govern economic activity."

"It is my contention that Rothbardian anarcho-capitalism is misnamed because it is actually a variety of socialism, in that it offers an alternative understanding of existing capitalism (or any other variety of statism) as systematic theft from the lower classes and envisions a more just society without that oppression. Rather than depending upon the the labor theory of value to understand this systematic theft, Rothbardian market anarchism utilizes natural law theory and Lockean principles of property and self-ownership taken to their logical extreme as an alternative framework for understanding and combating oppression. ... Murray Rothbard was a visionary socialist ... Because the market anarchist society would be one in which the matter of systematic theft has been addressed and rectified, market anarchism ... is best understood a new variety of socialism—a stigmergic socialism. Stigmergy is a fancy word for systems in which a natural order emerges from the individual choices made by the autonomous components of a collective within the sphere of their own self-sovereignty. To the extent coercion skews markets by distorting the decisions of those autonomous components (individual people), it ought to be seen that a truly free market (a completely stigmergic economic system) necessarily implies anarchy, and that any authentic collectivism is necessarily delineated in its bounds by the the natural rights of the individuals composing the collective."

"The American fascist would prefer not to use violence. His method is to poison the channels of public information.."

"With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public."

"American fascism will not be really dangerous until there is a purposeful coalition among the cartelists, the deliberate poisoners of public information... Fascism is a worldwide disease... greatest threat to the United States will come after the war... within the United States itself."

"If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States. There are probably several hundred thousand if we narrow the definition to include only those who in their search for money and power are ruthless and deceitful. ... They are patriotic in time of war because it is to their interest to be so, but in time of peace they follow power and the dollar wherever they may lead."

"They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection."

"The dangerous American fascist is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power."

"If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States. There are probably several hundred thousand if we narrow the definition to include only those who in their search for money and power are ruthless and deceitful. Most American fascists are enthusiastically supporting the war effort."

"My first introduction to economics came by way of Professor B.H. Hibbard. I remember being asked in 1910, at the close of my college course, who had influenced me most, and I said Professor Hibbard. Later, of course, we came to disagree violently about the McNary-Haugen Bill and some other things; but I still think that Professor Hibbard is a very good teacher."

"the Progressive Party, with its extravagant claims, has, therefore, imposed on itself the considerable burden of proof. The only party within recent memory which made equally strident claims of fellowship were the Communists, who failed to survive this test; and the only politician of similar claims was, of course, Wallace's erstwhile master, Roosevelt, who did not after all, now that the magic of his voice is gone, succeed in raising the darker brother to the status of a citizen. This is the ancestry of the Wallace party, and it does not work wholly in its favor. It operates to give pause to even the most desperate and the most gullible."

"The nature of the American consensus was redefined from the 1940s, with important political, social and intellectual effects. Left-wing ideas were castigated as was cultural relativism. Instead, there was pressure for support of a conservative view of American culture. The failed attempt by Henry Wallace, a New Dealer who had been Vice-President in 1941–5, to challenge Truman by running for President in 1948 as a candidate of the new Progressive Party, reflected not only the divisive impact of taking a relatively pro-Soviet foreign policy line, but also the popular preference of, and for, Truman. He had dismissed Wallace as Secretary of Commerce in 1946 for opposing American foreign policy as overly anti-Soviet."

"What all this reminds us is that in order to defeat an enemy they routinely denounced as barbaric the Western powers had made common cause with an ally that was morally little better - but ultimately more effective at waging total war. 'The choice before human beings,' George Orwell observed in 1941, 'is not . . . between good and evil but between two evils. You can let the Nazis rule the world: that is evil; or you can overthrow them by war, which is also evil . . . Whichever you choose, you will not come out with clean hands.' Orwell's Animal Farm is nowadays revered as a critique of the Russian Revolution's descent into Stalinism; people forget that it was written during the Second World War and turned down by no fewer than four publishers (including T. S. Eliot, on behalf of Faber & Faber) for its anti-Soviet sentiments. Nothing better symbolized the blind eye that the Western powers now turned to Stalin's crimes than the American Vice-President Henry Wallace's visit to the Kolyma Gulag in May 1944. 'No other two countries are more alike than the Soviet Union and the United States,' he told his hosts. 'The vast expanses of your country, her virgin forests, wide rivers and large lakes, all kinds of climate - from tropical to polar - her inexhaustible wealth, [all] remind me of my homeland . . . Both the Russians and the Americans, in their different ways, are groping for a way of life that will enable the common man everywhere in the world to get the most good out of modern technology. There is nothing irreconcilable in our aims and purposes.' All were now totalitarians; in the words of Norman Mailer's general in The Naked and the Dead."

"Like everyone else I was misled by the size and the enthusiasm of the crowds that Wallace was attracting across the country. In Los Angeles ten thousand Chicanos came to hear Wallace speak in Lincoln Park under the banner of "Amigos de Wallace," and twenty-five hundred blacks came to hear him speak in Watts. We filled Gilmore Stadium, with its 32,000 seats, on three occasions. Charlie Chaplin endorsed him; Katharine Hepburn spoke at the first of those Gilmore Stadium meetings and made a very powerful speech supporting Wallace and attacking red-baiting. The Students for Wallace movement was very strong at UCLA, and we recruited many young people into the Party as a result. In Berkeley, Wallace was banned from speaking on campus but managed to attract eight thousand students to hear him speak from a sidewalk adjoining the campus. In the California primaries in June, about a half million people cast ballots for candidates who had filed or cross-filed as Progressives, one fifth of the total primary vote. It was a very energizing campaign, and no one in the Party thought that Wallace could possibly end up with less than five million votes nationwide."

"In 1948 the two-party duopoly smeared and suppressed the pro-labor efforts by the Progressive Party and its presidential candidate, former Vice President (under Franklin Delano Roosevelt) Henry Wallace. This was followed by more onerous restrictions on state ballot access and exclusions of third parties, enacted by both the Republicans and Democrats, that further stunted competitive choices of candidates and agendas."

"Instead, the main challenge to Truman’s decision to confront the Soviet Union came from the Left. And it was not much of a challenge. Roosevelt’s former secretary of agriculture, Henry Wallace—a Democratic Party grandee who regarded himself as a leader of the Left—decided to form a separate party for the presidential elections in 1948. “The bigger the peace vote in 1948,” Wallace said in declaring his candidacy, “the more definitely the world will know that the United States is not behind the bipartisan reactionary war policy which is dividing the world into two armed camps and making inevitable the day when American soldiers will be lying in their Arctic suits in the Russian snow.” Even though it was supported by some Democrats who felt that Truman was moving away from the legacies of the New Deal by breaking the wartime alliance with the USSR, Wallace’s campaign was undermined by his own haplessness as a candidate and the rather shrill US Communist Party support for his cause. To everyone’s surprise, Truman narrowly won the election against the Republican Thomas Dewey. Wallace’s Progressives scored 2.5 percent of the vote, less than Strom Thurmond’s Southern segregationists ticket."

"Roy Cohn and Joe McCarthy will be redeemed when the people have taken back their government from the criminal alliance of Communists, Socialists, New Dealers and the Eisenhower-Dewey Republicans."

"The green movement, in other words, is the red movement stripped of the veneer of reason and science and bent on the destruction of reason and science rather than take the trouble to learn what reason and science actually are. The green movement is the red movement no longer in its boisterous, arrogant youth, but in its demented old age."

"Like the use of the word 'concupiscence' in an earlier age to describe sexual desire, the use of the word 'pollution' to describe essential aspects of the productive activities of an industrial society represents an attempt to defame an entirely proper human capacity by means of using an evil sounding name for it."

"Whoever claims that economic competition represents "survival of the fittest" in the sense of the law of the jungle, provides the clearest possible evidence of his lack of knowledge of economics."

"The truth is that economic competition is the very opposite of competition in the animal kingdom. It is not a competition in the grabbing off of scarce nature-given supplies, as it is in the animal kingdom. Rather, it is a competition in the positive creation of new and additional wealth."

"The slaves of socialism are slaves, but they are no one's property and therefore no one's loss."

"Under communism (socialism), there is no incentive to supply people with anything they need or want, including safety."

"The identification of Nazi Germany as a socialist state was one of the many great contributions of Ludwig von Mises."

"When one remembers that the word "Nazi" was an abbreviation for "der Nationalsozialistische Deutsche Arbeiters Partei" — in English translation: the National Socialist German Workers' Party — Mises's identification might not appear all that noteworthy. For what should one expect the economic system of a country ruled by a party with "socialist" in its name to be but socialism?"

"Private ownership of the means of production existed in name only under the Nazis and that the actual substance of ownership of the means of production resided in the German government. For it was the German government and not the nominal private owners that exercised all of the substantive powers of ownership: it, not the nominal private owners, decided what was to be produced, in what quantity, by what methods, and to whom it was to be distributed, as well as what prices would be charged and what wages would be paid, and what dividends or other income the nominal private owners would be permitted to receive."

"If the individual [in Nazi Germany] is a means to the ends of the State, so too, of course, is his property. Just as he is owned by the State, his property is also owned by the State."

"What specifically established de facto socialism in Nazi Germany was the introduction of price and wage controls in 1936."

"The combination of price controls with this further set of controls constitutes the de facto socialization of the economic system. For it means that the government then exercises all of the substantive powers of ownership."

"The requirements of enforcing a system of price and wage controls shed major light on the totalitarian nature of socialism — most obviously, of course, on that of the German or Nazi variant of socialism, but also on that of Soviet-style socialism as well."

"The enforcement of price controls requires a government similar to that of Hitler's Germany or Stalin's Russia, in which practically anyone might turn out to be a police spy and in which a secret police exists and has the power to arrest and imprison people."

"In any type of socialist state, Nazi or Communist, the government's economic plan is part of the supreme law of the land."

"Nazis generally did not have to kill in order to seize the property of Germans other than Jews. This was because, as we have seen, they established socialism by stealth, through price controls, which served to maintain the outward guise and appearance of private ownership. The private owners were thus deprived of their property without knowing it and thus felt no need to defend it by force."

"A largely parallel example involving human behavior has been used elsewhere by Savage and me. Consider the problem of predicting the shots made by an expert billiard player. It seems not at all unreasonable that excellent predictions would be yielded by the hypothesis that the billiard player made his shots as if he knew the complicated mathematical formulas that would give the optimum directions of travel, could estimate accurately by eye the angles, etc., describing the location of the balls, could make lightning calculations from the formulas, and could then make the balls travel in the direction indicated by the formulas. Our confidence in this hypothesis is not based on the belief that billiard players, even expert ones, can or do go through the process described; it derives rather from the belief that, unless in some way or other they were capable of reaching essentially the same result, they would not in fact be expert billiard players. It is only a short step from these examples to the economic hypothesis that under a wide range of circumstances individual firms behave as if they were seeking rationally to maximize their expected returns (generally if misleadingly called "profits") and had full knowledge of the data needed to succeed in this attempt; as if, that is, they knew the relevant cost and demand functions, calculated marginal cost and marginal revenue from all actions open to them, and pushed each line of action to the point at which the relevant marginal cost and marginal revenue were equal. Now, of course, businessmen do not actually and literally solve the system of simultaneous equations in terms of which the mathematical economist finds it convenient to express this hypothesis, any more than leaves or billiard players explicitly go through complicated mathematical calculations or falling bodies decide to create a vacuum. The billiard player, if asked how he decides where to hit the ball, may say that he "just figures it out" but then also rubs a rabbit's foot just to make sure; and the businessman may well say that he prices at average cost, with of course some minor deviations when the market makes it necessary. The one statement is about as helpful as the other, and neither is a relevant test of the associated hypothesis."

"If we are to use effectively these abstract models and this descriptive material, we must have a comparable exploration of the criteria for determining what abstract model it is best to use for particular kinds of problems, what entities in the abstract model are to be identified with what observable entities, and what features of the problem or of the circumstances have the greatest effect on the accuracy of the predictions yielded by a particular model or theory."

"The construction of hypotheses is a creative act of inspiration, intuition, invention; its essence is the vision of something new in familiar material. The process must be discussed in psychological, not logical, categories; studied in autobiographies and biographies, not treatises on scientific method; and promoted by maxim and example, not syllogism or theorem."

"Over the period covered by these data, a drastic change has occurred in the responsibilities undertaken by the state to provide assistance to the aged, unemployed and otherwise dependent. This change has had divergent results on the particular data under discussion. The availability of assistance from the state would clearly tend to reduce the need for private reserves and so to reduce private saving—it is equivalent, in terms of our hypothesis, to a reduction in the variance of transitory components."

"I have no right to coerce someone else, because I cannot be sure that I'm right and he is wrong."

"Now, when anybody starts talking about this [an all-volunteer force] he immediately shifts language. My army is 'volunteer,' your army is 'professional,' and the enemy's army is 'mercenary.' All these three words mean exactly the same thing. I am a volunteer professor, I am a mercenary professor, and I am a professional professor. And all you people around here are mercenary professional people. And I trust you realize that. It's always a puzzle to me why people should think that the term 'mercenary' somehow has a negative connotation. I remind you of that wonderful quotation of Adam Smith when he said, 'You do not owe your daily bread to the benevolence of the baker, but to his proper regard for his own interest.' And this is much more broadly based. In fact, I think mercenary motives are among the least unattractive that we have."

"Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. … A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society."

"Make politics an avocation, not a vocation."

"There was nothing in these views to repel a student; or to make Keynes attractive. Keynes had nothing to offer those of us who had sat at the feet of Simons, Mints, Knight, and Viner."

"So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not."

"The problem in this world is to avoid concentration of power - we must have a dispersion of power."

"Inflation is the one form of taxation that can be imposed without legislation."

"They had cliche answers but only to their self-created straw-men. To exaggerate only slightly, they had never talked to anyone who really believed, and had thought deeply about, views drastically different from their own. As a result, when they heard real arguments instead of caricatures, they had no answers, only amazement that such views could be expressed by someone who had the external characteristics of being a member of the intellectual community, and that such views could be defended with apparent cogency. Never have I been more impressed with the advice I once received: "You cannot be sure that you are right unless you understand the arguments against your views better than your opponents do.""

"I think the government solution to a problem is usually as bad as the problem and very often makes the problem worse."

"I want people to take thought about their condition and to recognize that the maintenance of a free society is a very difficult and complicated thing and it requires a self-denying ordinance of the most extreme kind. It requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to do something about them you not only may make them worse, you will spread your tentacles and get bad results elsewhere."

"I say thank God for government waste. If government is doing bad things, it's only the waste that prevents the harm from being greater."

"If we have system in which government is in a position to give large favor - it's human nature to try to get this favor - whether those people are large enterprises, or whether they're small businesses like farmers, or whether they're representatives of any other special group. The only way to prevent that is to force them to engage in competition one with the other."

"One of the great mistakes is to judge policies and programs by their intentions rather than their results."

"In this day and age, we need to revise the old saying to read, "Hell hath no fury like a bureaucrat scorned.""

"The elementary truth is that the Great Depression was produced by government mismanagement. It was not produced by the failure of private enterprise, it was produced by the failure of government to perform a function which had been assigned to it."

"This leads to my next myth—the myth that government can spend money at nobody’s expense. What was really involved in that last story was that somehow the local people do not pay out the money coming down from Washington somebody else does. Of course, the truth is that the money makes a round trip between Florida and Washington, and there is a discount taken off for cash as it passes through Washington. Some of you may remember that wonderful description of government by the French economist, Frederic Bastiat, who said that government is that fiction whereby everybody believes that he can live at the expense of everybody else."

"That is a widespread myth, that it is possible to spend money with nobody paying for it. You have everybody screaming that we ought to have new, bigger, more generous government programs. Where are we going to raise the money? Tax business. But business corporations can’t pay any taxes. A corporate executive may sign the check, but where does he get the money? From his stockholders or from his customers or from his employees. Unlike the federal government, he doesn’t have a printing press in his basement. So the only way he can pay money to the government is imposing a burden on somebody. Government cannot spend money at nobody’s expense."

"It's nice to elect the right people, but that isn't the way you solve things. The way you solve things is by making it politically profitable for the wrong people to do the right things."

"The great enemy of human freedom is the Government. By taking money out of our pockets and spending it, it destroys our freedom."

"The reality is that if you look at every program that the government has adopted in the direction of extending its scope, it took an enormous propaganda campaign by special propaganda groups to get those measures passed. There was no underlining public demand for those measures. On the contrary, the demand had to be created, it had to be developed, it had to be produced. And it was created, it was developed, it was produced, by people… who sincerely wanted to see an expansion in the scope of government."

"Let me take the example which is today the greatest sacred cow of them all—Social Security. Was there an overwhelming demand for Social Security in the 1930s when the law was adopted? Far from it. There was no public demand for it, it had to be sold. How was it sold? By the slickest devices of Madison Avenue, by imaginative packaging and deceptive labeling. Social Security was sold as an insurance scheme. It is not an insurance scheme. There is very little relationship to the amount of money any one individual pays and the amount of money he is entitled to receive. Social Security is a combination of a bad tax system with a bad way of distributing welfare… If you look at the tax system, who could defend a wage tax, a tax on wages up to a maximum, a tax on work, a tax which discourages employers from hiring people, and discourages people from going to work; a tax which is borne by the lowest wage group, workers? It is a regressive tax. You could never in a million Sundays… have gotten such a tax passed as a tax."

"Keep your eye on one thing and one thing only: how much government is spending, because that is the true tax. Every budget is balanced. There is no such thing as an unbalanced federal budget. You're paying for it. If you're not paying for it in the form of explicit taxes, you're paying for it indirectly in the form of inflation or in the form of borrowing. The thing that you keep your eye on is what government spends. And the real problem is to hold down government spending as a fraction of our income. And if you do that, you can stop worrying about the deficit."

"In my opinion, a society that aims for equality before liberty will end up with neither equality nor liberty. A society that aims first for liberty will not end up with equality, but it will end up with a closer approach to equality than any other kind of system that has ever been developed."

"You can only aim at equality by giving some people the right to take things from others. And what ultimately happens when you aim for equality is that A and B decide what C should do for D, except that they take a bit of commission off on the way.”"

"[A] society which is socialist cannot also be democratic, in the sense of guaranteeing individual freedom."

"There's a sense in which all taxes are antagonistic to free enterprise … and yet we need taxes. We have to recognize that we must not hope for a Utopia that is unattainable. I would like to see a great deal less government activity than we have now, but I do not believe that we can have a situation in which we don't need government at all. We do need to provide for certain essential government functions — the national defense function, the police function, preserving law and order, maintaining a judiciary. So the question is, which are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."

"They think that the cure to big government is to have bigger government... the only effective cure is to reduce the scope of government - get government out of the business."

"Is there some society you know that doesn't run on greed? You think Russia doesn't run on greed? You think China doesn't run on greed? What is greed? Of course, none of us are greedy, it's only the other fellow who's greedy. The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you're talking about, the only cases in recorded history, are where they have had capitalism and largely free trade. If you want to know where the masses are worse off, worst off, it's exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear that there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by the free-enterprise system."

"The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business."

"[I]t is very hard to achieve good objectives through bad means. And the means we have been using are bad in two very different respects. In the first place, all of these programs involve some people spending other people’s money for objectives that are determined by still a third group of people. Nobody spends somebody else’s money as carefully as he spends his own. Nobody has the same dedication to achieving somebody else’s objectives that he displays when he pursues his own. Beyond this, the [welfare] programs have an insidious effect on the moral fiber of both the people who administer the programs and the people who are supposedly benefiting from it. For the people who administer it, it instills in them a feeling of almost Godlike power. For the people who are supposedly benefiting it instills a feeling of childlike dependence. Their capacity for personal decision making atrophies. The result is that the programs involved are misuse of money, they do not achieve the objectives which it was their intention to achieve. But far more important than this, they tend to rot away the very fabric that holds a decent society together."

"Whether it is in the slums of New Delhi or in the affluence of Las Vegas, it simply isn't fair that there should be any losers. Life is unfair — there is nothing fair about one man being born blind and another man being born with sight. There is nothing fair about one man being born of a wealthy parent and one of an impecunious parent. There is nothing fair about Muhammad Ali having been born with a skill that enables him to make millions of dollars one night. There is nothing fair about Marlene Dietrich having great legs that we all want to watch. There is nothing fair about any of that. But on the other hand, don't you think a lot of people who like to look at Marlene Dietrich's legs benefited from nature's unfairness in producing a Marlene Dietrich. What kind of a world would it be if everybody was an absolute identical duplicate of anybody else. You might as well destroy the whole world and just keep one specimen left for a museum. In the same way, it's unfair that Muhammad Ali should be a great fighter and should be able to earn millions. But would it not be even more unfair to the people who like to watch him if you said that in the pursuit of some abstract idea of equality we're not going to let Muhammad Ali get more for one nights fight than the lowest man on the totem pole can get for a days unskilled work on the docks. You can do that but the result of that would be to deny people the opportunity to watch Muhammad Ali. I doubt very much he would be willing to subject himself to the kind of fights he's gone through if he were to get the pay of an unskilled docker."

"Society doesn't have values. People have values."

"The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both."

"There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves."

"Governments never learn. Only people learn."

"Nothing is so permanent as a temporary government program."

"Will we read next that government control of prices has created a shortage of sand in the Sahara?"

"With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves."

"The broader and more influential organisations of businessmen have acted to undermine the basic foundation of the free market system they purport to represent and defend."

"Every friend of freedom... must be as revolted as I am by the prospect of turning the United States into an armed camp, by the vision of jails filled with casual drug users and of an army of enforcers empowered to invade the liberty of citizens on slight evidence."

"Spending by government currently amounts to about 45 percent of national income. By that test, government owns 45 percent of the means of production that produce the national income. The U.S. is now 45 percent socialist."

"So far, twenty-two people have received the Nobel award in economics. Not one of them has been female—so, to judge only from the past, the most important thing to do if you want to be a Nobel laureate is to be male. I hasten to add that the absence of females is not, I believe, attributable to male chauvinist bias on the part of the Swedish Nobel Committee. I believe that the economics profession as a whole would have been nearly unanimous that, during the period in question, only one female candidate met the relevant standards—the English economist Joan Robinson, who has since died. The failure of the Nobel Committee to award her a prize may well have reflected bias but not sex bias. The economists here will understand what I am talking about. … A second requirement is to be a U.S. citizen. Twelve of the twenty-two recipients of the Nobel Prize were from the United States, four from the United Kingdom, two from Sweden, and one each from four other countries. … Of the twelve Americans who have won the Nobel Prize in economics, nine either studied or taught at the University of Chicago. So the next lesson is to go to the University of Chicago."

"The most unresolved problem of the day is precisely the problem that concerned the founders of this nation: how to limit the scope and power of government. Tyranny, restrictions on human freedom, come primarily from governmental restrictions that we ourselves have set up."

"The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another."

"After the fall of communism, everybody in the world agreed that socialism was a failure. Everybody in the world, more or less, agreed that capitalism was a success. And every capitalist country in the world apparently deduced from that what the West needed was more socialism."

"Thank heaven that we don’t get all of the government that we are made to pay for."

"The stock of money, prices and output was decidedly more unstable after the establishment of the Reserve System than before. The most dramatic period of instability in output was, of course, the period between the two wars, which includes the severe (monetary) contractions of 1920-1, 1929-33, and 1937-8. No other 20 year period in American history contains as many as three such severe contractions. This evidence persuades me that at least a third of the price rise during and just after World War I is attributable to the establishment of the Federal Reserve System... and that the severity of each of the major contractions — 1920-1, 1929-33 and 1937-8 is directly attributable to acts of commission and omission by the Reserve authorities... Any system which gives so much power and so much discretion to a few men, [so] that mistakes — excusable or not — can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic — this is the key political argument against an independent central bank... To paraphrase Clemenceau, money is much too serious a matter to be left to the central bankers."

"I know of no severe depression, in any country or any time, that was not accompanied by a sharp decline in the stock of money and equally of no sharp decline in the stock of money that was not accompanied by a severe depression."

"Joan Robinson, a leading Keynesian and radical, produced a specimen for me to analyze. I said something like, "This is obviously the writing of a foreigner, so it's difficult for me to analyze. But I would say it is written by someone who had considerable artistic but not much intellectual talent." It turned out to be the handwriting of Lydia Lopokova, the world-famous Russian ballerina whom Keynes had married. That was surely my greatest triumph of the year at Cambridge!"

"In the course of General Westmoreland's testimony, he made the statement that he did not want to command an army of mercenaries. I stopped him and said, 'General, would you rather command an army of slaves?' He drew himself up and said, 'I don't like to hear our patriotic draftees referred to as slaves.' I replied, 'I don't like to hear our patriotic volunteers referred to as mercenaries.' But I went on to say, 'If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general; we are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher.' That was the last that we heard from the general about mercenaries."

"There's a smokestack on the back of every government program."

"The unions might be good for the people who are in the unions but it doesn't do a thing for the people who are unemployed. Because the union keeps down the number of jobs, it doesn't do a thing for them."

"The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that’s why it’s so essential to preserving individual freedom."

"The most important single central fact about a free market is that no exchange takes place unless both parties benefit."

"I was not in Chile as a guest of the government. I was in Chile as the guest of a private organization… I must say, it's such a wonderful example of a double standard, because I had spent time in Yugoslavia, which was a communist country. I later gave a series of lectures in China. When I came back from communist China, I wrote a letter to the Stanford Daily newspaper in which I said, '"It's curious. I gave exactly the same lectures in China that I gave in Chile. I have had many demonstrations against me for what I said in Chile. Nobody has made any objections to what I said in China. How come?""

"The Chilean economy did very well, but more important, in the end the central government, the military junta, was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society."

"I think it is only because capitalism has proved so enormously more efficient than alternative methods that it has survived at all. (...) I'm not sure capitalism is the right word. There is a sense in which every society is capitalist. The Soviet Union was capitalist, but it was state capitalism. Latin American societies in the past have been capitalist, but it has been oligarchic capitalism. So what we really need to talk about is not capitalism but free market or competitive capitalism which is the system that we would like to have adopted, not just capitalism."

"The use of quantity of money as a target has not been a success. I'm not sure that I would as of today push it as hard as I once did."

"There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch! Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income."

"I am a libertarian with a small "l" and a Republican with a capital "R". And I am a Republican with a capital "R" on grounds of expediency, not on principle."

"You must distinguish sharply between being pro free enterprise and being pro business."

"I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. … because I believe the big problem is not taxes, the big problem is spending. I believe our government is too large and intrusive, that we do not get our money's worth for the roughly 40 percent of our income that is spent by government … How can we ever cut government down to size? I believe there is one and only one way: the way parents control spendthrift children, cutting their allowance. For government, that means cutting taxes."

"Keynes was a great economist. In every discipline, progress comes from people who make hypotheses, most of which turn out to be wrong, but all of which ultimately point to the right answer. Now Keynes, in The General Theory of Employment, Interest and Money, set forth a hypothesis which was a beautiful one, and it really altered the shape of economics. But it turned out that it was a wrong hypothesis. That doesn't mean that he wasn't a great man!"

"Thanks to economists, all of us, from the days of Adam Smith and before right down to the present, tariffs are perhaps one tenth of one percent lower than they otherwise would have been. … And because of our efforts, we have earned our salaries ten-thousand fold."

"If a tax cut increases government revenues, you haven't cut taxes enough."

"The true test of any scholar's work is not what his contemporaries say, but what happens to his work in the next 25 or 50 years. And the thing that I will really be proud of is if some of the work I have done is still cited in the text books long after I am gone."

"I’m in favor of legalizing drugs. According to my values system, if people want to kill themselves, they have every right to do so. Most of the harm that comes from drugs is because they are illegal."

"There is enormous inertia—a tyranny of the status quo—in private and especially governmental arrangements. Only a crisis—actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable."

"President Kennedy said, ‘Ask not what your country can do for you —ask what you can do for your country.’… Neither half of that statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. ‘What your country can do for you’ implies that the government is the patron, the citizen the ward. ‘What you can do for your country’ assumes that the government is the master, the citizen the servant."

"To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served."

"The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather 'What can I and my compatriots do through government' to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom? And he will accompany this question with another: How can we keep the government we create from becoming a Frankenstein that will destroy the very freedom we establish it to protect? Freedom is a rare and delicate plant. Our minds tell us, and history confirms, that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom. Even though the men who wield this power initially be of good will and even though they be not corrupted by the power they exercise, the power will both attract and form men of a different stamp."

"The preservation of freedom is the protective reason for limiting and decentralizing governmental power. But there is also a constructive reason. The great advances of civilization, whether in architecture or painting, in science or literature, in industry or agriculture, have never come from centralized government. … Government can never duplicate the variety and diversity of individual action."

"The power to do good is also the power to do harm; those who control the power today may not tomorrow; and, more important, what one man regards as good, another may regard as harm."

"By relying primarily on voluntary co-operation and private enterprise, in both economic and other activities, we can insure that the private sector is a check on the powers of the governmental sector and an effective protection of freedom of speech, of religion, and of thought."

"As it developed in the late eighteenth and early nineteenth centuries, the intellectual movement that went under the name of liberalism emphasized freedom as the ultimate goal and the individual as the ultimate entity in the society. It supported laissez faire at home as a means of reducing the role of the state in economic affairs and thereby enlarging the role of the individual; it supported free trade abroad as a means of linking the nations of the world together peacefully and democratically. In political matters, it supported the development of representative government and of parliamentary institutions, reduction in the arbitrary power of the state, and protection of the civil freedoms of individuals."

"The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth-century liberal regards welfare and equality as either prerequisites of or alternatives to freedom."

"Because we live in a largely free society, we tend to forget how limited is the span of time and the part of the globe for which there has ever been anything like : the typical state of mankind is tyranny, servitude, and misery. The nineteenth century and early twentieth century in the Western world stand out as striking exceptions to the general trend of historical development. Political freedom in this instance clearly came along with the free market and the development of capitalist institutions. So also did political freedom in the golden age of Greece and in the early days of the Roman era. History suggests only that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition."

"As liberals, we take freedom of the individual, or perhaps the family, as our ultimate goal in judging social arrangements. Freedom as a value in this sense has to do with the interrelations among people"

"The liberal conceives of men as imperfect beings. He regards the problem of social organization to be as much a negative problem of preventing 'bad' people from doing harm as of enabling 'good' people to do good; and, of course, 'bad' and 'good' people may be the same people, depending on who is judging them."

"The basic problem of social organization is how to co-ordinate the economic activities of large numbers of people."

"Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place."

"Political freedom means the absence of coercion of a man by his fellow men. The fundamental threat to freedom is power to coerce, be it in the hands of a monarch, a dictator, an oligarchy, or a momentary majority. The preservation of freedom requires the elimination of such concentration of power to the fullest possible extent and the dispersal and distribution of whatever power cannot be eliminated — a system of checks and balances."

"The existence of a free market does not of course eliminate the need for government. On the contrary, government is essential both as a forum for determining the 'rule of the game' and as an umpire to interpret and enforce the rules decided on."

"A major source of objection to a free economy is precisely that it … gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself."

"The widespread use of the market reduces the strain on the social fabric by rendering conformity unnecessary with respect to any activities it encompasses. The wider the range of activities covered by the market, the fewer are the issues on which explicitly political decisions are required and hence on which it is necessary to achieve agreement. In turn, the fewer the issues on which agreement is necessary, the greater is the likelihood of getting agreement while maintaining a free society."

"The need for government in these respects arises because absolute freedom is impossible. However attractive anarchy may be as a philosophy, it is not feasible in a world of imperfect men."

"The organization of economic activity through voluntary exchange presumes that we have provided, through government, for the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework."

"Exchange is truly voluntary only when nearly equivalent alternatives exist. Monopoly implies the absence of alternatives and thereby inhibits effective freedom of exchange."

"Freedom is a tenable objective only for responsible individuals. We do not believe in freedom for madmen or children. The necessity of drawing a line between responsible individuals and others is inescapable, yet it means that there is an essential ambiguity in our ultimate objective of freedom. Paternalism is inescapable for those whom we designate as not responsible."

"A government which maintained law and order, defined property rights, served as a means whereby we could modify property rights and other rules of the economic game, adjudicated disputes about the interpretation of the rules, enforced contracts, promoted competition, provided a monetary framework, engaged in activities to counter technical monopolies and to overcome neighborhood effects widely regarded as sufficiently important to justify government intervention, and which supplemented private charity and the private family in protecting the irresponsible, whether madman or child—such a government would clearly have important functions to perform. The consistent liberal is not an anarchist."

"A liberal is fundamentally fearful of concentrated power. His objective is to preserve the maximum degree of freedom for each individual separately that is compatible with one man's freedom not interfering with other men's freedom. He believes that this objective requires that power be dispersed. He is suspicious of assigning to government any functions that can be performed through the market, both because this substitutes coercion for voluntary co-operation in the area in question and because, by giving government an increased role, it threatens freedom in other areas."

"The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system, is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country."

"To paraphrase Clemenceau, money is much too serious a matter to be left to the Central Bankers."

"With respect to teachers' salaries .... Poor teachers are grossly overpaid and good teachers grossly underpaid. Salary schedules tend to be uniform and determined far more by seniority."

"The view has been gaining widespread acceptance that corporate officials and labor leaders have a "social responsibility"... beyond serving the interests of their stockholders or their members. This view shows a fundamental misconception of the character of a free economy. In such an economy there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. Similarly, the "social responsibility" of labor leaders is to serve the interests of the members of their unions. It is the responsibility of the rest of us to establish a framework of law such that an individual... is, to quote Adam Smith... "led by an ... I have never known much good done by those who affected to trade for the public good.""

"Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible. This is a fundamentally subversive doctrine. If businessmen do have a social responsibility other than making maximum profits for stockholders, how are they to know what it is? Can self-selected private individuals decide what the social interest is? Can they decide how great a burden they are justified in placing on themselves or their stockholders to serve that social interest?"

"Those of us who believe in freedom must believe also in the freedom of individuals to make their own mistakes. If a man knowingly prefers to live for today, to use his resources for current enjoyment, deliberately choosing a penurious old age, by what right do we prevent him from doing so? We may argue with him, seek to persuade him that he is wrong, but are we entitled to use coercion to prevent him from doing what he chooses to do? Is there not always the possibility that he is right and that we are wrong? Humility is the distinguishing virtue of the believer in freedom; arrogance, of the paternalist."

"The major disadvantage of the proposed negative income tax is its political implications. It establishes a system under which taxes are imposed on some to pay subsidies to others. And presumably, these others have a vote."

"The heart of the liberal philosophy is a belief in the dignity of the individual, in his freedom to make the most of his capacities and opportunities according to his own lights, subject only to the proviso that he not interfere with the freedom of other individuals to do the same. This implies a belief in the equality of man in one sense; in their inequality in another."

"An income tax intended to reduce inequality and promote the diffusion of wealth has in practice fostered reinvestment of corporate earnings, thereby favoring the growth of large corporations, inhibiting the operation of the capital market, and discouraging the establishment of new enterprises."

"As Adam Smith once said, 'There is much ruin in a nation'. Our basic structure of values and the interwoven network of free institutions will withstand much. I believe that we shall be able to preserve and extend freedom despite the size of the military programs and despite the economic powers already concentrated in Washington. But we shall be able to do so only if we awake to the threat that we face, only if we persuade our fellowmen that free institutions offer a surer, if perhaps at times a slower, route to the ends they seek than the coercive power of the state. The glimmerings of change that are already apparent in the intellectual climate are a hopeful augury."

"Concentrated power is not rendered harmless by the good intentions of those who create it."

"The contraction from 1929 to 1933 was by far the most severe business-cycle contraction during the near-century of U.S. history we cover and it may well have been the most severe in the whole of U.S. history."

"The key need in policy-setting is to reverse the growth of government!"

"The elementary fact is that ‘business’ does not and cannot pay taxes. Only people can pay taxes. Corporate officials may sign the check, but the money that they forward to Internal Revenue comes from the corporation’s employees, customers, or stockholders."

"We have heard much these past few years of how the government protects the consumer. A far more urgent problem is to protect the consumer from the government."

"A military draft is undesirable and unnecessary. We can and should man our armed forces with volunteers—as the United States has traditionally done except in major wars."

"In a free society, a government has no business using the power of the law or the taxpayer's money to propagandize for some views and to prevent the transmission of others."

"There is an invisible hand in politics that operates in the opposite direction to the invisible hand in the market."

"The old saw is that the Quakers went to the New World to do good and ended up doing well. Today, well-meaning reformers go to Washington to do good and end up doing harm."

"Legalizing drugs would simultaneously reduce the amount of crime and raise the quality of law enforcement."

"I am convinced that the minimum-wage law is the most anti-Negro law on our statute books—in its effect, not its intent."

"The draft is inequitable because irrelevant considerations play so large a role in determining who serves. It is wasteful because deferment of students, fathers, and married men jams colleges, raises the birth rate, and fuels divorce court. It is inconsistent with a free society because it exacts compulsory service from some and limits the freedom of others to travel abroad, emigrate, or even to talk and act freely. So long as compulsion is retained, these defects are inevitable."

"What does it mean to say that “business” has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but “business” as a whole cannot be said to have responsibilities, even in this vague sense."

"IN a free‐enterprise, private‐property system, a corporate executive is an employe of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose—for example, a hospital or school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services. In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them."

"What does it mean to say that the corporate executive has a “social responsibility” in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price increase would be in the best interests of the corporation. Or that he is to make expenditures on reducing pollution beyond the amount that is in the best interests of the corporation or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire “hard core” unemployed instead of better qualified available workmen to contribute to the social objective of reducing poverty. In each of these cases, the corporate executive would be spending someone else's money for a general social interest."

"Insofar as his actions in accord with his “social responsibility” reduce returns to stock holders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers’ money. Insofar as his actions lower the wages of some employes, he is spending their money. The stockholders or the customers or the employes could separately spend their own money on the particular action if they wished to do so. The executive is exercising a distinct “social responsibility,” rather than serving as an agent of the stockholders or the customers or the employes, only if he spends the money in a different way than they would have spent it. But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other. This process raises political questions on two levels: principle and consequences. On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are governmental functions. We have established elaborate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in accordance with the preferences and desires of the public — after all, "taxation without representation" was one of the battle cries of the American Revolution. We have a system of checks and balances to separate the legislative function of imposing taxes and enacting expenditures from the executive function of collecting taxes and administering expenditure programs and from the judicial function of mediating disputes and interpreting the law. Here the businessman — self-selected or appointed directly or indirectly by stockholders — is to be simultaneously legislator, executive and, jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds — all this guided only by general exhortations from on high to restrain inflation, improve the environment, fight poverty and so on and on."

"The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. This justification disappears when the corporate executive imposes taxes and spends the proceeds for “social” purposes. He becomes in effect a public employe, a civil servant, even though he remains in name an employe of private enterprise. On grounds of political principle, it is intolerable that such civil servants—insofar as their actions in the name of social responsibility are real and not just window‐dressing—should be selected as they are now. If they are to be civil servants, then they must be selected through a political process. If they are to impose taxes and make expenditures to foster “social” objectives, then political machinery must be set up to guide the assessment of taxes and to determine through a political process the objectives to be served. This is the basic reason why the doctrine of “social responsibility” involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce resources to alternative uses."

"The difficulty of exercising “social responsibility” illustrates, of course, the great virtue of private competitive enterprise — it forces people to be responsible for their own actions and makes it difficult for them to “exploit” other people for either selfish or unselfish purposes. They can do good—but only at their own expense."

"In a free society, it is hard for “good” people to do “good,” but that is a small price to pay for making it hard for “evil” people to do “evil,” especially since one man's good is anther's evil."

"I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely far‐sighted and clear‐headed in matters that are internal to their businesses. They are incredibly short sighted and muddle‐headed in mat ters [sic!] that are outside their businesses but affect the possible survival of business in general. This short sightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or incomes policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally controlled system than effective governmental control of prices and wages. The short‐sightedness is also exemplified in speeches by business men on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the ptirsuit [sic!] of profits is wicked and im moral [sic!] and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, business men seem to me to reveal a suicidal impulse."

"The political principle that underlies the is unanimity. In an ideal free market resting on private property, no individual can coerce any other, all cooperation is voluntary, all parties to such cooperation benefit or they need not participate. There are no values, no "social" responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form. The political principle that underlies the political mechanism is conformity. The individual must serve a more general social interest — whether that be determined by a church or a dictator or a majority. The individual may have a vote and say in what is to be done, but if he is overruled, he must conform. It is appropriate for some to require others to contribute to a general whether they wish to or not. Unfortunately, unanimity is not always feasible. There are some respects in which conformity appears unavoidable, so I do not see how one can avoid the use of the political mechanism altogether. But the doctrine of “social responsibility” taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book “Capitalism and Freedom,” I have called it a “fundamentally subversive doctrine” in a free society, and have said that in such a society, “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”"

"What kind of society isn’t structured on greed?... So the problem of social organization is how to set up an arrangement under which greed will do the least harm. It seems to me that the great virtue of capitalism is that it’s that kind of system. Because under capitalism, the power of any one individual over his fellow man is relatively small."

"The government solution to a problem is usually as bad as the problem and very often makes the problem worse."

"We want the kind of world in which greedy people can do the least harm to their fellow men. That’s the kind of world in which power is widely dispersed and each of us has as many alternatives as possible."

"Perfect competition is a theoretical concept like the Euclidian line, which has no width or depth. Just as we’ve never seen that line there has never been truly free enterprise."

"How much attention is paid to agreement between Galbraith and myself in opposing a draft and favoring an all-volunteer armed force, or in opposing tariffs and favoring free trade, or on a host of other issues? What is newsworthy is that Galbraith endorses wage and price controls, while I oppose them."

"Just as banks all around the country were closing, the Fed raised the discount rate; that's the rate they charge for loans to banks. Bank failures consequently increased spectacularly. We might have had an economic downturn in the thirties anyway, but in the absence of the Federal Reserve System—with its enormous power to make a bad situation worse—it wouldn't have been anything like the scale we experienced."

"Although I wish the anarchists luck, since that’s the way we ought to be moving now. But I believe we need government to enforce the rules of the game. By prosecuting anti-trust violations, for instance. We need a government to maintain a system of courts that will uphold contracts and rule on compensation for damages. We need a government to ensure the safety of its citizens–to provide police protection. But government is failing at a lot of these things that it ought to be doing because it’s involved in so many things it shouldn’t be doing."

"The essence of the problem is that once we begin to allow exceptions for special interests, we move from a system of private arrangements to a political system where everyone’s freedom is limited and government becomes a matter of trying to balance those interests. Nobody really wins under these terms."

"Even the most ardent environmentalist doesn’t really want to stop pollution. If he thinks about it and doesn’t just talk about it, he wants to have the right amount of pollution. We can’t really afford to eliminate it—not without abandoning all the benefits of technology that we not only enjoy but on which we depend. So the answer is to allow only pollution that’s worth what it costs, and not any pollution that isn’t worth what it costs."

"The average income of blacks here is far higher than the average income of all the people in the Soviet Union. The official government definition of the poverty line in the U.S. is higher than the average income in the Soviet Union; it’s higher than the income received by 90 percent of the people on the world’s surface. Now, that doesn’t mean blacks aren’t subject to injustice; of course they are."

"What country in the world today engages in the most extreme anti-Semitic persecution? The Soviet Union. It’s not an accident, because if you have a society with concentrated power, if you have a collectivist society, it’s going to be in a position to exercise the preferences and prejudices of its rulers. Moreover, it’s going to have an incentive to do so, because it’s going to need a scapegoat and it will choose some group like the Jews or the blacks to be the scapegoat."

"The combination of economic and political power in the same hands is a sure recipe for tyranny."

"The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another."

"The price system works so well, so efficiently, that we are not aware of it most of the time. We never realize how well it functions until it is prevented from functioning, and even then we seldom recognize the source of the trouble."

"Prices perform three functions in organizing economic activity: first, they transmit information; second, they provide an incentive to adopt those methods of production that are least costly and thereby use available resources for the most highly valued pur poses; third, they determine who gets how much of the product—the distribution of income. These three functions are closely in terrelated."

"The price system transmits only the important information and only to the people who need to know."

"When everybody owns something, nobody owns it, and nobody has a direct interest in maintaining or improving its condition. That is why buildings in the Soviet Union — like public housing in the United States — look decrepit within a year or two of their construction."

"The supporters of tariffs treat it as self-evident that the creation of jobs is a desirable end, in and of itself, regardless of what the persons employed do. That is clearly wrong. If all we want are jobs, we can create any number—for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs—jobs that will mean more goods and services to consume."

"Believers in aristocracy and socialism share a faith in centralized rule, in rule by command rather than by voluntary cooperation."

"As these remarks indicate, the Social Security program involves a transfer from the young to the old. To some extent such a transfer has occurred throughout history—the young supporting their parents, or other relatives, in old age. Indeed, in many poor countries with high infant death rates, like India, the desire to assure oneself of progeny who can provide support in old age is a major reason for high birth rates and large families. The difference between Social Security and earlier arrangements is that Social Security is compulsory and impersonal—earlier arrangements were voluntary and personal. Moral responsibility is an individual matter, not a social matter. Children helped their parents out of love or duty. They now contribute to the support of someone else’s parents out of compulsion and fear. The earlier transfers strengthened the bonds of the family; the compulsory transfers weaken them."

"When the law interferes with people's pursuit of their own values, they will try to find a way around. They will evade the law, they will break the law, or they will leave the country. Few of us believe in a moral code that justifies forcing people to give up much of what they produce to finance payments to persons they do not know for purposes they may not approve of. When the law contradicts what most people regard as moral and proper, they will break the law—whether the law is enacted in the name of a noble ideal such as equality or in the naked interest of one group at the expense of another. Only fear of punishment, not a sense of justice and morality, will lead people to obey the law."

"In the past century a myth has grown up that free market capitalism—equality of opportunity as we have interpreted that term—increases such inequalities, that it is a system under which the rich exploit the poor. Nothing could be further from the truth. Wherever the free market has been permitted to operate, wherever anything approaching equality of opportunity has existed, the ordinary man has been able to attain levels of living never dreamed of before. Nowhere is the gap between rich and poor wider, nowhere are the rich richer and the poor poorer, than in those societies that do not permit the free market to operate."

"Industrial progress, mechanical improvement, all of the great wonders of the modern era have meant little to the wealthy. The rich in ancient Greece would have benefited hardly at all from modern plumbing — running servants replaced running water. Television and radio — the patricians of Rome could enjoy the leading musicians and actors in their home, could have the leading artists as domestic retainers. Ready-to-wear clothing, supermarkets — all these and many other modern developments would have added little to their life. They would have welcomed the improvements in transportation and in medicine, but for the rest, the great achievements of western capitalism have rebounded primarily to the benefit of the ordinary person. These achievements have made available to the masses conveniences and amenities that were previously the exclusive prerogative of the rich and powerful."

"A society that puts equality—in the sense of equality of outcome—ahead of freedom will end up with neither equality nor freedom. The use of force to achieve equality will destroy freedom, and the force, introduced for good purposes, will end up in the hands of people who use it to promote their own interests. On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality."

"The threat to public schools arises from their defects, not their accomplishments. In small, closely knit communities where public schools, particularly elementary schools, are now reasonably satisfactory, not even the most comprehensive voucher plan would have much effect. The public schools would remain dominant, perhaps somewhat improved by the threat of potential competition. But elsewhere, and particularly in the urban slums where the public schools are doing such a poor job, most parents would undoubtedly try to send their children to nonpublic schools."

"A worker is protected from his employer by the existence of other employers for who he can go to work. An employer is protected from exploitation by his employees by the existence of other workers whom he can hire. The consumer is protected from exploitation by a given seller by the existence of other sellers from whom he can buy."

"The smaller the unit of government and the more restricted the functions assigned government, the less likely it is that its actions will reflect special interests rather than the general interest."

"The proper role of government is exactly what John Stuart Mill said in the middle of the 19th century in On Liberty. The proper role of government is to prevent other people from harming an individual. Government, he said, never has any right to interfere with an individual for that individual's own good. The case for is exactly as strong and as weak as the case for prohibiting people from overeating. We all know that overeating causes more deaths than drugs do. If it's in principle OK for the government to say you must not consume drugs because they'll do you harm, why isn't it all right to say you must not eat too much because you'll do harm? Why isn't it all right to say you must not try to go in for skydiving because you're likely to die? Why isn't it all right to say, "Oh, skiing, that's no good, that's a very dangerous sport, you'll hurt yourself"? Where do you draw the line?"

"It does harm a great many other people, but primarily because it's prohibited. There are an enormous number of innocent victims now. You've got the people whose purses are stolen, who are bashed over the head by people trying to get enough money for their next fix. You've got the people killed in the random drug war. You've got the corruption of the legal establishment. You've got the innocent victims who are taxpayers who have to pay for more and more prisons, and more and more prisoners, and more and more police. You've got the rest of us who don't get decent law enforcement because all the law enforcement officials are busy trying to do the impossible. And, last, but not least, you've got the people of Colombia and Peru and so on. What business do we have destroying and leading to the killing of thousands of people in Colombia because we cannot enforce our own laws? If we could enforce our laws against drugs, there would be no market for these drugs."

"It's a moral problem that the government is making into criminals people, who may be doing something you and I don't approve of, but who are doing something that hurts nobody else. Most of the arrests for drugs are for possession by casual users. Now here's somebody who wants to smoke a marijuana cigarette. If he's caught, he goes to jail. Now is that moral? Is that proper? I think it's absolutely disgraceful that our government, supposed to be our government, should be in the position of converting people who are not harming others into criminals, of destroying their lives, putting them in jail. That's the issue to me. The economic issue comes in only for explaining why it has those effects. But the economic reasons are not the reasons."

"If you look at the drug war from a purely economic point of view, the role of the government is to protect the . That's literally true."

"The term money has two very different meanings in popular discourse. We often speak of someone "making money," when we really mean that he or she is receiving an income. We do not mean that he or she has a printing press in the basement churning out greenbacked pieces of paper. In this use, money is a synonym for income or receipts; it refers to a flow, to income or receipts per week or per year. We also speak of someone's having money in his or her pocket or in a safe-deposit box or on deposit at a bank. In that use, money refers to an asset, a component of one's total wealth. Put differently, the first use refers to an item on a profit-and-loss statement, the second to an item on a balance sheet"

"One reason why money is a mystery to so many is the role of myth or fiction or convention."

"Why should they also be accepted by private persons in private transactions in exchange for goods and services? The short answer—and the right answer—is that private persons accept these pieces of paper because they are confident that others will. The pieces of green paper have value because everybody thinks they have value. Everybody thinks they have value because in everybody's experience they have had value..."

"Analysis of the supply of money, and in particular of changes in the supply of money, is simple in principle but extremely complex in practice, both in our hypothetical world and in the current real world. Simple in principle, because the supply of money is whatever the monetary authorities make if, complex in practice, because the decisions of the monetary authorities depend on numerous factors."

"For both long and short periods there is a consistent though not precise relation between the rate of growth of the quantity of money and the rate of growth of nominal income. If the quantity of money grows rapidly, so will nominal income, and conversely. The relation is much closer for long than for short periods"

"Over short periods, the relation between growth in money and growth in nominal income is often hard to see, partly because the relation is less close for short than for long periods, but mostly because it takes time for changes in monetary growth to affect income. And how long a time is itself variable. Today's income growth is not closely related to today's monetary growth; it depends on what has been happening to money in the past. What happens to money today affects what is going to happen to income in the future"

"Never underestimate the role of luck in the fate of individuals or of nations."

"The business of business is business."

"Corruption is government intrusion into market efficiencies in the form of regulations."

"The concept of freedom, though it appears in the title of the book, is not analyzed. The commonplace idea that poverty is in many ways a restriction of personal freedom is not even mentioned. Implicitly, there are several not completely compatible strands in the Friedmans' analysis. As the title suggests, the Friedmans' advocate an emotional libertarianism. No action is valid which is not the outcome of voluntary action and agreement, the argument made, for example, by Robert Nozick in Anarchy, State, and Utopia. This position does not rest on economic efficiency at all. Still, the Friedmans' training as economists cannot be shed so easily. Economic progress matters a good deal to them, and economic success is a major argument for laissez-faire. They are also aware that economic theory shows that the market cannot always be successful in achieving efficiency, for there are externalities, such as pollution, with which it does not deal."

"The question of criteria of judgment assumes particular force when the Friedmans deal with income distribution. They explicitly and strongly repudiate equality of outcome. But their reasoning is less clear. Part of the argument is that fair allocations are hard to define; but the difficulties of defining freedom are not even mentioned, let alone admitted as an argument against some attempt to achieve freedom."

"The strength of the Friedman's critique of active policy does not lie in general principles or broad sweeps of history. It lies in the itemization of government failures: industrial regulation that is primarily in the interests of the special groups regulated, inefficient post offices, disappointing schools, welfare " messes," the failure of public housing. To some extent the Friedmans document these changes; to a greater extent they rely on current popular perceptions. These failures are in part real, and the Friedmans are not wrong in suggesting that the pursuit of social goals is very apt to be carried on much less efficiently than the pursuit of one's own self-interest. They do not question the theoretical need for internalization of externalities, as in pollution, but argue that the arrangements are bound to be inefficient (actually, they are rather muted on this particular argument, and nowhere flatly assert that the social gains do not exceed the costs). They are strongly opposed to testing drugs for efficacy but do not seem to question testing them for safety. In short, the critique tends to be selective, They are very ingenious at suggesting alternative policies for some problems, such as the voucher system for elementary education, the negative income tax to replace welfare, or the abolition of licensing for physicians. But when advocating comprehensive changes, it is important to consider the effects on the entire system."

"On one hand, they are opposed to any support of academic research by the government, through the National Science Foundation and similar agencies; on the other hand, their book is replete with praise for the voluntary gift-giving for charities and intellectual life by the rich. I assume, then, that they would have no objection to having research in economics and the social sciences solely supported by gifts from the wealthy. That this state of affairs would result in unbiased research is beyond the scope of belief."

"I agree with specific planks in the Friedmans' program, but I remain disappointed at the lack of guiding principles, the casual recommendation of sweeping changes without consideration of their systematic effects, and the one-sided selection of evidence and problems."

"First, I think that his concept of freedom was much too shallow. The idea that low income is a restriction on freedom—something that I think is a fairly elementary point—is something he just never recognized. His idea of somehow equating the market with freedom, well, I don’t think they’re unconnected but to assume it’s a simple matter— as he seemed to assume—is to my mind disregarding the facts of life, and disregarding the values that are put on these ideas. Now Friedman did make some exceptions. He thought extreme poverty was a subject of government policy, but by and large I think this emphasis on freedom is misplaced because it has very little to do with the freedom of the individual, with the individual employee. It was the freedom of the employer, of a minority, that really he was pushing. I think freedom’s important. I certainly wouldn’t say freedom’s an unimportant matter. But the question is: What do you mean by freedom? Expanding the scope by which people can act is an important matter. And it was not just income transfers and other methods. I think Friedman let himself make rather absurd statements, like for example he opposed the licensing of physicians on the grounds that it was a restriction on freedom. So this is an illustration of how his narrow conceptualization of what freedom means led him to kind of absurd statements."

"In fact, the only person to rival Friedman for policy influence in the twentieth century is John Maynard Keynes, who had a strikingly different view of the role of government. Keynes was influential because he advocated more government intervention into what he perceived as poorly functioning private economies caught up in the Great Depression. In contrast to Keynes, Friedman put the main blame for the Depression on government failures, especially of monetary policy. Hence, the Depression did not make Friedman a fan of big government. He also found in the Federal Reserve’s failure to prevent deflation an argument in favor of monetary rules. As the world evolved— with low inflation becoming the major mission of central banks and free markets and secure property rights becoming the main policies to promote economic growth—Friedman surely won the intellectual battle."

"It was actually a gradual process. Certainly Milton Friedman had a great influence on me here. He was by far the greatest living teacher I have ever had. He really opened my eyes to economics as a powerful engine of analysis. Milton Friedman was just number one. He was a great man."

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

"The Bank [of Canada] gave it a college try, it really did. It just doesn't work that way."

"Waiting his time in the 1960s and early 1970s was, however, perhaps the most influential economic figure of the second half of the twentieth century. This was Milton Friedman (1912- ) of the University of Chicago, later of the Hoover Institution on War, Revolution and Peace, a diligent, even indefatigable, advocate of the policy that was to fill the post-Keynesian void, especially in the English-speaking countries. A small, vigorously spoken man, uniquely determined in debate and discussion, entirely free of the doubt that on occasion assails intellectually more vulnerable scholars, Friedman was, as he remains, the leading American exponent of the classical competitive market, which he held still to exist in substantially unimpaired form except as it had suffered from ill-advised government intrusion. Monopoly, oligopoly and imperfect competition played no important part in his thinking. Friedman was a powerful opponent of government regulation and government activity in general. Freedom, he held, was maximized when the individual was left free to deploy his own income as he wished. On the other hand, Friedman, unlike less sophisticated practitioners of his faith, was not wholly indifferent to the freedom that accrues from having income to spend. To this end, he was the author of the most radical welfare proposal in the years following World War II. The income tax, he proposed, should, as always, diminish to zero as the lower income brackets are approached. And then in the lowest brackets it should return income, the amount increasing with increasing impoverishment. This was the negative income tax, a secure minimum income for all. Not many economists of the left could lay claim to such an impressive innovation. Friedman's central contribution to the history of economics was, however, his insistence on the controlling influence of monetary action on the economy and specifically on prices. After a lag of a few months, prices, he held, would always reflect movements in the money supply. So if one controlled the money supply limited its increase to the slowly expanding requirements of trade, the T in Fisher's historic equation prices would remain stable. In a statistically impressive demonstration, Friedman, in company with Anna Jacobson Schwartz, sought to show that this relationship had held, or appeared to have held, long in the past. So, presumably, it must in the future."

"The classical support for as-if models in the social sciences stems from the economist Milton Friedman (1953), who, like the psychologist B. F. Skinner, saw little value in modeling cognitive processes. In contrast, our aim is to understand actual decision processes, not only the outcomes. There is a good reason for this. Without modeling the cognitive blade of Simon's scissors, it is utterly impossible to determine in what environments heuristics succeed, that is, their ecological rationality."

"His views have had as much, if not more, impact on the way we think about monetary policy and many other important economic issues as those of any person in the last half of the twentieth century."

"I don't know what monetarism is. If monetarism just means a good old-fashioned quantity theory, of course it has not failed. If it means the particular version of Milton Friedman, I think it has because he imagines that he can achieve — ascertain — a clear quantity relationship between a measurable quantity of money and the price level. I don't think that is possible. In fact, just about 40 years ago in the opening sentences of my book, Prices and Production, I wrote that it would be a great misfortune if people ever cease to believe in the quantity theory of money. It would be even worse ever to believe it literally. And that's exactly what Milton Friedman does."

"I don't like criticizing Milton Friedman not only because he is an old friend but because, outside of monetary theory, we are in complete agreement. Our general views on what is desired and what is not are almost identical until we get on to money. But if I told him what I said before, that I very much doubt whether monetary policy has ever done anything good, he would disagree. He personally is convinced that a good monetary policy is a foundation for everything."

"You see, in one respect, Milton Friedman is still a Keynesian, not on monetary theory, but on methodology. Keynes, very much against his own intentions, and it still dominates the economic theory, and Milton Friedman is one of the apostles of macroeconomics, which has the effect that while we completely agree on general economic policy, we wholly disagree on monetary policy, because his theory is based on supposed regularities between statistical magnitudes."

"Friedman argued that the sole duty of a company is to its shareholders, not to the interest of workers and surrounding communities. ...Workers may toil their entire lives, communities may tax themselves to create infrastructure a corporation needs, and vendors may invest their entire fortune to supply the corporation—but none of these parties, Friedman said, has significant legal rights or moral claims. The idea was radical. It was not supported by the development of the law, the regulation of business and the advancement of civilization over thousands of years. But in a surprisingly short time, Friedman's ahistorical thinking has come to dominate society."

"Although Humans are not irrational, they often need help to make more accurate judgments and better decisions, and in some cases policies and institutions can provide that help. These claims may seem innocuous, but they are in fact quite controversial. As interpreted by the important Chicago school of economics, faith in human rationality is closely linked to an ideology in which it is unnecessary and even immoral to protect people against their choices. Rational people should be free, and they should be responsible for taking care of themselves. Milton Friedman, the leading figure in that school, expressed this view in the title of one of his popular books: Free to Choose."

"The basic error, which was widespread long before Friedman and the new monetarism, lies in the assumption that regards the money supply as the source of the demand for goods and services."

"Milton Friedman may well be the world's best-known economist. He has turned his unprepossessing stature and manner into a trademark persona; a feisty conservative David battling the Goliath of Big Government. But his influence is not merely a matter of skill at propaganda. It rests on the long campaign that he waged against the ideas of Keynesian economics, a campaign that eventually bore fruit in radical changes in both economic ideology and real-world economic policy."

"On the whole, the monetarism for which Friedman first became famous seems clever, brilliantly argued, but shallow—and perhaps even a bit disingenuous. Friedman's writings from that period have the feel of a smart man who knows what he wants to believe looking hard for supporting arguments."

"Friedman was right, on a very big issue. His insight deservedly raised his prestige and that of the Chicago School of economics to new heights, and gave his earlier, monetarist critique of Keynesianism new respectability. But it is important to realize the limits of what Friedman's analysis of stagflation achieved."

"In the long run, great men are remembered for their strengths, not their weaknesses, and Milton Friedman was a very great man indeed—a man of intellectual courage who was one of the most important economic thinkers of all time, and possibly the most brilliant communicator of economic ideas to the general public that ever lived. But there’s a good case for arguing that Friedmanism, in the end, went too far, both as a doctrine and in its practical applications. When Friedman was beginning his career as a public intellectual, the times were ripe for a counterreformation against Keynesianism and all that went with it. But what the world needs now, I’d argue, is a counter-counterreformation."

"It’s a tribute to the importance of Friedman’s work that questions about his legacy bear so directly on contemporary policy issues. But for that reason it’s also important not to engage in hagiography. Friedman was a great economist, but like every other great economist in history, he was also wrong about some important things."

"Now, I don’t want to put Friedman on a pedestal. In fact, I’d argue that the experience of the past 15 years, first in Japan and now across the Western world, shows that Keynes was right and Friedman was wrong about the ability of unaided monetary policy to fight depressions. The truth is that we need a more activist government than Friedman was willing to countenance. The point, however, is that modern conservatism has moved so far to the right that it no longer has room for even small concessions to reality. Friedman tried to save free-market conservatism from itself — but the ideologues who now dominate the G.O.P. are beyond saving."

"Friedman is the right's Chomsky. Non-experts (can) rarely appreciate the depth of their academic contributions."

"Friedman was the big influence here. [...] Friedman is a really gifted teacher plus a superb economist. He spent almost all his time on applying economics. He would start with some real world situation, some quote from newspaper, some Wall Street Journal editorial, some sentence. And then he would try and get into a class discussion."

"One thing all of us admired about Friedman's book on consumption was the way Friedman integrated the aggregate time-series evidence and cross-sectional survey evidence. He gave a unified explanation of very different samples in a single theoretical model."

"He's very influenced by Savage and by this Bayesian way of thinking about probabilities. So when I talk about people "knowing" a probability, he just can't reach that language."

"I don't give a good goddamn what Milton Friedman says. He's not running for re-election!"

"As a libertarian, Mr. Friedman advocated legalizing drugs and generally opposed public education and the state's power to license doctors, automobile drivers and others. He was criticized for these views, but he stood by them, arguing that prohibiting, regulating or licensing human behavior either does not work or creates inefficient bureaucracies."

"There is as an unearthly, mystical element in Friedman's thought. The mere existence of a stock of money somehow promotes expenditure. But insofar as he offers an intelligible theory, it is made up of elements borrowed from Keynes."

"It’s that the profession has gone very much to the right ideologically. And guess who was the most important person responsible for that … it was Milton Friedman, not Friedrich Hayek."

"Today we see how utterly mistaken was the Milton Friedman notion that a market system can regulate itself... Everyone understands now, on the contrary, that there can be no solution without government. The Keynesian idea is once again accepted that fiscal policy and deficit spending has a major role to play in guiding a market economy. I wish Friedman were still alive so he could witness how his extremism led to the defeat of his own ideas."

"Everybody loves to argue with Milton, particularly when he isn't there."

"Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper."

"As far as Friedman's arguments are concerned, I always thought that he sang two tunes. In the economic profession, he was absolutely reasonable. I could find no distinction between his modern quantity theory of money and eclectic Keynesian economics. But in writing for Newsweek, he argued a hard monetarism, as against the soft monetarism of the "modern quantity theory." In hard monetarism, velocity is constant and nothing but the money supply matters for nominal GNP. I thought that was just factually wrong."

"Under Milton Friedman’s influence, the free-market ideology shifted toward unmitigated laissez-faire. Whereas earlier advocates had worried about the stringent conditions that were needed for unregulated markets to work their magic, Friedman was the master of clever (sometimes too clever) arguments to the effect that those conditions were not really needed, or that they were actually met in real-world markets despite what looked a lot like evidence to the contrary. He was a natural-born debater: single-minded, earnestly persuasive, ingenious, and relentless. My late friend and colleague Paul Samuelson, who was often cast as Friedman’s opponent in such jousts, written and oral, once remarked that he often felt that he had won every argument and lost the debate. As for relentlessness: Professor Friedman came to my department to give a talk to graduate students in economics. The custom was that, after the seminar, the speaker and a small group of students would have dinner together, and continue discussion. On one such occasion I went along for the dinner. The conversation was lively and predictable. I had a long drive home, so at about ten o’clock I excused myself and left. Next morning I saw one of the students and asked how the rest of the dinner had gone. “Well,” he replied, “Professor Friedman kept arguing and arguing, and after a while I heard myself agreeing to things I knew weren’t true.” I suspect that was not the only such occasion."

"All the way back, I thought about the fact that I would be held responsible for what was said in that lecture, even though I never heard it. Thereafter, I was always in my seat when Milton Friedman walked in to give his lecture. On a term paper, I wrote that either (a) this would happen or (b) that would happen. Professor Friedman wrote in the margin: "Or (c) your analysis is wrong." "Where was my analysis wrong?" I asked him. "I didn't say your analysis was wrong," he replied. "I just wanted you to keep that possibility in mind.""

"In his early research, Galbraith attempted to explain what had brought on the Great Crash of 1929 – including the role of the stock market's speculative greed fed by (what would today be called) irrational exuberance. Friedman ignored speculation and the failure of the labor market as he focused on the failures of the Federal Reserve. To Friedman, government was the problem, not the solution."

"While Friedman never really appreciated the limitations of the market, he was a forceful critic of government. Yet history shows that in every successful country, the government had played an important role. Yes, governments sometimes fail, but unfettered markets are a certain prescription for failure."

"Friedman came to Yale once and gave a talk called "Yale versus Chicago in Monetary Theory" before a house of 500 people. [...] It was quite interesting. I didn't get much involved at all in public, but we had a small private session afterwards. The thing I remember most about the occasion was that there was a very earnest, well-meaning graduate student who stood up at the big meeting and asked Friedman politely: "In your mode, money is the basic concept, and yet, you haven't ever told us exactly what money is conceptually. Could you help us understand it now?" Friedman cut the guy down in the withering way he can do by telling him that he didn't understand scientific methods. He said Newton didn't have to tell what gravity was; he only had to tell what it does. The same applied to money. That illustrates Friedman's methodology of positive economics which I think has done great damage. [...] You see that in Lucas, too. Their idea is the as-if methodology in which it is not a question whether the assumptions are realistic, but whether the results derived from the assumptions are consonant with the facts of observation. My reaction is that we are not so good at testing hypotheses so that we can give up any information we have at whatever stage of the argument. The realism of assumptions does matter. Any evidence you have on that, either casual or empirical, is relevant."

"Friedman, go home! Friedman, go home! Long live the people of Chile! Freedom! Stop the capitalism!"

"Futurists falter because they belittle the power of religious paradigms, deeming them either too literal or too fantastic."

"Let there be light, says the Bible. All the firmaments of technology, all our computers and networks, are built with light, and of light, and for light, to hasten its spread around the world. Light glows on the telescom's periphery; it shines as its core; it illuminates its webs and its links. From Newton, Maxwell, and Einstein to Richard Feynman and Charles Townes, the more men have gazed at light, the more it turns out to be a phenomenon utterly different from anything else. And yet everything else — every atom and every molecula — is fraught with its oscillating intensity."

"I'm not pushing to have [ ID ] taught as an alternative to Darwin, and neither are they... What’s being pushed is to have Darwinism critiqued, to teach there’s a controversy. Intelligent design itself does not have any content... Much of what I've written about has been in reaction to the materialist superstition, the belief that the universe is a purely material phenomenon that can be reduced to physical and chemical laws. It's a concept that's infected the social sciences as well."

"The analogy between Shannon and codes in biology isn't something that sprang from my belief in God... except maybe on some deeper or more transcendent level."

"Academic scientists of any sort expect to be struck by lightning if they celebrate real creation de novo in the world. One does not expect modern scientists to address creation by God. They have a right to their professional figments such as infinite multiple parallel universes. But it is a strange testimony to our academic life that they also feel it necessary of entrepreneurship to chemistry and cuisine, Romer finally succumbs to the materialist supersition: the idea that human beings and their ideas are ultimately material. Out of the scientistic fog there emerged in the middle of the last century the countervailling ideas if information theory and computer science. The progenitor of information theory, and perhaps the pivotal figure in the recent history of human thought, was Kurt Gödel, the eccentric Austrian genius and intimate of Einstein who drove determinism from its strongest and most indispensable redoubt; the coherence, consistency, and self-sufficiency of mathematics. Gödel demonstrated that every logical scheme, including mathematics, is dependent upon axioms that it cannot prove and that cannot be reduced to the scheme itself. In an elegant mathematical proof, introduced to the world by the great mathematician and computer scientist John von Neumann in September 1930, Gödel demonstrated that mathematics was intrinsically incomplete. Gödel was reportedly concerned that he might have inadvertently proved the existence of God, a faux pas in his Viennese and Princeton circle. It was one of the famously paranoid Gödel's more reasonable fears. As the economist Steven Landsberg, an academic atheist, put it, "Mathematics is the only faith-based science that can prove it.""

"Entrepreneurship is a creative process, and by its very nature, creativity comes as a surprise to us. To foresee an innovation is in effect to make it. If creativity' were not unexpected, customers could demand it and expert planners could supply it by rote. An economy could be run by demand. But an economy of mind is necessarily impelled by Say's Law ("Supply creates it's own demand."), driven by the unforced surprises of human intellect."

"Nonetheless, a kind of Gresham's law applies. Bad sex drives out the good, and the worst of all- philandering and homosexuality- are exalted. Gay liberation, pornographic glut, and one-night trysts are all indices of sexual frustration; all usually disclose a failure to achieve profound and loving sexuality. When a society deliberately affirms these failures: contemplates legislation of homosexual marriage, celebrates the women who denounce the family, and indulges pornography as a manifestation of sexual health and a release from repression- the culture is promoting a form of erotic suicide. For it is destroying the cultural preconditions of profound love and sexuality; the durable heterosexual relationships necessary to a community of emotional investments and continuities in which children can find a secure place."

"In the most elemental sense, the sex drive is the survival instinct: the primal tie to the future. When people lose faith in themselves and their prospects, they also lose their procreative energy. They commit sexual suicide. They just cannot bear the idea of "bringing children into the world." But it is a kind of aimless copulation having little to do with the deeper currents of sexuality and love that carry a community into the future."

"Marriage is not simply a ratification of an existing love. It is the conversion of that love into a biological and social continuity transcending any two individuals. The very essence of such continuity is children- now fewer than before but retained far longer within the family bounds. Regardless of whether a particular couple is getting married for the companionship or psychoindustrial energy or sexual massage, one must separate the professed motives of the individuals from deeper sexual and evolutionary propensities. All sorts of superficial deviations and distortions- from homosexual marriage to companionate partnership- can be elaborated on the primal foundations of human life. But the foundations remain. The natural fulfillment of love is a child, and the fantasies and projects of the childless couple may well be considered as surrogate children. The essential pattern is clear. Women manipulate male sexual desire in order to teach them the long-term cycles of female sexuality and biology on which civilization is based. When men learn, their view of the woman as an object of their own sexuality succumbs to an image of her as the bearer of a richer and more extended eroticism and as the keeper of the portals of social immorality. She becomes a way to lend elaborate continuity and meaning to the limited erotic compulsions of the male."

"This intuition of mysterious new realms of sexual and social experience, evoked by the body and spirit of woman, is the source of male love and ultimately of marriage. In evoking marriages love renders the woman transparent: The man sees through her, in a vision freighted with sexual desire, to the child they might have together. For it is a child that he might have only if he performs a role: only if he can offer, in exchange for the intense inner sexual meanings she imparts, an external realm of meaning, sustenance, and protection in which the child could be safely born. Both partners consciously or unconsciously glimpse a future infant- precarious in the womb, vulnerable in the world, and in need of nurture and protection. In the sweat of their bodies together, in the shape and softnesses of the woman, in the protective support of the man, the couple senses the outlines of a realm that can endure and perpetuate their union. At the deepest level, therefore, love and marriage are based on this complementary pattern. The man's most profound and indispensable life must be experienced through the woman; she is the master of their sexuality. Meanwhile the woman's external existence will to some extent be sustained and protected by the man; he gives space for their worldly haven. This may be the very essence of a closed marriage but it is the essence of the institution itself."

"Let us begin with a few simple, crucial, and apparently unmentionable facts about a typical high school classroom. First and most important, most of the boys and a good number of the girls are thinking about the opposite sex most of the time. If you do not believe this, you are a dreamer. The only thing about a classroom more important to adolescent boys than whether girls are present is whether or not it is on fire. Advocates of coeducation will tell you that the boys are learning to regard the girls as "human beings" rather than as sexual objects. These are the kinds of people who imagine that most males anywhere, under any circumstances- short of affliction by senility, homosexuality, or Bella Abzug- ever refrain from regarding females as sexual objects. These are the "imaginative" types of people who run our schools. They tend to think that their sexual interest in budding adolescent girls is their own secret perversion. It happens to be shared by the boys in the school (as well as by all the other male teachers). If the educator is particularly creative and imaginative, he will suppose that these young "human beings" are learning a lot about life in their work together. What in fact the boys are learning is that unless they are exceptionally "bright' and obedient, they will be exceeded in their studies by most of the girls. Unless you are imaginative, you will see that this is a further drag on their already faltering attention to Longfellow's Evangeline. Clearly in a losing game in masculine terms, the boys react in two ways: They put on a show for the girls and dominate the class anyway, or they drop out. Enough of them eventually drop out, in fact, to disguise the otherwise decided statistical superiority of female performance in school. But they do not drop out soon enough to suit educators for whom aggressive boys are the leading problem in every high school."

"The fact is that there seems to be virtually no chance of arresting the trend toward the integration of all sexually segregated schools. Young people are being immersed, if that is the word, in the shallow currents of reciprocal sex at an ever earlier age. It seems that by denying the Holy Ghost his six inches in the schools, one dooms most of society to just that measure of sexual fulfillment."

"American society is already hospitable to passive and effeminate males. What they need is affirmation as men so that their existing androgyny does not lead to sexual suicide; to impotence and homosexuality. Contrary to the feminist view, the latitude of the two sexes is not the same. While women can venture into the masculine sphere without grave damage and can even indulge in occasional lesbianism, the greater sexual insecurity of males makes it more difficult and unsettling for them to engage in female roles. Homosexuality, moreover, can inflict permanent damage on their sexual identities. Because males must bear the burdens of initiation and performance in sexual activity, a homosexual fixation is often permanent. A man cannot be easily rescued by an aggressive woman."

"While there are many people who accept the romantic propaganda about male homosexual existence, the life of tricks and trades is in fact agonizing for most of its practitioners. Lasting relationships are few and sour. The usual circuit of gay bars, returning servicemen, forlorn personal advertisements, and street cruises affords gratifications so brief and squalid that the society should do everything it can to prevent the spread of the disease. This emphatically does not mean harassing or imprisoning homosexuals. In fact, the worst perversion occasioned by homosexuality is the police practice of entraptment. But at the same time it is crucial to affirm precarious males of their heterosexuality. Natural compassion for men who are already homosexual- and our recognition that men who are already homosexual- and our recognition that some have adjusted happily- should not lead us to praise or affirm the homosexual alternative or to acquiesce in its propaganda."

"The chief attraction of homosexual activity is that it does not require confidence or male identity or even face-to-face self-exposure. It can even be informed without an erection. It is thus an inviting escape for the fallen male. Nonetheless, actual homosexuality is by no means inevitable in such cases. A man can recover from his dejection, restore hos confidence, and return to full heterosexuality. This is the usual course of events. It is tragic, therefore, if the cultural ambience provides more easily for homosexuality than for recover of normal patterns. In many parts of urban America this tragedy is a way of life."

"The question thus becomes: Will the scientists and women's liberationists be able to unleash on the world a generation of kinless children to serve as the Red Guards of a totalitarian state? Will we try to reproduce the Nazi experiment, when illegitimacy was promoted by the provision of lavish nursing homes and the state usurped the provider male. Or will we manage to maintain our most indispensable condition of civilization- and obstacle to totalitarian usurpation- the human marriage and family."

"George F. Gilder has written an important book called Sexual Suicide in which he examines a wealth of anthropological, economic, social, and psychological data. He then proceeds to explain why family breakdown is the chief cause of the problems that have come down with such force upon our country in recent years. The women's-liberation programs- many of them fostered by women with lesbian tendencies- have weakened family ties and worsened these problems. Gilder points to statistics that prove single men are the chief source of crime and social disruption. He argues convincingly that marriage is essential to male socialization in the modern world."

"He describes homosexuality as a "flight from identity and love," the "gay liberation" movement as an "escape from sexual responsibility and its display a threat to millions of young men who have precarious masculine identities." Women's liberation he looks upon as a destructive fantasy. "There are no human beings; there are just men and women, and when they deny their divergent sexuality, they reject the deepest sources of identity and love. They commit sexual suicide." The More I read, the more sick at heart I became and the fighting spirit within me grew. I had to look up words and terms- this was a whole new area of thinking for me. "Oh, dear Lord, has this been going on all around me? I've been so indifferent, so careless..." Because I knew my Bible I recognized the perils of homosexuality. But even if one did not know or accept the Word of God, common sense indicates that homosexuality is against nature and not normal and therefore not to be encouraged."

"Gilder's analysis saddened me considerably. Despite the romantic propaganda about male homosexual relationships, it is, in fact, agonizing for most of its practitioners. Lasting relationships are few and sour. Gratifications are brief and squalid- "gay" bars, street cruises, forlorn personal advertisements. These do not afford the kind of love the homosexual needs. Gilder warns that heterosexual society should not praise or affirm the homosexual alternatives or acquiesce to their propaganda. It is tragic if the cultural surroundings provide more easily for homosexuality than for recovery of normal patterns. Cities like Miami, which would give in to homosexual demands, are doing the homosexuals no favor. It is far better to help an individual recover from his dejection- whatever has led him into such a debased way of life- restore his confidence, and help him return to full heterosexuality. A society that condones homosexual behavior is a society that is uncaring, for it is allowing an individual to fall prey to sexual self-destruction."

"This is a political book... It has a political purpose: to strengthen the will to maintain freedom against the threat of its abandonment in favor of totalitarianism."

"As for the explanation that fascism is a last desperate attempt of capitalism to delay the socialist revolution, it simply is not true. It is not true that ‘big business’ promoted fascism. On the contrary, both in Italy and in Germany the proportion of fascist sympathizers and backers was smallest in the industrial and financial classes. It is equally untrue that ‘big business’ profits from fascism; of all the classes it probably suffers most from totalitarian economics and Wehrwirtschaft."

"The most dangerous and at the same time most stupid explanation of fascism is the propaganda theory. In the first place, I have never been able to find anyone who could reconcile it with the fact that right up to the fascist victory—and in Italy beyond it—literally all means of propaganda were in the hands of uncompromising enemies of fascism. There was not one widely-read newspaper but poured ridicule on Hitler and Mussolini while the Nazi and the fascist press were unread and on the verge of bankruptcy. The radio in Germany, owned by the government, issued one anti-Nazi broadside after the other. More powerful than both, the established churches used all the enormous direct influence of the pulpit and the confessional to fight fascism and Nazism."

"[T]he ‘total state’ of fascism is not a political alignment within the existing political and social setup, but that it is a revolution which, like all revolutions, works from without."

"Of course, every revolution repudiates what went on before and considers itself a conscious break with the past; it is only posterity that sees, or imagines it sees, the historical continuity. Fascism, however, goes much further in its negation of the past than any earlier political movement, because it makes this negation its main platform. What is even more important, it denies simultaneously ideas and tendencies which are in themselves antithetic. It is antiliberal, but it is also anticonservative; antireligious and antiatheist; anticapitalist and antisocialist; antiwar and antipacifist..."

"The Nazi agitator whom, many years ago, I heard proclaim to a wildly cheering peasants’ meeting: ‘We don’t want lower bread prices, we don’t want higher bread prices, we don’t want unchanged bread prices—we want National-Socialist bread prices,’ came nearer explaining fascism than anybody I have heard since."

"Of these denials of European tradition one is especially important: that is the refutation of the demand that the political and social order and the authority set up under it have to justify themselves as benefiting their subjects. Hardly any other concept or idea of our past is held up to so much ridicule by fascism as that of the justification of power. ‘Power is its own justification’ is regarded as self-evident. Nothing shows better how far the totalitarian revolution has already gone than the general acceptance of this new maxim throughout Europe as a matter of course... [I]t is the most startling innovation. For the last two thousand years... justification of power and authority has been the central problem of European political thought and... political history. And since Europe became Christian there has never been any other approach... than... seeking justification in the benefit which the exercise of power confers upon its subjects... Not even the most fanatical advocates of absolute monarchy would have dared to justify the sovereign otherwise."

"[J]ustification of power must be the central problem. For it is through this problem alone that freedom and equality—or... justice—can be projected into the social and political reality... But to fascism the problem does not even exist except as a ridiculous relic of "Jewish liberalism.""

"Equally striking is the fact that racial anti-Semitism was not taken seriously even by the great majority of Nazis. ‘It is just a catchword to attract voters’ was a standing phrase which everybody repeated and believed, and that I took it seriously was more than once regarded as definite proof of my stupidity and gullibility."

"Fascism is the result of the collapse of Europe's spiritual and social order... catastrophes broke through the everyday routine which makes men accept existing forms, institutions and tenets as unalterable natural laws. They suddenly exposed the vacuum behind the facade of society."

"Capitalism as a social order and as a creed is the expression of the belief in economic progress as leading toward the freedom and equality of the individual in a free and open society. Marxism expects this society to result from the abolition of private profit. Capitalism expects the free and equal society to result from the enthronement of private profit as supreme ruler of social behavior..."

"There is an unbroken chain of opposition to the introduction of economic freedom and to the capitalist autonomy of the economic sphere... In every case the opposition could only be overcome - peacefully or by force - because of the promise of capitalism to establish equality... That this promise was an illusion we all know."

"With Christianity, freedom and equality became the two basic concepts of Europe; they are themselves Europe."

"[The masses] … must turn their hopes toward a miracle. In the depths of their despair reason cannot be believed, truth must be false, and lies must be truth. "Higher bread prices," "lower bread prices," "unchanged bread prices" have all failed. The only hope lies in a kind of bread price which is none of these, which nobody has ever seen before, and which belies the evidence of one's reason."

"In addition, profits are so completely subordinated in Germany and Italy to requirements of a militarily conceived national interest and of full employment that the maintenance of the profit principle is purely theoretical. Profits have lost their autonomy as an independent, not to say the supreme, goal of economic activity."

"There is a definite trend in Italy and Germany to eliminate profit participation and the ownership rights of nonmanaging partners and shareholders."

"The regimentation of agriculture was in both fascist countries the first, and for a considerable time the most drastic, intervention in the free play of economic forces. In either country, and especially in Germany, the threat of the industrial revolution in agriculture had reached a point at which government intervention in the social structure of farming was entirely unavoidable."

"[T]he Western European democracies... will be forced into totalitarianism unless they produce a noneconomic society striving for the freedom and equality of the individual."

"Those German businessmen and industrialists, who, lured by the denunciation of fascism as antisocialist, concluded that it must be procapitalist, have since learned the better. But whereas originally the Right in France and England favored resistance to fascism, the slogan of the inevitable Russo-German war has made a large section favor the fascist advance, so that ‘both monsters devour each other.’"

"Actually, the specter of the Russo-German alliance is already the nightmare of every European government, however much they protest their belief in the inevitability of a Russo-German war. And what is only a nightmare today may be reality tomorrow. The two regimes will have to come together because they are similar ideologically and socially. That the European Left has not dared to admit this is understandable. By conceding that Soviet Russia is as fascist a state as Germany, they would have conceded that socialism must fail and would have abandoned themselves."

"[T]he enemy of totalitarian Nazism is not in the East. It is not Russian communism. The complete collapse of the belief in the attainability of freedom and equality through Marxist socialism has forced Russia to travel the same road toward a totalitarian, purely negative, noneconomic society of unfreedom and inequality which Germany has been following… During the last few years Russia has therefore been forced to adopt one purely totalitarian and fascist principle after the other; not, it must be emphasized, because of a "Stalinist conspiracy," but because there was no other possibility."

"Fascism is the stage reached after communism has proved an illusion. And it has been proven as much of an illusion in Stalinist Russia as it proven an illusion in pre-Hitler Germany. Communism in anything but name was abandoned in Russia when the Five-Year Plan was substituted for the New Economic Policy (NEP) after Lenin’s death."

"No society can function as a society, unless it gives the individual member social status and function, and unless the decisive social power is legitimate."

"In the modern corporation the decisive power, that of the managers, is derived from no one but the managers themselves controlled by nobody and nothing and responsible to no one. It is in the most literal sense unfounded, unjustified, uncontrolled and irresponsible power."

"Unless the power of the corporation can be organized on an accepted principle of legitimacy, it will... be taken over by a Central government..."

"We have only one alternative: either to build a functioning industrial society or see freedom itself disappear in anarchy and tyranny."

"Unless we realize that the essence of Nazism is also an attempt to solve a universal problem of Western civilization - that of the industrial society - and that the basic principles on which the Nazis base this attempt are also in no way confined to Germany, we do not know what we fight for or what we fight against... The war is being fought for the structure of industrial society--its basic principles, its purposes, and its institutions."

"The political and social conclusion from the freedom of the individual is self-government, self-government as a right and as a duty of the individual. If there is no individual decision in self-government, it is only a sham. But it is just as much a sham and a camouflage for tyranny if there is no individual responsibility. There must be active, responsible, and spontaneous participation of the individual in government as his government, in its decisions as his decisions, in its burdens as his burdens. Political freedom is neither easy nor automatic, neither pleasant nor secure. It is the responsibility of the individual for the decisions of society as if they were his own decisions—as in moral truth and accountability they are."

"Freedom rests on ethical decisions. But the political sphere deals with power. ...Individually, power may well be the goal of personal ambition. But socially it is a servant; its organization is only a means to a social end. ...[P]ower distributes rank and determines relations within society; it is a means of internal organization. But the end of society is always an ethical purpose."

"[F]reedom cannot be legislated into existence—though it can be legislated out of existence if the necessary minimum of free government is destroyed. ...[F]reedom rests upon beliefs and social institutions and not upon laws. ...[L]egislative enactment does not create or determine institutional structure, social beliefs and human nature."

"[T]echnical questions... constitute the bulk of our daily problems... But to everyone there is one correct answer. What is correct today may be made incorrect tomorrow by an advance in our knowledge or experience or by changes in the facts; but at any given time and place there is one optimum... provable, measurable, demonstrable... [i.e.,] objectively correct. ...[T]hat means that the human will does not enter. Without human will, however, there is no choice... no freedom. The whole technical and scientific field, is... ethically neutral; and freedom, like all other basic values, is an ethical value."

"[T]he basic decisions are... about aims... what is desirable... the greater good or the lesser evil in the case of conflicting aims... what sacrifice we are willing to make for a certain achievement, and at what point the sacrifice outweighs the advantages."

"There can be no freedom if one man or one group of men... is assumed... inherently perfect or perfectible. Its claim to perfection or perfectibility is a claim to absolute rule."

"There can... be no freedom if a man-made absolute is set up as the one and exclusive goal of human endeavor, or as the one and exclusive rule of individual or social conduct. The man-made absolute may be peace or war, economic progress or security, the Nordic Race or the greatest happiness of the greatest number. Each of these must destroy freedom if it is set up as The Absolute."

"If war production should remain the only way out of a long-term depression, industrial society would be reduced to the choice between suicide through total war or suicide through total depression."

"For if this country—or any other of the great powers—were to make its defense program a function of its domestic employment situation, it would become impossible to conduct a constructive and well-thought out foreign policy or to develop any lasting collaboration."

"Without... a subconscious unity, understanding of each other's behavior is difficult to attain. ...We have all ...had experience ...where someone from a different environment, a different region of the country, a different social group, perhaps a different country, behaves contrary to what we consider normal behavior ...In international affairs we have had a grotesque and tragic example of such failure to understand, and of its dangers, in Mr. Neville Chamberlain's profound belief that Hitler must react, think, and act like a successful British businessman; and it was probably Hitler's undoing that he expected the British and Americans to react and act in the "realistic" fashion of a Nazi boss."

"[W]e are all learning fast that we have to respect each other's basic beliefs and institutions, however much we must dislike them. If there is one lesson to this war, it is that the attempt to impose one's own system on the world, such as was made by both the Germans and the Japanese, must end not only in total world-wide conflict, but in the defeat and destruction of the country that makes the attempt."

"[C]ollaboration between... divergent systems is possible... only as long as both are stable. ...International security is ...based upon the internal political and social security of each of the Great Powers."

"[C]hronic unemployment is a denial of citizenship, a destruction of the rationality of our society, and a sign that we are socially incapable of mastering our economic tools. Reasonably full employment... is... a prerequisite to internal stability. ...[F]ailure to stabilize our economy would be the most severe threat to international order."

"[N]othing is easier to attain than full employment... All we would have to do, for instance, would be to continue a war-economy at no more, perhaps, than half its present level. Or we could adopt some sort of state socialism, under which the surplus resources... would be employed on non-economic projects, it makes... little difference what twentieth century equivalent of the Egyptian pyramids... so long as we do not use the surplus labor to produce ordinary economic goods. ...But we refuse to accept the kind of society to which either [a permanent war economy or state socialism] would lead. We demand more than a stable society, we demand a good society. Specifically, we demand of our economic system... that it produce goods... that add to the wealth... and... that these goods be produced... under... the free enterprise system."

"To eliminate depressions we must distribute capital investment... to eliminate the collapse of producer goods during the slack years... through a taxation policy... funds... should be spread... by means of a fiscal policy which rewards the accumulation of capital funds to be used for employment-creating investments in slack years. ...At the same time we should be able to organize for a steady expansion of our economic activity. One way of doing this would be to organize systematically the satisfaction of such major unfulfilled needs as housing. ...The only thing we lack today is the organization necessary for the mass production and mass assembly of houses, which could easily by supplied either by large corporation or by local cooperatives. ...[T]he problem of full employment is primarily one of organizing the resources which we so amply possess. ...[I]t requires that rarest of all qualities, political imagination ..."

"[A] totalitarian country... has a much greater freedom of political action and can use whatever policies seem expedient regardless of their moral or philosophical implications. ...[T]here is nothing weaker than a free society which no longer believes strongly enough in the principles on which it is founded to base a living faith on them, but still believes strongly enough in them to be unable to act contrary to them; for such a society will be paralyzed. ...But ...nothing is stronger than a free society which is conscious of its beliefs and vigorous in its adherence to them. For such a society possesses a moral strength and dignity and inspires a loyalty among its members which are invincible."

"It is not enough for the economist in a free society to be a good economic craftsman; he must also think and act as a citizen."

"[I]n a free society each individual has a responsibility towards the beliefs of his society—a responsibility on which all the rights and duties of citizenship are founded."

"[W]e have been forced to put a major emphasis on the acquisition of technical knowledge."

"[T]he nineteenth century was under the illusion that citizenship can take care of itself. It thought that a free society was "natural" and... would maintain itself by its own momentum. ..."[A]utomatic progress" would preserve liberty. ...[T]hese beliefs were false... they were destructive. They are not... the source and origin of Hitlerism, but they greatly facilitated its rise."

"Today we know that a free society is not the product of nature, but of man; that it is not self-maintaining and self-winding, but demands the vigilant and constant support of responsible citizens... freedom is not inevitable and easy... but the product of a long, hard struggle of man's reason and man's faith that has to be fought over and won again by every generation."

"It is this country today which has to prove—to a skeptical world and in constant competition—that it is possible to found a strong and stable modern industrial nation on the concept of citizenship in a free society. Hence the central task in this country, the task with the attainment of which we will stand or fall, is education."

"We need in this modern world... an incredible number of very highly trained technicians and professional men... But nothing will be gained unless [they] are also educated as citizens... to know about the ends, the beliefs, the purposes, to... which their craft and skill is to contribute... about the basic issues which... every generation of free men has had to decide... [I]t is the liberal arts... that is our lighthouse in the dark and uncharted waters of the postwar world."

"We still think and talk of the basic problems of an industrial society as problems that can be solved by changing the "system," that is the superstructure of political organization. Yet the real problems lie within the [industrial] enterprise. On the contrary, it is the solution of the problems of the enterprise that will shape the system under which we live."

"The large industrial enterprise is... the representative institution of an industrial society. It determines the individual's view of his society."

"The major incentive to productivity and efficiency are social and moral rather than financial."

"What the worker needs is to see the plant as if he were a manager. Only thus can he see his part; from his part he cannot reach the whole. This "seeing" is not a matter of information, training courses, conducted plant tours, or similar devices. What is needed is the actual experience of the whole in and through the individual's work."

"That the government's power under the Taft-Hartley Act to stop a strike by injunction so clearly strengthens the hand of the employer—even though it is used only when a strike threatens the national health, welfare, or safety—is a grave blemish and explains much of union resistance to the Act."

"There is only one valid definition of a business purpose: to create a customer."

"Free enterprise cannot be justified as being good for business. It can be justified only as being good for society."

"The days of the 'intuitive' manager are numbered."

"A man should never be appointed into a managerial position if his vision focuses on people's weaknesses rather than on their strengths."

"The better a man is, the more mistakes will he make - for the more new things he will try. I would never promote a man into a top level job who had not made mistakes, and big ones at that. Otherwise he is sure to be mediocre."

"It does not follow from the separation of planning and doing in the analysis of work that the planner and the doer should be two different people. It does not follow that the industrial world should be divided into two classes of people: a few who decide what is to be done, design the job, set the pace, rhythm and motions, and order others about; and the many who do what and as they are told."

"It does not matter whether the worker wants responsibility or not, ...The enterprise must demand it of him."

"The fundamental reality for every worker, from sweeper to executive vice-president, is the eight hours or so that he spends on the job. In our society of organizations, it is the job through which the great majority has access to achievement, to fulfillment, and to community."

"- A manager sets objectives - A manager organizes - A manager motivates and communicates - A manager, by establishing yardsticks, measures - A manager develops people."

"The company is not and must never claim to be home, family, religion, life or fate for the individual. It must never interfere in his private life or his citizenship. He is tied to the company through a voluntary and cancellable employment contract, not through some mystical or indissoluble bond."

"Capitalism is being attacked not because it is inefficient or misgoverned but because it is cynical. And indeed a society based on the assertion that private vices become public benefits cannot endure, no matter how impeccable its logic, no matter how great its benefits."

"We no longer even understand the question whether change is by itself good or bad, ...We start out with the axiom that it is the norm. We do not see change as altering the order... We see change as being order itself--indeed the only order we can comprehend today is a dynamic, a moving, a changing one."

"An organization belongs on a sick list when promotion becomes more important to its people than accomplishment of their job they are in. It is sick when it is more concerned with avoiding mistakes than with taking risks, with counteracting the weaknesses of its members than with building on their strength. But it is sick also when "good human relations" become more important than performance and achievement."

"The moment people talk of "implementing" instead of "doing," and of "finalizing" instead of "finishing," the organization is already running a fever."

"The individual needs the return to spiritual values, for he can survive in the present human situation only by reaffirming that man is not just a biological and psychological being but also a spiritual being, that is creature, and existing for the purposes of his Creator and subject to Him."

"In the political, the social, the economic, even the cultural sphere, the revolutions of our time have been revolutions "against" rather than revolutions "for"… On the whole throughout this period the man--or party--that stood for doing the positive has usually cut a pathetic figure; well meaning but ineffectual, civilized but unrealistic, he was suspect alike to [by both] the ultras of destruction and the ultras of preservation and restoration."

"[T]hroughout the ages to be educated meant to be unproductive.... our word "school" - and its equivalent in all European languages - derives from a Greek word meaning "leisure.""

"Tomorrow everybody - or practically everybody - will have had the education of the upper class of yesterday, and will expect equivalent opportunities. That is why we face the problem of making every kind of job meaningful and capable of satisfying every educated man."

"The arts alone give direct access to experience. To eliminate them from education - or worse, to tolerate them as cultural ornaments - is antieducational obscurantism. It is foisted on us by the pedants and snobs of Hellenistic Greece who considered artistic performance fit only for slaves..."

"In book subjects a student can only do a student's work. All that can be measured is how well he learns, rather than how well he performs. All he can show is promise."

"No matter how deeply wedded one may be to the free enterprise system (and I, for one, am wedded for life), one has to accept the need for positive government; one has to consider government action on a sizable scale as desirable rather than as a necessary evil."

"Communism is evil. Its driving forces are the deadly sins of envy and hatred."

"Through systematic terror, through indoctrination, through systematic manipulation of stimulus, reward, and punishment, we can today break man and convert him into brute animal... The first step toward survival is therefore to make government legitimate again by attempting to deprive it of these powers... by international action to ban such powers."

"Morale in an organization does not mean that "people get along together"; the test is performance not conformance."

"Large organizations cannot be versatile. A large organization is effective through its mass rather than through its agility. Fleas can jump many times their own height, but not an elephant."

"The world economy is not yet a community--not even an economic community...Yet the existence of the "global shopping center" is a fact that cannot be undone. The vision of an economy for all will not be forgotten again."

"If "socialism" is defined as "ownership of the means of production"--and this is both the orthodox and the only rigorous definition--then the United States is the first truly Socialist country."

"Whenever anything is being accomplished, it is being done, I have learned, by a monomaniac with a mission."

"Few companies that installed computers to reduce the employment of clerks have realized their expectations; most computer users have found that they now need more, and more expensive clerks, even though they call them "operators" or "programmers."

"All economic activity is by definition "high risk." And defending yesterday--that is, not innovating--is far more risky than making tomorrow."

"Ideas are somewhat like babies--they are born small, immature, and shapeless. They are promise rather than fulfillment. In the innovative company executives do not say, "This is a damn-fool idea." Instead they ask, "What would be needed to make this embryonic, half-baked, foolish idea into something that makes sense, that is an opportunity for us?""

"The citizen of today in every developed country is typically an employee. He works for one of the institutions. He looks to them for his livelihood. He looks to them for his opportunities. He looks to them for access to status and function in society, as well as for personal fulfillment and achievement."

"Without institution there is no management. But without management there is no institution."

"We will have to learn to lead people rather then to contain them."

"A primary task of management in the developed countries in the decades ahead will be to make knowledge productive."

"A management decision is irresponsible if it risks disaster this year for the sake of a grandiose future."

"The only thing we know about the future is that it is going to be different."

"The prevailing economic theory of business enterprise and behavior, the maximization of profit—which is simply a complicated way of phrasing the old saw of buying cheap and selling dear—may adequately explain how Richard Sears operated. But it cannot explain how Sears, Roebuck or any other business enterprise operates, nor how it should operate. The concept of profit maximization is, in fact, meaningless."

"Profit is not a cause but a result-"

"Success always obsoletes the very behavior that achieved it."

"The basic definition of the business and of its purpose and mission have to be translated into objectives."

"It is better to pick the wrong priority than none at all."

"Decisions exist only in the present."

"The fault is in the system and not in the men."

"A success that has outlived its usefulness may, in the end, be more damaging than failure."

"One cannot hire a hand; the whole man always comes with it."

"Frederick W. Taylor was the first man in recorded history who deemed work deserving of systematic observation and study. On Taylor's 'scientific management' rests, above all, the tremendous surge of affluence in the last seventy-five years which has lifted the working masses in the developed countries well above any level recorded before, even for the well-to-do. Taylor, though the Isaac Newton (or perhaps the Archimedes) of the science of work, laid only first foundations, however. Not much has been added to them since – even though he has been dead all of sixty years."

"As with every phenomenon of the objective universe, the first step toward understanding work is to analyze it."

""Loafing" is easy, but "leisure" is difficult."

"The first step toward making the worker achieving is to make work productive."

"When Henry Ford said, "The customer can have a car in any color as long as it's black," he was not joking."

"A tool is not necessarily better because it is bigger. A tool is best if it does the job required with a minimum of effort, with a minimum of complexity, and with a minimum of power."

"An employer has no business with a man's personality. Employment is a specific contract calling for a specific performance... Any attempt to go beyond that is usurpation. It is immoral as well as an illegal intrusion of privacy. It is abuse of power. An employee owes no "loyalty," he owes no "love" and no "attitudes"--he owes performance and nothing else. .... The task is not to change personality, but to enable a person to achieve and to perform."

"The society of organizations is new-only seventy years ago employees were a small minority in every society."

"[[Management] has authority only as long as it performs."

"It has been said, and only half in jest, that a tough, professionally led union is a great force for improving management performance. It forces the manager to think about what he is doing and to be able to explain his actions and behavior."

"And no matter how serious an environmental problem the automobile poses in today's big city, the horse was dirtier, smelled worse, killed and maimed more people, and congested the streets just as much."

"Wherever an impact can be eliminated by dropping the activity that causes it, this is therefore the best-indeed the only truly good-solution."

"The manager is a servant. His master is the institution he manages and his first responsibility must therefore be to it."

"We do not need more laws. No country suffers from a shortage of laws. We need a new model."

"The worker's effectiveness is determined largely by the way he is being managed."

"To be a manager requires more than a title, a big office, and other outward symbols of rank. It requires competence and performance of a high order."

"A superior who works on his own development sets an almost irresistible example."

"The purpose of an organization is to enable common men to do uncommon things."

"Executives do many things in addition to making decisions. But only executives make decisions. The first managerial skill is, therefore, the making of effective decisions."

"One has to make a decision when a condition is likely to degenerate if nothing is done."

"Communication is always "propaganda." The emitter always wants "to get something across.""

"The tool user, provided the tool is made well, need not, and indeed should not, know anything about the tool."

"The first organization structure in the modern West was laid down in the canon law of the Catholic Church eight hundred years ago."

"One reason for the tremendous increase in health-care costs in the U.S. is managerial neglect of the "hotel services" by the people who dominate the hospital, such as doctors and nurses."

"The rule should be to minimize the need for people to get together to accomplish anything."

"Top management as a function and as a structure was first developed by Georg von Siemens (1839-1901) in Germany between 1870 and 1880, when he designed and built the Deutsche Bank and made it, within a very few years, into continental Europe's leading and most dynamic financial institution."

"There is a point at which a transformation has to take place."

""Value added" is a meaningless concept for a retail business , for a bank, for a life insurance company, and for any other business which is not primarily engaged in manufacturing."

"Absolute size by itself is no indicator of success and achievement, let alone of managerial competence. Being the right size is."

"Engineers speak half–jokingly about Murphy's Law: " If anything can go wrong, it will." But complexity stands under a second law as well. Let me call it Drucker's law: "If one thing goes wrong, everything else will, and at the same time.""

"There is a point of complexity beyond which a business is no longer manageable."

"Financial "synergy" is a will-o'-the-wisp.It looks good on paper, but it fails to work out in practice."

"The world political system is till based on the concept of the national sovereign state. For the first time therefore, in three hundred years economy and sovereignty are becoming divorced from each other."

"Organizationally what is required - and evolving - is systems management."

"Growth as a goal, to repeat, is delusion. William James, the American philosopher, talked of the "bitch goddess success." A philosopher of business today might well talk of the "bitch goddess growth.""

"There is every indication that the period ahead will be an innovative one, one of rapid change in technology, society, economy, and institutions."

"One of the great movements in my lifetime among educated people is the need to commit themselves to action. Most people are not satisfied with giving money; we also feel we need to work. That is why there is an enormous surge in the number of unpaid staff, volunteers. The needs are not going to go away. Business is not going to take up the slack, and government cannot."

"Sören Kierkegaard has another answer: human existence is possible as existence not in despair, as existence not in tragedy; it is possible as existence in faith... Faith is the belief that in God the impossible is possible, that in Him time and eternity are one, that both life and death are meaningful."

"For the social ecologist language is not "communication." It is not just "message." It is substance. It is the cement that holds humanity together. It creates community and communication. ...Social ecologists need not be "great" writers; but they have to be respectful writers, caring writers."

"That people even in well paid jobs choose ever earlier retirement is a severe indictment of our organizations -- not just business, but government service, the universities. These people don't find their jobs interesting."

"...what's absolutely unforgivable is the financial benefit top management people get for laying off people. There is no excuse for it. No justification. This is morally and socially unforgivable, and we will pay a heavy price for it."

"Thirty years from now the big university campuses will be relics. Universities won't survive. It's as large a change as when we first got the printed book. Do you realize that the cost of higher education has risen as fast as the cost of health care? And for the middle-class family, college education for their children is as much of a necessity as is medical care—without it the kids have no future. Such totally uncontrollable expenditures, without any visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable. Higher education is in deep crisis."

"Universities won't survive. The future is outside the traditional campus, outside the traditional classroom. Distance learning is coming on fast."

"...human beings need community. If there are no communities available for constructive ends, there will be destructive, murderous communities... Only the social sector, that is, the nongovernmental, nonprofit organization, can create what we now need, communities for citizens... What the dawning 21st century needs above all is equally explosive growth of the nonprofit social sector in building communities in the newly dominant social environment, the city."

"...all earlier pluralist societies destroyed themselves because no one took care of the common good. They abounded in communities but could not sustain community, let alone create it."

"Knowing Yourself ...We also seldom know what gifts we are not endowed with. We will have to learn where we belong, what we have to learn to get the full benefit from our strengths, where our weaknesses lie, what our values are. We also have to know ourselves temperamentally: "Do I work well with people, or am I a loner? What am I committed to? And what is my contribution?""

"...the information revolution. Almost everybody is sure ...that it is proceeding with unprecedented speed; and ...that its effects will be more radical than anything that has gone before. Wrong, and wrong again. Both in its speed and its impact, the information revolution uncannily resembles its two predecessors ...The first industrial revolution, triggered by James Watt's improved steam engine in the mid-1770s...did not produce many social and economic changes until the invention of the railroad in 1829 ...Similarly, the invention of the computer in the mid-1940s, ...it was not until 40 years later, with the spread of the Internet in the 1990s, that the information revolution began to bring about big economic and social changes. ...the same emergence of the “super-rich” of their day, characterized both the first and the second industrial revolutions. ...These parallels are close and striking enough to make it almost certain that, as in the earlier industrial revolutions, the main effects of the information revolution on the next society still lie ahead."

"This new knowledge economy will rely heavily on knowledge workers. ...the most striking growth will be in “knowledge technologists:” computer technicians, software designers, analysts in clinical labs, manufacturing technologists, paralegals. ...They are not, as a rule, much better paid than traditional skilled workers, but they see themselves as “professionals.” Just as unskilled manual workers in manufacturing were the dominant social and political force in the 20th century, knowledge technologists are likely to become the dominant social—-and perhaps also political—-force over the next decades."

"Once a year ask the boss, "What do I or my people do that helps you to do your job?" and "What do I or my people do that hampers you?""

"The subordinate's job is not to reform or reeducate the boss, not to make him conform to what the business schools or the management book say bosses should be like. It is to enable a particular boss to perform as a unique individual."

"A manager's task is to make the strengths of people effective and their weakness irrelevant - and that applies fully as much to the manager's boss as it applies to the manager's subordinates"

"Keep the boss aware. Bosses, after all, are held responsible by their own bosses for the performance of their subordinates. They must be able to say: "I know what Anne [or John] is trying to do.""

"Never underrate the boss! The boss may look illiterate. He may look stupid. But there is no risk at all in overrating a boss. If you underrate him he will bitterly resent it or impute to you the deficiency in brains and knowledge you imputed to him."

"The postwar [WWII] GI Bill of Rights - and the enthusiastic response to it on the part of America's veterans - signaled the shift to the knowledge society. Future historians may consider it the most important event of the twentieth century. We are clearly in the midst of this transformation; indeed, if history is any guide, it will not be completed until 2010 or 2020. But already it has changed the political, economic and moral landscape of the world."

"That knowledge has become the resource, rather than a resource, is what makes our society "post-capitalist."

"In the 1950s, industrial workers had become the largest single group in every developed country, and unionized industrial workers in mass-production industry (which was then dominant everywhere) had attained upper-middle-class income levels. They had extensive job security, pensions, long paid vacations, and comprehensive unemployment insurance or "lifetime employment." Above all, they had achieved political power... Thirty-five years later, in 1990, industrial workers and their unions were in retreat. They had become marginal in numbers. Whereas industrial workers who make or move things had accounted for two fifths of the American work force in the 1950s, they accounted for less than one fifth in the early 1990s--that is, for no more than they had accounted for in 1900, when their meteoric rise began... By the year 2000 or 2010, in every developed free-market country, industrial workers will account for no more than an eighth of the work force. Union power has been declining just as fast... By the year 2000 or 2010, in every developed free-market country, industrial workers will account for no more than an eighth of the work force. Union power has been declining just as fast."

"The newly emerging dominant group is "knowledge workers." The very term was unknown forty years ago. (I coined it in a 1959 book, Landmarks of Tomorrow.) By the end of this century knowledge workers will make up a third or more of the work force in the United States--as large a proportion as manufacturing workers ever made up, except in wartime. The majority of them will be paid at least as well as, or better than, manufacturing workers ever were. And the new jobs offer much greater opportunities."

"Increasingly, politics is not about "who gets what, when, how" but about values, each of them considered to be absolute. Politics is about "the right to life"...It is about the environment. It is about gaining equality for groups alleged to be oppressed...None of these issues is economic. All are fundamentally moral."

"This society in which knowledge workers dominate is in danger of a new "class conflict" between the large minority of knowledge workers and the majority of workers who will make their livings through traditional ways, either by manual work... or by service work. The productivity of knowledge work - still abysmally low - will predictably become the economic challenge of the knowledge society. On it will depend the ability of the knowledge society to give decent incomes, and with them dignity and status, to non knowledge people."

"I think the growth industry of the future in this country and the world will soon be the continuing education of adults. ...I think the educated person of the future is somebody who realizes the need to continue to learn. That is the new definition and it is going to change the world we live in and work in."

"I would hope that American managers - indeed, managers worldwide - continue to appreciate what I have been saying almost from day one: that management is so much more than exercising rank and privilege, that it is much more than "making deals." Management affects people and their lives."

"Culture eats strategy for breakfast."

"Although he reputedly hated the label of ‘guru’, Peter Drucker was, by any standards, the greatest management guru the world has yet seen. In 1996, the McKinsey Quarterly journal described him as ‘the one guru to whom other gurus kowtow’ and Robert Heller described him as ‘the greatest man in the history of management’, praise indeed for a man who described himself as ‘just an old journalist’."

"What fascinated me about Drucker, and still does, is how he infuses his broad perspective on business issues with philosophical and historical considerations."

"The publication of Peter F. Drucker's The Practice of Management in 1954 was a turning point in the development of the discipline of management."

"If there were an Economist's Creed, it would surely contain the affirmations 'I understand the Principle of Comparative Advantage' and 'I advocate Free Trade'"

"If there is one single area of economics in which path dependence is unmistakable, it is in economic geography – the location of production in space."

"In the course of describing my formative moment in 1978, I have already implicitly given my four basic rules for research. Let me now state them explicitly, then explain. Here are the rules:1. Listen to the Gentiles 2. Question the question 3. Dare to be silly 4. Simplify, simplify"

"I do not mean to say that formal economic analysis is worthless, and that anybody's opinion on economic matters is as good as anyone else's. On the contrary! I am a strong believer in the importance of models, which are to our minds what spear-throwers were to stone age arms: they greatly extend the power and range of our insight. In particular, I have no sympathy for those people who criticize the unrealistic simplifications of model-builders, and imagine that they achieve greater sophistication by avoiding stating their assumptions clearly. The point is to realize that economic models are metaphors, not truth. By all means express your thoughts in models, as pretty as possible (more on that below). But always remember that you may have gotten the metaphor wrong, and that someone else with a different metaphor may be seeing something that you are missing."

"But the honest truth is that what drives me as an economist is that economics is fun. I think I understand why so many people think that economics is a boring subject, but they are wrong. On the contrary, there is hardly anything I know that is as exciting as finding that the great events that move history, the forces that determine the destiny of empires and the fate of kings, can sometimes be explained, predicted, or even controlled by a few symbols on a printed page. We all want power, we all want success, but the ultimate reward is the simple joy of understanding."

"If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God."

"If economists ruled the world, there would be no need for a World Trade Organization. The economist's case for free trade is essentially a unilateral case—that is, it says that a country serves its own interests by pursuing free trade regardless of what other countries may do."

"It is a bit funny, but also quite sad: Those who preach the doctrine of global glut are tilting at windmills, when there are some real monsters out there that need slaying."

"The idea of comparative advantage—with its implication that trade between two nations normally raises the real incomes of both—is, like evolution via natural selection, a concept that seems simple and compelling to those who understand it. Yet anyone who becomes involved in discussions of beyond the narrow circle of academic economists quickly realizes that it must be, in some sense, a very difficult concept indeed."

"There is nothing that plays worse in our culture than seeming to be the stodgy defender of old ideas, no matter how true those ideas may be. Luckily, at this point the orthodoxy of the academic economists is very much a minority position among intellectuals in general; one can seem to be a courageous maverick, boldly challenging the powers that be, by reciting the contents of a standard textbook. It has worked for me!"

"By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

"Now I’m not saying that Keynes was right about everything, that we should treat The General Theory as a sort of secular bible - the way that Marxists treat Das Kapital. But the essential truth of Keynes’s big idea - that even the most productive economy can fail if consumers and investors spend too little, that the pursuit of sound money and s is sometimes (not always!) folly rather than wisdom - is as evident in today’s world as it was in the 1930s. And in these dangerous days, we ignore or reject that idea at the world economy’s peril."

"So the story of the baby-sitting co-op is not a mere amusement. If people would only take it seriously—if they could only understand that when great economic issues are at stake, whimsical parables are not a waste of time but the key to enlightenment—it is a story that could save the world."

"Here, then, is a revised version of Marshall's rules: (1) Figure out what you think about an issue, working back and forth among verbal intuition, evidence, and as much math as you need. (2) Stay with it till you are done. (3) Publish the intuition, the math, and the evidence - all three - in an economics journal. (4) But also try to find a way of expressing the idea without the formal apparatus. (5) If you can, publish that where it can do the world some good."

"In short, the success of macroeconomic activism, in both theory and practice, has made it possible for free market microeconomics to survive--again both in theory and in practice."

"The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone—horrors!—printing money) can ever be a good idea. Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms—especially when it gives them a chance to lecture others on their failings."

"The serious lesson of the antics in Argentina, then, is that the big issues of --fixed vs. flexible exchange rates, whether countries should have independent currencies at all--are still wide open. It's an eternal controversy, and not even the pope can resolve it."

"So you can take your pick as to which Mundell you prefer; but the Nobel committee basically honored Mundell the younger, the economist who was iconoclastic enough to imagine that Canada, of all places, was the economy of the future--and was right."

"The whole subject of the liquidity trap has a sort of Alice-through-the-looking glass quality. Virtues like , or a known to be strongly committed to , become vices; to get out of the trap a country must loosen its belt, persuade its citizens to forget about the future, and convince the that the government and central bank aren’t as serious and austere as they seem."

"There is no economic policy. That's really important to say. The general of the Bushies is that they don't make policies to deal with problems. They use problems to justify things they wanted to do anyway. So there is no policy to deal with the lack of jobs. There really isn't even a policy to deal with terrorism. It's all about how can we spin what's happening out there to do what we want to do."

"...Exxon Mobil is a worse environmental villain than other big oil companies...Exxon, headed by Mr. Raymond, chose a different course of action: it decided to fight the science....And that's just what Exxon Mobil has done: lavish grants have supported a sort of alternative intellectual universe of global warming skeptics....the fact is that whatever small chance there was of action to limit global warming became even smaller because ExxonMobil chose to protect its profits by trashing good science."

"It’s a tribute to the importance of Friedman’s work that questions about his legacy bear so directly on contemporary policy issues. But for that reason it’s also important not to engage in . Friedman was a great economist, but like every other great economist in history, he was also wrong about some important things."

"Whether the influence of increasing returns on trade and geography is rising or falling, one thing is clear: much was learned from the intellectual revolution that brought increasing returns into the heart of how we think about the world economy. It wasn't just that economists could make sense of previously puzzling data, we found ourselves able to see things that had previously been in an intellectual blind spot. Many people contributed to this process of enlightenment; I'm proud to have been a part of the journey."

"So let’s bid a not at all fond farewell to the Big Zero — the decade in which we achieved nothing and learned nothing."

"I know that when I look at today’s Mexicans and Central Americans, they seem to me fundamentally the same as my grandparents seeking a better life in America. On the other side, however, open immigration can’t coexist with a strong ; if you’re going to assure health care and a decent income to everyone, you can’t make that offer global. So Democrats have mixed feelings about immigration; in fact, it’s an agonizing issue."

"… politics determine who has the power, not who has the truth."

"It’s a great honour to be asked to give this talk, especially because I’m arguably not qualified to do so. I am, after all, not a Keynes , nor any kind of serious intellectual historian. Nor have I spent most of my career doing macroeconomics. Until the late 1990s my contributions to that field were limited to international issues; although I kept up with macro research, I avoided getting into the frontline theoretical and empirical disputes."

"If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. … There was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace. Well, this time, we don't need it, we need it in order to get some fiscal stimulus."

"...and Newt [Gingrich] — although somebody said "he’s a stupid man’s idea of what a smart person sounds like," but he is more plausible than the other guys that they’ve been pushing up."

"in goods and services has expanded steadily over the past six decades thanks to declines in shipping and communication costs, globally negotiated reductions in government s, the widespread outsourcing of production activities, and a greater awareness of foreign cultures and products. New and better communications technologies, notably the Internet, have revolutionized the way people in all countries obtain and exchange information."

"More than four years after the financial crisis began, the world's major advanced economies remain deeply depressed, in a scene all too reminiscent of the 1930s. And the reason is simple: we are relying on the same ideas that governed policy in the 1930s. These ideas, long since disproved, involve profound errors both about the causes of the crisis, its nature, and the appropriate response. These errors have taken deep root in public consciousness and provide the public support for the excessive austerity of current fiscal policies in many countries. So the time is ripe for a in which mainstream economists offer the public a more evidence-based analysis of our problems."

"This is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics."

"When the economy is in a depression, scarcity ceases to rule. Productive resources sit idle, so that it is possible to have more of some things without having less of others; free lunches are all around. As a result, all the usual rules of economics are stood on their head; we enter a looking-glass world in which virtue is vice and prudence is folly. Thrift hurts our future prospects; sound money makes us poorer. Moreover, that's the kind of world we have been living in for the past several years, which means that it is a kind of world that students should understand. […] Depression economics is marked by paradoxes, in which seemingly virtuous actions have perverse, harmful effects. Two paradoxes in particular stand out: the , in which the attempt to save more actually leads to the nation as a whole saving less, and the less-well-known , in which the willingness of workers to protect their jobs by accepting lower wages actually reduces total employment. […] In times of depression, the rules are different. Conventionally sound policy—s, a firm commitment to —helps to keep the economy depressed. Once again, this is not normal. Most of the time we are not in a depression. But sometimes we are—and 2013, when this chapter was written, was one of those times."

"I do not think this is a permanent condition. The craziness comes more from cultural ethnic issues than anything else, because you have a… A lot of the real craziness come from, if you like, from rural who feel that they’re losing their country, they’re losing ownership of the country. And they are right—we are becoming more diverse, more multicultural. And in the end... they are not the future. In the end, the power they still have will go away. But it’s a very difficult time until then. So the future is Mayor Deblasio of New York, but Ted Cruz is still out there with the ability to do a lot of damage."

"Economics is harder than physics; luckily it is not quite as hard as sociology. Why is economics such a hard subject? Part of the answer has to do with complexity. The economy cannot be put in a box. [...] Another reason economics is hard is that the critical sociologist is right: it involves human beings, who do not behave in simple, mechanical ways."

"As the example of Ronald Reagan shows, real political success comes not simply from appealing to the interests that people currently perceive but from finding ways to redefine their perceived interests, to harness their discontent in favor of changes that you can lead."

"Why did the magic economy go away? Hundreds of books have been written on that topic. This isn't one of them ― although I'll devote part of a chapter to some plausible stories and take a number of stabs at the issue along the way. But let me cut to the chase: the real answer is that we don't know. There are a lot of stories out there. Most of them, including the ones that have achieved the widest currency, are dead wrong on logical or factual grounds. There are some less popular stories that could be right ― but if you are honest with yourself, you will admit that nobody, yourself included, knows which if any of these stories actually is right."

"Where do ideas about economics come from? They come, of course from economists—where by an "economist" I mean someone who thinks and writes regularly about economic issues. But not all economists are alike, and in fact the genus includes two radically distinct species: The professors and the policy entrepreneurs."

"No, the problem that the politicians have with the professors is not one of failure to communicate; it is one of failure to say what politicians want (need) to hear, especially when they are trying to seize power from other politicians. And necessity is the mother of invention: a different group, the policy entrepreneurs, has arisen to fill the gap."

"There are many economic puzzles, but there are only two really great mysteries. One of these mysteries is why economic growth takes places at different rates over time and across countries. Nobody really knows why the U.S. economy could generate 3 percent annual productivity growth before 1973 but only 1 percent afterward, nobody really knows why Japan surged from defeat to global economic power after World War II, while Britain slid slowly into third-rate status. At any given time there are always policy entrepreneurs willing to claim that they have all the answers, but we'll come to that story in later chapters. The other mystery is the reason why there is a business cycle ― the irregular rhythm of recessions and recoveries that prevents economic growth from being a smooth trend. It was in challenging the orthodox, Keynesian view of business cycles that conservatives first forced a major rethinking of economics."

"The phenomenon of recessions puzzled many economists in the early years of this century, and led many of them produce their worst work. Thorstein Veblen went from his brilliant Theory of the Leisure Class to write a really terrible book (') purporting to explain economic slumps. Joseph Schumpeter, whose magnificent vision of the "creative destruction" inherent in capitalist growth continues to inspire many economists, wrote a turgid, almost meaningless two-volume study, Business Cycles. Marxists gleefully seized upon the biggest recession of all, the Great Depression of the 1930s, as evidence of the irrationality of capitalism; yet they never offered a good explanation of why and how such things happen, just assurances that socialism would cure them. It fell to the British economist John Maynard Keynes to provide a clear story about what happens during a recession, and some useful advice about how to get out of one."

"The usual and basic Keynesian answer to recessions is a monetary expansion. But Keynes worried that even this might sometimes not be enough, particularly if a recession had been allowed to get out of hand and become a true depression. Once the economy is deeply depressed, households and especially firms may be unwilling to increase spending no matter how much cash they have, they may simply add any monetary expansion to their board. Such a situation, in which monetary policy has become ineffective, has come to be known as a ""; Keynes believed that the British and American economies had entered such a trap by the mid-1930s, and some economists believed that the United States was on the edge of such a trap in 1992. The Keynesian answer to a liquidity trap is for the government to do what the private sector will not: spend. When monetary expansion is ineffective, fiscal expansion—such as public works programs financed by borrowing—must take its place. Such a fiscal expansion can break the vicious circle of low spending and low incomes, "priming the pump: and getting the economy moving again. But remember that this is not by any means an all-purpose policy recommendation; it is essentially a strategy of desperation, a dangerous drug to be prescribed only when the usual over-the-counter remedy of monetary policy has failed."

"Like any major intellectual contribution, Keynes's ideas were bitterly criticized. To many people it seems obvious that massive economic slumps must have deep roots. To them, Keynes's argument that they are essentially no more than a problem of mixed signals, which can be cured by printing a bit more money, seems unbelievable."

"The first stage of Friedman's attack on Keynes was his effective though somewhat slippery critique of the idea that monetary and fiscal policy can be actively used to smooth out the business cycle. Friedman argued that such active policy is not only unnecessary but actually harmful, worsening the very economic instability that it is supposed to correct, and should be replaced by simple, mechanical monetary rules. This is the doctrine that came to be known as "monetarism.""

"On the whole, the monetarism for which Friedman first became famous seems clever, brilliantly argued, but shallow ― and perhaps even a bit disingenuous. Friedman's writings from that period have the feel of a smart man who knows what he wants to believe looking hard for supporting arguments. And I think it is fair to say that up until the late 1960s Friedman and his followers, while influential, were regarded by many of their colleagues as faintly disreputable."

"Milton Friedman was not surprised. In 1968, in one of the decisive intellectual achievements of postwar economics, Friedman not only showed why the apparent tradeoff embodied in the idea of the Phillips curve was wrong; he also predicted the emergence of combined inflation and high unemployment, which Paul Samuelson dubbed ".""

"Feldstein pointed out that throughout the tax system inflation was turning tolerable paper tax rates into very high effective rates. Corporations, for example, were supposed to pay a tax rate of 42 percent on their profits. Feldstein calculated, however, that when the effects of inflation were taken into account, the true tax on any profits from investing in equipment was more like 75 percent. You don't need to be a Republican to accept that tax rates this high might discourage investment and hurt economic growth. But was the interaction between inflation and investment really a major villain in America's economic difficulties? There the evidence was less clear."

"By 1980, the work of Feldstein, Boskin, Summers, and others had convinced many economists that U.S. taxes were in fact a significant obstacle to investment. Nor was this all: another major U.S. policy, the Social Security system, was also discouraging saving and investment."

"In the world of politics, however, the actual content of an academic movement may be less important than the way it affects the tone of the discussion. During the 1970s there was a growing public sense of disillusionment with government, which first fed grass-roots tax revolts in California and , then helped elect Ronald Reagan. And there was also a determined effort by a few extremely conservative journalists and politicians to promote radical tax-cutting plans. No matter how careful the research of conservative public finance theorists like Martin Feldstein might be, in that political climate it was inevitable that it would be widely seen as basically confirming popular prejudices. There was a huge intellectual gulf between Feldstein or Boskin and the sweeping claims of Arthur Laffer; but in the public mind, they were in effect allies."

"In a way, the worst sin of the conservatives was that of hypocrisy. They proclaimed growth as their objective, offered it as the answer to all problems, all while following policies that actually inhibited that growth at least a bit. At the end of the day, however, the most striking fact is how little happened to U.S. long-term growth, good or bad, on their watch."

"In the court of conventional wisdom, Ronald Reagan stands accused of inflicting a huge burden of debt upon his country. He cut taxes on the rich, increased military spending, and failed to cut enough spending elsewhere to pay for his largesse. The result was a string of unprecedented peacetime deficits, and a debt that will be a drag on the national for decades to come. Reagan is guilty as charged. The supply-side apologists' claim that some extraordinary economic success vindicates in spite of the deficits just doesn't hold up in the face of the evidence. The question, however, is whether the crime was a felony or a misdemeanor. The answer proposed here will not satisfy those with a taste for drama. Reagan created a deficit, and it hurt American economic growth. But even if the effects of the visible deficit are supplemented with appeals to several alleged hidden deficits of the 1980s, the cost was not catastrophic. The deficit is not nearly the monster some people imagine."

"The new trade theory picture of the world looks something like this: Each country has, at any given time, a set of broad resources—land, skilled labor, capital, climate, general technological competence. These resources define up to a point the industries in which the country can hope to be competitive on world markets. [...] But a country's resources do not fully determine what it produces, because the detailed pattern of advantage reflects the self-reinforcing virtuous circles, set in motion by the vagaries of history."

"It's tempting to give up—either to retreat to the ivory tower, or to start to play the policy entrepreneur game. After all, what is the use of sophisticated policy thinking or careful examination of the facts if simplistic ideas win every time? One answer is simply that it would be wrong to give up. If the people with good ideas do not fight for them, they have no right to complain about the outcome. But good ideas will still often lose to convenient nonsense. When that happens, every serious economist is ultimately sustained by a faith that the right ideas will eventually prevail."

"Economists, like everyone, have their political es, but these are by no means as strong an influence on what they are willing to consider as you might think. For example, one might have thought that strongly liberal economists like, say, James Tobin would be at least mildly sympathetic to the views of radical economists who draw their inspiration from Marx, or of heterodox economic thinkers like Galbraith. After all, in such fields as history and sociology the Marxist or post-Marxist left has long received a respectful hearing. And yet you don't find this happening: liberal economists are almost as quick as their conservative colleagues to condemn heterodox leftist ideas as foolish—it was the liberal Robert Solow, not Milton Friedman, who defended orthodoxy in the bitter "capital controversy" with British radicals."

"Consider John Kenneth Galbraith or Lester Thurow, both leading economists in the view of the general public, both with all the formal qualifications, both totally ignored by the academic mainstream. Or consider Robert Mundell, who is still revered for his contributions to international monetary theory, yet whose later incarnation as the father of supply-side economics has similarly been ignored."

"In the last few years it has become apparent that during the 1940s and 1950s, a core of ideas emerged regarding external economies, strategic complementarity, and that remains intellectually valid and may continue to have practical applications. This set of ideas which I will refer to as "high " — anticipated in a number of ways the cutting edge of modern trade and growth theory. But these ideas have had to be rediscovered. Between 1960 and 1980 high development theory was virtually buried, essentially because the founders of development economics failed to make their points with sufficient analytical clarity to communicate their essence to other economists, and perhaps even to each other. Only recently have changes in economics made it possible to reconsider what the development theorists said, and to regain the valuable ideas that have been lost."

"A casual reading of the development literature suggests that there is a dividing line circa 1960. Before 1960 writers on development generally assumed as a matter of course that economies of scale were a limiting factor on the ability to profitably establish industries in less developed countries, and that in the presence of such economies of scale pecuniary external economies assume real welfare significance. They seem, however, to have been unaware of the degree to which economies of scale raise problems for explicit modeling of competition, and/or of the extent to which the drive for formalism was pushing economics toward explicit models. After 1960, by contrast, economists working on development had been trained in the formalism of constant-returns general equilibrium, and did not so much reject the possibility that economies of scale might matter, as simply fail to notice it."

"In this part of the lecture I have argued that a number of works in development economics written during the 1950s contained, more or less explicitly and more or less self-consciously, a theory in which strategic complementarity played a key role in development: external economies arose from a circular relationship in which the decision to invest in large-scale production depended on the size of the market, and the size of the market depended on the decision to invest. Whatever the practical relevance of this theory, it made perfectly good logical sense. Yet this was subsequently abandoned, to such an extent that classic papers in the field began to seem, as the physicist Wolfgang Pauli used to say, "not even wrong" — simply incomprehensible."

"From the point of view of a modern economist, the most striking feature of the works of high is their adherence to a discursive, nonmathematical style. Economics has, of course, become vastly more mathematical over time. Nonetheless, development economics was archaic in style even for its own time. Of the four most famous high development works, Rosenstein-Rodan's was approximately contemporary with Samuelson's formulation of the Heckscher–Ohlin model, while Lewis, Myrdal, and Hirschman were all roughly contemporary with Solow's initial statement of growth theory. This lack of formality was not because development economists were peculiarly mathematically incapable. Hirschman made a significant contribution to the formal theory of in the 1940s, while Fleming helped create the still influential of s. Moreover, the development field itself was at the same time generating mathematical planning models—first Harrod–Domar type growth models, then linear programming approaches that were actually quite technically advanced for their time. So why didn't high development theory get expressed in formal models? Almost certainly for one basic reason: the difficulty of reconciling economies of scale with a competitive market structure."

"The irony... is that high development theory was right. By this I do not mean that the Big Push is really the right story of how development takes place, or even that the issues raised in high development theory are necessarily the key ones for making poor countries rich. What I do mean is that the unconventional themes put forth by the high development theorists—their emphasis on strategic complementarity in investment decisions and on the problem of coordination failure—did... identify important possibilities that are neglected in models. But the high development theorists failed to convince their colleagues of the importance of those possibilities. Worse, they failed even to communicate clearly what they were talking about. And so good ideas, important ideas, were ignored for a generation..."

"The history of of the study of the location of economic activity is more like the story of geological thought about the shapes and location of continents and mountain ranges. The location of production is an obvious feature of the economic world. Indeed, I began to get interested in economics as a schoolchild by looking at those old-fashioned maps of countries that used picturesque symbols to represent economic activity: sheaves of wheat to represent agriculture, little miners' carts to represent resource extraction, little factories to represent industry, and so on. And yet there is almost no spatial analysis in mainstream economics."

"So why did spatial issues remain a blind spot for the economic profession? It was not a historical accident: there was something about spatial economics that made it inherently unfriendly terrain for the kind of modeling mainstream economists know how to do. That something was, as you might well guess, the problem of in the face of increasing returns, a problem that is even more acute in than in . In development the crucial role that high assigned to increasing returns was a hypothesis crucial to that doctrine, but not necessarily crucial to understanding development in general. One could do meaningful theorizing about developing countries, albeit not in the grand tradition, without sacrificing the convenient assumptions of constant returns and perfect competition. In spatial economics, however, you really cannot get started at all without finding a way to deal with scale economies and oligopolistic firms."

"So what's the moral? We've seen how the insistence on models that meet the standards of rigor in mainstream economics can lead to neglect of clearly valuable ideas. Does this mean that the whole emphasis on models is wrong? Should we make a major effort to open up economics, to relax our standards about what constitutes an acceptable argument? No—the moral of my tale is nowhere near that easy. Economists can often be remarkably obtuse, failing to see things that are right in front of them. But sometimes a bit of obtuseness is not entirely a bad thing."

"Homo economicus is an implausible caricature, but a highly productive one, and no useful alternative has yet been found."

"Many of those who reject the idea of economic models are ill-informed or even (perhaps unconsciously) intellectually dishonest. Still, there are highly intelligent and objective thinkers who are repelled by simplistic models for a much better reason: they are very aware that the act of building a involves loss as well as gain."

"The problem is that there is no alternative to models. We all think in simplified models, all the time. The sophisticated thing to do is not to pretend to stop, but to be self-conscious—to be aware that your models are maps rather than reality."

"A temporary evolution of ignorance, a period when our insistence on looking in certain directions leaves us unable to see what is right under our noses, may be the price of progress, an inevitable part of what happens when we try to make sense of the world's complexity."

"Any interesting model of must exhibit a tension between two kinds of forces: "centripetal" forces that tend to pull economic activity into agglomerations, and "centrifugal" forces that tend to break up such agglomerations or limit their size."

"Whose fault is the replacement of serious discussion of world trade by what I have come to think of as "pop internationalism"? To some extent, of course, it is the result of basic human instincts: intellectual laziness, even among those who would be seen as wise and deep, will always be a powerful force. To some extent it also reflects the decline in the influence of economists in general: the high prestige of the profession a generation ago had much to do with the presumed effectiveness of Keynesian macroeconomic policies, and has suffered greatly as macroeconomics has dissolved into squabbling factions. And one should not ignore the role of editors, who often prefer what pop internationalists have to say to the disturbingly difficult ideas of people who know how to read national accounts or understand that the trade balance is also the difference between savings and investment. Indeed, some important editors, like James Fallows at The Atlantic or Robert Kuttner at The American Prospect are pop internationalists themselves; they deliberately use their magazines as platforms for what amounts to an anti-intellectual crusade."

"The idea that a country's economic fortunes are largely determined by its success on world markets is a hypothesis, not a necessary truth; and as a practical, empirical matter, that hypothesis is flatly wrong. That is, it is simply not the case that the world's leading nations are to any important degree in economic competition with each other, or that any of their major economic problems can be attributed to failures to compete on world markets."

"This article makes three points. First, it argues that concerns about competitiveness are, as an empirical matter, almost completely unfounded. Second, it tries to explain why defining the economic problem as one of international competition is nonetheless so attractive to so many people. Finally, it argues that the obsession with competitiveness is not only wrong but dangerous, skewing domestic policies and threatening the international economic system."

"To make a harsh but not entirely unjustified analogy, a government wedded to the ideology of competitiveness is as unlikely to make good economic policy as a government committed to creationism is to make good science policy, even in areas that have no direct relationship to the theory of evolution."

"So let's start telling the truth: competitiveness is a meaningless word when applied to national economies. And the obsession with competitiveness is both wrong and dangerous."

"First, most of the speculation about the superiority of the communist system - including the popular view that Western economies could painlessly accelerate their own growth by borrowing some aspects of that system - was off base. Rapid growth was based entirely on one attribute: the willingness to save, to sacrifice current consumption for the sake of future production. The communist example offered no hint of a free lunch. Second, the economic analysis of communist countries' growth implied some future limits to their industrial expansion - in other words, implied that a naive projection of their past growth rates into the future was likely to greatly overstate their real prospects. Economic growth that is based on expansion of inputs, rather than on growth in output per unit of input, is inevitably subject to diminishing returns. It was simply not possible for the Soviet economies to sustain the rates of growth of labor force participation, average education levels, and above all the physical capital stock that had prevailed in previous years. Communist growth would predictably slow down, perhaps drastically."

"If growth in East Asia is indeed running into diminishing returns, however, the conventional wisdom about an Asian-centered world economy needs some rethinking."

"That's a hard answer to accept, especially for those American policy intellectuals who recoil from the dreary task of reducing deficits and raising the national savings rate. But economics is not a dismal science because the economists like it that way; it is because in the end we must submit to the tyranny not just of the numbers, but of the logic they express."

"In this book I try to show how models of self-organization can be applied to many economic phenomena - how the principle of "order from instability," which explains the growth of hurricanes and embryos, can also explain the formation of cities and business cycles; how the principle of "order from random growth" can explain the strangely simple rules that describe the sizes of earth quakes, meteorites, and metropolitan areas. I believe that the ideas of self-organization theory can add substantially to our understanding of the economy; whatever their ultimate usefulness, these ideas are very exciting, and playing around with them is tremendous fun."

"The world is full of self-organizing systems, systems that form structures not merely in response to inputs from outside but also, indeed primarily, in response to their own internal logic. Global weather is a self-organizing system; so, surely, is the global economy."

"There are three kinds of writing in economics: Greek-letter, up-and-down, and airport. Greek-letter writing formal, theoretical, mathematical is how professors communicate. Like any academic field, economics has its fair share of hacks and phonies, who use complicated language to hide the banality of their ideas; it also contains profound thinkers, who use the specialized language of the discipline as an efficient way to express deep insights. [...] Up-and-down economics is what one encounters on the business pages of newspapers, or for that matter on TV. It is preoccupied with the latest news and the latest numbers, hence its name. [...] Finally, airport economics is the language of economics bestsellers. These books are most prominently displayed at airport bookstores, where the delayed business traveler is likely to buy them. Most of these books predict disaster: a new great depression, the evisceration of our economy by Japanese multinationals, the collapse of our money. A minority have the opposite view, a boundless optimism: new technology or supply-side economics is about to lead us into an era of unprecedented economic progress. Whether pessimistic or optimistic, airport economics is usually fun, rarely well informed, and never serious."

"Productivity isn't everything, but in the long run it is almost everything. A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker."

"The appeal to the intellectually insecure is also more important than it might seem. Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant -- that all you really need to know are a few simple ideas! Quite a few supply-siders have created for themselves a wonderful alternative intellectual history in which John Maynard Keynes was a fraud, Paul Samuelson and even Milton Friedman are fools, and the true line of deep economic thought runs from Adam Smith through obscure turn-of-the-century Austrians straight to them."

"The legend of King Midas has been generally misunderstood. Most people think the curse that turned everything the old miser touched into gold, leaving him unable to eat or drink, was a lesson in the perils of avarice. But Midas’s true sin was his failure to understand monetary economics. What the gods were really telling him is that gold is just a metal. If it sometimes seems to be more, that is only because society has found it convenient to use gold as a medium of exchange—a bridge between other, truly desirable, objects. There are other possible mediums of exchange, and it is silly to imagine that this pretty, but only moderately useful, substance has some irreplaceable significance."

"Will the tax cut destroy America’s prosperity? Probably not. As Adam Smith observed, there’s a deal of ruin in a nation. We have a huge, resilient economy that can survive and recover from even quite bad government policies. Yet while the tax cut may not be a matter of economic life or death, it is a very serious issue. For one thing, like it or not, the tax cut has become the central political issue in the United States right now. Conservatives who want to reshape America view passage of a large tax cut as a first step toward realizing their vision. For that reason, those who do not share this vision feel, rightly, that they must oppose the plan."

"To be a progressive, then, means being a partisan—at least for now. The only way a progressive agenda can be enacted is if Democrats have both the presidency and a large enough majority in Congress to overcome Republican opposition. And achieving that kind of political preponderance will require leadership that makes opponents of the progressive agenda pay a political price for their obstructionism—leadership that, like FDR, welcomes the hatred of the interest groups trying to prevent us from making our society better."

"I believe in a relatively equal society, supported by institutions that limit extremes of wealth and poverty. I believe in democracy, civil liberties, and the rule of law. That makes me a liberal, and I’m proud of it."

"Most economists, to the extent that they think about the subject at all, regard the Great Depression of the 1930s as a gratuitous, unnecessary tragedy."

"The kind of economic trouble that Asia experienced a decade ago, and that we're all experiencing now, is precisely the sort of thing we thought we had learned to prevent. In the bad old days big, advanced economies with stable governments-like Britain in the 1920s-might have had no answer to prolonged periods of stagnation and deflation; but between John Maynard Keynes and Milton Friedman, we thought we knew enough to keep that from happening again."

"At the time, I thought of it this way: it was as if bacteria that used to cause deadly plagues, but had long been considered conquered by modem medicine, had reemerged in a form resistant to all the standard antibiotics. Here's what I wrote in the introduction to the first edition: "So far only a limited number of people have actually fallen prey to the newly incurable strains; but even those of us who have so far been lucky would be foolish not to seek new cures, new prophylactic regimens, whatever it takes, lest we tum out to be the next victims." Well, we were foolish. And now the plague is upon us."

"For the first time since 1917, then, we live in a world in which property rights and free markets are viewed as fundamental principles, not grudging expedients; where the unpleasant aspects of a market system—inequality, unemployment, injustice—are accepted as facts of life. As in the Victorian era, capitalism is secure not only because of its successes—which, as we will see in a moment, have been very real—but because nobody has a plausible alternative. This situation will not last forever. Surely there will be other ideologies, other dreams; and they will emerge sooner rather than later if the current economic crisis persists and deepens. But for now capitalism rules the world unchallenged."

"In retrospect it is also clear that we gave far too much credit to “Washington,” to the IMF and the Treasury. It was true that they had acted courageously and decisively, and that the results had been a vindication. But on close examination the omens were not all that good for a repeat performance. For one thing, the mobilization of money was achieved through what amounted to a legal sleight of hand, justified mainly by the special significance of Mexico to U.S. interests. Money would not come as quickly or as easily in later crises. The Mexican rescue was also made less complicated by the cooperation of the Mexican government: Zedillo’s people had no pride to swallow—not with Mexico’s history—and were in complete agreement with Washington about what needed to be done. Dealing with Asian countries that had been accustomed to negotiating from a position of strength, and with Asian leaders accustomed to having things their own way, would be very different. Perhaps most of all, we failed to understand the extent to which both Mexico and Washington simply got lucky. The rescue wasn’t really a well-considered plan that addressed the essence of the crisis: it was an emergency injection of cash to a beleaguered government, which did its part by adopting painful measures less because they were clearly related to the economic problems than because by demonstrating the government’s seriousness they might restore market confidence. They succeeded, albeit only after the economy had been punished severely, but there was no good reason to suppose that such a strategy would work the next time."

"Indeed, there has long been a strand of thought that says that moderate inflation may be necessary if monetary policy is to be able to fight recessions. Still, advocates of inflation have had to contend with a deep-seated sense that stable prices are always desirable, that to promote inflation is to create perverse and dangerous incentives. This belief in the importance of price stability is not based on standard economic models—on the contrary, the usual textbook theory, when applied to Japan’s unusual circumstances, points directly to inflation as the natural solution. But conventional economic theory and conventional economic wisdom are not always the same thing—a conflict that would become increasingly apparent as one country after another found itself having to make hard choices in the face of financial crisis."

"Were the Asian economies more vulnerable to financial panic in 1997 than they had been, say, five or ten years before? Yes, surely—but not because of crony capitalism, or indeed what would usually be considered bad government policies. Rather, they had become more vulnerable partly because they had opened up their financial markets—because they had, in fact, become better free-market economies, not worse. And they had also grown vulnerable because they had taken advantage of their new popularity with international lenders to run up substantial debts to the outside world. These debts intensified the feedback from loss of confidence to financial collapse and back again, making the vicious circle of crisis more intense. It wasn’t that the money was badly spent; some of it was, some of it wasn’t. It was that the new debts, unlike the old ones, were in dollars—and that turned out to be the economies’ undoing."

"Here’s what the IMF did: In Asia (as opposed to Brazil, which as I said was a sort of caricature of the Asian programs) it did not tell countries to defend the values of their currencies at all cost. But it did tell them to raise interest rates, initially to very high levels, in an attempt to persuade investors to keep their money in place. Some vociferous critics of the IMF—most notably Harvard’s Jeffrey Sachs—said that this was very much the wrong thing to do. Sachs believed, in effect, that Asian countries could and should have behaved like Australia, simply letting their currencies decline until they started to look cheap to investors, and that if they had done so, the great slump would never have happened. What the IMF said in response is that Asia is not Australia: that to let the currencies fall unchecked would have led to “hyperdevaluations,” and that the result would have been both massive financial distress (because so many businesses had debt denominated in dollars) and soaring inflation. The trouble with this rationale is, of course, that the massive financial distress happened anyway, thanks to high interest rates and the recession they helped cause. So the IMF at best avoided one vicious circle only by starting another."

"It is important to realize that even now Fed officials are not quite sure how they pulled this rescue off. At the height of the crisis it seemed entirely possible that cutting interest rates would be entirely ineffectual—after all, if nobody can borrow, what difference does it make what the price would be if they could? And if everyone had believed that the world was coming to an end, their panic might—as in so many other countries—have ended up being a self-fulfilling prophecy. In retrospect Greenspan seemed to have been like a general who rides out in front of his demoralized army waves his sword and shouts encouragement, and somehow turns the tide of battle: well done, but not something you would want to count on working next time."

"As I’ve just noted, Greenspan warned about irrational exuberance, but he didn’t do anything about it. And in fact, the Fed chairman holds what I believe is a unique record among central bankers: he presided over not one but two enormous asset bubbles, first in stocks, then in housing."

"But this warning was ignored, and there was no move to extend regulation. On the contrary, the spirit of the times—and the ideology of the George W. Bush administration—was deeply antiregulation. This attitude was symbolized by a photo-op held in 2003, in which representatives of the various agencies that play roles in bank oversight used pruning shears and a chainsaw to cut up stacks of regulations. More concretely, the Bush administration used federal power, including obscure powers of the Office of the Comptroller of the Currency, to block state-level efforts to impose some oversight on subprime lending."

"We will not achieve the understanding we need, however, unless we are willing to think clearly about our problems and to follow those thoughts wherever they lead. Some people say that our economic problems are structural, with no quick cure available; but I believe that the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men."

"Many of the stories economists tell take the form of models—for whatever else they are, economic models are stories about how the world works."

"As is often the case with major disputes in economics, the argument over fiscal policy went on for years, with some critics of fiscal policy still defending their position when this book went to press. It seems fair, however, to say that among economists a more or less Keynesian view of the effects of fiscal policy came to prevail. Careful statistical studies at the International Monetary Fund and else where showed that austerity policies have historically been followed by contraction, not expansion. Recent experience, in which countries like Spain and Greece that were forced into severe austerity also experienced severe slumps, seemed to confirm that observation. Furthermore, it was clear that those who had predicted a sharp rise in U.S. interest rates due to budget deficits, leading to conventional crowding out, had been wrong: U.S. long-term interest rates remained near record lows even during the years from 2009 to 2012, when the government ran very large deficits."

"Even when political action doesn't backfire, when the movement gets what it wants, the effects are often startlingly malign. For example, could anything be worse than having children work in sweatshops? Alas, yes. In 1993, child workers in Bangladesh were found to be producing clothing for Wal-Mart, and Senator Tom Harkin proposed legislation banning imports from countries employing underage workers. The direct result was that Bangladeshi textile factories stopped employing children. But did the children go back to school? Did they return to happy homes? Not according to Oxfam, which found that the displaced child workers ended up in even worse jobs, or on the streets -- and that a significant number were forced into prostitution. The point is that third-world countries aren't poor because their export workers earn low wages; it's the other way around. Because the countries are poor, even what look to us like bad jobs at bad wages are almost always much better than the alternatives: millions of Mexicans are migrating to the north of the country to take the low-wage export jobs that outrage opponents of Nafta. And those jobs wouldn't exist if the wages were much higher: the same factors that make poor countries poor -- low productivity, bad infrastructure, general social disorganization -- mean that such countries can compete on world markets only if they pay wages much lower than those paid in the West."

"To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging."

"What saved the economy, and the New Deal was the enormous public-works project known as World War II, which finally provided a fiscal stimulus adequate to the economy's needs."

"When it comes to the all-too-human problem of recessions and depressions, economists need to abandon the neat but wrong solution of assuming that everyone is rational and markets work perfectly. The vision that emerges as the profession rethinks its foundations may not be all that clear; it certainly won’t be neat; but we can hope that it will have the virtue of being at least partly right."

"I do not think that word “compromise” means what Mr. Ryan thinks it means. Above all, he failed to offer the one thing the White House won’t, can’t bend on: an end to extortion over the debt ceiling. Yet even this ludicrously unbalanced offer was too much for conservative activists, who lambasted Mr. Ryan for basically leaving health reform intact.Does this mean that we’re going to hit the debt ceiling? Quite possibly; nobody really knows, but careful observers are giving no better than even odds that any kind of deal will be reached before the money runs out. Beyond that, however, our current state of dysfunction looks like a chronic condition, not a one-time event. Even if the debt ceiling is raised enough to avoid immediate default, even if the government shutdown is somehow brought to an end, it will only be a temporary reprieve. Conservative activists are simply not willing to give up on the idea of ruling through extortion, and the Obama administration has decided, wisely, that it will not give in to extortion.So how does this end? How does America become governable again?"

"Things could have been even worse. This week, we managed to avoid driving off a cliff. But we’re still on the road to nowhere."

"Many liberals have changed their views in response to new evidence. It’s an interesting experience; conservatives should try it some time."

"Holding people accountable for their past is O.K., but imposing a standard of purity, in which any compromise or misstep makes you the moral equivalent of the bad guys, isn’t. Abraham Lincoln didn’t meet that standard; neither did F.D.R. Nor, for that matter, has Bernie Sanders (think guns)."

"The Sanders campaign has brought out a lot of idealism and energy that the progressive movement needs. It has also, however, brought out a streak of petulant self-righteousness among some supporters. Has it brought out that streak in the candidate, too?"

"If the question is when markets will recover, a first-pass answer is never."

"The fact is that Democrats have already been pursuing policies that are much better for the white working class than anything the other party has to offer. Yet this has brought no political reward."

"Nobody can credibly promise to bring the old jobs back; what you can promise — and Mrs. Clinton did — are things like guaranteed health care and higher minimum wages. But working-class whites overwhelmingly voted for politicians who promise to destroy those gains."

"You can’t explain the votes of places like Clay County as a response to disagreements about trade policy. The only way to make sense of what happened is to see the vote as an expression of, well, identity politics — some combination of white resentment at what voters see as favoritism toward nonwhites (even though it isn’t) and anger on the part of the less educated at liberal elites whom they imagine look down on them."

"Democrats have to figure out why the white working class just voted overwhelmingly against its own economic interests, not pretend that a bit more populism would solve the problem."

"With great wealth comes great pettiness."

"Nonetheless, William Barr — again, the nation’s chief law enforcement officer, responsible for defending the Constitution — is sounding remarkably like America’s most unhinged religious zealots, the kind of people who insist that we keep experiencing mass murder because schools teach the theory of evolution. Guns don’t kill people — Darwin kills people!"

"The [Trump impeachment] inquiry hasn’t found a smoking gun; it has found what amounts to a smoking battery of artillery."

"The way to deal with China would have been a broad coalition of countries that play by the rules. Instead, we've conveyed the message that big countries don't need no rules. And China is a very big country."

"Republicans Add Insult to Illness"

"Because the Trump team insisted that a roaring recovery was coming, and refused to notice that it wasn’t happening, we’ve now stumbled into a completely gratuitous economic crisis."

"If Keynes was Luther, Friedman was Ignatius of Loyola, founder of the Jesuits. And like the Jesuits, Friedman’s followers have acted as a sort of disciplined army of the faithful, spearheading a broad, but incomplete, rollback of Keynesian heresy. By the century’s end, classical economics had regained much though by no means all of its former dominion, and Friedman deserves much of the credit."

"Keynesian theory initially prevailed because it did a far better job than classical orthodoxy of making sense of the world around us, and Friedman’s critique of Keynes became so influential largely because he correctly identified Keynesianism’s weak points. And just to be clear: although this essay argues that Friedman was wrong on some issues, and sometimes seemed less than honest with his readers, I regard him as a great economist and a great man."

"Keynes didn’t make an all-out assault on Economic Man, but he often resorted to plausible psychological theorizing rather than careful analysis of what a rational decision-maker would do. Business decisions were driven by “animal spirits,” consumer decisions by a psychological tendency to spend some but not all of any increase in income, wage settlements by a sense of fairness, and so on. But was it really a good idea to diminish the role of Economic Man that much? No, said Friedman, who argued in his 1953 essay “The Methodology of Positive Economics” that economic theories should be judged not by their psychological realism but by their ability to predict behavior. And Friedman’s two greatest triumphs as an economic theorist came from applying the hypothesis of rational behavior to questions other economists had thought beyond its reach."

"One interesting footnote: although Friedman made great strides in macroeconomics by applying the concept of individual rationality, he also knew where to stop. In the 1970s, some economists pushed Friedman’s analysis of inflation even further, arguing that there is no usable trade-off between inflation and unemployment even in the short run, because people will anticipate government actions and build that anticipation, as well as past experience, into their price-setting and wage-bargaining. This doctrine, known as “rational expectations,” swept through much of academic economics. But Friedman never went there."

"In effect, Japan in the Nineties offered a fresh opportunity to test the views of Friedman and Keynes regarding the effectiveness of monetary policy in depression conditions. And the results clearly supported Keynes’s pessimism rather than Friedman’s optimism."

"What’s odd about Friedman’s absolutism on the virtues of markets and the vices of government is that in his work as an economist’s economist he was actually a model of restraint. As I pointed out earlier, he made great contributions to economic theory by emphasizing the role of individual rationality—but unlike some of his colleagues, he knew where to stop. Why didn’t he exhibit the same restraint in his role as a public intellectual? The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm of his early career hardened into a rigid defense of what had become the new orthodoxy. In the long run, great men are remembered for their strengths, not their weaknesses, and Milton Friedman was a very great man indeed—a man of intellectual courage who was one of the most important economic thinkers of all time, and possibly the most brilliant communicator of economic ideas to the general public that ever lived. But there’s a good case for arguing that Friedmanism, in the end, went too far, both as a doctrine and in its practical applications. When Friedman was beginning his career as a public intellectual, the times were ripe for a counterreformation against Keynesianism and all that went with it. But what the world needs now, I’d argue, is a counter-counterreformation."

"Equally important, the financial industry’s political power has not gone away. Banks have waged a fierce campaign against what many expected to be an easily passed reform proposal, the creation of a new agency to protect financial consumers. Despite the steady drumbeat of scandalous revelations—most recently, the discovery that Goldman Sachs helped Greece cook its books, while Lehman cooked its own books—top financial executives continue to have ready access to the corridors of power. And as many have noted, President Obama’s chief economic and financial officials are men closely associated with Clinton-era deregulation and financial triumphalism; they may have revised their views but the continuity remains striking. In that sense, this time really is different: while the first great global financial crisis was followed by major reforms, it’s not clear that anything comparable will happen after the second. And history tells us what will happen if those reforms don’t take place. There will be a resurgence of financial folly, which always flourishes given a chance. And the consequence of that folly will be more and quite possibly worse crises in the years to come."

"Piketty ends Capital in the Twenty-First Century with a call to arms — a call, in particular, for wealth taxes, global if possible, to restrain the growing power of inherited wealth. It’s easy to be cynical about the prospects for anything of the kind. But surely Piketty’s masterly diagnosis of where we are and where we’re heading makes such a thing considerably more likely. So Capital in the Twenty-First Century is an extremely important book on all fronts. Piketty has transformed our economic discourse; we’ll never talk about wealth and inequality the same way we used to."

"We’re living in a Dark Age of macroeconomics. Remember, what defined the Dark Ages wasn’t the fact that they were primitive — the Bronze Age was primitive, too. What made the Dark Ages dark was the fact that so much knowledge had been lost, that so much known to the Greeks and Romans had been forgotten by the barbarian kingdoms that followed."

"The best you can say about economic policy in this slump is that we have for the most part avoided a full repeat of the Great Depression. I say “for the most part” because we actually are seeing a Depression-level slump in Greece, and very bad slumps elsewhere in the European periphery. Still, the overall downturn hasn’t been a full 1930s replay. But all of that, I think, can be attributed to the financial rescue of 2008-2009 and automatic stabilizers. Deliberate policy to offset the crash in private spending has been largely absent."

"Sometimes economists in official positions give bad advice; sometimes they give very, very bad advice; and sometimes they work at the OECD."

"We’re now in the seventh year of a slump brought on by Wall Street excess; the wizardly job of “allocating the economy’s investment resources” consisted, we now know, largely of funneling money into a real estate bubble."

"I would summarize the Keynesian view in terms of four points:1. Economies sometimes produce much less than they could, and employ many fewer workers than they should, because there just isn’t enough spending. Such episodes can happen for a variety of reasons; the question is how to respond. 2. There are normally forces that tend to push the economy back toward full employment. But they work slowly; a hands-off policy toward depressed economies means accepting a long, unnecessary period of pain. 3. It is often possible to drastically shorten this period of pain and greatly reduce the human and financial losses by “printing money”, using the central bank’s power of currency creation to push interest rates down. 4. Sometimes, however, monetary policy loses its effectiveness, especially when rates are close to zero. In that case temporary deficit spending can provide a useful boost. And conversely, fiscal austerity in a depressed economy imposes large economic losses."

"It has been obvious for quite a while that Sanders — not just his supporters, not even just his surrogates, but the candidate himself — has a problem both in facing reality and in admitting mistakes."

"As Branko says, there was a time when Serbs and Croats seemed to get along fairly well, indeed intermarrying at a high rate. But could anyone now put Yugoslavia back together? At this rate, we’ll soon be asking the same question about America."

"What does Alexandria Ocasio-Cortez know about tax policy? A lot."

"Paul Krugman's attack on Brian Arthur ("The Legend of Arthur") requires a correction of its misrepresentations of fact. Arthur is a reputable and significant scholar whose work is indeed having influence in the field of industrial organization and in particular public policy toward antitrust policy in hightech industries. Krugman admits that he wrote the article because he was "just pissed off," not a very good state for a judicious statement of facts, as his column shows."

"Critics of Paul Krugman call him acerbic and boastful, unfair on the attack and unwilling to make concessions on the defense, certain that he is correct, and always sure that those who disagree are mendacious or foolish (or both). And I cannot deny that these criticisms are accurate. But all these are outweighed by one fact: he is almost always--not always, but almost always--right. He is the closest thing to an heir to John Maynard Keynes we have today."

"Krugman is right about democracy in a sense: Democracy is essentially one big organized act of bullying whereby a larger group bullies a smaller group in order to plunder it with taxes. The “Civil War” proved that whenever a smaller group has finally had enough, and attempts to leave the game, the larger group will resort to anything—even the mass murder of hundreds of thousands and the bombing and burning of entire cities—to get its way. After all, in his first inaugural address Lincoln literally threatened “force,” “invasion,” and “bloodshed” (his exact words) in any state that refused to pay the federal tariff , which had just been more than doubled two days earlier. He followed through with his threat. This is “the kind of nation I believe in,” says Paul Krugman on his blog."

"I was just reading an excellent and appropriately approving account of your work. It tells of those who vigorously oppose. My admiration and my personal reward from what you do has no qualification, so it is with all those I wittingly know. Do realize that this is your worthwhile majority and that dissenters are an essential proof of your merit. I should be clear: your column is the best regular reading on economics and politics that I’ve encountered over the last seventy-five years and even a few more."

"I cannot forbear to lengthen an already long paper by adding some remarks about what Paul Krugman calls the "new international economics" (Strategic Trade Policy and the New International Economics, MIT paperback, 1986) and "new trade theory" (in "New Trade Theory and the Less Developed Countries," a paper submitted to the Carlos F. Diaz-Alejandro memorial conference held in Helsinki, August 23-5, 1986). The "new" theory rests on economies of scale. As I told Krugman at Helsinki, I find it a bizarre notion that increasing returns in international trade are new. I developed it at length in my 1953 textbook, based on the 1929 article of John Williams, reprinted in the AEA, "Readings in the Theory of International Trade." Jan Tinbergen developed it in his textbook, International Economic Integration (1954). I recall the joy in Cambridge, Massachusetts, when Kenneth Arrow made increasing returns respectable by formalizing Alfred Marshall's description of long-run decreasing costs historically with his paper on "Learning by Doing," a paper rapidly incorporated into international-trade theory by those who need formal models to understand the intuitively obvious. I confess to some irritation over Krugman's defense of his international-trade theory as new because it offers a well-worn truth in equation form."

"Like clockwork every election cycle: Krugman forgets everything he wrote about inequality and legalized corruption in Washington, sides w/ the candidate most likely to give him a power job, and screams at the left for doing what primaries are supposed to do: vet the candidates."

"Krugman [...] was not cheerfully advocating a housing bubble, but instead he was glumly saying that the only way he could see to get out of the recession would be for such a bubble to occur."

"As was the case with Smith's original observations on specialization and market size, we shall need a tractable analytical framework to make progress on this issue. The two Helpman and Krugman monographs have amply shown that when Smith's ideas are developed within a clear theoretical framework, they contain some surprising implications. They are, I think, outstanding illustrations of why we work to construct useful, explicit theories rather than being content with good rules of thumb."

"Paul Krugman has been doing a lot of very effective writing attacking non-economists writing about economic matters. Paul is speaking for the whole profession in a very effective way and addressing the most important questions in social science."

"Despite its flaws, Peddling Prosperity has much to recommend it. There is no book written for a lay audience that explains the economics profession with more perception or clarity than this one."

"I grew to understand how the Chicago School argued, and I can do it myself, but they were lying about how they arrived at their conclusions. I could see that they were obviously lying, but I was just annoyed and shocked that they continued to lie about how they got to the questions that they got to. And then it gradually occurred to me that if this is true, then maybe the whole profession is lying, and that belief has gotten stronger as I have gotten older. People say, "We do econometrics, and that tests our hypotheses." Baloney. We do theory. I was just rereading last night Paul Krugman's famous article where he tries to introduce geographical considerations into economics, and it is a very skillfully done article. It's rhetorically very skillful. I can show you how it works rhetorically, but it is complete nonsense scientifically, not because it is wrong but because it is arbitrary. There are a zillion other ways of formalizing geography in economics that would come to opposite conclusions to those he comes to, and yet he's kind of airily saying that this is a contribution. Then there are a thousand other articles modifying that. It doesn't get anywhere: they modify it and get completely different conclusions. If you change your assumptions, you get different theorems. So the whole exercise, it gradually dawned on me, was complete nonsense, so that's what turned me. But it is unfair and kind of stupid to say that I stopped doing economics."

"Paul Krugman is a respected trade theorist. But he does not speak authoritatively on subjects on which he has no expertise. Monetary economics is not his field of expertise. Krugman’s research background does not qualify him as an authority on Milton Friedman’s work. … Friedman’s reputation is intact despite Krugman’s deplorable efforts to denigrate him and his contributions."

"(Which writers — novelists, playwrights, critics, journalists, poets — working today do you admire most?) ...Because of “The Daily Show,” most of my reading time these days is consumed by journalists. Paul Krugman is always great. ..."

"I am proud of my generation of policy economists. You know their names: Walter Heller, Milton Friedman, John Kenneth Galbraith, Arthur Okun, Herbert Stein, Peter Drucker, and many more. But, as some sage has said, science progresses funeral by funeral. Paul Krugman is the rising star of this century and the next, and the world beats a path to his door. International finance is his thing, but that is only one of the many strings to his fiddle. The World Bank, the IMF, the Bank of Japan, and the Boston Fed all seek to tap his fountain of wisdom and new ideas."

"If you grew up in the 80s you probably remember Voltron. Although the show often had convoluted plotlines, it would somehow always end with Voltron (a super-powerful robot formed from five mechanical lions) facing off against a monster called a "Robeast". Voltron had plenty of weapons, but he would invariably strike the killing blow with his "Blazing Sword". Eventually the show became kind of routine, but to a four-year-old, it was pure gold. In the econ blogosphere, a similar dynamic has played out over the last few years. Each week a Robeast will show up, bellowing predictions of inflation and/or soaring interest rates. And each week, Paul Krugman...I mean, KrugTron, Defender of the Blogoverse, will strike down the monster with a successful prediction of...low inflation and continued low interest rates. Goldbugs, "Austrians", New Classical economists, and harrumphing conservatives of all stripes have eagerly gone head-to-head with KrugTron in the prediction wars, and have been summarily cloven in twain."

"I was explaining Nordhaus’s work in a graduate course I was then teaching on the economic theory of natural resources. As a strong believer in economics as a handicraft industry, I mentioned, teasingly, to the class that this remarkable piece of work had been done by an extraordinarily powerful research apparatus, not to be undervalued by advocates of Big Economics: one professor and one undergraduate research assistant. When the class was over, one of the students came shyly up to me and said, “I was the undergraduate research assistant.” It turned out to be Paul Krugman. Teaching can be an unexpected pleasure."

"Until the emergence of Democrat leader John Kerry, Paul Krugman had virtually become the leader of the opposition in America, an unusual position for an academic economist."

"From conversations, I became convinced that people who counterfactual upwards (i.e., compare themselves to those richer) want to actively dispossess the rich. As with all communist movements, it is often the bourgeois or clerical classes who are the early adopters of revolutionary theories. So class envy doesn’t originate from a truck driver in South Alabama, but from a New York or Washington, D.C., Ivy League–educated IYI [Intellectual Yet Idiot] (say Paul Krugman or Joseph Stiglitz) with a sense of entitlement, upset some “less smart” persons are much richer."

"New York Times columnist Paul Krugman wrote Wednesday that his computer had been hacked and that someone was "using it to download child pornography.""

"The indispensable first step to getting the things you want out of life is this: decide what you want."

"For any exam in history, here is the answer: all human history is the struggle between systems that attempt to shackle the human personality in the name of some intangible good on the one hand and systems that enable and expand the scope of human personality in the pursuit of extremely tangible aims. The American system is the most successful in the world because it harmonizes best with the aims and longings of human personality while allowing the best protection to other personalities."

"A few truths, for those who have ears and eyes and care to know the truth: 1.) The hurricane that hit New Orleans and Mississippi and Alabama was an astonishing tragedy. The suffering and loss of life and peace of mind of the residents of those areas is acutely horrifying. 2.) George Bush did not cause the hurricane. Hurricanes have been happening for eons. George Bush did not create them or unleash this one. 3.) George Bush did not make this one worse than others. There have been far worse hurricanes than this before George Bush was born."

"I hope it won’t come as a surprise to anyone that a big part of male homosexual behavior is interest in young boys."

"In today’s world, at least in America, an Einstein or a Newton or a Galileo would probably not be allowed to receive grants to study or to publish his research. They cannot even mention the possibility that–as Newton or Galileo believed–these laws were created by God or a higher being. They could get fired, lose tenure, have their grants cut off. This can happen. It has happened."

"Darwinism is still very much alive, utterly dominating biology. Despite the fact that no one has ever been able to prove the creation of a single distinct species by Darwinist means, Darwinism dominates the academy and the media."

"[The] Third (problem with Darwinism), which I think is overwhelming, and just sort of blows the whole theory of Random Mutation out of the water, is, at least, let me say, raises big questions, that is. Assuming it all did happen by Random Mutation and Natural Selection, where did the laws of gravity come from. Where did the laws of thermodynamics come from? Where did the laws of motion and, of heat come from? Where, I guess that's the same as thermodynamics. Where did all these laws, that make it possible for the universe to function, where did they all come from? Why isn't all just chaos and everything collapsing in on itself and killing everything?"

"Neo-Darwinists ask us to believe in things not seen. We’re not supposed to have an established religion in America, but we do, and it’s called Darwinism."

"Evolutionism, as taught by Darwinism, has nothing - nothing - to say about how life originated. Has nothing to say about how the governing principles in the universe - gravity, thermodynamics, motion, fluid motion - how any of those originated. It's...it's got some gigantic missing pieces."

"We believe that Darwinism is the real Orthodox Church, because Darwinism asks you to believe in things unseen that are incredibly unlikely. Darwinism asks us to believe that out of pure random chance, we got a cell that is as complicated as a Boeing 777. Darwinism asks us to believe that one day there was nothing but mud and ooze, and the next day there was life, and very soon after there was intelligent life. Darwinism asks us to believe that you can destroy genetic material through random mutation and natural selection and yet end up with more genetic material. We don't really ask you to believe anything that difficult; it is sort of innate in mankind to believe that there is a God, a heavenly Father and we're asking you to just follow the consequences of that and see if possibly there could be some scientific validity to that."

"Humans are alive, therefore life must be complex."

"My feeling is that Darwinism is only at best a partial solution, and an extremely dangerous partial solution. I would say, based on the little I know, Darwinism explains microevolution within species quite well. As to its broader consequence and implications, I don't think it explains individual species evolution at all well."

"And for me, it's pretty clear-cut that until we learn some better explanation for how life began, there is a God who always existed and created the heavens and the earth. And until somebody gives me a better explanation, I'll go for it. And it doesn't scare me at all when scientists say, "Oh, but that can't be proved," because neither can any of the Darwinian hypotheses about how life began be proved. Anyway, I couldn't give a [profanity] whether a person calls himself a scientist. It doesn't earn any extra respect from me, because it's not as if science has covered itself with glory, morally, in my time. Scientists were the people in Germany telling Hitler that it was a good idea to kill all the Jews. Scientists were telling Stalin it was a good idea to wipe out the middle-class peasants. Scientists were telling Mao Tse-Tung it was fine to kill 50 million people in order to further the revolution."

"I'm still not that familiar with it [Intelligent Design]. I'm more familiar with it than most people, but nowhere near as familiar with it as a genuine expert in the subject. I don't pretend to be a scientist. I'm the person who moderates the discussion between and among the scientists."

"[I did] Some [reading to prep for Expelled]. I read one book cover to cover, From Darwin to Hitler, and that was a very interesting book--one of these rare books I wish had been even longer. It's about how Darwin's theory--supposedly concocted by this mild-mannered saintly man, with a flowing white beard like Santa Claus--led to the murder of millions of innocent people."

"Yes, it [making Expelled] has made my belief in that [Intelligent Design] much stronger. It has pointed out something which haunted me ever since I learned about Darwinism, which is, Where did it all start? How did life start? Darwinism has nothing to say about that--nothing useful, anyway--but I think Intelligent Design has a great deal to say about it."

"I went in thinking: "I'm not going to find out that Darwinism is a fraud. I'll probably find out these (intelligent design proponents) are frauds." But I wound up knowing a lot more than when I started. I learned that Darwinism is being overhyped, and that it doesn't really convey what's going on. Sometimes if you follow a "truth" far enough, it becomes a lie."

"And there hasn't been much progress in Darwinism since [the life of Darwin]."

"Well, the first cause is not...it's lightning striking a mud puddle. See, and this is what the evolutionists say. And by the way, they may be right -- you know, I'm not a scientist, they could be right."

"But when I talk to people who are Darwinists or evolutionists and say, 'Well, how did life begin' -- they're...they don't have an answer. I mean, they have an answer, but it's a BS answer. It's an answer that wouldn't make sense to a small child."

"Yes, [I spent] two long years, traveling all over the United States, all over Europe, interviewing many, many, many people who had been thrown out of their academic jobs because they taught that there was a possibility of life coming from something other than Darwinism, who thought that possibly random selection and mutations didn't account for the universe, didn't account for gravity, didn't account for why nobody had ever seen an individual species evolve -- no one's ever seen an individual species evolve!""

"The scientific community says that if you even mention God as causes of anything scientific, you're gone."

"You can only say Darwinian causes -- random mutation, natural selection -- even gravity is supposed to be done by that! And I would say to these people, well, how did life begin? We don't know, but it had to be by Darwinian means. Well, how did gravity begin? We don't know, but it had to be by Darwinian means. Why did it have to be that way? Why couldn't there have been an intelligent designer?"

"Love of God and compassion and empathy leads you to a very glorious place- science leads you to killing people."

"When we just saw that man, I think it was Mr. Myers, talking about how great scientists were, I was thinking to myself the last time any of my relatives saw scientists telling them what to do they were telling them to go to the showers to get gassed … that was horrifying beyond words, and that’s where science — in my opinion, this is just an opinion — that’s where science leads you."

"There's no evidence whatsoever that Darwin had anything useful to say or anything to say period about how life began or how the universe began or how gravity began or how physics began or fluid motion or how thermodynamics began. He had nothing to say about that whatsoever."

"God bless the devout Christians of this country. They are Israel's best friends on the earth."

"In life, events tend to follow patterns. People who commit crimes tend to be criminals, for example. Can anyone tell me any economists who have been convicted of violent sex crimes? Can anyone tell me of any heads of nonprofit international economic entities who have ever been charged and convicted of violent sexual crimes? Is it likely that just by chance this hotel maid found the only one in this category?"

"The prosecutors say that Mr. Strauss-Kahn "forced" the complainant to have oral and other sex with him. How? Did he have a gun? Did he have a knife? He's a short fat old man."

"What the welfare system and other kinds of governmental programs are doing is paying people to fail. In so far as they fail, they receive the money; in so far as they succeed, even to a moderate extent, the money is taken away."

"Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it."

"Too many Republicans treat English as a second language, with Beltway lingo being their native tongue."

"The most fundamental fact about the ideas of the political left is that they do not work. Therefore we should not be surprised to find the left concentrated in institutions where ideas do not have to work in order to survive."

"If you have always believed that everyone should play by the same rules and be judged by the same standards, that would have gotten you labeled a radical 50 years ago, a liberal 25 years ago and a racist today."

"Ideas are everywhere, but knowledge is rare."

"Ideas, as the raw material from which knowledge is produced, exist in superabundance, but that makes the production of knowledge more difficult rather than easier."

"Civilization is an enormous device for economizing on knowledge."

"Knowledge may be enjoyed as a speculative diversion, but it is needed for decision making."

"It is unnecessary to attempt any general rule as to where the overall balance lies in comparing the respective costs of knowledge in larger and smaller decision-making units. What is important is to understand that (1) the respective cost advantages of the large and small units differ according to the kind of knowledge involved (general versus specific), that (2) most decisions involve mixtures of the two kinds of knowledge, so that the net advantages of the larger and smaller units vary with the kind of decision, and (3) the effectiveness of hierarchical subordination varies with the extent to which the subordinate unit has knowledge advantages over the higher unit."

"While decisions are constrained by the kinds of organizations and the kinds of knowledge involved, the Impetus for decisions comes from the internal preferences and external incentives facing those who actually make the decisions."

"Key indicators require some specified time span during which they are to be tabulated for purposes of reward or penalty. The time span can vary enormously according to the process and the indicator."

"Before attempting to determine the effect of institutions, it is necessary to consider the inherent circumstances, constraints, and impelling forces at work in the environment within which the institutional mechanisms function."

"The cavemen had the same natural resources at their disposal as we have today, and the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources and the knowledge used today."

"Freedom has cost too much blood and agony to be relinquished at the cheap price of rhetoric."

"We will do almost anything for our visions, except think about them. The purpose of this book is to think about them."

"Facts do not "speak for themselves." They speak for or against competing theories. Facts divorced from theory or visions are mere isolated curiosities."

"Competition does a much more effective job than government at protecting consumers."

"One of the grand fallacies of our time is that something beneficial should be subsidized."

"The case for the political left looks more plausible on the surface but is harder to keep believing in as you become more experienced."

"Understanding the limitations of human beings is the beginning of wisdom."

"The key feature of Communist propaganda has been the depiction of people who are more productive as mere exploiters of others."

"In short, it is not merely that Johnny can't read, or even that Johnny can't think. Johnny doesn't know what thinking is, because thinking is so often confused with feeling in many public schools. [emphasis in the original]"

"Much of the social history of the Western world over the past three decades has involved replacing what worked with what sounded good. In area after area - crime, education, housing, race relations - the situation has gotten worse after the bright new theories were put into operation. The amazing thing is that this history of failure and disaster has neither discouraged the social engineers nor discredited them."

"The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics."

"Both free speech rights and property rights belong legally to individuals, but their real function is social, to benefit vast numbers of people who do not themselves exercise these rights."

"Envy plus rhetoric equals 'social justice'."

"People will forgive you for being wrong, but they will never forgive you for being right – especially if events prove you right while proving them wrong."

"History shows that degeneracy can be turned around because it has been done in the past. But the real question today is: Will we turn it around-or is what we are doing likely to make matters worse?"

"Just as any moron can destroy a priceless Ming vase, so the shallow and ill-educated people who run our schools can undermine and destroy from within a great civilization that took centuries of dedicated effort to create and maintain. (27 December 2002)"

"When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear."

"I have never understood why it is "greed" to want to keep the money you have earned but not greed to want to take somebody else's money."

"People who pride themselves on their "complexity" and deride others for being "simplistic" should realize that the truth is often not very complicated. What gets complex is evading the truth."

"Those who believe that "basic necessities" should belong to people as a matter of right ignore the implication -- that people are to work only for amenities, frivolities, and ego. Will that mean more work or less work? And if less, where are all those "basic necessities" coming from that the government is supposed to hand out?"

"Many of the dangerous things that drivers do are not likely to save them even 10 seconds. When you bet your life against 10 seconds, that is giving bigger odds than you are ever likely to get in Las Vegas."

"Most problems do not get solved. They get superseded by other concerns."

"People who talk incessantly about "change" are often dogmatically set in their ways. They want to change other people."

"Maturity is not a matter of age. You have matured when you are no longer concerned with showing how clever you are, and give your full attention to getting the job done right. Many never reach that stage, no matter how old they get."

"One of the most ridiculous defenses of foreign aid is that it is a very small part of our national income. If the average American set fire to a five-dollar bill, it would be an even smaller percentage of his annual income. But everyone would consider him foolish for doing it."

"Letters from teachers continue to confirm the incompetence which they deny. A teacher in Montana says that my criticisms of teachers are "nieve." No, that wasn't a typographical error. He spelled it that way twice."

"If I could offer one piece of advice to young people thinking about their future, it would be this: Don't preconceive. Find out what the opportunities are."

"Some of the people on death row today might not be there if the courts had not been so lenient on them when they were first offenders."

"If you don't believe in the innate unreasonableness of human beings, just try raising children."

"Time was when people used to brag about how old they were -- and I am old enough to remember it."

"It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong. Know-it-alls in the school system do not lose one dime or one hour's sleep if their bright ideas turn out to be all wrong, or even disastrous, for the child."

"The greatness of a free-market economy is that it does not depend upon the wisdom of those who happen to be on top at the moment."

"People who think that they are being "exploited" should ask themselves whether they would be missed if they left, or whether people would say: "Good riddance"?"

"To the economically illiterate, if some company makes a million dollars in profit, this means that their products cost a million dollars more than they would have cost without profits. It never occurs to such people that these products might cost several million dollars more to produce if they were produced by enterprises operating without the incentives to be efficient created by the prospect of profits."

"Intellectuals may like to think of themselves as people who "speak truth to power" but too often they are people who speak lies to gain power."

"Activism is a way for useless people to feel important."

"Walter Williams figured out some years ago that the amount of money needed to move the poor out of poverty would be trivial compared to the amount of money that's spent on these damn programs that are supposed to help the poor but usually don't. But the poor are being used as human shields in the political battle. You put the poor up in front of you as you march across the battlefield and enemy troops won't fire, so you can expand your power, and raise taxes, and so forth."

"I'm always embarrassed when people say that I'm courageous. Soldiers are courageous. Policemen are courageous. Firemen are courageous. I just have a thick hide and disregard what silly people say."

"Before the Iraq war I was quite disturbed by some of the neoconservatives, who were saying things like, "What is the point of being a superpower if you can't do such-and-such, take on these responsibilities?" The point of being a superpower is that people will leave you alone."

"It is amazing how many people think that they can answer an argument by attributing bad motives to those who disagree with them. Using this kind of reasoning, you can believe or not believe anything about anything, without having to bother to deal with facts or logic."

"Nothing could be more jolting and discordant with the vision of today's intellectuals than the fact that it was businessmen, devout religious leaders and Western imperialists who together destroyed slavery around the world. And if it doesn't fit their vision, it is the same to them as if it never happened."

"Virtually no idea is too ridiculous to be accepted, even by very intelligent and highly educated people, if it provides a way for them to feel special and important. Some confuse that feeling with idealism."

"Some of the most vocal critics of the way things are being done are people who have done nothing themselves, and whose only contributions to society are their complaints and moral exhibitionism."

"When I see the worsening degeneracy in our politicians, our media, our educators, and our intelligentsia, I can’t help wondering if the day may yet come when the only thing that can save this country is a military coup."

"Some of the biggest cases of mistaken identity are among intellectuals who have trouble remembering that they are not God."

"Too often what are called "educated" people are simply people who have been sheltered from reality for years in ivy-covered buildings. Those whose whole careers have been spent in ivy-covered buildings, insulated by tenure, can remain adolescents on into their golden retirement years."

"One of the painful signs of years of dumbed-down education is how many people are unable to make a coherent argument. They can vent their emotions, question other people's motives, make bold assertions, repeat slogans-- anything except reason."

"Although I am ready to defend what I have said, many people expect me to defend what others have attributed to me."

"'Global warming' is just the latest in a long line of hysterical crusades to which we seem to be increasingly susceptible."

"In a world where young blacks, especially, are bombarded with claims that they are being unfairly targeted by police, and where a general attitude of belligerence is being promoted literally in word and song, it is hard not to wonder whether some people's responses to policemen do not have something to do with the policemen's responses to them. Neither the police nor people in any other occupation always do what is right but automatic belligerence is not the answer."

"As far as party primaries are concerned, both Republican and Democratic Party primaries are dominated by the most zealous voters, whose views may not reflect the views of most members of their own respective parties, much less the views of those who are going to vote in the November general election. In recent times, each election year has seen each party's nominee selected - or at least subject to veto - by its most extreme wing and then forced to try to move back to the center before the general election. This can only undermine the public's confidence in the integrity of the candidates of both parties."

"Right after liberal Democrats, the most dangerous politicians are country club Republicans."

"Republicans won big, running as Republicans, in 2004. But once they took control of Congress, they started acting like Democrats and lost big. There is a lesson in that somewhere but whether Republicans will learn it is another story entirely."

"When we hear about rent control or gun control, we may think about rent or guns but the word that really matters is 'control.' That is what the political left is all about, as you can see by the incessant creation of new restrictions in places where they are strongly entrenched in power, such as San Francisco or New York."

"To find anything comparable to crowds' euphoric reactions to Obama, you would have to go back to old newsreels of German crowds in the 1930s, with their adulation of their fuehrer, Adolf Hitler. With hindsight, we can look back on those people with pity, knowing now how many of them would be led to their deaths by the man they idolized."

"“Anyone who has actually had to take responsibility for consequences by running any kind of enterprise — whether economic or academic, or even just managing a sports team — is likely at some point to be chastened by either the setbacks brought on by his own mistakes or by seeing his successes followed by negative consequences that he never anticipated.”"

"Racism has never done this country any good, and it needs to be fought against, not put under new management for different groups."

"The average black student at MIT is in the bottom 10% of MIT students in math. But he is in the top 90% of all American students in math. Something like one fourth of all the black students going to MIT do not graduate. You're talking about a pool of people whom you are artificially turning into failures by mismatching them with the school."

"In the summer of 1959, as in the summer of 1957, I worked as a clerk-typist in the headquarters of the U.S. Public Health Service in Washington. The people I worked for were very nice and I grew to like them. One day, a man had a heart attack at around 5 PM, on the sidewalk outside the Public Health Service. He was taken inside to the nurse's room, where he was asked if he was a government employee. If he were, he would have been eligible to be taken to a medical facility there. Unfortunately, he was not, so a phone call was made to a local hospital to send an ambulance. By the time this ambulance made its way through miles of Washington rush-hour traffic, the man was dead. He died waiting for a doctor, in a building full of doctors. Nothing so dramatized for me the nature of a bureaucracy and its emphasis on procedures, rather than results."

"In its pursuit of justice for a segment of society, in disregard of the consequences for society as a whole, what is called 'social justice' might more accurately be called anti-social justice, since what consistently gets ignored or dismissed are precisely the costs to society. Such a conception of justice seeks to correct, not only biased or discriminatory acts by individuals or by social institutions, but unmerited disadvantages in general, from whatever source they may arise."

"It may be expecting too much to expect most intellectuals to have common sense, when their whole life is based on their being uncommon -- that is, saying things that are different from what everyone else is saying. There is only so much genuine originality in anyone. After that, being uncommon means indulging in pointless eccentricities or clever attempts to mock or shock."

"It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer "universal health care.""

"Failure is a big part of a free market's success. People fail to live up to their potential, or to carry out all their good intentions, in all kinds of economic and political systems. Capitalism makes them pay a price for their failures, while socialism, feudalism, fascism and other systems enable personal failures, especially by those at the top, to be ignored and the inevitable price to be paid by others in lower standards of living than they could have had with the existing resources and technology. p. 24"

"Peter Robinson: Our intellectual-in-chief, Barack Obama, got his BA from Columbia, his JD from Harvard, he taught for a number of years at the University of Chicago Law School. May I suppose that Tom Sowell is duly impressed? Thomas Sowell: [laughing] Oh, yeah! You might say the road to hell is paved with Ivy League degrees!"

"The fact that so many successful politicians are such shameless liars is not only a reflection on them, it is also a reflection on us. When the people want the impossible, only liars can satisfy."

"Both history and contemporary data show that countries prosper more when there are stable and dependable rules, under which people can make investments without having to fear unpredictable new government interventions before these investments can pay off."

"What socialism, fascism and other ideologies of the left have in common is an assumption that some very wise people—like themselves—need to take decisions out of the hands of lesser people, like the rest of us, and impose those decisions by government fiat."

"If the battle for civilization comes down to the wimps versus the barbarians, the barbarians are going to win."

"In a country with more than 300 million people, it is remarkable how obsessed the media have become with just one—Donald Trump. What is even more remarkable is that, after seven years of repeated disasters, both domestically and internationally, under a glib egomaniac in the White House, so many potential voters are turning to another glib egomaniac to be his successor."

"What was special about America was not that it had slavery, which existed all over the world, but that Americans were among the very few peoples who began to question the morality of holding human beings in bondage. That was not yet a majority view among Americans in the 18th century, but it was not even a serious minority view."

"If there is one thing that is bipartisan in Washington, it is brazen hypocrisy."

"Socialism sounds great. It has always sounded great. And it will probably always continue to sound great. It is only when you go beyond rhetoric, and start looking at hard facts, that socialism turns out to be a big disappointment, if not a disaster."

"Some intellectuals’ downplaying of objective reality and enduring criteria extends beyond social, scientific, or economic phenomena into art, music, and philosophy. The one over-riding consistency across all these disparate venues is the self-exaltation of the intellectuals. Unlike great cultural achievements of the past, such as magnificent cathedrals, which were intended to inspire kings and peasants alike, the hallmark of self-consciously “modern” art and music is its inaccessibility to the masses and often even its deliberate offensiveness to, or mockery of, the masses. Just as a physical body can continue to live, despite containing a certain amount of microorganisms whose prevalence would destroy it, so a society can survive a certain amount of forces of disintegration within it. But that is very different from saying that there is no limit to the amount, audacity and ferocity of those disintegrative forces which a society can survive, without at least the will to resist."

"Since this is an era when many people are concerned about 'fairness' and 'social justice,' what is your 'fair share' of what someone else has worked for?"

"Envy is always referred to by its political alias, 'social justice'."

"The question is not what anybody deserves. The question is who is to take on the God-like role of deciding what everybody else deserves. You can talk about 'social justice' all you want. But what death taxes boil down to is letting politicians take money from widows and orphans to pay for goodies that they will hand out to others, in order to buy votes to get re-elected. That is not social justice or any other kind of justice."

"Neither in nature nor among human beings are either equal or randomly distributed outcomes automatic. On the contrary, grossly unequal distributions of outcomes are common, both in nature and among people, in circumstances where neither genes nor discrimination are involved... The idea that it would be a level playing field, if it were not for either genes or discrimination, is a preconception in defiance of both logic and facts."

"I must take the occasion to apologize for a major omission from my article, my failure to give credit to Professor Thomas Sowell for two excellent discussions on Marxian economics which I have only recently come across. While he does not deal explicitly with the transformation problem, his discussion of Marxian value theory, which is documented with exquisite care, comes to conclusions very similar to my own on the tautological nature of the value theory and on the nature of Marx' interests in the subject. Though he does sometimes speak of value theory as a first approximation [3,1967, p. 66] he makes it clear that Marx always considered the deviations between prices and values to be systematic [3, 1967, pp. 65-6]. I recommend these pieces unhesitatingly as models of Marxian scholarship."

"Sowell is an economist by training and should not be expected to know much about American foreign policy, as it’s beyond his area of expertise. I do find it a little rich, however, that Sowell has written a book complaining about what happens when intellectuals leave their knowledge reservation to opine about events of the day — and then proceeds to commit that precise sin during his book promotion. There are two possibilities here. Either Sowell has no capacity for irony, or he’s cleverly trying to add data points to support his argument."

"If there was any justice in the intellectual world, Thomas Sowell would be awarded the Nobel Prize for his brilliant interdisciplinary studies on the connections between race, culture and economics around the globe."

"Thomas Sowell is a gifted applied economist with much of importance to say about the larger issues in social policy and government regulation of economic affairs. [...] Sowell, however, has two failings. First, he has no heart for the plight of the poor, so his work in this area is illuminating for the false ideas he debunks, but does not contribute in any way to dealing with the problem of poverty. Second, he is a thorough-going right-wing ideologue, who is often cogent in his critique of liberal ideas, but is blind to similar, indeed often parallel, problems with conservative ideas. This book suffers especially from the second of these weaknesses. [...]Sowell has no understanding of information economics. He follows Hayek on the distributed nature of information, but he never confronts the literature that deals with the transformation of private information into public information. The importance of public information, central for instance to Durkheim and Aumann, is completely ignored in his treatment of government regulation."

"For many years the term Austrian school in the United States was synonymous with Mises’s disciples. The first outstanding pupils to find themselves highly respected were Murray N. Rothbard and Israel M. Kirzner. In the 1970s and 1980s the group greatly expanded, with the present most representative work probably being done by Thomas Sowell."

"Professor Sowell is one of the rare minds who, after they have ascended from the infinite variety of concrete facts to a general view accounting for the structure of the complex world, find their way back to the wealth of particulars from which they started and in which ordinary people, other than economic theorists, are alone interested. Although his exposition of economic theory is impeccable and contains many original contributions, the strength of the book, its impressiveness and liveliness, is due to his always having before his eyes the concrete phenomena. Simple and vivid illustrations make us aware of the practical implications of his theoretical insights. [...] What I mean by the heading I have given to this review is that if I should now be asked by persons capable of exact thinking but ignorant of technical economics (and there must be hundreds of thousands of them who have great influence on policy) what single modern work would give them the best introduction to the present knowledge needed to judge the wisdom or folly of current policies, I would without hesitation refer them to Professor Sowell’s book."

"All in all, Sowell offers a number of intriguing ideas in the book, but he leaves too many of them only partly developed and defended. One final example: Sowell claims that those of us who favor free markets are more empirically inclined and have less ego invested in our views than those who advocate central planning and heavy government intervention generally. That is my impression too, and it is one of the most interesting and important ideas in his book. Unfortunately, he gives no evidence for that comparison. The book would have been a great forum in which to do so, but on this idea and too many others, he leaves his readers unsatisfied."

"Sowell likes history, but he likes it on Post-it notes. He also prefers to revisit stale arguments rather than intervene in current controversies. In a book about intellectuals and society, he manages to ignore the health-care and financial crises. Instead, he argues that intellectuals have misunderstood Herbert Hoover. Wouldn't VLII help us with the current economic crisis, to find out which ideas "worked"?"

"Instead of addressing any concrete issues, Mr. Sowell simply repeats the bluster that intellectuals play rhetorical tricks and avoid arguments. As usual, he provides no details. If teaching consists of repetition, Mr. Sowell is a master. As to the single specific point in Sowell's note—that he in fact offers criticism of contemporary intellectuals, for instance, of myself: Dream on. Sowell cites me in two sentences—that is all—and he cites me in error. In Sowell country, a passing mention or mismention constitutes criticism."

"I have a very high likelihood of finding amusement in the things that Thomas Sowell says. It's not what he says so much as the fact that he's saying it. ... Thomas Sowell is very well known for his critique of intellectuals who make claims about society. That's all well and good - he even has some good points in the critique. But I just can't bring myself to take Sowell completely seriously when he puts on his public intellectual hat, precisely because he is so widely identified as an anti-public-intellectual. ... A lot of this is just meant to be in fun - the point of Intellectuals and Society was a good point. Unfortunately, it's often people who complain the loudest about the misbehavior of others that are successful in taking the spotlight off themselves."

"Thomas Sowell, an eighty-seven-year-old African American economist, has written more than thirty mind-expanding books. These include his Culture trilogy which (among other things) anticipated Jared Diamond’s ideas in Guns, Germs, and Steel and explains the ubiquity of anti-Semitism; A Conflict of Visions, which identifies the rival theories of the human condition underlying left-wing and right-wing political ideologies; The Quest for Cosmic Justice, which compares this quixotic pursuit with the quest for human justice; Intellectuals and Society, an uncomfortable exposé of the follies of all-star intellectuals; and Late-Talking Children, which anticipated Simon Baron-Cohen’s work on the extreme male brain. Sowell is a libertarian conservative, which makes him taboo in mainstream intellectual circles, but even those who disagree are well advised to grasp his facts and arguments."

"Sowell is misled, I believe, by his own basic strategy of taking familiar controversies about the market as the model for understanding a wide range of fundamental political disagreements. To begin with, the central virtues of competitive markets are not a matter of dispute among most of the theorists whom Sowell discusses. Rawls and Dworkin, for example, make clear their respect for the efficiency of markets as mechanisms for gathering information and allocating resources. What they question is the importance to be given to this kind of efficiency, as compared to other values such as equity and individual autonomy, when we are justifying economic and legal systems. The controversy is thus a moral one that cannot be avoided simply by “leaving it to the process” (i.e., to the market), since to do that would be already to decide the matter. The market is not a neutral means for deciding all social questions, and those who have doubts about its proper role need not claim that they can “do better” than the market in the sense of producing a more efficient outcome. Sowell’s strategy is also misleading in a further way: it overlooks important differences between competitive markets and other processes that he mentions, such as the common law, constitutional government, and the processes through which traditions and languages evolve. Three distinctive features of the market are important here. First, the ideal of the perfectly competitive market is a precise theoretical notion. No actual social institution can be identified with this ideal—since any such institution involves particular legal forms of property and contract, particular imperfections in knowledge, and particular limitations on freedom of entry into the market. But it is frequently quite clear which conditions move a system closer to perfect competition and which ones disrupt it. Second, market institutions (even actual, imperfect ones) produce their outcomes mechanically: prices and employment levels emerge as the result of competition, leaving little need for interpretation. Third, the efficiency of these outcomes is supposed to be a product of the process itself, not something with which any of the participants need be consciously concerned: agents in the perfectly competitive market are assumed to be assiduous pursuers of their own interests, but there is no need for anyone at any stage even to address the question of what would be best from a social point of view."

"As I said in my review, “Sowell maintains that his purpose in A Conflict of Visions is not to argue for one of the visions he describes but rather to understand the nature of enduring differences in political outlook.” On the other hand, as I also said, it is quite clear where his sympathies lie, and I do not think that any careful reader could fail to conclude from this book that Sowell takes a concern with “results” rather than with “process” to be a fault. An adherent of what he calls the unconstrained vision would not describe that vision in the terms Sowell employs."

"Sowell’s A Conflict of Visions is, on the whole, a very stimulating book and it argues a very important point, namely, that the political struggles which will shape our future social and political order are not only, and maybe not even primarily, driven by identifiable interests and by rent-seeking activities that use politics as a pure machinery for the redistribution of material wealth. Sowell rightly reminds us of the genuine power of ideas and visions in the political arena."

"Perhaps Sowell’s joylessness stems from the fact that his main idea is the hatred of ideas. It is one thing to be an intellectual and love ideas: why else spend so much time reading and thinking about them? When I come across a bad idea, I disagree with it and, as I am doing here, I try to expose its silliness. But I value bad ideas well enough to take them seriously. I write about Thomas Sowell because I recognize in him a fellow intellectual. But it is by no means clear that Sowell recognizes himself as one. He does from time to time note the existence of “conservative and neo-conservative intellectuals” who offer “an alternative vision” to the dominant ideology and whose influence “no longer negligible” in the media. But then Sowell goes on to write as if the only talking heads on television belong to Bertrand Russell and Noam Chomsky. Safely back to his thesis that intellectuals are always loathsome meddlers who hate capitalism, rationalize evil, and get everything wrong, he is free to quote Eric Hoffer, Paul Johnson, and all like-thinking writers who trod this ground before him."

"I'd say Tom is an empiricist, and by that I mean Tom looks at evidence, and then he makes a diagnosis, and then he offers a therapy for the perceived problem, and then he offers a prognosis, and he's not interested as much, if at all, on how people interpret that or what are the ramifications in contemporary political terms of his argument."

"The shock therapy of decisive war against Iraq will elevate the stock market by a couple-thousand points. We will know that our businesses will stay open, that our families will be safe, and that our future will be unlimited. The world will be righted in this life-and-death struggle to preserve our values and our civilization. But to do all this, we must act."

"Either you believe in markets, or you believe in government."

"I think the housing boom is a tremendous plus."

"If stocks are optimistic, then so am I."

"Free market capitalism is the best path to prosperity!"

"There ain't no recession."

"The Bush boom is alive and well. It's finishing up its sixth splendid year with many more years to come."

"What matters most for all Americans is economic growth. As Arthur Laffer frequently reminds us: Tax something more, get less of it. Tax something less, get more of it."

"We have contained this. I won't say airtight but pretty close to airtight."

"There is no second wave coming. It’s just hot spots. They send in CDC teams, we’ve got the testing procedures, we’ve got the diagnostics, we’ve got the PPE. And so I really think it’s a pretty good situation."

"OK, Peter writes, "Should I be worried about in terms of liquidity and get my money out of there?" No, no, no! Bear Stearns is fine. Do not take your money— this is ridi— if there's one takeaway other than a +400 so Bear— Bear Stearns is not in trouble. If anything, they're more likely to be taken over. Don't move your money from Bear! That's just being silly! Don't be silly."

"Go cry to your mother."

"Apple is becoming the JC Penney of tech. I think that there is a sense that the company is in a tailspin, and it doesn't seem to matter what they do right now. … Whatever product that is coming out in September is a clear loser. We haven't seen it yet, but it is a loser."

"I would spend a nickel on the subway and go arbitrarily to some other stop and look around there. So I was roaming the city in the afternoons and applying for jobs in the morning. And one day I found myself in a neighborhood I just liked so much…it was one of those times I had put a nickel in and just invested something. And where did I get out? I just liked the sound of the name: Christopher Street — so I got out at Christopher Street, and I was enchanted with this neighborhood, and walked around it all afternoon and then I rushed back to Brooklyn. And I said, "Betty I found out where we have to live.""

"I did have an inkling that I was going to be a writer. That was my intention."

"I was brought up to believe that there is no virtue in conforming meekly to the dominant opinion of the moment. I was encouraged to believe that simple conformity results in stagnation for a society, and that American progress has been largely owing to the opportunity for experimentation, the leeway given initiative, and to a gusto and a freedom for chewing over odd ideas."

"I was taught that the American's right to be a free individual, not at the mercy of the state, was hard-won and that its price was eternal vigilance, that I too would have to be vigilant. I was made to feel that it would be a disgrace to me, as an individual, if I should not value or should give up rights that were dearly bought. I am grateful for that upbringing."

"We must demonstrate that it is possible to overcome poverty, misery and decay by democratic means, and we must ourselves believe, and must show others, that our American tradition of the dignity and liberty of the individual is not a luxury for easy times but is the basic source of the strength and security of a successful society."

"The other threat to the security of our tradition, I believe, lies at home. It is the current fear of radical ideas and of people who propound them. I do not agree with the extremists of either the left or the right, but I think they should be allowed to speak and to publish, both because they themselves have, and ought to have, rights, and once their rights are gone, the rights of the rest of us are hardly safe. Extremists typically want to squash not only those who disagree with them diametrically, but those who disagree with them at all. It seems to me that in every country where extremists of the left have gotten sufficiently in the saddle to squash the extremists of the right, they have ridden on to squash the center or terrorize it also. And the same goes for extremists of the right. I do not want that to happen in our country."

"Great cities are not like towns, only larger. They are not like suburbs, only denser. They differ from towns and suburbs in basic ways, and one of them is that cities are, by definition, full of strangers."

"It may be that we have become so feckless as a people that we no longer care how things do work, but only what kind of quick, easy outer impression they give. If so, there is little hope for our cities or probably for much else in our society. But I do not think this is so."

"A region is an area safely larger than the last one to whose problems we found no solution."

"As for really new ideas of any kind—no matter how ultimately profitable or otherwise successful some of them might prove to be—there is no leeway for such chancy trial, error and experimentation in the high-overhead economy of new construction. Old ideas can sometimes use new buildings. New ideas must use old buildings."

"This is both a gloomy and a hopeful book. The subject itself is gloomy. A Dark Age is a culture's dead end. We in North America and Western Europe, enjoying the many benefits of the culture conventionally known as the West, customarily think of a Dark Age as happening once, long ago, following the collapse of the Western Roman Empire. But in North America we live in a graveyard of lost aboriginal cultures, many of which were decisively finished off by mass amnesia in which even the memory of what was lost was also lost. Throughout the world Dark Ages have scrawled finis to successions of cultures receding far into the past."

"The salient mystery of Dark Ages sets the stage for mass amnesia. People living in vigorous cultures typically treasure those cultures and resist any threat to them. How and why can a people so totally discard a formerly vital culture that it becomes vitally lost?"

"Writing, printing, and the Internet give a false sense of security about the permanence of culture."

"While politicians, clergy, creators of advertisements, and other worthies assert stoutly that the family is the foundation of society, the nuclear family, as an institution, is currently in grave trouble."

"Credentialing, not education, has become the primary business of North American universities."

"To science, not even the bark of a tree or a drop of pond water is dull or a handful of dirt banal. They all arouse awe and wonder."

"One wonders at the docility of the students who evidently must be satisfied enough with the credentials to be uncaring about the lack of education."

"Subsidiarity is the principle that government works best — most responsibly and responsively — when it is closest to the people it serves and the needs it addresses. Fiscal accountability is the principle that institutions collecting and disbursing taxes work most responsibly when they are transparent to those providing the money."

"Virtually all ideologues, of any variety, are fearful and insecure, which is why they are drawn to ideologies that promise prefabricated answers for all circumstances."

"Advanced cultures are usually sophisticated enough, or have been sophisticated enough at some point in their pasts, to realize that foxes shouldn't be relied on to guard henhouses."

"In wretched outcomes, the devil is in the details."

"Redundancy is expensive but indispensable."

"Beneficent spirals, operating by benign feedback, mean that everything needful is not required at once: each individual improvement is beneficial for the whole"

"I have learned yet again (this has been going on all my life) what folly it is to take any thing for granted without examining it skeptically."

"Privately run jails are a mark of American "reinvented government" that has been picked up by neoconservatives in Canada."

"Jacobs has never been political in the sense of supporting one ideology or party over another. Larger ideologies, she firmly believed then and continues to believe, only obscure the realities, which are to be found by looking around, paying attention, and trusting your eyes over what people are merely saying. In that spirit, she always supported the right of labor unions and grass roots movements to exist. "I think it is good for us to have vociferous political minorities and to know how to live with them," she wrote. But her personal support of any individual cause was always based on her absolutely unbending principles."

"If something cannot go on forever, it will stop."

"Once stock prices reach the point at which it is hard to value them by logical methodology, stocks will be bought as they were in the late 1920s not for investment but to be unloaded at a still higher price. The ensuing break could be disastrous because panic psychology cannot be summarily altered or reversed by easing money policies."

"The world of antitrust is reminiscent of Alice’s Wonderland: everything seemingly is, yet apparently isn’t, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat." It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict—after the fact."

"Capitalism is based on self-interest and self-esteem; it holds integrity and trustworthiness as cardinal virtues and makes them pay off in the marketplace, thus demanding that men survive by means of virtue, not vices. It is this superlatively moral system that the welfare statists propose to improve upon by means of preventative law, snooping bureaucrats, and the chronic goad of fear."

"An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense—perhaps more clearly and subtly than many consistent defenders of laissez-faire—that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other."

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves."

"We are obviously all hurt by inflation. Everybody is hurt by inflation. If you really wanted to examine who percentage-wise is hurt the most in their incomes, it is the Wall Street brokers. I mean their incomes have gone down the most."

"Since becoming a central banker, I have learned to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said."

"I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I said."

"Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets.… But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

"For some, the benign inflation outcome of 1996 might be considered surprising, as resource utilization rates--particularly of labor--were in the neighborhood of those that historically have been associated with building inflation pressures. To be sure, an acceleration in nominal labor compensation, especially its wage component, became evident over the past year. But the rate of pay increase still was markedly less than historical relationships with labor market conditions would have predicted. Atypical restraint on compensation increases has been evident for a few years now and appears to be mainly the consequence of greater worker insecurity. In 1991, at the bottom of the recession, a survey of workers at large firms by International Survey Research Corporation indicated that 25 percent feared being laid off. In 1996, despite the sharply lower unemployment rate and the tighter labor market, the same survey organization found that 46 percent were fearful of a job layoff."

"Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

"The reason there is very little support for the gold standard is the consequences of those types of market adjustments are not considered to be appropriate in the 20th and 21st century. I am one of the rare people who have still some nostalgic view about the old gold standard, as you know, but I must tell you, I am in a very small minority among my colleagues on that issue."

"It hardly makes any difference who will be the next president. The world is governed by market forces."

"Intensive research in recent years into the sources of economic growth among both developing and developed nations generally point to a number of important factors: the state of knowledge and skill of a population; the degree of control over indigenous natural resources; the quality of a country's legal system, particularly a strong commitment to a rule of law and protection of property rights; and yes, the extent of a country's openness to trade with the rest of the world. For the United States, arguably the most important factor is the type of rule of law under which economic activity takes place. When asked abroad why the United States has become the most prosperous large economy in the world, I respond, with only mild exaggeration, that our forefathers wrote a constitution and set in motion a system of laws that protects individual rights, especially the right to own property. Nonetheless, the degree of state protection is sometimes in dispute. But by and large, secure property rights are almost universally accepted by Americans as a critical pillar of our economy. While the right of property in the abstract is generally uncontested in all societies embracing democratic market capitalism, different degrees of property protection do apparently foster different economic incentives and outcomes."

"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."

"Rising interest rates have been advertised for so long and in so many places that anyone who has not appropriately hedged this position by now obviously is desirous of losing money."

"While local economies may experience significant price imbalances, a national severe price distortion seems most unlikely in the United States, given its size and diversity."

"Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern."

"A decline in the national housing price level would need to be substantial to trigger a significant rise in foreclosures, because the vast majority of homeowners have built up substantial equity in their homes despite large mortgage-market financed withdrawals of home equity in recent years."

"[There are] signs of froth in some local markets where home prices seem to have risen to unsustainable levels."

"That said, there can be little doubt that exceptionally low interest rates on ten-year Treasury notes, and hence on home mortgages, have been a major factor in the recent surge of homebuilding and home turnover, and especially in the steep climb in home prices. Although a 'bubble' in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels."

"The resolution of our current account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our fiscal deficit, which, according to the Congressional Budget Office, will rise significantly as the baby boomers start to retire in 2008. Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances."

"History has not dealt kindly with the aftermath of protracted periods of low risk premiums."

"If you get beyond the political rhetoric [and assembled a group to solve Social Security] it would take them 15 minutes. It would take them 15 minutes only because 10 minutes was used for pleasantries."

"I was aware that the loosening of mortgage credit terms for subprime borrowers increased financial risk. But I believed then, as now, that the benefits of broadened home ownership are worth the risk."

"I really didn't get it until very late in 2005 and 2006."

"We had a bubble in housing."

"Well, first of all, the Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take. So long as that is in place and there is no evidence that the administration or the Congress or anybody else is requesting that we do things other than what we think is the appropriate thing, then what the relationships are don't, frankly, matter. And I've had very good relationships with presidents."

"I think Bill Clinton was the best Republican president we've had in a while."

"Cash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this."

"Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity – myself especially – are in a state of shocked disbelief."

"Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact."

"The need for values is inbred. Their content is not."

"Modern dynamic economies do not stay still long enough to allow for an accurate reading of their underlying structures."

"It did not go without notice that Ayn Rand stood beside me as I took the oath of office in the presence of President Ford in the Oval Office. Ayn Rand and I remained close until she died in 1982, and I'm grateful for the influence she had on my life. I was intellectually limited until I met her."

"It's hard to overemphasize how important Ford's deregulation was. True, most of the benefits took years to unfold-rail freight rates, for example hardly budged at first. Yet deregulation set the stage for an enormous wave of creative destruction in the 1980s:..."

"Treasury Secretary Brady didn't like the Fed either. He and the president were friends and had a lot in common-both were wealthy, Yale educated patricians and members of Skull and Bones."

"We generally did not talk about the stock market very much at the Fed."

"Of course, shedding the debt burden would be a happy development for our country, but it would nevertheless pose a big dilemma for the Fed. Our primary lever of monetary policy was buying and selling treasury securities-Uncle Sam's IOU's. But as the debt was paid down, those securities would grow scarce, leaving the Fed in need of a new set of assets to effect monetary policy."

"I came to a stark realization: chronic surpluses could be almost as destabilizing as chronic deficits."

"Globalization was exerting a dis-inflationary impact."

"When trust is lost, a nation's ability to transact business is palpably undermined."

"The Fabians laid the groundwork for modern social democracy, and their influence on the world would end up being at least as powerful as that of Marx."

"In general, corruption tends to exist whenever governments have favors to extend, or something to sell."

"Over the years I have had the most contact with Lee Kuan Yew, most recently in 2006, and have always found him impressive, even though we do not always see eye to eye. I met him first when he was George Shultz's guest at the famous (or infamous, depending on your perspective) Bohemian Grove, a male only bonding retreat among the redwoods of California."

"An area in which more rather than less government involvement is needed, in my judgment, is the rooting out of fraud. It is the bane of any market system."

"The probability of ten consecutive heads is 0.1 percent; thus, when you have millions of coin tossers, or investors, in the end there will be thousands of very successful practitioners of coin tossing, or stock picking."

"From the development of the textile loom two centuries ago to today's Internet, output per hour has increased fifty fold."

"Much of the securitization took the form of collateralized debt obligations (CDOs) with senior credit tranches certified by rating agencies as AAA. It was the failure to properly price such risky assets that characterized the crisis."

"We are going through a period with no precedent in American history."

"I know you think you understand what you thought I said, but I'm not sure you realize that what you heard is not what I meant"

"I got to know a lot of people on Wall Street. I used to tell then that Alan Greenspan was a musician. He was at Juilliard when I was there, a clarinet major, and he played in the Henry Jerome Band at the . After he became chairman of the Fed, Time had his picture on the cover, and inside they had a picture of him with the Edison Hotel band. One of the guys said, "I don't understand something. Why did Greenspan give up the music business, to become an economist?" "Very simple," I told him, "you should have heard him play the clarinet.""

"If you look at the speeches he gave just before he left the Fed, it's pretty much “After me - the Deluge. I'm getting out while my reputation's intact”."

"If you want a simple model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God."

"Greenspan doesn't get out of bed before examining the political consequences."

"I would not only reappoint Mr. Greenspan -- if Mr. Greenspan should happen to die, God forbid -- I would do like was did in the movie, 'Weekend at Bernie's.' I'd prop him up and put a pair of dark glasses on him and keep him as long as we could."

"The most devoted member of (Ayn Rand's) inner circle was Alan Greenspan, former head of the US Federal Reserve. Among the essays he wrote for Rand were those published in a book he co-edited with her called Capitalism: The Unknown Ideal. Here, starkly explained, you'll find the philosophy he brought into government. There is no need for the regulation of business—even builders or Big Pharma—he argued, as 'the "greed" of the businessman or, more appropriately, his profit-seeking … is the unexcelled protector of the consumer.' As for bankers, their need to win the trust of their clients guarantees that they will act with honour and integrity. Unregulated capitalism, he maintains, is a 'superlatively moral system.'"

"I sometimes say that Alan Greenspan overdosed on Ayn Rand when he was young. He thought that if an axe murder happened in a free market it was probably all for the best."

"[He is] one of the biggest political hacks we have in Washington."

"Greenspan's reaction with regard to the stock-market bubble has caused two more bubbles to grow: a real-estate bubble and a consumer-debt bubble... History will judge him one of the worst Central Bankers ever."

"In my view, Alan Greenspan will go down in history as one of the worst chairmen of the Federal Reserve. Future textbooks will refer to Greenspan as an example of how not to run a central bank. In order to underline the bipartisan support that Wall Street has in Congress, during his time of leadership at the Fed he was hailed not only by Republicans but also by most Democrats as "the Maestro." This, despite his extremely conservative views, which called for, among other reactionary policies, the elimination of the minimum wage. In 2000, at a House Financial Services Committee hearing on bank mergers, I asked Greenspan, "Aren't you concerned that with such a growing concentration of wealth, if one of these huge institutions fails it will have a horrendous impact on the national and global economy?" Greenspan replied, "No, I'm not. I believe that the general growth in large institutions has occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically-I should say, fully-hedged." Greenspan could not have been more wrong. Yet after leaving the Fed, he was hired to advise some of the biggest banks and wealthiest hedge fund managers in the world."

"Greenspan kept an eye on such fluctuations as the sale of vacuum cleaners in Cleveland to, as they say, " get a precise idea about where the economy is going," and of course he micromanaged us into chaos."

"The country will not have to pay the piper. Through a combination of sound policy actions and a great deal of good luck we are well on our way to a soft landing and a period of growth and price stability."

"The things you hear now about European unemployment -- that there are structural problems, that real wages have failed to adjust, that there are inflationary fears -- are the same things that were said during the early 1930. It is well established that government spending began to pull Germany out of its slump in 1935. There is no known reason why spending for peace can't do as well at getting the economy going as spending for war."

"Takeovers wouldn't cause the stock market to rise unless there is an upward reassessment of earnings (potential). People are more optimistic and confident about the future."

"I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that. . . . I’ve always thought that countries in Africa are vastly under polluted; their air quality is probably vastly inefficiently low compared to Los Angeles . . . Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the Least Developed Countries?"

"Things take longer to happen than you think they will and then they happen faster than you think they will."

"No free country will ever again have anything like the 90 percent tax rates that we had in this country. Past a certain point, high marginal tax rates are, indeed, terribly destructive."

"Where countries have been able to carry through on their reform commitments -- as in Korea, Thailand and the Philippines -- results are starting to come in the form of lower interest rates, new investment and increased growth."

"The situation in a number of countries reminds one that it's still a risky world out there in the emerging markets."

"We must recognise that in an integrated world, trade cannot be divorced from other concerns. We need to promote free trade and serious global efforts with respect to common problems even as we support every nation's right to chart its own course."

"I deeply regret the impact of my comments and apologise for not having weighed them more carefully … I was wrong to have spoken in a way that has resulted in an unintended signal of discouragement to talented girls and women."

"I know that there is one additional thing that I've learned and that is that what Harvard does and says has an enormous resonance that goes beyond Zip code 02138."

"With uncertainty in oil markets, a buildup of speculative pressures and the large U.S. current account deficit, there is a real possibility that Paulson's crisis-management skills will be tested."

"[I]t's important to remember how fortunate we are as a country to have a currency and a bond market that is seen in every way as a source of strength and it’s a huge responsibility for us to keep it that way."

"We know the first rule of holes is stop digging. We are in a hole that we have made. If we stop digging, the situation is less serious than if we continue to dig."

"Summers’s outlook on economic policy can be summarized by the remark that he gave me some years ago: "If I had your views on economics, I would find another profession." He meant that if free markets usually worked well and the government ought usually to stay out, then he would find economics to be an uninteresting occupation. Fortunately for Summers, he has always believed in the potential benefits from governmental activism, although the strength of this belief may have diminished over time."

"I vote to banish Larry Summers. Not from the planet. That wouldn't be nice. Just from public life. The criticisms of President Obama's chief economic adviser are well known. He's too close to Wall Street. And he's a frightful bully, of both people and countries. Still, we're told we shouldn't care about such minor infractions. Why? Because Summers is brilliant, and the world needs his big brain. And this brings us to a central and often overlooked cause of the global financial crisis: Brain Bubbles. This is the process wherein the intelligence of an inarguably intelligent person is inflated and valued beyond all reason, creating a dangerous accumulation of unhedged risk. Larry Summers is the biggest Brain Bubble we've got."

"There is little doubt that the observation that quality may depend on price (productivity on wages; default probability on interest rates) has provided a rich mine for economic theorists: A simple modification of the basic assumptions results in a profound alteration of many of the basic conclusions of the standard paradigm. The Law of Supply and Demand has been repealed. The Law of the Single Price has been repealed. The Fundamental Theorem of Welfare Economics has been shown not to be valid. More than that, the theories that we describe here provide the basis of progress toward a unification of macroeconomics and microeconomics. They pro vide an explanation of unemployment and credit rationing, derived from basic microeconomic principles. It is a theory in which the extensive idleness that periodically confronts society's resources, human and capital, is seen as but the most obvious example of market failures that prevasively and persistently distort the allocation of resources."

"Most poor people earn more than minimum wage when they are working; their problem is not low wages. The problem comes when they are not working."

"The reason that the invisible hand often seems invisible is that it is often not there."

"They [free market policies] were never based on solid empirical and theoretical foundations, and even as many of these policies were being pushed, academic economists were explaining the limitations of markets — for instance, whenever information is imperfect, which is to say always."

"It's actually a tribute to the quality of economics teaching that they have persuaded so many generations of students to believe in so much that seems so counter to what the world is like. Many of the things that I'm going to describe make so much more common sense than these notions that seem counter to what ones eyes see every day."

"The fall of Wall Street is for market fundamentalism what the fall of the Berlin Wall was for communism."

"The theories that I (and others) helped develop explained why unfettered markets often not only do not lead to social justice, but do not even produce efficient outcomes. Interestingly, there has been no intellectual challenge to the refutation of Adam Smith’s invisible hand: individuals and firms, in the pursuit of their self-interest, are not necessarily, or in general, led as if by an invisible hand, to economic efficiency. The only question that has been raised concerns the ability of government to remedy the deficiencies of the market. Within academia, a significant fraction of economists are involved with developing and expanding on the ideas of imperfect information (and imperfect markets) that I explored. For instance, Edmund Phelps, this year’s Nobel Prize winner, belongs to this "school" of thought. But in political discourse, simplistic “market fundamentalism” continues to exert enormous influence."

"The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late."

"And it should be clear that, in spite of the increases in GDP, in spite of the 2008 crisis being well behind us, everything is not fine. We see this in the political discontent rippling through so many advanced countries; we see it in the widespread support of demagogues, whose successes depend on exploiting economic discontent; and we see it in the environment around us, where fires rage and floods and droughts occur at ever-increasing intervals."

"Today, as we face a retreat from the rules-based, liberal global order, with autocratic rulers and demagogues leading countries that contain well over half the world’s population, Fukuyama’s idea seems quaint and naive."

"The standard neoclassical model the formal articulation of Adam Smith's invisible hand, the contention that market economies will ensure economic efficiency provides little guidance for the choice of economic systems, since once information imperfections (and the fact that markets are incomplete) are brought into the analysis, as surely they must be, there is no presumption that markets are efficient."

"The Lange-Lerner-Taylor theorem, asserting the equivalence of market and market socialist economies, is based on a misguided view of the market, of the central problems of resource allocation, and (not surprisingly, given the first two failures) of how the market addresses those basic problems."

"The neoclassical paradigm, through its incorrect characterization of the market economies and the central problems of resource allocation, provides a false sense of belief in the ability of market socialism to solve those resource allocation problems. To put it another way, if the neoclassical paradigm had provided a good description of the resource allocation problem and the market mechanism, then market socialism might well have been a success. The very criticisms of market socialism are themselves, to a large extent, criticisms of the neoclassical paradigm."

"The central economic issues go beyond the traditional three questions posed at the beginning of every introductory text: What is to be produced? How is it to be produced? And for whom is it to be produced? Among the broader set of questions are: How should these resource allocation decisions be made? Who should make these decisions? How can those who are responsible for making these decisions be induced to make the right decisions? How are they to know what and how much information to acquire before making the decisions? How can the separate decisions of the millions of actors decision makers in the economy be coordinated?"

"At the core of the success of market economies are competition, markets, and decentralization. It is possible to have these, and for the government to still play a large role in the economy; indeed it may be necessary for the government to play a large role if competition is to be preserved. There has recently been extensive confusion over to what to attribute the East Asian miracle, the amazingly rapid growth in countries of this region during the past decade or two. Countries like Korea did make use of markets; they were very export oriented. And because markets played such an important role, some observers concluded that their success was convincing evidence of the power of markets alone. Yet in almost every case, government played a major role in these economies. While Wade may have put it too strongly when he entitled his book on the Taiwan success Governing the Market, there is little doubt that government intervened in the economy through the market."

"At the core of the failure of the socialist experiment is not just the lack of property rights. Equally important were the problems arising from lack of incentives and competition, not only in the sphere of economics but also in politics. Even more important perhaps were problems of information. Hayek was right, of course, in emphasizing that the information problems facing a central planner were overwhelming. I am not sure that Hayek fully appreciated the range of information problems. If they were limited to the kinds of information problems that are at the center of the Arrow-Debreu model consumers conveying their preferences to firms, and scarcity values being communicated both to firms and consumers then market socialism would have worked. Lange would have been correct that by using prices, the socialist economy could "solve" the information problem just as well as the market could. But problems of information are broader."

"In short, whether for the obvious reason that in the absence of futures markets the price system cannot perform its essential coordinating role with respect to future-oriented activities, such as investments, or for the more subtle reasons just discussed, that in the absence of futures markets, extending infinitely far into the future, the market economy is likely to exhibit dynamic instabilities there is no reason to believe that even with rational expectations it will converge to the steady state; there is no presumption that markets, left to themselves, will be efficient. For advocates of market socialism, the implication of this analysis seems clear: There is a need for the kind of government control of the allocation of investment envisaged in market socialism."

"Competition is limited by the scale of the market, and as the scale of the market has changed, so has the effectiveness of competition."

"But while Keynes as well as the subsequent research in new Keynesian economics has provided an explanation for both unemployment and economic volatility while it has attempted to identify precisely what is wrong with the Arrow-Debreu model that can account for these observations there was another message of Keynes that was clearly heard: The macroeconomic ills of capitalism were curable. One didn't need to institute fundamental reforms in the economic system. One only needed selective government intervention. It is in this sense that Keynesian economics greatly weakened the case for market socialism."

"Advocates of the Austrian tradition often defend the lack of formal modeling and the corresponding absence of formal efficiency theorems: The market economy is an organic process, too complicated to be reduced to the simplistic formal models. The job of the economists is to describe this organic process and to see the kinds of impediments that the absence of a legal structure, on the one hand, or excessive government intervention, on the other, might impose for it. But while they may not resort to, or even like, the standard welfare criterion of Pareto optimality, there are strong normative overtones in their discussions. Darwin may have thought that he was simply describing the evolutionary process when he asserted that it resulted in the survival of the fittest, but such statements require a definition of the "fittest" and an analysis of the general equilibrium, dynamic properties of the system. Today we recognize that evolutionary processes, under a wide variety of circumstances, may not possess "efficiency" properties."

"It should be clear of course that for traders to have incentives to gather information required that information not be perfectly disseminated in the market. If, simply by looking at market prices, those who do not spend money to acquire information can glean all the information that the informed traders who have spent money to acquire information have, then the informed traders will not have any informational advantage; they will not be able to obtain any return to their expenditures on information acquisition. Accordingly, if there were a complete set of markets, information would be so well conveyed that investors would have no incentives to gather information. (Of course with all participants having the same [zero] information, incentives to trade would be greatly reduced.) To put the matter differently, the assumptions of "informed" markets and "a complete set of markets" may be mutually exclusive."

"The theory of market socialism, for the most part, was not based on an analysis of these market failures, and of the reasons why government might be able to resolve them, but rather on the naive comparison of the actual performance of market economies and the hypothesized performance of a market socialist economy with an idealized view of government. This idealization not only failed to take into account the political realities, but more important from the perspective of this chapter, failed to take into account essential economic realities."

"We need to distinguish between incentives at the organizational level and at the individual level, though some of the problems in designing incentive structures are common to both. We need to ask how, for the kinds of activities the public sector engages in, the organization is rewarded for "success" or punished for lack of it, and how individuals are similarly rewarded and punished."

"Informational constraints not only limit the ability of shareholders to control rent-seeking behavior on the part of top managers, they also limit the ability of top managers to control rent-seeking behavior on the part of their subordinates. How much of the time spent by a middle-level manager to prepare a report was absolutely necessary? To what extent was it devoted to acquiring information, of marginal value to the firm, but which would make that manager look relatively good compared to other managers? To what extent are the efforts and resources spent by a manager to cultivate a client really being directed to enhance that manager's job opportunities? Private and organizational objectives are intricately intertwined, and in many cases they are not conflicting. But at the margin they frequently are, and there seems little reason to doubt that private objectives frequently, perhaps usually, win out."

"At the same time I have noted that some of the differences between the public and private sector may have been exaggerated they are differences among the activities being pursued, not differences of the sector within which they are pursued. Private sector organizations face incentive (principal-agent) problems no less than do public organizations. Some of the differences are not innate but are more a consequence of common practice. The most important of these is the absence of competition and the high degree of centralization. Government organizations no less than private organizations dislike competition. The difference is the government has the power to forbid competition, which private organizations do not and indeed government sees one of its roles as curbing unfair practices aimed at reducing competition."

"Thus the first objective of state economic policy is to ensure competition. This needs to be taken into account in the process of privatization or reorganizing state enterprises, as well as in the laws allowing the formation of firms, cooperatives, and partnerships. The government must take actions to minimize the barriers to entry."

"An essential commitment, which virtually all observers have emphasized, is not to subsidize enterprises that are making losses. While the standard remedy for this is "privatization," it should be recognized that this is neither necessary nor sufficient for imposing hard budget constraints. Governments in many countries have subsidized private producers (e.g., of steel), and governments in some countries have imposed hard budget constraints on government enterprises."

"Privatization is, at best, only a partial solution. Privatizations in which vouchers are given, and there is not a recapitalization, do not address this problem at all. Privatizations in which the firm is sold are likely, in the presence of limited competition for the firm, to provide an underestimate of the true value of the firm's assets. Accordingly good performance, based on this undervaluation of the firm's assets, does not provide a true measure of the firm's efficiency."

"As I argued earlier, I view competition as far more important than privatization."

"Competition is important, not only because of its ability to promote economic efficiency but also because of the zest that it gives to life. Here we encounter one of the many ambivalences that characterizes our views about market economies: Competition is good, but we have our doubts about excessive competition. We encourage cooperation within teams but competition among them. We frown upon people who are excessively competitive. Yet the competitive market environment may encourage and bring out these aspects of individuals' personalities. If ruthlessly competitive people are successful, such behavior may be imitated. At the same time those who are (excessively) cooperative may be taken advantage of, derogated as pansies. Accordingly such behavior will be discouraged."

"By changing the locus of caring and responsibility from the individual to the government not only for the needy, but for oneself, one's parents, one's children we change society and we change ourselves. Here again we see a certain irony: Attempts to improve society by having the government undertake a greater role in redistribution, may ultimately through their effects on individuals and the nature of the social contract have more ambiguous consequences."

"The answer that socialism provided to the age-old question of the proper balance between the public and the private can now, from our current historical perspective, be seen to have been wrong. But if it was based on wrong, or at least incomplete, economic theories, theories that are quickly passing into history, it was also based on ideals and values many of which are eternal. It represented a quest for a more humane and a more egalitarian society."

"There must have been something in the air of Gary that led one into economics: the first Nobel Prize winner, Paul Samuelson, was also from Gary, as were several other distinguished economists... Certainly, the poverty, the discrimination, the episodic unemployment could not but strike an inquiring youngster: why did these exist, and what could we do about them."

"My teachers helped guide and motivate me; but the responsibility of learning was left with me."

"In debate, one randomly was assigned to one side or the other. This had at least one virtue — it made one see that there was more than one side to these complex issues."

"The notion that every well educated person would have a mastery of at least the basic elements of the humanities, sciences, and social sciences is a far cry from the specialized education that most students today receive, particularly in the research universities."

"The best teachers still taught in a Socratic style, asking questions, responding to the answers with still another question. And in all of our courses, we were taught that what mattered most was asking the right question — having posed the question well, answering the question was often a relatively easy matter."

"I, like many members of my generation, was concerned with segregation and the repeated violation of civil rights. We were impatient with those (like President Kennedy) who took a cautious approach. How could we continue to countenance these injustices that had gone on so long? (The fact that so many people in the establishment seemed to do so — as they had accepted colonialism, slavery, and other forms of oppression — left a life-long mark. It reinforced a distrust of authority which I had had from childhood)."

"There was an incongruity between many of the models that we were taught and the policy positions that our teachers (and we) believed in. The models seemed more consonant with free market prescriptions, though they were presented more as benchmarks rather than full characterizations."

"Once I undertook the analysis of a problem, I often looked at it from a variety of perspectives. I approached the problem as a series of thought experiments — unlike many other sciences, we typically cannot do actual experiments."

"If stability and efficiency required that there existed markets that extended infinitely far into the future — and these markets clearly did not exist — what assurance do we have of the stability and efficiency of the capitalist system?"

"Economists often like startling theorems, results which seem to run counter to conventional wisdom."

"An early insight in my work on the economics of information concerned the problem of appropriability — the difficulty that those who pay for information have in getting returns."

"I recognized that information was, in many respects, like a public good, and it was this insight that made it clear to me that it was unlikely that the private market would provide efficient resource allocations whenever information was endogenous."

"Seeing an economy that is, in many ways, quite different from the one grows up in, helps crystallize issues: in one's own environment, one takes too much for granted, without asking why things are the way they are."

"Growing up in Gary Indiana gave me, I think, a distinct advantage over many of my classmates who had grown up in affluent suburbs. They could read articles that argued that in competitive equilibrium, there could not be discrimination, so long as there are some non-discriminatory individuals or firms, since it would pay any such firm to hire the lower wage discriminated-against individuals, and take them seriously. I knew that discrimination existed, even though there were many individuals who were not prejudiced. To me, the theorem simply proved that one or more of the assumptions that went into the theory was wrong."

"Instead, unchecked by competition [by the USSR] to "win the heart and minds" of those in the Third World, the advanced industrial countries actually created a global trade regime that helped their special corporate and financial interests, and hurt the poorest countries of the world."

"New technologies (reinforced by new trade rules) are enhancing the market power of incumbent, dominant firms, such as Microsoft, which are all from the developed world; for the first time, in a key global industry, there is a near-global monopolist."

"When I was at the World Bank, it would often be said in the face of obvious failure that our strategy was correct, it just wasn't implemented well."

"In part, free trade has not worked because we have not tried it: trade agreements of the past have been neither free nor fair. They have been asymmetric, opening up markets in the developing countries to goods from the advanced industrial countries without full reciprocation."

"The United States and Europe have perfected the art of arguing for free trade while simultaneously working for trade agreements that protect themselves against imports from developing countries. [...] Western negotiators almost take it for granted that they can control what gets discussed, and determine the outcomes."

"The era of multilateral trade liberalization seems to be nearing an end (at least for a while), as well-founded disillusionment in the developing countries combines with growing protectionist sentiment in the developed world."

"If there is to be support for trade globalization in the developed world, we must make sure that the benefits and costs are more evenly shared, which will entail more progressive income taxation."

"Innovation is important; it has transformed the lives of everyone in the world. And intellectual property laws can and should play a role in stimulating innovation. However, the contention that stronger intellectual property rights always boost economic performance is not in general correct. It is an example of how special interests—those who benefit from stronger intellectual property rights—use simplistic ideology to advance their causes."

"One of the reasons that basic research is advanced most by not resorting to intellectual property is that while doing so would have questionable benefits, the costs are apparent. [...] Interestingly, even in software, this system of open collaboration has worked. Today we have the Linux computer operating system, which is also based on the principle of open architecture."

"Intellectual property does not really belong in a trade agreement."

"TRIPs imposed on the entire world the dominant intellectual property regime in the United States and Europe, as it is today. I believe that the way that intellectual property regime has evolved is not good for the United States and the EU; but even more, I believe it is not in the interest of the developing countries."

"The job of the Western trade negotiators is to get a better trade deal for their country's interests—for example, gaining more market access and stronger intellectual property rights—without giving up agriculture subsidies or nontariff trade barriers. Fairness is not in the lexicon of these trade negotiators."

"The natural resource curse is not fate; it is choice. The exploitation of natural resources is an important part of globalization today, and in some ways the failures of the resource-rich developing countries are emblematic of globalization's failures."

"I have argued that simply as a matter of fairness in trade, it is intolerable for one country to provide, in effect, emission subsidies to its firms. [...] Europe must use the foundations of the international trade law we have created to force any recalcitrant country, any rogue state—including the United States—to behave responsibly."

"Perhaps the most successful global monopoly is Microsoft, which has succeeded in gaining global market power not only in PC operating systems but in key applications such as browsers. [...] Microsoft's monopoly power leads not only to higher prices but to less innovation. [...] The failure to develop a global approach to global cartels and monopolies is yet another instance of economic globalization outpacing political globalization."

"Limited liability should not be sacrosanct. Like property rights—including intellectual property—it is a creation of man, to provide appropriate incentives; when that artifice fails to fulfill its social function, it needs to be modified."

"The problem is easy to state: developing countries borrow too much—or are lent too much—and in ways that force them to bear most or all of the risk of subsequent increases in interest rates, fluctuations in the exchange rate, or decreases in income. Given this, it is not surprising that they often cannot repay what is owed."

"The global financial system is not working well, and it is especially not working well for developing countries. Money is flowing uphill, from the poor to the rich. [...] With nearly two-thirds of reserves being held in dollars, the United States is, in this sense, the major recipient of these benefits. If the interest rate America has to pay is just one percentage point lower than it otherwise would be on these $3 trillion of loans from poor countries, what America received from the developing countries via the global reserve system is more than it gives to the developing countries in aid."

"The IMF has been encouraging, sometimes even forcing (as condition of assistance), countries to have their central banks focus only on inflation. Europe succumbed to these doctrines. Today, throughout Euroland, there is unhappiness as the European Central Bank pursues a monetary policy that, while it may do wonders for bond markets by keeping inflation low and bond prices high, has left Europe's growth and employment in shambles."

"In the long run, the most important changes required to make globalization work are reforms to reduce the democratic deficit."

"For much of the world, globalization as it has been managed seems like a pact with the devil. A few people in the country become wealthier; GDP statistics, for what they are worth, look better, but ways of life and basic values are threatened. For some parts of the world the gains are even more tenuous, the costs more palpable. Closer integration into the global economy has brought greater volatility and insecurity, and more inequality. It has even threatened fundamental values. This is not how it has to be. We can make globalization work, not just for the rich and powerful but for all people, including those in the poorest countries. The task will be long and arduous, We have already waited far too long. the time to begin is now."

"My final criticism is that Stiglitz's book is carelessly written. Stiglitz was—and perhaps still is—an outstanding economic theorist. But he has been producing big, loosely argued books. The laudable aim behind them is to inform a broader audience about economic policies that could make the world a better place, certainly with better lives for the poor, and such advocacy has its place in moving people to action. But he lacks the eloquence, urgency, and passion of the preacher, while he has too often abandoned the rigor of the scientist. In my view, he has not yet found a style suitable to the popular exposition of his economic ideas."

"I recently told Joe Stiglitz how much I admire him. I really think he’s so exemplary, not just because he’s smart but because of what he did in the Clinton administration and what he did at the World Bank. When he won the Nobel Prize, all he talked about to any reporter who asked him questions was that the real problem is world poverty. When I first met him, Dunlop insisted on the young radicals getting together with the real smart guys who were not the radicals, and Stiglitz was one of them. So we got together for lunch at the Harvard Faculty Club. It was a little strained at first, but we had a nice talk, and I finally said to Stiglitz, “Listen Joe, do you really believe that the interest rate is the intersection of the supply and demand for capital?” I said exactly that, and he said, “Yes, I believe that.” So twenty years later I said to him, “Listen Joe, you really threw me a curve ball when you told me you believed this.” I thought if this is what the smartest people in the profession believe, I’m not going to even talk to them; meanwhile he totally revolutionizes capital theory along the lines that supply and demand don’t determine interest rates! Either his views changed, or he was being “in your face” to me."

"To allow arcane trade law, which has been negotiated with scant public scrutiny, to have this kind of power over an issue so critical to humanity's future is a special kind of madness. As Nobel Prize-winning economist Joseph Stiglitz puts it, "Should a group of foolish lawyers, who put together something before they understood these issues, interfere with saving the planet?" Clearly not."

"Most economists now recognize climate change as a market failure, but only a few understand it as part of the larger pattern of environmental destruction that scientists have labelled the 'Great Acceleration'. Capitalism as currently practised has imperilled the existence of millions of planetary species, as well as the health and well-being of billions of humans. It also threatens the prosperity that it was intended to create. Challenging 250 years of dominant economic thinking, the climate crisis has shown that the unrestrained pursuit of self-interest does not serve the common good. It has shown, in the words of economist Joseph Stiglitz, that Adam Smith's invisible hand - the idea that free markets lead to efficiency as if consciously guided - is invisible because it is not there'."

"From conversations, I became convinced that people who counterfactual upwards (i.e., compare themselves to those richer) want to actively dispossess the rich. As with all communist movements, it is often the bourgeois or clerical classes who are the early adopters of revolutionary theories. So class envy doesn’t originate from a truck driver in South Alabama, but from a New York or Washington, D.C., Ivy League–educated IYI [Intellectual Yet Idiot] (say Paul Krugman or Joseph Stiglitz) with a sense of entitlement, upset some “less smart” persons are much richer."

"The power of the sword, say the minority..., is in the hands of Congress. My friends and countrymen, it is not so, for the powers of the sword are in the hands of the yeomanry of America from sixteen to sixty. The militia of these free commonwealths, entitled and accustomed to their arms, when compared with any possible army, must be tremendous and irresistible. Who are the militia? Are they not ourselves? Is it feared, then, that we shall turn our arms each man against his own bosom. Congress has no power to disarm the militia. Their swords and every terrible implement of the soldier are the birthright of Americans."

"The unlimited power of the sword is not in the hands of either the federal or state governments but where, I trust in God, it will always remain, in the hands of the people."

"Whereas civil rulers, not having their duty to the people duly before them, may attempt to tyrannize, and as the military forces which must be occasionally raised to defend our country, might pervert their power to the injury of their fellow citizens, the people are confirmed by the article in their right to keep and bear their private arms."

"The militia, who are in fact the effective part of the people at large, will render many troops quite unnecessary. They will form a powerful check upon the regular troops, and will generally be sufficient to over-awe them."

"There is no moral argument that justifies using the coercive powers of government to force one person to bear the expense of taking care of another. If that person is too resolute in his refusal to do so, what is the case for imposing fines, imprisonment or death? You say, "Death! Aren't you exaggerating, Williams?" Say he tells the agents of Congress that he'll pay his share of the constitutionally mandated functions of government but refuse to pay the health costs of a sick obese person or a cyclist who becomes a vegetable, what do you think the likely course of events will be? First, he'd be threatened with fines, imprisonment or property confiscation. Refusal to give in to these government sanctions would ultimately lead to his being shot by the agents of Congress."

"If FDA officials err on the side of under-caution in approving an unsafe drug, they are attacked by the media and patient groups, and investigated by Congress. Their victims, sick and dead people, are highly visible. If FDA officials err on the side of over-caution, keeping a safe and effective drug off the market, who's to know? The victims are invisible. For example, neither the Americans who get sick or die from meningitis C this year, nor their loved ones, will know that their illness or death could have been prevented had it not been for errors by FDA officials. It's a no-brainer to figure out which error FDA officials prefer to make."

"In 302, the Roman emperor Diocletian commanded "there should be cheapness," declaring, "Unprincipled greed appears wherever our armies … march. … Our law shall fix a measure and a limit to this greed." The predictable result of Diocletian's food price controls were black markets, hunger and food confiscation by his soldiers. Despite the disastrous history of price controls, politicians never manage to resist tampering with prices -- that's not a flattering observation of their learning abilities."

"I personally believe that economics is fun and valuable. People who say they found it a nightmare in college just didn't have a good teacher-professor. I became a good teacher-professor as a result of tenacious mentors during my graduate study at UCLA. Professor Armen Alchian, a very distinguished economist, used to give me a hard time in class. But one day, we were having a friendly chat during our department's weekly faculty/graduate student coffee hour, and he said, "Williams, the true test of whether someone understands his subject is whether he can explain it to someone who doesn't know a darn thing about it." That's a challenge I love: making economics fun and understandable."

"We're all grossly ignorant about most things that we use and encounter in our daily lives, but each of us is knowledgeable about tiny, relatively inconsequential things. For example, a baker might be the best baker in town, but he's grossly ignorant about virtually all the inputs that allow him to be the best baker. What is he likely to know about what goes into the processing of the natural gas that fuels his oven? For that matter, what does he know about oven manufacture? Then, there are all the ingredients he uses -- flour, sugar, yeast, vanilla and milk. Is he likely to know how to grow wheat and sugar and how to protect the crop from diseases and pests? What is he likely to know about vanilla extraction and yeast production? Just as important is the question of how all the people who produce and deliver all these items know what he needs and when he needs them. There are literally millions of people cooperating with one another to ensure that the baker has all the necessary inputs. It's the miracle of the market and prices that gets the job done so efficiently. What's called the market is simply a collection of millions upon millions of independent decision makers not only in America but around the world. Who or what coordinates the activities all of these people? Rest assuredly it's not a bakery czar."

"At the beginning of each semester, I tell students that my economic theory course will deal with positive, non-normative economic theory. I also tell them that if they hear me making a normative statement without first saying, "In my opinion," they are to raise their hands and say, "Professor Williams, we didn't take this class to be indoctrinated with your personal opinions passed off as economic theory; that's academic dishonesty." I also tell them that as soon as they hear me say, "In my opinion," they can stop taking notes because my opinion is irrelevant to the subject of the class -- economic theory. Another part of this particular lecture to my students is that by no means do I suggest that they purge their vocabulary of normative or subjective statements. Such statements are useful tools for tricking people into doing what you want them to do. You tell your father that you need a cell phone and he should buy you one. There's no evidence whatsoever that you need a cell phone. After all, George Washington managed to lead our nation to defeat Great Britain, the mightiest nation on Earth at the time, without owning a cell phone."

""You can never be too safe." Yes, you can. How many of us bother to inspect the hydraulic brake lines in our cars before we start the engine and head off to work? Doing so would be safer than simply assuming that the lines were intact and driving off. After all, prior to launching a space vehicle, the people at NASA make no similar assumptions. They go through a countdown of all systems, taking nothing for granted. Erring on the side of over-caution is costly, and so is erring on the side of under-caution, though for a given choice, one might be costlier than the other."

"There are several methods of conflict resolution. First, there's the market mechanism -- let the highest bidder be the one who owns and decides how the land will be used. Then, there's government fiat, where the government dictates who gets to use the land for what purpose. Gifts might be the way where an owner arbitrarily chooses a recipient. Finally, violence is a way to resolve the question of who has the use rights to the coastline -- let people get weapons and physically fight it out. At this juncture, some might piously say, "Violence is no way to resolve conflict!" The heck it isn't. The decision of who had the right to use most of the Earth's surface was settled through violence (wars). Who has the right to the income I earn is partially settled through the threats of violence. In fact, violence is such an effective means of resolving conflict that most governments want a monopoly on its use."

"there's the claim that this or that price is unreasonable. I used to have conversations about this claim with Mrs. Williams early on in our 44-year marriage. She'd return from shopping complaining that stores were charging unreasonable prices. Having aired her complaints, she'd ask me to go out and unload a car trunk loaded with groceries and other items. Having completed the chore, I'd resume our conversation, saying, "Honey, I thought you said the prices were unreasonable. Are you an unreasonable person? Only an unreasonable person would pay unreasonable prices." The long and short of it is that the conversation never went over well, and we both ceased discussions of reasonable or unreasonable prices. The point is that whatever price a transaction is transacted at represents a meeting of the mind of both buyer and seller. Both viewed themselves as being better off than the next alternative -- not making the transaction. That's not to say that the seller wouldn't have found a higher price more pleasing or the buyer wouldn't have been pleased with a lower price."

""It's wrong to profit from the misfortune of others." I ask my students whether they'd support a law against doing so. But I caution them with some examples. An orthopedist profits from your misfortune of having broken your leg skiing. When there's news of a pending ice storm, I doubt whether it saddens the hearts of those in the collision repair business. I also tell my students that I profit from their misfortune — their ignorance of economic theory."

"How does something immoral, when done privately, become moral when it is done collectively? Furthermore, does legality establish morality? Slavery was legal; apartheid is legal; Stalinist, Nazi, and Maoist purges were legal. Clearly, the fact of legality does not justify these crimes. Legality, alone, cannot be the talisman of moral people."

"But let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn belongs to you - and why?"

"We should view our government the way we should a friendly, cuddly lion. Just because he’s friendly and cuddly shouldn’t blind us to the fact that he’s still got teeth and claws."

"Say that you hire me to mow your lawn and afterwards you pay me $30. What I have earned might be thought of as certificates of performance, i.e. proof that I served you. With these certificates of performance in hand, I visit my grocer and demand 3 pounds of steak and a six-pack of beer that my fellow man produced. In effect, the grocer asks, "Williams, you're demanding that your fellow man, as ranchers and brewers, serve you; what did you do in turn to serve your fellow man?" I say, "I mowed my fellow man’s lawn." The grocer says, "Prove it!" That's when I hand over my certificates of performance -- the $30."

"Three-fifths to two-thirds of the federal budget consists of taking property from one American and giving it to another. Were a private person to do the same thing, we'd call it theft. When government does it, we euphemistically call it income redistribution, but that's exactly what thieves do -- redistribute income. Income redistribution not only betrays the founders' vision, it's a sin in the eyes of God."

"This is why socialism is evil. It employs evil means, coercion or taking the property of one person, to accomplish good ends, helping one's fellow man. Helping one's fellow man in need, by reaching into one's own pockets, is a laudable and praiseworthy goal. Doing the same through coercion and reaching into another's pockets has no redeeming features and is worthy of condemnation."

"But I think that the Democrats have been very successful in portraying themselves as the caring people, when if you look at the effects of the Democratic Party on Black people I think it’s horrible, it’s horrendous. For example, if you ask the question, “In what cities do Blacks live under the worst conditions—in terms of crime, rotten education, poor services,”—these are the very cities that have been run for decades by Democrats. I don’t care whether you are talking about Philadelphia, Washington D.C., Chicago, or Detroit, it’s all been Democrats. And then on top of it, it’s been Black Democrats! That is, again, if you look at where Blacks live under the most horrible conditions, its in cities where a Black is the mayor, a Black is the chief of police and a Black is the superintendent of schools."

"In August 2009, MSNBC's Contessa Brewer was discussing a tea party rally in Arizona, where it's legal to carry an unconcealed weapon. She said: "A man at a pro-health care rally... wore a semiautomatic assault rifle on his shoulder and a pistol on his hip... There are questions about whether this has racial overtones, I mean, here you have a man of color in the presidency and white people showing up with guns." All that her audience was shown were a rifle and pistol strapped to a man's back. MSNBC concealed the fact that the armed man was black and did not show the interview he gave to the reporter. Brewer knowingly deceived her audience because an armed black man didn't fit the racial narrative."

"Paul Laurence Dunbar High School was established in 1870 in Washington, D.C., as the nation's first black public high school. From 1870 to 1955, most of its graduates went off to college, earning degrees from Harvard, Princeton, Williams, Wesleyan and others. As early as 1899, Dunbar students scored higher on citywide tests than students at any of the district's [three] white [high] schools. Its attendance and tardiness records were generally better than those of white schools. During this era of high achievement, there was no school violence. It wasn't racially integrated. It didn't have a big budget. It didn't even have a lunchroom or all those other things that today's education establishment says are necessary for black academic excellence."

"First, weaken the black family, but don't blame it on individual choices. You have to preach that today's weak black family is a legacy of slavery, Jim Crow and racism. The truth is that black female-headed households were just 18 percent of households in 1950, as opposed to about 68 percent today. In fact, from 1890 to 1940, the black marriage rate was slightly higher than that of whites... In New York City, in 1925, 85 percent of black households were two-parent households... Disgustingly, black politicians, civil rights leaders, liberals and the president are talking nonsense about "having a conversation about race." That's beyond useless. Tell me how a conversation with white people is going to stop black predators from preying on blacks. How is such a conversation going to eliminate the 75 percent illegitimacy rate? What will such a conversation do about the breakdown of the black family... Only black people can solve our problems."

"Socialism promises a utopia that sounds good, but those promises are never realized. It most often results in massive human suffering. Capitalism fails miserably when compared with a heaven or utopia promised by socialism. But any earthly system is going to come up short in such a comparison. Mankind must make choices among alternative economic systems that actually exist. It turns out that for the common man capitalism, with all of its alleged shortcomings, is superior to any system yet devised to deal with his everyday needs and desires. By most any measure of human well-being, people who live in countries toward the capitalistic end of the economic spectrum are far better off than their fellow men who live in countries toward the socialist end."

"Capitalism, or what some call free markets, is relatively new in human history. Prior to capitalism, the way individuals amassed great wealth was by looting, plundering and enslaving their fellow man. With the rise of capitalism, it became possible to amass great wealth by serving and pleasing your fellow man. Capitalists seek to discover what people want and produce and market it as efficiently as possible as a means to profit. A historical example of this process would be John D. Rockefeller, whose successful marketing drove kerosene prices down from 58 cents a gallon in 1865 to 7 cents in 1900. Henry Ford became rich by producing cars for the common man. Both Ford's and Rockefeller's personal benefits pale in comparison to the benefits received by the common man who had cheaper kerosene and cheaper and more convenient transportation. There are literally thousands of examples of how mankind's life has been made better by those in the pursuit of profits. Here's my question to you: Are the people who, by their actions, created unprecedented convenience, longer life expectancy and a more pleasant life for the ordinary person — and became wealthy in the process — deserving of all the scorn and ridicule heaped upon them by intellectuals and political hustlers today?"

"What human motivation is responsible for getting the most wonderful things done? I would say greed. When I use the term greed, I do not mean cheating, stealing, fraud and other acts of dishonesty, I mean people seeking to get the most for themselves. One might be tempted to use “enlightened self interest” but I like greed better. Unfortunately, many people are naive enough to believe that it is compassion, concern, and "feeling another's pain" that's the superior human motivation. As such we fall easy prey to charlatans, quacks and hustlers."

"Since it's not considered polite, and surely not politically-correct to come out and actually say that greed gets wonderful things done, let me go through a few of the millions of examples of the benefits of people trying to get more for themselves. There's probably widespread agreement that it's a wonderful thing that most of us own cars. Is there anyone who believes that the reason we have cars is because Detroit assembly line workers care about us? It's also wonderful that Texas cattle ranchers make the sacrifices of time and effort caring for steer so that New Yorkers can have beef on their supermarket shelves. It is also wonderful that Idaho potato growers arise early to do back-breaking work in the hot sun to ensure that New Yorkers also have potatoes on their supermarket shelves. Again, is there anyone who believes that ranchers and potato growers, who make these sacrifices, do so because they care about New Yorkers? They might hate New Yorkers. New Yorkers have beef and potatoes because Texas cattle ranchers and Idaho potato growers care about themselves and they want more for themselves. How much steak and potatoes would New Yorkers have if it all depended on human love and kindness? I would feel sorry for New Yorkers. Thinking this way bothers some people because they are more concerned with the motives behind a set of actions rather than the results. This is what Adam Smith, the father of economics, meant in The Wealth of Nations when he said, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interests.""

"Market capitalism is the best thing that ever happened to the common man. The rich have always had access to entertainment, often in the comfort of their palaces and mansions. The rich have never had to experience the drudgery of having to beat out carpets, iron their clothing or slave over a hot stove all day in order to have a decent dinner. They could afford to hire people. Capitalism's mass production and marketing have made radios and televisions, vacuum cleaners, wash-and-wear clothing and microwave ovens available and well within the means of the common man; thus, sparing him of the boredom and drudgery of the past. Today, the common man has the power to enjoy much (and more) of what only the rich could afford yesteryear."

"Most people agree that slavery is immoral. But what makes it so? Slavery denies a person the right to use his property (body) and the fruits of his labor the way he sees fit. Slavery forcibly uses one person to serve the purposes of another. Tragically, most Americans, including blacks, whose ancestors have suffered from gross property right violations, think it quite proper that one person be forcibly used to serve the purposes of another."

"Despite the miracles of capitalism, it doesn't do well in popularity polls. One of the reasons is that capitalism is always evaluated against the non-existent, non-realizable utopias of socialism or communism. Any earthly system, when compared to a Utopia will pale in comparison. But for the ordinary person, capitalism, with all of its warts, is superior to any system yet devised to deal with our everyday needs and desires."

"A resource allocation method that requires that I serve my fellow man in order to have a claim on what he produces is far more moral than government resource allocation. The government can offer, justifying it with one reason or another, "Williams, you don't have to serve your fellow man in order to have a claim on what he produces. Through the tax code, we'll take what he produces and give it to you." Of course, if I were to privately take what my fellow man produced, we'd call it theft. The only difference is when the government does it, that theft is legal but nonetheless theft — the taking of one person's rightful property to give to another."

"The Rev. Jesse Jackson once said, “There is nothing more painful for me at this stage in my life than to walk down the street and hear footsteps and start thinking about robbery—then look around and see somebody white and feel relieved."

"French economist/philosopher Frederic Bastiat (1801–50) gave a test for immoral government acts: “See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."

"Philosopher Johann Wolfgang von Goethe explained that “no one is as hopelessly enslaved as the person who thinks he’s free.” That’s becoming an apt description for Americans who are oblivious to—or ignorant of—the liberties we’ve lost."

"Believing that presidents have taxing and spending powers leaves Congress less politically accountable for our deepening economic quagmire. Of course, if you’re a congressman, not being held accountable is what you want."

"The 2000 election of George W. Bush as president gave Republicans what the Democrats have now, total control of the legislative and executive branches of government. When Bush came to office, federal spending was $1.788 trillion. When he left office, federal spending was $2.982 trillion."

"Do-gooders fail to realize that most good is not done in the name of good but done in the name of self-interest."

"Our founders, in the words of Thomas Paine, recognized that, “Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one."

"What our nation needs is a separation of “business and state” as it has a separation of “church and state.” That would mean crony capitalism and crony socialism could not survive."

"It’s government people, not rich people, who have the power to coerce and make our lives miserable. Coercive power goes a long way toward explaining political corruption."

"A national debt, if it is not excessive, will be to us a national blessing."

"I feel the deepest affliction at the news we have just received at the loss of our dear and inestimable friend Laurens. His career of virtue is at end. How strangely are human affairs conducted, that so many excellent qualities could not ensure a more happy fate! The world will feel the loss of a man who has left few like him behind; and America, of a citizen whose heart realized that patriotism of which others only talk. I feel the loss of a friend whom I truly and most tenderly loved, and one of a very small number."

"It has been observed that a pure democracy if it were practicable would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity."

"Here, sir, the people govern; here they act by their immediate representatives."

"Constitutions should consist only of general provisions; the reason is that they must necessarily be permanent, and that they cannot calculate for the possible change of things."

"Unless your government is respectable, foreigners will invade your rights; and to maintain tranquillity you must be respectable; even to observe neutrality you must have a strong government."

"Every power vested in a government is in its nature sovereign, and includes by force of the term a right to employ all the means requisite...to the attainment of the ends of such power."

"If the end be clearly comprehended within any of the specified powers, and if the measure have an obvious relation to that end, and is not forbidden by any particular provision of the Constitution, it may safely be deemed to come within the compass of the national authority."

"If it be asked, What is the most sacred duty and the greatest source of our security in a Republic? The answer would be, An inviolable respect for the Constitution and Laws — the first growing out of the last... A sacred respect for the constitutional law is the vital principle, the sustaining energy of a free government."

"And it is long since I have learned to hold popular opinion of no value."

"In no part of the constitution is more wisdom to be found than in the clause which confides the question of war or peace to the legislature, and not to the executive department. Beside the objection to such a mixture of heterogeneous powers: the trust and the temptation would be too great for any one man: not such as nature may offer as the prodigy of many centuries, but such as may be expected in the ordinary successions of magistracy. War is in fact the true nurse of executive aggrandizement. In war a physical force is to be created, and it is the executive will which is to direct it. In war the public treasures are to be unlocked, and it is the executive hand which is to dispense them. In war the honors and emoluments of office are to be multiplied; and it is the executive patronage under which they are to be enjoyed. It is in war, finally, that laurels are to be gathered, and it is the executive brow they are to encircle. The strongest passions, and most dangerous weaknesses of the human breast; ambition, avarice, vanity, the honorable or venial love of fame, are all in conspiracy against the desire and duty of peace."

"The passions of a revolution are apt to hurry even good men into excesses."

"A nation which can prefer disgrace to danger is prepared for a master, and deserves one."

"I have thought it my duty to exhibit things as they are, not as they ought to be."

"Men are rather reasoning than reasonable animals, for the most part governed by the impulse of passion."

"A garden, you know, is a very usual refuge of a disappointed politician. Accordingly, I have purchased a few acres about nine miles from town, have built a house, and am cultivating a garden."

"I have resolved, if our interview is conducted in the usual manner, and it pleases God to give me the opportunity, to reserve and throw away my first fire, and I have thoughts even of reserving my second fire."

"It is a maxim deeply ingrafted in that dark system, that no character, however upright, is a match for constantly reiterated attacks, however false."

"We must make the best of those ills which cannot be avoided."

"Every day proves to me more and more that this American world was not made for me."

"When we read in the valuable production of those great Oriental scholars ... those of a Jones, a Wilkings, a Colebrooke, or a Halhed, - we uniformly discover in the Hindus a nation, whose polished manners are the result of a mild disposition and an extensive benevolence."

"If they break this Union, they will break my heart."

"The origin of all civil government, justly established, must be a voluntary compact, between the rulers and the ruled; and must be liable to such limitations, as are necessary for the security of the absolute rights of the latter; for what original title can any man or set of men have, to govern others, except their own consent? To usurp dominion over a people, in their own despite, or to grasp at a more extensive power than they are willing to entrust, is to violate that law of nature, which gives every man a right to his personal liberty; and can, therefore, confer no obligation to obedience."

"The right of parliament to legislate for us cannot be accounted for upon any reasonable grounds. The constitution of Great Britain is very properly called a limited monarchy, the people having reserved to themselves a share in the legislature, as a check upon the regal authority, to prevent its degenerating into despotism and tyranny. The very aim and intention of the democratical part, or the house of commons, is to secure the rights of the people. Its very being depends upon those rights. Its whole power is derived from them, and must be terminated by them."

"The fundamental source of all your errors, sophisms, and false reasonings, is a total ignorance of the natural rights of mankind. Were you once to become acquainted with these, you could never entertain a thought, that all men are not, by nature, entitled to a parity of privileges. You would be convinced, that natural liberty is a gift of the beneficent Creator, to the whole human race; and that civil liberty is founded in that; and cannot be wrested from any people, without the most manifest violation of justice. Civil liberty is only natural liberty, modified and secured by the sanctions of civil society. It is not a thing, in its own nature, precarious and dependent on human will and caprice; but it is conformable to the constitution of man, as well as necessary to the well-being of society."

"The sacred rights of mankind are not to be rummaged for among old parchments or musty records. They are written, as with a sunbeam, in the whole volume of human nature, by the hand of the divinity itself; and can never be erased or obscured by mortal power."

"There is a certain enthusiasm in liberty, that makes human nature rise above itself in acts of bravery and heroism."

"I believe the British government forms the best model the world ever produced, and such has been its progress in the minds of the many, that this truth gradually gains ground. This government has for its object public strength and individual security. It is said with us to be unattainable. All communities divide themselves into the few and the many. The first are the rich and well born, the other the mass of the people. The voice of the people has been said to be the voice of God; and however generally this maxim has been quoted and believed, it is not true in fact. The people are turbulent and changing; they seldom judge or determine right. Give therefore to the first class a distinct, permanent share in the government. They will check the unsteadiness of the second, and as they cannot receive any advantage by a change, they therefore will ever maintain good government. Can a democratic assembly, who annually revolve in the mass of the people, be supposed steadily to pursue the public good?"

"We are now forming a republican government. Real liberty is neither found in despotism or the extremes of democracy, but in moderate governments. Those who mean to form a solid republican government, ought to proceed to the confinges of another government. As long as offices are open to all men, and no constitutional rank is established, it is pure republicanism. But if we incline too much to democracy, we shall soon shoot into a monarchy."

"As long as offices are open to all men and no constitutional rank is established, it is pure republicanism."

"It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force."

"In politics, as in religion, it is equally absurd to aim at making proselytes by fire and sword. Heresies in either can rarely be cured by persecution."

"To look for a continuation of harmony between a number of independent, unconnected sovereignties in the same neighborhood, would be to disregard the uniform course of human events, and to set at defiance the accumulated experience of ages."

"The rights of neutrality will only be respected, when they are defended by an adequate power. A nation, despicable by its weakness, forfeits even the privilege of being neutral."

"Let Americans disdain to be the instruments of European greatness! Let the thirteen States, bound together in a strict and indissoluble Union, concur in erecting one great American system, superior to the control of all transatlantic force or influence, and able to dictate the terms of the connection between the old and the new world!"

"Government implies the power of making laws. It is essential to the idea of a law, that it be attended with a sanction; or, in other words, a penalty or punishment for disobedience."

"Why has government been instituted at all? Because the passions of men will not conform to the dictates of reason and justice, without constraint."

"Has it been found that bodies of men act with more rectitude or greater disinterestedness than individuals? The contrary of this has been inferred by all accurate observers of the conduct of mankind; and the inference is founded upon obvious reasons. Regard to reputation has a less active influence, when the infamy of a bad action is to be divided among a number than when it is to fall singly upon one. A spirit of faction, which is apt to mingle its poison in the deliberations of all bodies of men, will often hurry the persons of whom they are composed into improprieties and excesses, for which they would blush in a private capacity."

"When the sword is once drawn, the passions of men observe no bounds of moderation. The suggestions of wounded pride, the instigations of irritated resentment, would be apt to carry the States against which the arms of the Union were exerted, to any extremes necessary to avenge the affront or to avoid the disgrace of submission. The first war of this kind would probably terminate in a dissolution of the Union."

"The fabric of American Empire ought to rest on the solid basis of THE CONSENT OF THE PEOPLE. The streams of National power ought to flow immediately from that pure original fountain of all legitimate authority."

"If the representatives of the people betray their constituents, there is then no recourse left but in the exertion of that original right of self-defense which is paramount to all positive forms of government, and which against the usurpations of the national rulers may be exerted with infinitely better prospect of success than against those of the rulers of an individual State. In a single State, if the persons entrusted with supreme power become usurpers, the different parcels, subdivisions, or districts of which it consists, having no distinct government in each, can take no regular measures for defense. The citizens must rush tumultuously to arms, without concert, without system, without resource; except in their courage and despair."

"A tolerable expertness in military movements is a business that requires time and practice. It is not a day, or even a week, that will suffice for the attainment of it. To oblige the great body of the yeomanry, and of the other classes of the citizens, to be under arms for the purpose of going through military exercises and evolutions, as often as might be necessary to acquire the degree of perfection which would entitle them to the character of a well-regulated militia, would be a real grievance to the people, and a serious public inconvenience and loss. It would form an annual deduction from the productive labor of the country, to an amount which, calculating upon the present numbers of the people, would not fall far short of the whole expense of the civil establishments of all the States. To attempt a thing which would abridge the mass of labor and industry to so considerable an extent, would be unwise: and the experiment, if made, could not succeed, because it would not long be endured. Little more can reasonably be aimed at, with respect to the people at large, than to have them properly armed and equipped; and in order to see that this be not neglected, it will be necessary to assemble them once or twice in the course of a year."

"If circumstances should at any time oblige the government to form an army of any magnitude that army can never be formidable to the liberties of the people while there is a large body of citizens, little, if at all, inferior to them in discipline and the use of arms, who stand ready to defend their own rights and those of their fellow-citizens. This appears to me the only substitute that can be devised for a standing army, and the best possible security against it, if it should exist."

"In the usual progress of things, the necessities of a nation in every stage of its existence will be found at least equal to its resources."

"If the federal government should overpass the just bounds of its authority and make a tyrannical use of its powers, the people, whose creature it is, must appeal to the standard they have formed, and take such measures to redress the injury done to the Constitution as the exigency may suggest and prudence justify."

"If a number of political societies enter into a larger political society, the laws which the latter may enact, pursuant to the powers intrusted to it by its constitution, must necessarily be supreme over those societies and the individuals of whom they are composed.... But it will not follow from this doctrine that acts of the larger society which are not pursuant to its constitutional powers, but which are invasions of the residuary authorities of the smaller societies, will become the supreme law of the land. These will be merely acts of usurpation, and will deserve to be treated as such."

"Let us recollect that peace or war will not always be left to our option; that however moderate or unambitious we may be, we cannot count upon the moderation, or hope to extinguish the ambition of others."

"Justice is the end of government. It is the end of civil society. It ever has been, and ever will be, pursued, until it be obtained, or until liberty be lost in the pursuit. In a society, under the forms of which the stronger faction can readily unite and oppress the weaker, anarchy may as truly be said to reign, as in a state of nature where the weaker individual is not secured against the violence of the stronger: And as in the latter state even the stronger individuals are prompted by the uncertainty of their condition, to submit to a government which may protect the weak, as well as themselves: so in the former state, will the more powerful factions be gradually induced by a like motive, to wish for a government which will protect all parties, the weaker as well as the more powerful."

"The mode of appointment of the Chief Magistrate of the United States is almost the only part of the system, of any consequence, which has escaped without severe censure, or which has received the slightest mark of approbation from its opponents. The most plausible of these, who has appeared in print, has even deigned to admit that the election of the President is pretty well guarded.1 I venture somewhat further, and hesitate not to affirm, that if the manner of it be not perfect, it is at least excellent. It unites in an eminent degree all the advantages, the union of which was to be wished for."

"The President, and government, will only control the militia when a part of them is in the actual service of the federal government, else, they are independent and not under the command of the president or the government. The states would control the militia, only when called out into the service of the state, and then the governor would be commander in chief where enumerated in the respective state constitution."

"There is an idea, which is not without its advocates, that a vigorous Executive is inconsistent with the genius of republican government. The enlightened well-wishers to this species of government must at least hope that the supposition is destitute of foundation; since they can never admit its truth, without at the same time admitting the condemnation of their own principles. Energy in the Executive is a leading character in the definition of good government. It is essential to the protection of the community against foreign attacks; it is not less essential to the steady administration of the laws; to the protection of property against those irregular and high-handed combinations which sometimes interrupt the ordinary course of justice; to the security of liberty against the enterprises and assaults of ambition, of faction, and of anarchy."

"Men often oppose a thing, merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike. But if they have been consulted, and have happened to disapprove, opposition then becomes, in their estimation, an indispensable duty of self-love. They seem to think themselves bound in honor, and by all the motives of personal infallibility, to defeat the success of what has been resolved upon contrary to their sentiments. Men of upright, benevolent tempers have too many opportunities of remarking, with horror, to what desperate lengths this disposition is sometimes carried, and how often the great interests of society are sacrificed to the vanity, to the conceit, and to the obstinacy of individuals, who have credit enough to make their passions and their caprices interesting to mankind. Perhaps the question now before the public may, in its consequences, afford melancholy proofs of the effects of this despicable frailty, or rather detestable vice, in the human character."

"A council to a magistrate, who is himself responsible for what he does, are generally nothing better than a clog upon his good intentions, are often the instruments and accomplices of his bad and are almost always a cloak to his faults."

"When occasions present themselves, in which the interests of the people are at variance with their inclinations, it is the duty of the persons whom they have appointed to be the guardians of those interests, to withstand the temporary delusion, in order to give them time and opportunity for more cool and sedate reflection."

"The Courts must declare the sense of the law; and if they should be disposed to exercise will instead of judgement; the consequences would be the substitution of their pleasure for that of the legislative body."

"There are men who could neither be distressed nor won into a sacrifice of their duty; but this stern virtue is the growth of few soils; and in the main it will be found that a power over a man's support is a power over his will. If it were necessary to confirm so plain a truth by facts, examples would not be wanting, even in this country, of the intimidation or seduction of the Executive by the terrors or allurements of the pecuniary arrangements of the legislative body."

"An avaricious man might be tempted to betray the interests of the State to the acquisition of wealth. An ambitious man might make his own aggrandizement, by the aid of a foreign power, the price of his treachery to his constituents. The history of human conduct does not warrant that exalted opinion of human virtue, which would make it wise in a Nation to commit interests of so delicate and momentous a kind, as those which concern its intercourse with the rest of the world, to the sole disposal of a Magistrate created and circumstanced as would be a President of the United States."

"The complete independence of the Courts of justice is peculiarly essential in a limited Constitution. By a limited Constitution, I understand one which contains certain specified exceptions to the Legislative authority; such, for instance, as that it shall pass no bills of attainder, no ex post facto laws, and the like. Limitations of this kind can be preserved in practice no other way than through the medium of the Courts of justice; whose duty it must be to declare all Acts contrary to the manifest tenor of the Constitution void. Without this, all the reservations of particular rights or privileges would amount to nothing."

"There is no position which depends on clearer principles, than that every act of a delegated authority, contrary to the tenor of the commission under which it is exercised, is void. No Legislative act, therefore, contrary to the Constitution, can be valid. To deny this, would be to affirm, that the deputy is greater than his principal; that the servant is above his master; that the Representatives of the People are superior to the People themselves; that men acting by virtue of powers, may do not only what their powers do not authorize, but what they forbid. If it be said that the Legislative body are themselves the constitutional judges of their own powers, and that the construction they put upon them is conclusive upon the other departments, it may be answered, that this cannot be the natural presumption, where it is not to be collected from any particular provisions in the Constitution. It is not otherwise to be supposed, that the Constitution could intend to enable the Representatives of the People to substitute their will to that of their constituents. It is far more rational to suppose, that the Courts were designed to be an intermediate body between the People and the Legislature, in order, among other things, to keep the latter within the limits assigned to their authority. The interpretation of the laws is the proper and peculiar province of the Courts. A Constitution is, in fact, and must be regarded by the Judges, as a fundamental law. It therefore belongs to them to ascertain its meaning, as well as the meaning of any particular Act proceeding from the Legislative body. If there should happen to be an irreconcilable variance between the two, that which has the superior obligation and validity ought, of course, to be preferred; or in other words, the Constitution ought to be preferred to the statute, the intention of the People to the intention of their agents. Nor does this conclusion by any means suppose a superiority of the Judicial to the Legislative power. It only supposes that the power of the People is superior to both; and that where the will of the Legislature, declared in its statutes, stands in opposition to that of the People, declared in the Constitution, the Judges ought to be governed by the latter rather than the former. They ought to regulate their decisions by the fundamental laws, rather than by those which are not fundamental. [...] whenever a particular statute contravenes the Constitution, it will be the duty of the Judicial tribunals to adhere to the latter and disregard the former."

"It can be of no weight to say, that the courts, on the pretence of a repugnancy, may substitute their own pleasure to the constitutional intentions of the legislature. This might as well happen in the case of two contradictory statutes; or it might as well happen in every adjudication upon any single statute. The courts must declare the sense of the law; and if they should be disposed to exercise instead of , the consequence would equally be the substitution of their pleasure to that of the legislative body. The observation, if it proved any thing, would prove that there ought to be no judges distinct from that body."

"If then the Courts of justice are to be considered as the bulwarks of a limited Constitution, against Legislative encroachments, this consideration will afford a strong argument for the permanent tenure of Judicial offices, since nothing will contribute so much as this to that independent spirit in the Judges, which must be essential to the faithful performance of so arduous a duty. This independence of the Judges is equally requisite to guard the Constitution and the rights of individuals, from the effects of those ill humors, which the arts of designing men, or the influence of particular conjunctures, sometimes disseminate among the People themselves, and which, though they speedily give place to better information, and more deliberate reflection, have a tendency, in the mean time, to occasion dangerous innovations in the Government, and serious oppressions of the minor party in the community."

"Until the People have, by some solemn and authoritative act, annulled or changed the established form, it is binding upon themselves collectively, as well as individually; and no presumption, or even knowledge of their sentiments, can warrant their Representatives in a departure from it, prior to such an act. But it is easy to see, that it would require an uncommon portion of fortitude in the Judges to do their duty as faithful guardians of the Constitution, where Legislative invasions of it had been instigated by the major voice of the community. But it is not with a view to infractions of the Constitution only, that the independence of the Judges may be an essential safeguard against the effects of occasional ill humors in the society. These sometimes extend no farther than to the injury of the private rights of particular classes of citizens, by unjust and partial laws. Here also the firmness of the Judicial magistracy is of vast importance in mitigating the severity, and confining the operation of such laws. It not only serves to moderate the immediate mischiefs of those which may have been passed, but it operates as a check upon the Legislative body in passing them; who, perceiving that obstacles to the success of iniquitous intention are to be expected from the scruples of the Courts, are in a manner compelled, by the very motives of the injustice they meditate, to qualify their attempts."

"That inflexible and uniform adherence to the rights of the Constitution, and of individuals, which we perceive to be indispensable in the Courts of justice, can certainly not be expected from Judges who hold their offices by a temporary commission. Periodical appointments, however regulated, or by whomsoever made, would, in some way or other, be fatal to their necessary independence. If the power of making them was committed either to the Executive or Legislature, there would be danger of an improper complaisance to the branch which possessed it; if to both, there would be an unwillingness to hazard the displeasure of either; if to the People, or to persons chosen by them for the special purpose, there would be too great a disposition to consult popularity, to justify a reliance that nothing would be consulted but the Constitution and the laws."

"There is yet a further and a weightier reason for the permanency of the Judicial offices, which is deducible from the nature of the qualifications they require. It has been frequently remarked, with great propriety, that a voluminous code of laws is one of the inconveniences necessarily connected with the advantages of a free Government. To avoid an arbitrary discretion in the Courts, it is indispensable that they should be bound down by strict rules and precedents, which serve to define and point out their duty in every particular case that comes before them; and it will readily be conceived from the variety of controversies which grow out of the folly and wickedness of mankind, that the records of those precedents must unavoidably swell to a very considerable bulk, and must demand long and laborious study to acquire a competent knowledge of them. Hence it is, that there can be but few men in the society, who will have sufficient skill in the laws to qualify them for the stations of Judges. And making the proper deductions for the ordinary depravity of human nature, the number must be still smaller of those who unite the requisite integrity with the requisite knowledge. These considerations apprize us, that the Government can have no great option between fit characters; and that a temporary duration in office, which would naturally discourage such characters from quitting a lucrative line of practice to accept a seat on the Bench, would have a tendency to throw the administration of justice into hands less able, and less well qualified, to conduct it with utility and dignity."

"In the general course of human nature, a power over a man's subsistence amounts to a power over his will."

"I go further, and affirm that bills of rights, in the sense and to the extent in which they are contended for, are not only unnecessary in the proposed Constitution, but would even be dangerous. They would contain various exceptions to powers not granted; and, on this very account, would afford a colorable pretext to claim more than were granted. For why declare that things shall not be done which there is no power to do?"

"The creation of crimes after the commission of the fact, or, in other words, the subjecting of men to punishment for things which, when they were done, were breaches of no law, and the practice of arbitrary imprisonments, have been, in all ages, the favorite and most formidable instruments of tyranny."

"The system, though it may not be perfect in every part, is, upon the whole, a good one; is the best that the present views and circumstances of the country will permit; and is such an one as promises every species of security which a reasonable people can desire."

"I should esteem it the extreme of imprudence to prolong the precarious state of our national affairs, and to expose the Union to the jeopardy of successive experiments, in the chimerical pursuit of a perfect plan. I never expect to see a perfect work from imperfect man. The result of the deliberations of all collective bodies must necessarily be a compound, as well of the errors and prejudices, as of the good sense and wisdom, of the individuals of whom they are composed."

"If there be anything in a remark often to be met with, namely that there is, in the genius of the people of this country, a peculiar aptitude for mechanic improvements, it would operate as a forcible reason for giving opportunities to the exercise of that species of talent, by the propagation of manufactures."

"To cherish and stimulate the activity of the human mind, by multiplying the objects of enterprise, is not among the least considerable of the expedients, by which the wealth of a nation may be promoted. Even things in themselves not positively advantageous, sometimes become so, by their tendency to provoke exertion. Every new scene, which is opened to the busy nature of man to rouse and exert itself, is the addition of a new energy to the general stock of effort."

"Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of a country more nearly upon a level with those in the neighborhood of the town. They are, upon that account, the greatest of all improvements. They encourage the cultivation of the remote, which must always be the most extensive circle of the country. They are advantageous to the town, by breaking down the monopoly of the country in its neighborhood. They are advantageous, even to that part of the country. Though they introduce some rival commodities into the old market, they open many new markets to its produce. Monopoly, besides, is a great enemy to good management, which can never be universally established, but in consequence of that free and universal competition, which forces every body to have recourse to it for the sake of self-defence. It is not more than fifty years ago that some of the counties in the neighborhood of London petitioned the parliament against the extension of the turnpike roads into the remoter counties. Those remoter counties, they pretended, from the cheapness of labor, would be able to sell their grass and corn cheaper in the London market than themselves, and they would thereby reduce their rents, and ruin their cultivation. Their rents, however, have risen, and their cultivation has been improved since that time."

"The expediency of encouraging manufactures in the United States, which was not long since deemed very questionable, appears at this time to be pretty generally admitted. (...) There still are, nevertheless, respectable patrons of opinions, unfriendly to the encouragement of manufactures. The following are, substantially, the arguments, by which these opinions are defended. (...) “In every country (say those who entertain them,) Agriculture is the most beneficial and productive object of human industry. (...) To endeavor by the extraordinary patronage of Government, to accelerate the growth of manufactures, is in fact, to endeavor, by force and art, to transfer the natural current of industry, from a more, to a less beneficial channel. Whatever has such a tendency must necessarily be unwise. Indeed it can hardly ever be wise in a government, to attempt to give a direction to the industry of its citizens. This under the quick-sighted guidance of private interest, will, if left to itself, infallibly find its own way to the most profitable employment; and it is by such employment, that the public prosperity will be most effectually promoted. To leave industry to itself, therefore, is, in almost every case, the soundest as well as the simplest policy.” This policy is not only recommended to the United States, by considerations which affect all nations, it is, in a manner, dictated to them by the imperious force of a very peculiar situation."

"It ought readily to be conceded, that the cultivation of the earth as the primary and most certain source of national supply, as the immediate and chief source of subsistence to man, (...) has intrinsically a strong claim to pre-eminence over every other kind of industry. But, that it has a title to any thing like an exclusive predilection, in any country, ought to be admitted with great caution. That it is even more productive than every other branch of Industry requires more evidence, than has yet been given in support of the position. That its real interests, precious and important as without the help of exaggeration, they truly are, will be advanced, rather than injured by the due encouragement of manufactures, may, it is believed, be satisfactorily demonstrated. And it is also believed that the expediency of such encouragement in a general view may be shewn to be recommended by the most cogent and persuasive motives of national policy."

"It has been maintained, that Agriculture is, not only, the most productive, but the only productive species of industry. The reality of this suggestion in either aspect, has, however, not been verified by any accurate detail of facts and calculations; and the general arguments, which are adduced to prove it, are rather subtil and paradoxical, than solid or convincing."

"It is very conceivable, that the labor of man alone laid out upon a work, requiring great skill and art to bring it to perfection, may be more productive, in value, than the labour of nature and man combined, when directed towards more simple operations and objects"

"The foregoing suggestions are not designed to inculcate an opinion that manufacturing industry is more productive than that of Agriculture. They are intended rather to shew that the reverse of this proposition is not ascertained; that the general arguments which are brought to establish it are not satisfactory; and consequently that a supposition of the superior productiveness of Tillage ought to be no obstacle to listening to any substantial inducements to the encouragement of manufactures."

"To affirm, that the labour of the Manufacturer is unproductive, because he consumes as much of the produce of land, as he adds value to the raw materials which he manufactures, is not better founded, than it would be to affirm, that the labour of the farmer, which furnishes materials to the manufacturer, is unproductive, because he consumes an equal value of manufactured articles. Each furnishes a certain portion of the produce of his labor to the other, and each destroys a correspondent portion of the produce of the labour of the other. In the mean time, the maintenance of two Citizens, instead of one, is going on; the State has two members instead of one; and they together consume twice the value of what is produced from the land."

"It is now proper to proceed a step further, and to enumerate the principal circumstances, from which it may be inferred, that manufacturing establishments not only occasion a positive augmentation of the Produce and Revenue of the Society, but that they contribute essentially to rendering them greater than they could possibly be, without such establishments. These circumstances are:"

"From these causes united, the mere separation of the occupation of the cultivator, from that of the Artificer, has the effect of augmenting the productive powers of labour, and with them, the total mass of the produce or revenue of a Country. In this single view of the subject, therefore, the utility of Artificers or Manufacturers, towards promoting an increase of productive industry, is apparent."

"The Cotton Mill invented in England, within the last twenty years, is a signal illustration of the general proposition, which has been just advanced. In consequence of it, all the different processes for spinning Cotton are performed by means of Machines, which are put in motion by water, and attended chiefly by women and Children; and by a smaller number of persons, in the whole, than are requisite in the ordinary mode of spinning. And it is an advantage of great moment that the operations of this mill continue with convenience, during the night, as well as through the day. The prodigious affect of such a Machine is easily conceived. To this invention is to be attributed essentially the immense progress, which has been so suddenly made in Great Britain in the various fabrics of Cotton."

"It merits particular observation, that the multiplication of manufactories not only furnishes a Market for those articles, which have been accustomed to be produced in abundance, in a country; but it likewise creates a demand for such as were either unknown or produced in inconsiderable quantities. The bowels as well as the surface of the earth are ransacked for articles which were before neglected. Animals, Plants and Minerals acquire an utility and value, which were before unexplored."

"The remaining objections to a particular encouragement of manufactures in the United States now require to be examined. One of these turns on the proposition, that Industry, if left to itself, will naturally find its way to the most useful and profitable employment: whence it is inferred, that manufactures without the aid of government will grow up as soon and as fast, as the natural state of things and the interest of the community may require. Against the solidity of this hypothesis, in the full latitude of the terms, very cogent reasons may be offered. These have relation to the strong influence of habit and the spirit of imitation, the fear of want of success in untried enterprises, the intrinsic difficulties incident to first essays towards a competition with those who have previously attained to perfection in the business to be attempted, the bounties, premiums, and other artificial encouragements, with which foreign nations second the exertions of their own Citizens in the branches, in which they are to be rivalled. Experience teaches, that men are often so much governed by what they are accustomed to see and practice, that the simplest and most obvious improvements, in the most ordinary occupations, are adopted with hesitation, reluctance and by slow gradations. The spontaneous transition to new pursuits, in a community long habituated to different ones, may be expected to be attended with proportionably greater difficulty. When former occupations ceased to yield a profit adequate to the subsistence of their followers, or when there was an absolute deficiency of employment in them, owing to the superabundance of hands, changes would ensue; but these changes would be likely to be more tardy than might consist with the interest either of individuals or of the Society. In many cases they would not happen, while a bare support could be ensured by an adherence to ancient courses; though a resort to a more profitable employment might be practicable. To produce the desirable changes, as early as may be expedient, may therefore require the incitement and patronage of government."

"When the Manufacturing Capitalist of Europe shall advert to the many important advantages, which have been intimated, in the Course of this report, he cannot but perceive very powerful inducements to a transfer of himself and his Capital to the United States."

"If the system of perfect liberty to industry and commerce were the prevailing system of nations, the arguments which dissuade a country in the predicament of the United States, from the zealous pursuits of manufactures would doubtless have great force. (...) But the system which has been mentioned, is far from characterising the general policy of Nations. The prevalent one has been regulated by an opposite spirit. The consequence of it is, that the United States are to a certain extent in the situation of a country precluded from foreign Commerce. They can indeed, without difficulty obtain from abroad the manufactured supplies, of which they are in want; but they experience numerous and very injurious impediments to the emission and vent of their own commodities. (...) In such a position of things, the United States cannot exchange with Europe on equal terms, and the want of reciprocity would render them the victim of a system, which should induce them to confine their views to Agriculture and refrain from Manufactures. A constant and increasing necessity, on their part, for the commodities of Europe, and only a partial and occasional demand for their own, in return, could not but expose them to a state of impoverishment, compared with the opulence to which their political and natural advantages authorise them to aspire."

"It is not uncommon to meet with an opinion that though the promoting of manufactures may be the interest of a part of the Union, it is contrary to that of another part. The Northern & Southern regions are sometimes represented as having adverse interests in this respect. Those are called Manufacturing, these Agricultural states; and a species of opposition is imagined to subsist between the Manufacturing and Agricultural interests. This idea of an opposition between those two interests is the common error of the early periods of every country, but experience gradually dissipates it. Indeed they are perceived so often to succour and to befriend each other, that they come at length to be considered as one. (...) Perhaps the superior steadiness of the demand of a domestic market for the surplus produce of the soil, is alone a convincing argument of its truth."

"The terms "general welfare" were doubtless intended to signify more than was expressed or imported in those which preceded; otherwise, numerous exigencies incident to the affairs of a nation would have been left without a provision. The phrase is as comprehensive as any that could have been used; because it was not fit that the constitutional authority of the Union to appropriate its revenues should have been restricted within narrower limits than the "general welfare;" and because this necessarily embraces a vast variety of particulars, which are susceptible neither of specification nor of definition."

"The manufactures of Iron are entitled to pre-eminent rank. None are more essential in their kinds, nor so extensive in their uses. They constitute, in whole, or in part, the implements or the materials, or both, of almost every useful occupation. Their instrumentality is every, where conspicuous. It is fortunate for the United States that they have peculiar advantages for deriving the full benefit of this most valuable material, and they have every motive to improve it with systematic care. It is to be found in various parts of the United States, in great abundance, and of almost every quality; and fuel, the chief instrument in manufacturing it, is both cheap and plenty."

"The propriety of stimulating by rewards the invention and introduction of useful improvements, is admitted without difficulty. But the success of attempts in this way, must evidently depend much on the manner of conducting them. It is probable that the placing of the dispensation of those rewards under some proper discretionary direction, where they may be accompanied by collateral expedients, will serve to give them the surest efficacy. It seems impracticable to apportion, by general rules, specific compensations for discoveries of unknown and disproportionate utility."

"In countries where there is great private wealth, much may be effected by the voluntary contributions of patriotic individuals; but in a community situated like that of the United States, the public purse must supply the deficiency of private resource. In what can it be so useful, as in prompting and improving the efforts of industry?"

"When a man unprincipled in private life desperate in his fortune, bold in his temper, possessed of considerable talents, having the advantage of military habits—despotic in his ordinary demeanour—known to have scoffed in private at the principles of liberty—when such a man is seen to mount the hobby horse of popularity—to join in the cry of danger to liberty—to take every opportunity of embarrassing the General Government & bringing it under suspicion—to flatter and fall in with all the non sense of the zealots of the day—It may justly be suspected that his object is to throw things into confusion that he may "ride the storm and direct the whirlwind.""

"The laws of certain states …give an ownership in the service of negroes as personal property…. But being men, by the laws of God and nature, they were capable of acquiring liberty—and when the captor in war …thought fit to give them liberty, the gift was not only valid, but irrevocable."

"For my own part, I sincerely esteem it a system which without the finger of God, never could have been suggested and agreed upon by such a diversity of interests."

"It was the tendency to infidelity he saw so rife that led him often to declare in the social circle his estimate of Christian truth. “I have examined carefully,” he said to a friend from his boyhood, “the evidence of the Christian religion; and, if I was sitting as a juror upon its authenticity, I should unhesitatingly give my verdict in its favor.” To another person, he observed, “I have studied it, and I can prove its truth as clearly as any proposition ever submitted to the mind of man.”"

"One gentleman, whose name I never heard, was an earnest “friend of the people,” and descanted with much enthusiasm upon the glorious future then opening upon this new-born nation, and predicted the perpetuity of our institutions, from the purity and intelligence of the people, their freedom from interest or prejudice, their enlightened love of liberty, &c, &c. Alexander Hamilton was among the guests; and, his patience being somewhat exhausted, he replied with much emphasis, striking his hand upon the table, “Your people, sir,—your people is a great beast!” I have this anecdote from a friend, to whom it was related by one who was a guest at the table. After-dinner utterances have little value, unless, perhaps, their very levity makes them good indicators of the wind. We do not know the qualifying words which may have followed, or the tone and manner of that which was, perhaps, in part or in the whole, a jest."

"Those who stand for nothing, fall for anything."

"He stands at the front rank of a generation never surpassed in history, but whose countrymen seem to have never duly recognized his splendid gifts."

"If Jefferson provided the essential poetry of American political discourse, Hamilton established the prose of American statecraft."

"When America ceases to remember his greatness, America will no longer be great."

"With the sure sagacity of a leader of men, Washington at once selected, for the highest and most responsible stations, the three chief Americans who represented the three forces in the nation which alone could command success in the institution of the government. Hamilton was the head, Jefferson was the heart, and John Jay was the conscience. Washington's just and serene ascendancy was the lambent flame in which these beneficent powers were fused, and nothing less than that ascendancy could have ridden the whirlwind and directed the storm that burst around him."

"When called to him upon his receiving the fatal wound, I found him half sitting on the ground, supported in the arms of Mr. Pendleton. His countenance of death I shall never forget. He had at that instant just strength to say, 'This is a mortal wound, doctor;' when he sunk away, and became to all appearance lifeless. I immediately stripped up his clothes, and soon, alas I ascertained that the direction of the ball must have been through some vital part. His pulses were not to be felt, his respiration was entirely suspended, and, upon laying my hand on his heart and perceiving no motion there, I considered him as irrecoverably gone. I, however, observed to Mr. Pendleton, that the only chance for his reviving was immediately to get him upon the water. We therefore lifted him up, and carried him out of the wood to the margin of the bank, where the bargemen aided us in conveying him into the boat, which immediately put off. During all this time I could not discover the least symptom of returning life. I now rubbed his face, lips, and temples with spirits of hartshorn, applied it to his neck and breast, and to the wrists and palms of his hands, and endeavoured to pour some into his mouth."

"Soon after recovering his sight, he happened to cast his eye upon the case of pistols, and observing the one that he had had in his hand lying on the outside, he said, "Take care of that pistol; it is undischarged, and still cocked; it may go off and do harm. Pendleton knows" (attempting to turn his head towards him) 'that I did not intend to fire at him.' 'Yes,' said Mr. Pendleton, understanding his wish, 'I have already made Dr. Hosack acquainted with your determination as to that' He then closed his eyes and remained calm, without any disposition to speak; nor did he say much afterward, except in reply to my questions. He asked me once or twice how I found his pulse; and he informed me that his lower extremities had lost all feeling, manifesting to me that he entertained no hopes that he should long survive."

"Hamilton is really a colossus to the antirepublican party. Without numbers, he is an host within himself."

"I was duped … by the Secretary of the treasury, and made a fool for forwarding his schemes, not then sufficiently understood by me; and of all the errors of my political life, this has occasioned the deepest regret."

"I invited them to dine with me, and after dinner, sitting at our wine, having settled our question, other conversation came on, in which a collision of opinion arose between Mr. Adams and Colonel Hamilton, on the merits of the British Constitution, Mr. Adams giving it as his opinion, that, if some of its defects and abuses were corrected, it would be the most perfect constitution of government ever devised by man. Hamilton, on the contrary, asserted, that with its existing vices, it was the most perfect model of government that could be formed; and that the correction of its vices would render it an impracticable government. And this you May be assured was the real line of difference between the political principles of these two gentlemen. Another incident took place on the same occasion, which will further delineate Mr. Hamilton's political principles. The room being hung around with a collection of the portraits of remarkable men, among them were those of Bacon, Newton and Locke. Hamilton asked me who they were. I told him they were my trinity of the three greatest men the world had ever produced, naming them. He paused for some time: “The greatest man,” said he, “that ever lived, was Julius Caesar.” Mr. Adams was honest as a politician as well as a man; Hamilton honest as a man, but, as a politician, believing in the necessity of either force or corruption to govern men."

"Hamilton was the greatest constructive mind in all our history and I should come pretty near saying... in the history of modern statesmen in any country."

"Jefferson was not entirely wrong to fear Hamilton's vision for the country, for we have always been in a constant balancing act between self-interest and community, market and democracy, the concentration of wealth and power and the opening up of opportunity."

"If you have an American ten-dollar bill handy, look at the man portrayed on it and give a moment’s thought to his life and death. Alexander Hamilton is one of American history’s most luminous figures. As a coauthor of the Federalist Papers, he helped to articulate the philosophical basis of democracy. As America’s first secretary of the treasury, he devised the institutions that support modern market economies. At other times in his life he led three battalions in the Revolutionary War, helped launch the Constitutional Convention, commanded a national army, established the Bank of New York, served in the New York legislature, and founded the New York Post. Yet in 1804 this brilliant man did something that by today’s standards was astonishingly stupid. Hamilton had long exchanged bitchy remarks with his rival Vice President Aaron Burr, and when Hamilton refused to disavow a criticism of Burr that had been attributed to him, Burr challenged him to a duel. Common sense was just one of many forces that could have pulled him away from a date with death. The custom of dueling was already on the wane, and Hamilton’s state of residence, New York, had outlawed it. Hamilton had lost a son to a duel, and in a letter explaining his response to Burr’s challenge, he enumerated five objections to the practice. But he agreed to the duel anyway, because, he wrote, “what men of the world denominate honor” left him no other choice. The following morning he was rowed across the Hudson to face Burr on the New Jersey Palisades. Burr would not be the last vice president to shoot a man, but he was a better shot than Dick Cheney, and Hamilton died the following day. Nor was Hamilton the only American statesman to be drawn into a duel. Henry Clay fought in one, and James Monroe thought the better of challenging John Adams only because Adams was president at the time. Among the other faces on American currency, Andrew Jackson, immortalized on the twenty-dollar bill, carried bullets from so many duels that he claimed to “rattle like a bag of marbles” when he walked. Even the Great Emancipator on the five-dollar bill, Abraham Lincoln, accepted a challenge to fight a duel, though he set the conditions to ensure that it would not be consummated."

"I consider Napoleon, Fox, and Hamilton, the three greatest men of our epoch, and if I were forced to decide between the three, I would give without hesitation the first place to Hamilton. He divined Europe."

"Hamilton, the most brilliant American statesman who ever lived, possessing the loftiest and keenest intellect of his time, was of course easily the foremost champion in the ranks of the New York Federalists; second to him came Jay, pure, strong and healthy in heart, body, and mind. Both of them watched with uneasy alarm the rapid drift toward anarchy; and both put forth all their efforts to stem the tide. They were of course too great men to fall in with the views of those whose antagonism to tyranny made them averse from order. They had little sympathy with the violent prejudices produced by the war. In particular, they abhorred the vindictive laws directed against the persons and property of Tories; and they had the manliness to come forward as the defenders of the helpless and excessively unpopular Loyalists. They put a stop to the wrongs which were being inflicted on these men and finally succeeded in having them restored to legal equality with other citizens, standing up with generous fearlessness against the clamor of the mob."

"General Hamilton says he cannot imagine what Dr. Cooper may have alluded, unless it were to a conversation at Mr. Taylor's, in Albany, last winter (at which he and General Hamilton were present). General Hamilton cannot recollect distinctly the particulars of that conversation, so as to undertake to repeat them, without running the risk of varying or omitting what might be deemed important circumstances. The expressions are entirely forgotten, and the specific ideas imperfectly remembered; but to the best of his recollection it consisted of comments on the political principles and views of Colonel Burr, and the results that might be expected from them in the event of his election as Governor, without reference to any particular instance of past conduct or private character."

"How far Colo. Hamilton—of whom you ask my opinion as a financier—has turned his thoughts to that particular study I am unable to ansr because I never entered upon a discussion of this post with him—but this I can venture to advance from a thorough knowledge of him, that there are few men to be found, of his age, who has a more general knowledge than he possesses—and none whose Soul is more firmly engaged in the cause—or who exceeds him in probity & Sterling virtue."

"There is an elegant memorial in Washington to Jefferson, but none to Hamilton. However, if you seek Hamilton's monument, look around. You are living in it. We honor Jefferson, but live in Hamilton's country, a mighty industrial nation with a strong central government."

"Some leaders (like George Washington, James Madison, and Alexander Hamilton) wanted the United States to be a strong nation with a solid central government, one that would oversee all the states. These leaders were called nationalists."

"America of 2015 IS [Hamilton's] world: A strong union bound by a federal government and the rule of law; a country unapologetic about its pursuit of profit and the banks to finance it; a place where cities, not farms, are the central organizing structure."

"If the character of Washington fortified the new government, the genius of his secretary of treasury enabled it to function successfully….He had a keen and quick perception of means, and a steady eye on remote ends. He produced bold plans and definite policies where others had cautious notions and vague principles. When Congress was thinking of what the people would say, Hamilton told it and the people what it ought to do. He had untiring energy, and accepted responsibility with gusto."

"It has long been the belief of modern men that the history of Europe covers the essential history of civilization, with unimportant exceptions; that the progress of the white [Europeans] has been along the one natural, normal path to the highest possible human culture."

"There is always a certain glamour about the idea of a nation rising up to crush an evil simply because it is wrong. Unfortunately, this can seldom be realized in real life; for the very existence of the evil usually argues a moral weakness in the very place where extraordinary moral strength is called for."

"There is but one coward on earth, and that is the coward that dare not know."

"The problem of the twentieth century is the problem of the color line."

"I insist that the object of all true education is not to make men carpenters, it is to make carpenters men."

"The school system in the country districts of the South is a disgrace and in few towns and cities are Negro schools what they ought to be. We want the national government to step in and wipe out illiteracy in the South. Either the United States will destroy ignorance or ignorance will destroy the United States. And when we call for education we mean real education. We believe in work. We ourselves are workers, but work is not necessarily education. Education is the development of power and ideal. We want our children trained as intelligent human beings should be, and we will fight for all time against any proposal to educate black boys and girls simply as servants and underlings, or simply for the use of other people. They have a right to know, to think, to aspire. These are some of the chief things which we want. How shall we get them? By voting where we may vote, by persistent, unceasing agitation; by hammering at the truth, by sacrifice and work. We do not believe in violence, neither in the despised violence of the raid nor the lauded violence of the soldier, nor the barbarous violence of the mob, but we do believe in John Brown, in that incarnate spirit of justice, that hatred of a lie, that willingness to sacrifice money, reputation, and life itself on the altar of right. And here on the scene of John Brown’s martyrdom we reconsecrate ourselves, our honor, our property to the final emancipation of the race which John Brown died to make free. Our enemies, triumphant for the present, are fighting the stars in their courses. Justice and humanity must prevail."

"The cost of liberty is less than the price of repression."

"Liberty trains for liberty. Responsibility is the first step in responsibility."

"I believe that there are human stocks with whom it is physically unwise to intermarry, but to think that these stocks are all colored or that there are no such white stocks is unscientific and false."

"I do not laugh. I am quite straight-faced as I ask soberly: "But what on earth is whiteness that one should so desire it?" Then always, somehow, some way, silently but clearly, I am given to understand that whiteness is the ownership of the earth forever and ever, Amen! Now what is the effect on a man or a nation when it comes passionately to believe such an extraordinary dictum as this? That nations are coming to believe it is manifest daily. Wave on wave, each with increasing virulence, is dashing this new religion of whiteness on the shores of our time. Its first effects are funny: the strut of the Southerner, the arrogance of the Englishman amuck, the whoop of the hoodlum who vicariously leads your mob."

"The cause of war is preparation for war."

"It is ridiculous to seek to excuse Robert Lee as the most formidable agency this nation ever raised to make 4 million human beings goods instead of men. Either he knew what slavery meant when he helped maim and murder thousands in its defense, or he did not. If he did not he was a fool. If he did, Robert Lee was a traitor and a rebel–not indeed to his country, but to humanity and humanity’s God."

"Hitler set up a tyranny: a state with a mighty police force, a growing army, a host of spies and informers, a secret espionage, backed by swift and cruel punishment, which migh vary from loss of job to imprisonment, incommunicado and without trial, to cold murder."

"There has been no tragedy in modern times equal in its awful effects to the fight on the Jew in Germany. It is an attack on civilization, comparable only to such horrors as the Spanish Inquisition and the African slave trade. It has set civilization back a hundred years, and in particular has it made the settlement and understanding of race problems more difficult and more doubtful. It is widely believed by many that the Jewish problem in Germany was episodic, and is already passing. Visitor to the Olympic Games are apt to have gotten that impression. They saw no Jewish oppression. Just as Northern visitors to Mississippi see no Negro oppression."

"By sheer will and grit, arising out of this, amid the derision and disdain of the world, Hitler has become the greatest figure of the Twentieth Century and in all probability will be the arbiter of the future patterns of human civilization."

"Joseph Stalin was a great man; few other men of the 20th century approach his stature. He was simple, calm and courageous. He seldom lost his poise; pondered his problems slowly, made his decisions clearly and firmly; never yielded to ostentation nor coyly refrained from holding his rightful place with dignity. He was the son of a serf but stood calmly before the great without hesitation or nerves. But also — and this was the highest proof of his greatness — he knew the common man, felt his problems, followed his fate."

"How shall Integrity face Oppression? What shall Honesty do in the face of Deception, Decency in the face of Insult, Self-Defense before Blows? How shall Desert and Accomplishment meet Despising, Detraction, and Lies? What shall Virtue do to meet Brute Force? There are so many answers and so contradictory; and such differences for those on the one hand who meet questions similar to this once a year or once a decade, and those who face them hourly and daily."

"The return from your work must be the satisfaction which that work brings you and the world's need of that work. With this, life is heaven, or as near heaven as you can get. Without this — with work which you despise, which bores you, and which the world does not need — this life is hell."

"In my own country for nearly a century I have been nothing but a nigger."

"Believe in life! Always human beings will progress to greater, broader, and fuller life."

"The most ordinary Negro is a distinct gentleman, but it takes extraordinary training and opportunity to make the average white man anything but a hog."

"The Soviet Union does not allow any church of any kind to interfere with education, and religion is not taught in public schools. It seems to me that this is the greatest gift of the Russian Revolution to the modern world. Most educated modern men no longer believe in religious dogma. If questioned they will usually resort to double-talk before admitting the fact. But who today actually believes that this world is ruled and directed by a benevolent person of great power who, on humble appeal, will change the course of events at our request? Who believes in miracles? Many folk follow religious ceremonies and services and allow their children to learn fairy tales and so-called religious truth, which in time the children come to recognize as conventional lies told by their parents and teachers for the children's good. One can hardly exaggerate the moral disaster of the custom. We have to thank the Soviet Union for the courage to stop it."

"The men of the Niagara Movement coming from the toil of the year's hard work and pausing a moment from the earning of their daily bread turn toward the nation and again ask in the name of ten million the privilege of a hearing. In the last year the work of the Negro hater has flourished in the land. Step by step the defenders of the rights of American citizens have retreated. The work of stealing the black man's ballot has progressed and the fifty and more representatives of stolen votes still sit in the nation's capital. Discrimination in travel and public accommodation has so spread the some of our weaker brethren are actually afraid to thunder against color discrimination as such and are simply whispering for ordinary decencies."

"After the Egyptian and Indian, the Greek and Roman, the Teuton and Mongolian, the Negro is a sort of seventh son, born with a veil, and gifted with second-sight in this American world, — a world which yields him no true self-consciousness, but only lets him see himself through the revelation of the other world. It is a peculiar sensation, this double-consciousness, this sense of always looking at one's self through the eyes of others, of measuring one's soul by the tape of a world that looks on in amused contempt and pity. One ever feels his twoness, — an American, a Negro; two warring souls, two thoughts, two unreconciled strivings; two warring ideals in one dark body, whose dogged strength alone keeps it from being torn asunder.The history of the American Negro is the history of this strife, — this longing to attain self-conscious manhood, to merge his double self into a better and truer self."

"To be a poor man is hard, but to be a poor race in a land of dollars is the very bottom of hardships."

"And yet this very singleness of vision and thorough oneness with his age is a mark of the successful man. It is as though Nature needs must make men narrow in order to give them force."

"The function of the university is not simply to teach bread-winning, or to furnish teachers for the public schools or to be a centre of polite society; it is, above all, to be the organ of that fine adjustment between real life and the growing knowledge of life, an adjustment which forms the secret of civilization."

"The worker must work for the glory of his handiwork, not simply for pay; the thinker must think for truth, not for fame."

"I sit with Shakespeare and he winces not. Across the color-line I move arm in arm with Balzac and Dumas, where smiling men and welcoming women glide in gilded halls. From out the caves of the evening that swing between the strong-limbed earth and the tracery of the stars, I summon Aristotle and Aurelius and what soul I will, and they come all graciously with no scorn nor condescension. So, wed with Truth, I dwell above the Veil. Is this the life you grudge us, O knightly America? Is this the life you long to change into the dull red hideousness of Georgia? Are you so afraid lest peering from this high Pisgah, between Philistine and Amalekite, we sight the Promised Land?"

"It is, then, the strife of all honorable men and women of the twentieth century to see that in the future competition of the races the survival of the fittest shall mean the triumph of the good, the beautiful, and the true; that we may be able to preserve for future civilization all that is really fine and noble and strong, and not continue to put a premium on greed and imprudence and cruelty."

"Daily the Negro is coming more and more to look upon law and justice, not as protecting safeguards, but as sources of humiliation and oppression. The laws are made by men who have little interest in him; they are executed by men who have absolutely no motive for treating the black people with courtesy and consideration; and, finally, the accused law-breaker is tried, not by his peers, but too often by men who would rather punish ten innocent Negroes than let one guilty one escape."

"The Negro cannot stand the present reactionary tendencies and unreasoning drawing of the color line indefinitely without discouragement and retrogression. And the condition of the Negro is ever the cause for further discrimination."

"Why was his hair tinted with gold? An evil omen was golden hair in my life. Why had not the brown of his eyes crushed out and killed the blue? — for brown were his father’s eyes, and his father’s father’s. And thus in the Land of the Color-line I saw, as it fell across my baby, the shadow of the Veil."

"Within the Veil was he born, said I; and there within shall he live, — a Negro and a Negro's son. Holding in that little head — ah, bitterly! — the unbowed pride of a hunted race, clinging with that tiny dimpled hand — ah, wearily! — to a hope not hopeless but unhopeful, and seeing with those bright wondering eyes that peer into my soul a land whose freedom is to us a mockery and whose liberty is a lie."

"Herein lies the tragedy of the age: not that men are poor, — all men know something of poverty; not that men are wicked, — who is good? not that men are ignorant, — what is Truth? Nay, but that men know so little of men."

"It was a bright September afternoon, and the streets of New York were brilliant with moving men.... He was pushed toward the ticket-office with the others, and felt in his pocket for the new five-dollar bill he had hoarded.... When at last he realized that he had paid five dollars to enter he knew not what, he stood stock-still amazed.... John... sat in a half-maze minding the scene about him; the delicate beauty of the hall, the faint perfume, the moving myriad of men, the rich clothing and low hum of talking seemed all a part of a world so different from his, so strangely more beautiful than anything he had known, that he sat in dreamland, and started when, after a hush, rose high and clear the music of Lohengrin's swan. The infinite beauty of the wail lingered and swept through every muscle of his frame, and put it all a-tune. He closed his eyes and grasped the elbows of the chair, touching unwittingly the lady's arm. And the lady drew away. A deep longing swelled in all his heart to rise with that clear music out of the dirt and dust of that low life that held him prisoned and befouled. If he could only live up in the free air where birds sang and setting suns had no touch of blood! Who had called him to be the slave and butt of all?... If he but had some master-work, some life-service, hard, aye, bitter hard, but without the cringing and sickening servility.... When at last a soft sorrow crept across the violins, there came to him the vision of a far-off home — the great eyes of his sister, and the dark drawn face of his mother.... It left John sitting so silent and rapt that he did not for some time notice the usher tapping him lightly on the shoulder and saying politely, 'will you step this way please sir?'... The manager was sorry, very very sorry — but he explained that some mistake had been made in selling the gentleman a seat already disposed of; he would refund the money, of course... before he had finished John was gone, walking hurriedly across the square... and as he passed the park he buttoned his coat and said, 'John Jones you're a natural-born fool.' Then he went to his lodgings and wrote a letter, and tore it up; he wrote another, and threw it in the fire...."

"Present-day students are often puzzled at the apparent contradictions of Southern slavery. One hears, on the one hand, of the staid and gentle patriarchy, the wide and sleepy plantations with lord and retainers, ease and happiness; on the other hand one hears of barbarous cruelty and unbridled power and wide oppression of men. Which is the true picture? The answer is simple: both are true. They are not opposite sides of the same shield; they are different shields."

"The theory of democratic government is not that the will of the people is always right, but rather that normal human beings of average intelligence will, if given a chance, learn the right and best course by bitter experience."

"Unfortunately there was one thing that the white South feared more than Negro dishonesty, ignorance, and incompetency, and that was Negro honesty, knowledge, and efficiency."

"The object of this new American industrial empire, so far as that object was conscious and normative, was not national well-being, but the individual gain of the associated and corporate monarchs through the power of vast profit on enormous capital investment; through the efficiency of an industrial machine that bought the highest managerial and engineering talent and used the latest and most effective methods and machines in a field of unequaled raw material and endless market demand. That this machine might use the profit for the general weal was possible and in cases true. But the uplift and well-being of the mass of men, of the cohorts of common labor, was not its ideal or excuse. Profit, income, uncontrolled power in My Business for My Property and for Me—this was the aim and method of the new monarchial dictatorship that displaced democracy in the United States in 1876."

"So far as the Negroes were concerned, their demand for a reasonable part of the land on which they had worked for a quarter of a millennium was absolutely justified, and to give them anything less than this was an economic farce."

"To have given each one of the million Negro free families a forty-acre freehold would have made a basis of real democracy in the United States that might easily have transformed the modern world."

"The Sherman order gave rise to all sorts of difficulties. The Negroes were given only possessory titles. Then the owners came back and immediately there was trouble. The Negroes protested, “What is the use of giving us freedom if we can’t stay where we were raised and own our own house where we were born and our own piece of ground?” It was on May 25, 1865, that Johnson in his Proclamation of Pardon had provided easy means whereby all property could be restored, except the land at Port Royal, which had been sold for taxes. General Howard came to Charleston to make arrangements, and the story is characteristic—“At first,” said a witness, “the people hesitated, but soon as the meaning struck them that they must give up their little homes and gardens and work for others, there was a general murmuring of dissatisfaction.”"

"President Johnson, forgetting his own pre-war declaration that the “great plantations must be seized, and divided into small farms,” declared that this land must be restored to its original owners and this would be done if owners received a presidential pardon. The pardoning power was pushed and the land all over the South rapidly restored. Negroes were dispossessed."

"The first attempt of a democracy which includes the previously disfranchised poor is to redistribute wealth and income, and this is exactly what the black South attempted. The theory is that the wealth and the current income of the wealthy ruling class does not belong to them entirely, but is the product of the work and striving of the great millions; and that, therefore, these millions ought to have a voice in its more equitable distribution; and if this is true in modern countries, like France and England and Germany, how much more true was it in the South after the war where the poorest class represented the most extreme case of theft of labor that the world can conceive; namely, chattel slavery?"

"The Negro voter ... had, then, but one clear economic ideal and that was his demand for land, his demand that the great plantations be subdivided and given to him as his right. This was a perfectly fair and natural demand and ought to have been an integral part of Emancipation. To emancipate four million laborers whose labor had been owned, and separate them from the land upon which they had worked for nearly two and a half centuries, was an operation such as no modern country had for a moment attempted or contemplated. The German and English and French serf, the Italian and Russian serf, were, on emancipation, given definite rights in the land. Only the American Negro slave was emancipated without such rights and in the end this spelled for him the continuation of slavery."

"The treatment of the period of Reconstruction reflects small credit upon American historians as scientists. We have too often a deliberate attempt so to change the facts of history that the story will make pleasant reading for Americans."

"The difference of development, North and South, is explained as a sort of working out of cosmic social and economic law. ... In this sweeping mechanistic interpretation, there is no room for the real plot of the story, for the clear mistake and guilt of building a new slavery of the working class in the midst of a fateful experiment in democracy."

"The most magnificent drama in the last thousand years of human history is the transportation of ten million human beings out of the dark beauty of their mother continent into the new-found Eldorado of the West. They descended into Hell; and in the third century they arose from the dead, in the finest effort to achieve democracy for the working millions which this world had ever seen. It was a tragedy that beggared the Greek; it was an upheaval of humanity like the Reformation and the French Revolution. Yet we are blind and led by the blind. We discern in it no part of our labor movement; no part of our industrial triumph; no part of our religious experience. Before the dumb eyes of ten generations of ten million children, it is made mockery of and spit upon; a degradation of the eternal mother; a sneer at human effort; with aspiration and art deliberately and elaborately distorted. And why? Because in a day when the human mind aspired to a science of human action, a history and psychology of the mighty effort of the mightiest century, we fell under the leadership of those who would compromise with truth in the past in order to make peace in the present and guide policy in the future."

"I am one who tells the truth and exposes evil and seeks with Beauty for Beauty to set the world right."

"Human nature is not simple and any classification that roughly divides men into good and bad, superior and inferior, slave and free, is and must be ludicrously untrue and universally dangerous as a permanent exhaustive classification."

"The world is shrinking together; it is finding itself neighbor to itself in strange, almost magic degree."

"The time must come when, great and pressing as change and betterment may be, they do not involve killing and hurting people."

"The Negro slave trade was the first step in modern world commerce, followed by the modern theory of colonial expansion. Slaves as an article of commerce were shipped as long as the traffic paid."

"I believe in God who made of one blood all races that dwell on earth. I believe that all men, black and brown and white, are brothers, varying through Time and Opportunity, in form and gift and feature, but differing in no essential particular, and alike in soul and in the possibility of infinite development."

"He was at once a scientist in his skillful use of history as a tool for comprehending the present, and a prophet in the application of his gift for analyzing the present as an indicator of the future. Because he lived simultaneously firmly entrenched within his time and decades ahead of it, the light of his wisdom, like that of his great love for humanity, is one that never diminishes."

"You are neither right nor wrong because people agree with you."

"The idea of storage as a solution of economic problems at least has the support of common sense.It is diametrically opposed to the topsy-turvy Alice-in-Wonderland reasoning that has marked so much of our depression thinking and policy."

"Instead of passing blithely over into that Promised Land, flowing almost literally with milk and honey, it may be our destiny to wander a full 40 years or more in the wilderness of doubt and divided sentiments."

"Even the most conservative must realize that the recent transformation of surplus from an individual to a national disaster implies a scathing indictment of our capitalist system as it has now developed."

"Whether we like it or not, government intervention in the face of surplus is here to stay."

"It is a fact worth pondering that four centuries ago the evil of "an abundance or surplus" arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market."

"The State can always afford to finance what its citizens can soundly produce."

"The Reservoir system will function not only as an equalizer of business conditions, but also as a national store to meet further emergencies, such as war and drought, and-most important of all-as the concrete means of developing a steadily higher living standard for all."

"Why should the cotton growers suffer if there is shortage of wheat?"

"Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices."

"The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant."

"Both a priori reasoning and experience teach us that as as these funds grow larger the geometrical rate of growth by compound interest ultimately defeats itself."

"The money cost of the reservoir plan literally fades into insignificance when it is compared with the financial burden which the great depression imposed on the nation."

"The utility, or intrinsic value of gold as a commodity is now considerably less than in the past; its monetary status has become extraordinarily ambiguous; and its future is highly uncertain."

"THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression."

"The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend."

"There is something paradoxical in the fact that by establishing an export market we subject our entire domestic production to the vagaries of that market."

"It must be fundamentally wrong to reduce production of food and fiber while one-third of our population is still ill fed and ill clothed."

"The Reservoir plan is an engineering mechanism applied to the field of economics, and in its essence it has nothing to do with democracy or any other political philosophy."

"The people of the United States will not tolerate another deep depression that arises not from any lack of natural resources, productive capacity or man and brain power, but solely from imperfections in the functioning of the system of finance capitalism."

"The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion."

"Cartels have spread and will spread as long as the world lacks an effective mechanism by which balanced expansion may be achieved without a resulting disruption of prices."

"The modern world is not geared properly to the storage of goods."

"The story of Joseph in Egypt and of the seven fat and the seven lean years has passed into the homely wisdom of the ages; but our economic thinking seems to have lost contact with so simple and basic approach to prudent management of a nations welfare."

"Many progressive economists insist that gold is now in essentially the same position as silver and that the arguments the simon-pure gold advocates use against the white metal can be directed with equal effect against their own fetish."

"It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals."

"We have introduced the monetary factor not by necessity but by choice. Its advantages are obvious. Self-financed commodity units are not only interest free, but free also from dependence upon credit conditions. They are a step-desirable, it seems to us-in the direction of a goods economy as distinct from a money economy; but this step is taken without violence by merely identifying basic goods with money. It guarantees unfailing purchasing power where it is most needed-among the countless producers of raw commodities."

"Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same. Thus the important and difficult part of sound investment, which hinges upon the investor's own temperament and attitude, is not much affected by the passing years."

"The history of the past fifty years, and longer, indicates that a diversified holding of representative common stocks will prove more profitable over a stretch of years than a bond portfolio, with one important provisio—that the shares must be purchased at reasonable market levels, that is, levels that are reasonable in the light of fairly well-defined standards derived from past experience."

"Stocks can be dynamite."

"The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character"

"It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits. These virtues, if channeled in the wrong directions, become indistinguishable from handicaps."

"All the real money in investment will have to be made—as most of it has been in the past— not out of buying and selling but out of owning and holding securities, receiving interests and dividends therein, and benefiting from their long-term increases in value. Hence stockholder's major energies and wisdom as investors should be directed toward assuring themselves of the best operating results from their corporations. This in turn means assuring themselves of fully honest and competent managements."

"Nothing in finance is more fatuous and harmful, in our opinion, than the firmly established attitude of common stock investors regarding questions of corporate management. That attitude is summed up in the phrase: "If you don't like the management, sell your stock." [...] The public owners seem to have abdicated all claim to control over the paid superintendents of their property"

"Intelligent investment is more a matter of mental approach than it is of technique. A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions."

"In most cases the favorable price performance will be accompanied by a well-defined improvement in the average earnings, in the dividend, and in the balance-sheet position. Thus in the long run the market test and the ordinary business test of a successful equity commitment tend to be largely identical."

"A price decline is of no real importance to the bona fide investor unless it is either very substantial—say, more than a third from cost—or unless it reflects a known deterioration of consequence in the company's position. In a well-defined bear market many sound common stocks sell temporarily at extraordinary low prices. It is possible that the investor may then have a paper loss of fully 50 per cent on some of his holdings, without any convincing indication that the underlying values have been permanently affected."

"Why could the typical investor expect any better success in trying to buy at low levels and sell at high levels than in trying to forecast what the market is going to do? Because if he does the former he acts only after the market has moved down into buying levels or up into selling levels. His role is not that of a prophet but of a businessman seizing clearly evident investment opportunities. He is not trying to be smarter than his fellow investors but simply trying to be less irrational than the mass of speculators who insist on buying after the market advances and selling after it goes down. If the market persists in behaving foolishly, all he seems to need is ordinary common sense in order to exploit its foolishness."

"It is worth pointing out that assuredly not more than one person out of a hundred who stayed in the market after after 1925 emerged from it with a net profit and that the speculative losses taken were appalling."

"Whenever the investor sold out in an upswing as soon as the top level of the previous well-recognized bull market was reached, he had a chance in the next bear market to buy back at one third (or better) below his selling price."

"The graph does show one tremendous rise and collapse which stands out starkly from all the other fluctuations. This is commonly called the "new era" stock market of 1927-33. The striking feature of this phenomenon was that the new era existed solely in the minds of market speculators. The whole episode, in retrospect, now seems to have been one of those rare manifestations of mass financial madness which we used to study in our history books under the titles of "the South Sea Bubble", "the Mississippi Bubble" and so on."

"The purchase of a bargain issue presupposes that the market's current appraisal is wrong, or at least that the buyer's idea of value is more likely to be right than the market's. In this process the investor sets his judgement against that of the market. To some this may seem arrogant or foolhardy."

"If General Motors is worth $60 a share to an investor it must be because the full common-stock ownership of this gigantic enterprise as a whole is worth 43 million (shares) times $60, or no less than $2,600 million."

"The true investor scarcely ever has to sell his shares, and at all other times he is free di disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons mistakes of judgement."

"The investor has the benefit of the stock market's daily and changing appraisal of his holdings, for whatever that appraisal may be worth, and, second, that the investor is able to increase or decrease his investment at the market's daily figure—if he chooses. Thus the existence of a quoted market gives the investor certain options which he does not have if his security is unquoted. But it does not impose the current quotation on an investor who prefers to take his idea of value from some other source."

"Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies."

"The investor's primary interest lies in acquiring and holding suitable securities at suitable prices."

"The investor would not be far wrong if this motto read more simply: "Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop"."

"Good managements produce a good average market price, and bad managements produce bad market prices."

"If we assume that there are normal or standard income results to be obtained from investing money in securities, then the role of the adviser can be more readily established. He will use his superior training and experience to protect his clients against mistakes and to make sure that they obtain the results to which their money is entitled."

"Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied."

"The value of the security analyst to the investor depends largely on the investor's own attitude. If the investor asks the analyst the right questions, he is likely to get the right—or at least valuable— answers."

"Readers of this book, however intelligent and knowing, could scarcely expect to do a better job of portfolio selection than the top analysts of the country. But if it is true that a fairly large segment of the stock market is often discriminated against or entirely neglected in the standard analytical selections, then the intelligent investor may be in a position to profit from the resultant undervaluations."

"Good management are rarely overcompensated to an extent that makes any significant difference with respect to the stockholder's position. Poor management are always overcompensated, because they are worth less than nothing to the owners."

"Unusually rapid growth cannot keep up forever; when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult."

"Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed."

"Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions."

"Investment is most intelligent when it is most businesslike."

"Do not let anyone else run your business."

"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks."

"In the short-run, the market is a voting machine - reflecting a voter-registration test that requires only money, not intelligence or emotional stability - but in the long-run, the market is a weighing machine."

"[Shorter variant:] In the short run, the market is a voting machine but in the long run, it is a weighing machine."

"A story that was passed down from Ben Graham illustrates the lemminglike behavior of the crowd: "Let me tell you the story of the oil prospector who met St. Peter at the Pearly Gates. When told his occupation, St. Peter said, “Oh, I’m really sorry. You seem to meet all the tests to get into heaven. But we’ve got a terrible problem. See that pen over there? That’s where we keep the oil prospectors waiting to get into heaven. And it’s filled—we haven’t got room for even one more.” The oil prospector thought for a minute and said, “Would you mind if I just said four words to those folks?” “I can’t see any harm in that,” said St. Pete. So the old-timer cupped his hands and yelled out, “Oil discovered in hell!” Immediately, the oil prospectors wrenched the lock off the door of the pen and out they flew, flapping their wings as hard as they could for the lower regions. “You know, that’s a pretty good trick,” St. Pete said. “Move in. The place is yours. You’ve got plenty of room.” The old fellow scratched his head and said, “No. If you don’t mind, I think I’ll go along with the rest of ’em. There may be some truth to that rumor after all.""

"In his first edition of Security Analysis, back in 1933, Graham expressed disdain for Wall Street's near-obsession with earnings in determining the value of a public company. For Graham, book value was a better guide. ...Bill Graham was right. ...We took the largest 1,500 companies... for the 25-year period ended Dec. 31, 1994. ...We calculated returns for the 20% of stocks with the lowest and highest price-to-book ratios. ...[I]t was no contest. ...If you had invested $10,000 in the lowest... it would have returned $364,000... This more than doubled the return of the market as a whole... an equally weighted market index provided... $163,000. ...[S]tocks that sold at the handsomest premiums to book value... ended up with a miserable $92,000, about 55% of the market's return and only one-fourth ...the lowest price-to-book group. ...[E]motion favors the premium priced stocks. They are fashionable. They are hot. ...Emotion overrides logic time after time."

"Ben Graham was a truly formidable mind, and he also had a clarity in writing. And, we've talked over and over again about the power of a few simple ideas thoroughly assimilated. ... that happened with Graham's ideas, which came to me indirectly through Warren — but also some directly from Graham. ... And, by the way, Buffett was the best student Graham had in 30 years of teaching at Columbia. ... Buffett became way better than Graham. That is a natural outcome. ... Newton said that, "If I've seen a little further than other men, it's by standing on the shoulders of giants." ... Warren may have stood on Ben's shoulders, but he ended up seeing farther. And, no doubt, somebody will come along in due course and do a lot better than we have."

"Tom [Knapp] was a chemistry major at Princeton before the war; when he came back... he was a beach bum. And then one day he read that Dave Dodd was giving a night course in investments at Columbia. Tom took it on a non-credit basis, and he got so interested... that he enrolled at Columbia Business School where he got the MBA... He took Dodd's course again, and took Ben Graham's course. ...35 years later ...I found him on the beach ...he owns the beach!"

"You... have to have the knowledge to... make a very general estimate about the value of the underlying businesses. But you do not cut it close. That is what Ben Graham meant by having a margin of safety."

"[T]he secret has been out for 50 years, ever since Ben Graham and Dave Dodd wrote Security Analysis, yet I have seen no trend toward in... 35 years... There seems to be some perverse human characteristic that likes to make easy things difficult."

"There will continue to be wide discrepancies between price and value in the marketplace, and those who read their Graham and Dodd will continue to prosper."

"There are perhaps four points where Graham departs radically from conventional practice: ...The "value" ...is not a short-term price forecast ...The "value" is a medium-term sustainable value for the firm as on on-going operation. ...The future is estimated conservatively, using realistic estimates of earnings, and prudent multipliers ...[O]nly ...purchase when price is substantially below value, thus using a considerable "margin of safety". The security should be sold when price begins to exceed value by a given proportion. ...[P]articularly at times when the market is low, a sufficiently large number of under-priced securities will exist ...This insight is perhaps his most unusual one. ...[U]nderpriced shares almost disappear when the market is historically high, and reappear when it falls."

"Graham strongly felt that market prices could be considerably out of line with values. The reason for this discrepancy he took to be psychological. ...[T]he overall level of the market could go to extremes in either direction, as optimism or pessimism holds sway. ...[F]avored stocks would sell at unduly high prices, while unpopular stocks would sell at unduly low prices."

"Graham's approach is cogent, well argued and has a substantial following among successful investors. There is some modern evidence to support him. It may well be worthwhile to sharpen his methods along modern lines and to test them thoroughly."

"This increase in the world's population represents humanity's victory against death."

"We now have in our hands — really, in our libraries — the technology to feed, clothe, and supply energy to an ever-growing population for the next seven billion years."

"Progress toward a more abundant material life does not come like manna from heaven, however. My message certainly is not one of complacency. The ultimate resource is people — especially skilled, spirited, and hopeful young people endowed with liberty — who will exert their wills and imaginations for their own benefit and inevitably benefit the rest of us as well."

"Citizens of a modern society need [...] more than that ordinary "common sense" which was defined by Stuart Chase as that which tells you that the world is flat."

"Political democracy can remain if it confines itself to all but economic matters."

"The outcome of any serious research can only be to make two questions grow where only one grew before."

"It is a matter of course and of absolute necessity to the conduct of business, that any discretionary businessman must be free to deal or not to deal in any given case; to limit or withhold the equipment under his control, without reservation. Business discretion and business strategy, in fact, has no other means by to work out its aims. So that, in effect, all business sagacity reduces itself in the last analysis to judicious use of sabotage."

"In point of substantial merit the law school belongs in the modern university no more than a school of fencing or dancing."

"Any evolutionary science... is a close-knit body of theory. It is a theory of a process, of an unfolding sequence... of cumulative causation. The great deserts of the evolutionist leaders... lie... in their having shown how this colorless impersonal sequence of cause and effect can be made use of for theory proper, by virtue of its cumulative character."

"The institution of a leisure class has emerged gradually during the transition from primitive savagery to barbarism; or more precisely, during the transition from a peaceable to a consistently warlike habit of life."

"In order to stand well in the eyes of the community, it is necessary to come up to a certain, somewhat indefinite, conventional standard of wealth."

"In itself and in its consequences the life of leisure is beautiful and ennobling in all civilised men's eyes."

"From the ownership of women the concept of ownership extends itself to include the products of their industry, and so there arises the ownership of things as well as of persons."

"The possession of wealth confers honor; it is an invidious distinction."

"However widely, or equally, or "fairly", it may be distributed, no general increase of the community's wealth can make any approach to satiating this need, the ground of which is the desire of every one to excel every one else in the accumulation of goods."

"While the proximate ground of discrimination may be of another kind, still the pervading principle and abiding test of good breeding is the requirement of a substantial and patent waste of time."

"Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure."

"The chief use of servants is the evidence they afford of the master's ability to pay."

"In the modern industrial communities... the apparatus of living has grown so elaborate and cumbrous... that the consumers of these things cannot make way with them in the required manner without help."

"The latter-day outcome of this evolution of an archaic institution, the wife, who was at the outset the drudge and chattel of the man... has become the ceremonial consumer of goods which he produces. But she still quite unmistakably remains his chattel in theory; for the habitual rendering of vicarious leisure and consumption is the abiding mark of the unfree servant."

"In modern civilized communities... the members of each stratum accept as their ideal of decency the scheme of life in vogue in the next higher stratum."

"Leisure held the first place at the start, and came to hold a rank very much above wasteful consumption of goods... From that point onward, consumption has gained ground, until, at present, it unquestionably holds the primacy."

"It frequently happens that an element of the standard of living which set out with being primarily wasteful, ends with becoming, in the apprehension of the consumer, a necessary of life."

"It is much more difficult to recede from a scale of expenditure once adopted than it is to extend the accustomed scale in response to an accession of wealth."

"In the rare cases where it occurs, a failure to increase one's visible consumption when the means for an increase are at hand is felt in popular apprehension to call for explanation, and unworthy motives of miserliness are imputed."

"A standard of living is of the nature of habit. ...it acts almost solely to prevent recession from a scale of conspicuous expenditure that has once become habitual."

"The need of conspicuous waste... stands ready to absorb any increase in the community's industrial efficiency or output of goods."

"As increased industrial efficiency makes it possible to procure the means of livelihood with less labor, the energies of the industrious members of the community are bent to the compassing of a higher result in conspicuous expenditure, rather than slackened to a more comfortable pace."

"The domestic life of most classes is relatively shabby, as compared with the éclat of that overt portion of their life that is carried on before the eyes of observers."

"The thief or swindler who has gained great wealth by his delinquency has a better chance than the small thief of escaping the rigorous penalty of the law."

"In the priestly life of all anthropomorphic cults the marks of a vicarious consumption of time are visible."

"All ritual has a notable tendency to reduce itself to a rehearsal of formulas."

"There is probably no cult in which ideals of pecuniary merit have not been called in to supplement the ideals of ceremonial adequacy that guide men's conception of what is right in the matter of sacred apparatus."

"The requirement of conspicuous wastefulness is... present as a constraining norm selectively shaping and sustaining our sense of what is beautiful."

"The superior gratification derived from the use and contemplation of costly and supposedly beautiful products is, commonly, in great measure a gratification of our sense of costliness masquerading under the name of beauty."

"The walking stick serves the purpose of an advertisement that the bearer's hands are employed otherwise than in useful effort, and it therefore has utility as an evidence of leisure."

"In common with other men, the business man is moved by ideals of serviceability and an aspiration to make the way of life easier for his fellows... Motives of this kind detract from business efficiency, and an undue yielding to them on the part of business men is to be deprecated as an infirmity. Still, throughout men's dealings with one another and with the interests of the community there runs a sense of equity, fair dealing, and workmanlike integrity."

"The sequence of the process involves both the one and the other, both the apparatus and the materials, in such intimate interaction that the process cannot be spoken of simply as an action of the apparatus upon the materials. It is not simply that the apparatus reshapes the materials; the materials reshape themselves by the help of the apparatus... The whole concert of industrial operations is to be taken as a machine process, made up of interlocking detail processes, rather than as a multiplicity of mechanical appliances each doing its particular work in severalty."

"To make effective use of the modern system of communication in any way or all of its ramifications (streets, railways, steamship lines, telephone, telegraph, postal service, etc.), men are required to adapt their needs and their motions to the exigencies of the process whereby this civilized method of intercourse is carried into effect. The service is standardized, and therefore the use of it is standardized also... one's plans and projects must be conceived and worked out in terms of those standard units which the system imposes."

"The machine process pervades the modern life and dominates it in a mechanical sense. Its dominance is seen in the enforcement of precise mechanical measurements and adjustment and the reduction of all manner of things, purposes and acts, necessities, conveniences, and amenities of life, to standard units."

"Without much preliminary exposition and without feeling himself to be out of touch with his contemporaries, Darwin set to work to explain species in terms of the process out of which they have arisen, rather than out of the prime cause to which the distinction between them may he due."

"Darwin’s] inquiry characteristically confines itself to the process of cumulative change. His results, as well as his specific determination of the factors at work in this process of cumulative change, have been questioned; perhaps they are open to all the criticisms levelled against them as well as a few more not thought of; but the scope and method given to scientific enquiry by Darwin and the generation whose spokesman he is has substantially not been questioned, except by that diminishing contingent of the faithful"

"The current periodical press... is a vehicle for advertisements. ...Exceptions ...are official and minor propagandist periodicals, and, in an uncertain measure, scientific journals. ...The first duty of an editor is to gauge the sentiments of his readers, and the tell them what they like to believe. ...His second duty is to see that nothing is said which may discountenance ...his advertisers. ...The net result is that both the news columns and the editorial columns are commonly meretricious in a high degree."

"Systematic insincerity on the part of purveyors of information and leaders of opinion may be deplored by persons who stickle for truth and pin their hopes of social salvation on the spread of accurate information. ...[T]he insincerity is guided by a wish to avoid any lesion of the received preconceptions and prejudices. The insincerity of the newspapers and magazines seems, on the whole, to be of a conservative trend."

"The periodical press is not only a purveyor of news, opinions, and admonitions; it also supplies the greater part of the literature currently read. ...The standards of excellence that govern this periodical literature... must in no way hamper the purposes of the advertisers. ...Taken in the aggregate, the literary output is designed to meet the tastes of that large body of people who are in the habit of buying freely. The successful magazine writers... follow the taste of the class to whom they speak... They must also conform to the fancies and prejudices of this class as regards the ideals—artistic, moral, religious, or social—for which they speak. The class... is that great body of people who are in moderately easy circumstances... the respectable middle class... of various shades of conservatism, affectation, and snobbery."

""Snobbery" is here used without disrespect, as a convenient term to denote the element of strain involved in the quest for gentility on the part of persons whose accustomed social standing is less high or less authentic than their aspirations."

"A civilization which is dominated by this matter-of-fact insight must prevail against any cultural scheme that lacks this element. This characteristic of western civilization comes to a head in modern science, and finds its highest material expression in the technology of the machine industry."

"The means whereby this work of Nature is brought to its consummate issue are forces of Nature working under her Laws by the method of cause and effect. The principle, or "law," of causation is a metaphysical postulate; in the sense that such a fact as causation is unproved and unprovable. No man has ever observed a case of causation, as is a commonplace with the latterday psychologists."

"[H]ere and now, as always and everywhere, invention is the mother of necessity."

"Habituation to bargaining and to the competitive principles of business necessarily brings it about that pecuniary standards of efficiency invade (contaminate) the sense of workmanship; so that work, workmen, equipment and products come to be rated on a scale of money values, which has only a circuitous and often only a putative relation to their workmanlike efficiency or their serviceability. Those occupations and those aptitudes that yield good returns in terms of price are reputed valuable and commendable, — the accepted test of success, and even of serviceability, being the gains acquired. Workmanship comes to be confused with salesmanship, until tact, effrontery and prevarication have come to serve as a standard of efficiency, and unearned gain is accepted as the measure of productiveness."

"Born in iniquity and conceived in sin, the spirit of nationalism has never ceased to bend human institutions to the service of dissension and distress."

"It is always sound business to take any obtainable net gain, at any cost and at any risk to the rest of the community."

"Veblen seemed to me less sure with regard to his understanding of market forces. He’s not entirely consistent. At times he recognizes a tendency towards equalization of rates of return in different industries. But at other times he seems blind to the theoretical issues."

"Veblen ... was a masterless, recalcitrant man, and if we must group him somewhere in the American scene, it is with those most recalcitrant Americans, the Wobblies. On the edges of the higher learning, Veblen tried to live like a Wobbly. It was a strange place for such an attempt. The Wobblies were not learned, but they were, like Veblen, masterless men, and the only non-middle class movement of revolt in twentieth-century America. With his acute discontent and shyness of program Veblen was a sort of intellectual Wobbly."

"If Veblen failed to develop an evolutionary methodology, he also failed to develop a comprehensive evolutionary theory to explain in detail how institutions evolve in the cultural environment and what sorts of interaction occur between economic activity and institutional structures. Veblen was something of an intellectual butterfly, and he often lacked the patience to elaborate his ideas into a coherent system. But he teemed with fragmentary insights, and these can be pieced together to suggest the outlines of a Veblenian scheme of cultural evolution - what might be called a ‘pre-theory’ of cultural change."

"There is a political and financial vested interest in obsolete technical equipment: that underlying conflict between business interests and industrial interests, which Veblen analyzed with great acuteness in The Theory of Business Enterprise, is accentuated by the fact that vast amounts of capital are sunk in antiquated machines and burdensome utilities. Financial acquisitiveness which had originally seeded invention now furthers technical inertia [i.e., in the sense of resistance or drag]. ...Hence the continued design of automobiles in terms of superficial fashions, rather than with any readiness to take advantage of aerodynamic principles in building for comfort and speed and economy: hence the continued purchase of patent rights for improvements which are then quietly extirpated by the monopoly holding them."

"One might multiply... examples from many departments: they point to a fact about the machine that has not been generally recognized by those quaint apologists for machine-capitalism who look upon every expenditure of horsepower and every fresh piece of mechanical apparatus as an automatic net gain in efficiency. In the Instinct of Workmanship Veblen has indeed wondered whether the typewriter, the telephone, and the automobile, though creditable technological achievements "have not wasted more effort and substance than they have saved," whether they are not to be credited with an appreciable economic loss, because they have increased the pace and the volume of correspondence and communication and travel out of all proportion to the real need."

"We are now entering a phase of disassociation between capitalism and technics; and we begin to see with Thorstein Veblen that their respective interests, so far from being identical, are often at war, and that the human gains of technics have been forfeited by perversion in the interests of pecuniary economy. We see in addition that many of the special gains in productivity which capitalism took credit for were in reality due to quite different agents—collective thought, cooperative action, and the general habits of order—virtues which have no necessary connection with capitalist enterprise."

"We are not sent into this world to walk it in solitude. We are born to love, as we are born to breathe and eat and drink. The babe is hardly separated from his mother’s womb before he stretches out a tiny clasping hand, and from that time forth he will constantly stretch out to touch the world that lies about him and the folk that dwell therein. The purpose of our growth in life is to bring us into unity with the universe into which we are born, to make us aware that we are not lonely individual meteors hurtling blindly through an abysmal dark, but living parts of a living whole. As we grow we learn to love more and more: first ourselves; then the family within the small kingdom of the home; then the school, the wider circle of friends, the home community, the college, and the still wider community of the nation; and finally, the greatest country of all, which has no boundaries this side of Hell, and perhaps not even there."

"The ultimate "causes of price" - to use a Classical term - lie deeply embedded in the psychology and techniques of mankind and his environment, and are as manifold as the sands of the sea. All economic analysis is an attempt to classify these manifold causes, to sort them out into categories of discourse that our limited minds can handle, and so to perceive the unity of structural relationship which both unites and separates the manifoldness. Our concepts of "" and "supply" are such broad categories. In whatever sense they are used, they are not ultimate determinants of anything, but they are convenient channels through which we can classify and describe the effects of the multitude of determinants of the system of economic magnitude."

"The greater the penalties laid on sellers in the ... the higher the black market price."

"Conventions of generality and mathematical elegance may be just as much barriers to the attainment and diffusion of knowledge as may contentment with particularity and literary vagueness... It may well be that the slovenly and literary borderland between economics and sociology will be the most fruitful building ground during the years to come and that mathematical economics will remain too flawless in its perfection to be very fruitful."

"The task of presenting a systematic, orderly, and accurate account of economic analysis is identical with the task of preparing the material for teaching. It must be emphasized, however, that the purpose of this work is not primarily to entertain the student, or to enable him to regurgitate appropriate material into examination books, or to learn a few pat phrases, or to indoctrinate him with an abstract discipline which he will never use. Economics is like photography in this respect, that under-exposure is less desirable than no exposure at all."

"A distinguished economist, on being asked to define the subject matter of his science, once replied, "Economics is what economists do.""

"We have defined the main task of economic analysis as the explanation of the magnitudes of economic quantities. The student will find also that the main part of this, as of most other works on the subject, is concerned with the theory of the determination of prices, wages, interest rates, incomes, and the like. He may well inquire, therefore, in the midst of so much mathematics, whether the first task of economics is not the investigation of wealth, or welfare. Some economists have endeavored to restrict the boundaries of the science to the investigation of those quantities which are numerically measurable. Well-being, under such a restriction, would not be part of economics at all."

"Thus we seem to be on the verge of an expansion of welfare economics into something like a social science of ethics and politics: what was intended to be a mere porch to ethics is either the whole house or nothing at all. In so laying down its life welfare economics may be able to contribute some of its insights and analytical methods to a much broader evaluative analysis of the whole social process."

"[In this we may expect the article to be sold to] "the most eager buyer at a price which is just about the highest he is willing to pay, for in this case the most eager buyer does not know what prices the other buyers are willing to give [and] … each buyer fear that someone may slip in ahead of him."

"Mathematicians themselves set up standards of generality and elegance in their exposition which are a bar to understand."

"A firm may be defined as an institution which buys things, transforms them in some way, and then sells them with the purpose of making a profit. The things a firm buys we shall call "inputs." The things it sells we shall call "outputs." The process whereby the things it buys are transformed into the things it sells we shall call the "process of production." In any process of buying to sell again a process of production is always involved..."

"Just as there are inputs which are supplied by the owner of a business, and whose value therefore is a "virtual," not an actual, expense, so there can be outputs which are consumed by the owner of a business, and whose value therefore forms."

"[The is] the supreme mover of economic order... for whom all goods are made and towards whom all economic activity is directed."

"The process of ... is the final act in the economic drama"

"There is reason for this shift of emphasis from any actual price to a hypothetical 'equilibrium' price. It is usually more interesting to know where a train is going than to know exactly where it is at any moment. The 'equilibrium' position of any price, wage, firm, industry, or system is the position toward which it is tending. The importance of equilibrium analysis, then, is that it enables us to discuss the directions of change. If a train is in New- York and its 'equilibrium' position is in Chicago, we are reasonably confident that the general direction of its motion will be westward, even if it unaccountably decides to travel north for the first hundred and fifty miles."

"It is probable that when future historians of economic thought look back over this century, the thirties will appear as an era of rapid development in economic theory. Not only has there been unusual activity in monetary theory, theory of value. but extensive transformations have also been made in the basic theory of value. The outstanding publications in this field are, of course, Joan Robinson's Theory of Imperfect Competition and Chamberlin's Theory of Monopolistic Competition, the first produced in Cambridge, England, and the second in Cambridge, Massachusetts. These volumes mark the explicit recognition of the theory of the firm as an integral division of economic analysis upon which rests the whole fabric of equilibrium theory. General equilibrium is nothing more than the problem of the interaction of individual economic organisms, under various conditions and assumptions; as a necessary preliminary to its solution, an adequate theory of the individual organism itself is necessary."

"The discounting presumably is to be done for each period of time at that rate of interest which represents the alternative cost of employing capital in the occupation in question; that is, at the rate which the entrepreneur could obtain in other investments"

"[The theory of the firm] is exactly analogous to the analysis of the reactions of a consumer by means of indifferent curves. Indeed, a consumer is merely a ‘firm’ whose product is ‘utility’."

"The use of isoquants to describe the production function did not develop to any great extent until the thirties."

"The main key to the economics of the postwar world is a simple truism — that the rate of accumulation is equal to the rate of production less the rate of consumption. This is the "Bathtub Theorem." Production may be likened to the flow of water from the faucet, consumption to the flow down the drain. The difference between these two flows is the rate at which the water in the bathtub - the total stockpile of all goods - is accumulating. War drains the economic bathtub in a great waste of consumption. The first problem of reconstruction is to rebuild the stockpile. It can be rebuilt only by widening the gap between production and consumption, or, in the case of a single country, by importing more than is exported. It is difficult for a ravaged country to increase either its production or its net imports. Unless it can obtain outside help, therefore, it must suffer a drastic restriction of consumption. Frequently the only way consumption can be restricted is by inflation. Here, therefore, is the key to the most fundamental problems of reconstruction."

"This concept of capital-rebuilding is so important that it may be desirable to digress for a moment. In the broadest sense of the word, capital means the sum total of the valuable things possessed by the individuals of a society, excluding "claims," that is, mere titles to property. The word is used to mean both the inventory of these valuable things; the houses, factories, machines, livestock, stocks of raw materials, and goods in all stages of completion; and also to mean the sum of the values of these things. It should generally be clear from the context which of these two meanings is intended."

"Reconstruction is merely a special case of economic progress. If we are to understand its problems thoroughly, we must examine what is meant by economic progress and try to discover how it comes about... Economic progress is not altogether easy to define and is even more difficult to measure. Nevertheless, the phrase clearly corresponds to a meaningful idea. We have only to contrast a savage society with our own. In a savage society, the same customs, the same techniques, the same ways of doing everything, from ploughing to praying, are maintained generation after generation, son following exactly in the footsteps of his father and daughter in the footsteps of her mother, without deviating an inch from the well-trodden way. In modern civilized society, on the other hand, there is constant change and flux; we are constantly improving on the methods of our ancestors, and indeed one of the surest ways to discredit anything is to call it "old-fashioned!""

"The should not be confused with the profit system. By the profit system, of course, we mean the institution of private property in capital goods and the free private enterprise that goes along with it. There is no reason why the "profit motive" should be necessarily connected with the profit system. In a profit system there is nothing to prevent anyone acting on altruistic lines; there is no law that says a businessman must maximize his profits. If a businessman chose to operate with outputs, prices, and wages that yielded him a smaller profit than the maximum, but which he felt were socially more desirable, there is nothing in the profit system that would prevent him from doing this. Nothing in the profit system would prevent the most ardent liberal from refusing an increase in wages, or from accepting an unpleasant and poorly paid job. At the other extreme, there is nothing in a communist system that would do away with the profit motive, or the "advantage motive.""

"Economic problems have no sharp edges. They shade off imperceptibly into politics, sociology, and ethics. Indeed, it is hardly an exaggeration to say that the ultimate answer to every economic problem lies in some other field."

"We all, or nearly all, consent If wages rise by ten per cent It puts a choice before the nation Of unemployment or inflation."

"I seem to have come to much of the same conclusion as you have reached, though approaching it from the direction of economics and the social sciences rather than from biology - that there is a body of what have been calling "general empirical theory," or "general system theory" in your excellent terminology , which is of wide applicability in many different disciplines. I am sure there are many people all over the world who have come to essentially the same position that we have, but we are widely scattered and do not know each other, so difficult is it to cross the boundaries of the disciplines."

"Theories without facts may be barren, but facts without theories are meaningless."

"The controversy as to whether socialism is possible has been settled by the fact that it exists, and it is a fundamental axiom of my philosophy, at any rate, that anything that exists, is possible."

"[Veblenian institutionalism was] part of a much larger movement of dissent, that includes London School Institutionalists, Oxford Antimarginalists and the German Historical School (especially its second generation."

"[There will be movement toward] behavioral economics... [which] involves study of those aspects of men’s images, or cognitive and affective structures that are more relevant to economic decisions."

"Accounting for the most part, remains a legalistic and traditional practice, almost immune to self-criticism by scientific methods."

"In every field there is a need for writing where the main objective is to extend the reader's field of acquaintance with the complex cases of the real world. Such writing does not have to be very exact or quantitative; it does not even have to formulate or to demonstrate hypotheses. It constitutes, as it were, travel over the field of study. Travel is certainly not enough, even for a geographer, but we would feel, I imagine, that a geographer who had never travelled would be under a serious handicap. Similarly the student of organizations who has never, even vicariously through reading, been in a hospital, a bank, a research laboratory, a large corporation, a Soviet factory, a revolution, an Egyptian civil service department, and so on, has missed something. His generalizations are apt to be based on too narrow a selection of the field."

"The thing that distinguishes social systems from physical or even biological systems is their incomparable (and embarrassing) richness in special cases. Generalizations in the social sciences are mere pathways which lead through a riotous forest of individual trees, each a species unto itself. The social scientist who loses this sense of the essential individuality and uniqueness of each case is all too likely to make a solemn scientific ass of himself, especially if he thinks that his faceless generalizations are the equivalents of the rich variety of the world."

"I have been gradually coming under the conviction, disturbing for a professional theorist, that there is no such thing as economics - there is only social science applied to economic problems."

"Reality, in its quantitative aspect, must be considered as a system of populations... The general study of the equilibria and dynamics of populations seems to have no name; but as it has probably reached its highest development in the biological study known as 'ecology,' this name may well be given to it."

"In calling society an ecological system we are not merely using an analogy; society is an example of the general concept of an "ecosystem" that is, an ecological system of which biological systems--forests, fields, swamps--are other examples."

"Almost every organization... exhibits two faces — a smiling face which it turns toward its members and a frowning face which it turns to the world outside."

"The organizer who creates roles, who creates the holes that will force the pegs to their shape, is a prime creator of personality itself. When we ask of a man, "What is he?" the answer is usually given in terms of his major role, job, or position in society; he is the place that he fills, a painter, a priest, a politician, a criminal."

"[Boulding's belief in] the immediate experience of the Holy Spirit, or Inward Light, available to every man to teach, guide, reprove, and draw him up toward goodness."

"General Systems Theory is a name which has come into use to describe a level of theoretical model-building which lies somewhere between the highly generalized constructions of pure mathematics and the specific theories of the specialized disciplines. Mathematics attempts to organize highly general relationships into a coherent system, a system however which does not have any necessary connections with the "real" world around us. It studies all thinkable relationships abstracted from any concrete situation or body of empirical knowledge."

"Knowledge is not something which exists and grows in the abstract. It is a function of human organisms and of social organization. Knowledge, that is to say, is always what somebody knows: the most perfect transcript of knowledge in writing is not knowledge if nobody knows it. Knowledge however grows by the receipt of meaningful information - that is, by the intake of messages by a knower which are capable of reorganising his knowledge."

"Two possible approaches to the organization of general systems theory suggest themselves, which are to be thought of as complementary rather than competitive, or at least as two roads each of which is worth exploring. The first approach is to look over the empirical universe and to pick out certain general phenomena which are found in many different disciplines, and to seek to build up general theoretical models relevant to these phenomena. The second approach is to arrange the empirical fields in a hierarchy of complexity of organization of their basic "individual" or unit of behavior, and to try to develop a level of abstraction appropriate to each."

"A second possible approach to general systems theory is through the arrangement of theoretical systems and constructs in a hierarchy of complexity, roughly corresponding to the complexity of the "individuals" of the various empirical fields... leading towards a "system of systems."… I suggest below a possible arrangement of "levels" of theoretical discourse."

":(i) The first level is that of the static structure. It might be called the level of frameworks..."

":(ii) The next level of systematic analysis is that of the simple dynamic system with predetermined, necessary motions..."

":(iii) The next level is that of the control mechanism or cybernetic system, which might be nicknamed the level of the thermostat..."

":(iv) The fourth level is that of the "open system," or self-maintaining structure..."

":(v) The fifth level might be called the genetic~societal level; it is typified by the plant, and it dominates the empirical world of the botanist."

":(vi) … the "animal" level, characterized by increased mobility, teleological behavior and self-awareness..."

":(vii) The next level is the "human" level, that is of the individual human being considered as a system..."

":(viii) Because of the vital importance for the individual man of symbolic images and behavior based on them it is not easy to separate clearly the level of the individual human organism from the next level, that of social organizations..."

":(ix) To complete the structure of systems we should add a final turret for transcendental systems..."

"One advantage of exhibiting a hierarchy of systems in this way is that it gives us some idea of the present gaps in both theoretical and empirical knowledge. Adequate theoretical models extend up to about the fourth level, and not much beyond. Empirical knowledge is deficient at practically all levels."

"As I sit at my desk, I know where I am. I see before me a window; beyond that some trees; beyond that the red roofs of the campus of Stanford University; beyond them the trees and the roof tops which mark the town of Palo Alto; beyond them the bare golden hills of the Hamilton Range... beyond that other mountains, range upon range, until we come to the Rockies; beyond that the Great Plains and the Mississippi; beyond that the Alleghenies; beyond that the eastern seaboard; beyond that the Atlantic Ocean; beyond that is Europe; beyond that is Asia. I know, furthermore, that if I go far enough I will come back to where I am now. In other words, I have a picture of the earth as round. I visualize it as a globe. I am a little hazy on some of the details... I probably could not draw a very good map of Indonesia, but I have a fair idea where everything is located on the face of this globe. Looking further, I visualize the globe as a small speck circling around a bright star which is the sun, in the company of many other similar specks, the planets. Looking still further, I see our star the sun as a member of millions upon millions of others in the Galaxy. Looking still further, I visualize the Galaxy as one of millions upon millions of others in the universe."

"What I have been talking about is knowledge. Knowledge, perhaps, is not a good word for this. Perhaps one would rather say my image of the world. Knowledge has an implication of validity, of truth. What I am talking about is what I believe to be true; my subjective knowledge. It is this Image that largely governs my behavior. In about an hour I shall rise, leave my office, go to a car, drive down to my home, play with the children, have supper, perhaps read a book, go to bed. I can predict this behavior with a fair degree to accuracy because of the knowledge which I have: the knowledge that I have a home not far away, to which I am accustomed to go. The prediction, of course, may not be fulfilled. There may be an earthquake, I may have an accident with the car on the way home, I may get home to find that my family has been suddenly called away. A hundred and one things may happen. As each event occurs, however, it alters my knowledge structure or my image. And as it alters my image, I behave accordingly. The first proposition of this work, therefore, is that behavior depends on the image."

"[Even the mechanism can be endowed with an image. Thus] the thermostat has an image of the outside world in the shape of information regarding its temperature. It has also a value system in the sense of the ideal temperature at which it is set. Its behavior is directed towards the receipt of information which will bring its image and its value systems together"

"The human being, on the other hand, is firmly located in a temporal process. He has an image of the past which extends back far beyond the limits of his own life and experience, and he likewise has an image of the future. Closely associated with the time structure of his image is the image of the structure of relationships. Because we are aware of time, we are also aware of cause and effect, of contiguity and succession, of cycles and repetition. The image of man is also characterized by a much greater degree of self-consciousness and of self-awareness than that of the lower animals. We not only know, but we know that we know. This reflective character of the human image is unique, and is what leads to philosophy."

"Because of his capacity for abstract communications and language and his ability to enter in imagination into the lives of others, man is able to build organizations of a size and complexity far beyond those of the lower animals."

"The basic bond of any society, culture, subculture, or organization is 'a public image."

"If a totally new image is to come into being however, there must be sensitivity to internal messages, the image itself must be sensitive to change, must be unstable, and it must include a value image which places high value on trials, experiments, and the trying of new things."

"In this chapter I want to raise the question partly in jest but partly also in seriousness whether the concept of the image cannot become the abstract foundation of a new science, or at least a cross-disciplinary specialization. As I am indulging in the symbolic communication of an image of images I will even venture to give the science a name — Eiconics — hoping thereby to endow it in the minds of my readers with some of the prestige of classical antiquity. I run some risk perhaps of having my new science confused with the study of icons. A little confusion, however, and the subtle overtones of half-remembered associations are all part of the magic of the name."

"There is something, however humble, which can properly be called skill among those who recognise themselves as economists."

"It is important to realize that the exercise of any skill depends on the ability to create an abstract system of some kind out of the totality of the world around us. For instance, the carpenter is not interested in wood as a biological or chemical entity. He is sensitive to many of its grosser physical properties but not to many subtler ones. The wood of a carpenter is not the real — that is, the complete substance — but merely wood as a material on which the carpenter can exercise his skill."

"[The notion of equilibrium ] is a notion which can be employed usefully in varying degrees of looseness. It is an absolutely indispensable part of the toolbag of the economist and one which he can often contribute usefully to other sciences which are occasionally apt to get lost in the trackless exfoliations of purely dynamic systems."

"The ability to work with systems of general equilibrium is perhaps one of the most important skills of the economist — a skill which he shares with many other scientists, but in which he has perhaps a certain comparative advantage."

"It is clear that the building of models is not a purely mechanical process but requires skill of a high order – not merely mathematical skill but a sensitivity to the relative importance of different factors and a critical, almost an artistic, faculty in the selection of behaviour equations which are reasonable, tentative hypotheses in explaining the behaviour of actual economies."

"One of the most important skills of the economist, therefore, is that of simplification of the model. Two important methods of simplification have been developed by economists. One is the method of partial equilibrium analysis (or microeconomics), generally associated with the name of Alfred Marshall and the other is the method of aggregation (or macro-economics), associated with the name of John Maynard Keynes."

"Without the heroic, man has no meaning; without the economic, he has no sense. Economic man is most likely to be economic woman — a good wife, pulling the coat tails of her heroic husband, checking his extravagances of speech and action with words of caution and good sense. But without the heroic coat tails to pull, life for both of them would be dull and savorless indeed."

"The word 'policy' generally refers to the principles that govern action directed towards given ends. Any study of policy therefore should concern itself with three things — what we want (the ends), how we get it (the means), and who are 'we,' that is, what is the nature of the organization or group concerned. Science is concerned with means rather than with ends. The study of "what we want" (objectives) extends beyond the boundaries of the social sciences into the field of ethics. It is not the business of the social sciences to evaluate the ultimate ends of human activity. The social sciences, therefore, cannot give a final answer to the question whether any given policy is right. The social scientist can study what people say they want, what they think they want and may even infer from their behaviour what they really want, but it is not the business of science to say whether people want right things."

"Economic progress... means the discovery and application of better ways of doing things to satisfy our wants. The piping of water to a household that previously dragged it from a well, the growing of two blades of grass where one grew before, the development of a power loom that enables one man to weave ten times as much as he could before, the use of steam power and electric power instead of horse or human power — all these things clearly represent economic progress."

"Justification, in terms of the broadening of freedom, for any particular form of institution of property must be argued in terms of whether the losses caused by the restrictions imposed are greater or less than the gains derived from the elimination of costly conflict."

"Private property is a means, and neither its abolition nor its unrestricted right should be an end in itself"

"An international system consists of a group of interacting behavior units called "nations" or "countries," to which may sometimes be added certain supra-national organizations, such as the United Nations. Each of the behavior units in the system can be described in terms of a set of "relevant variables." Just what is relevant and what is not is a matter of judgment of the system-builder, but we think of such things as states of war or peace, degrees of hostility or friendliness, alliance or enmity, arms budgets, geographic extent, friendly or hostile communications, and so on. Having defined our variables, we can then proceed to postulate certain relationships between them, sufficient to define a path for all the variables through time. Thus we might suppose, with Lewis Richardson that the rate of change of hostility of one nation toward a second depends on the level of hostility in the second and that the rate of change of hostility of the second toward the first depends on the level of hostility of the first. Then, if we start from given levels of hostility in each nation, these equations are sufficient to spell out what happens to these levels in succeeding time periods."

"Nations are divided into "good"and "bad"-the enemy is all bad, one's own nation is of spotless virtue. Wars are either acts of God or acts of the other nations, which always catch us completely by surprise. To a student of international systems the national image even of respectable, intellectual, and powerful people seems naive and untrue. The patriotism of the sophisticated cannot be a simple faith. There is, however, in the course of human history a powerful and probably irreversible movement toward sophistication. We can wise up, but we cannot wise down, except at enormous cost in the breakdown of civilizations, and not even a major breakdown results in much loss of knowledge."

"In spite of the moderate usefulness of what the economist has to say on this subject... there is a cry for a cultural anthropologist or even a psychologist when the economist runs into sacred cows, extended families, traditional motivations, levels of achievement, and social morale, all of which may be more important to economic development than any of the traditional economic variables. We still await a true synthesis of the insights of economics with those of other social sciences in the area"

"In view of the importance of philanthropy in our society, it is surprising that so little attention has been given to it by economic or social theorists. In economic theory, especially, the subject is almost completely ignored. This is not, I think, because economists regard mankind as basically selfish or even because economic man is supposed to act only in his self-interest; it is rather because economics has essentially grown up around the phenomenon of exchange and its theoretical structure rests heavily on this process."

"We face the dilemma... that if everyone gets his deserts, some may be driven from the table: and if everyone comes to the table, some may not get their deserts. In practice, this seems to be resolved by the establishment of a social minimum as reflected for instance, in the poor law, in social security and various welfare services. The principle of desert come into play above this social minimum. That is to say, society lays a modest table at which all can sup and a high table at which the deserving can feast"

"In the imagination of those who are sensitive to the realities of our era, the earth has become a space ship, and this, perhaps, is the most important single fact of our day. For millennia, the earth in men's minds was flat and illimitable. Today, as a result of exploration, speed, and the explosion of scientific knowledge, earth has become a tiny sphere, closed, limited, crowded, and hurtling through space to unknown destinations. This change in man's image of his home affects his behaviour in many ways, and is likely to affect it much more in the future."

"A somewhat casual observer from outer space might well deduce that the course of evolution in this planet had produced a species of large four-wheeled bugs with detachable brains; peculiar animals which rested when they sent their brains away from them but performed in rather predictable manner when their brains were recalled."

"The concept of need is often looked upon rather unfavorably by economists, in contrast with the concept of demand. Both, however, have their own strengths and weaknesses. The need concept is criticized as being too mechanical, as denying the autonomy and individuality of the human person, and as implying that the human being is a machine which "needs" fuel in the shape of food, engine dope in the shape of medicine, and spare parts provided by the surgeon."

"One demand for a concept of need arises because the concept of demand itself has serious weaknesses and limitations. It assumes away, for instance, a serious epistemological problem. The very idea of autonomous choice implies first that the chooser knows the real alternatives which are open to him, and second that he makes the choice according to value criteria or a utility function which he will not later regret. Both the image of the field of choice and the utility function have a learning problem which, by and large, economists have neglected. This problem is particularly acute in the case of medical care, where the demander is usually a layman faced with professional suppliers who know very much more than he does. The demand for medical care, indeed, is primarily a demand for knowledge or at least the results of knowledge..."

"It seems reasonable to suppose that conflict does exhibit many general patterns, that the patterns of conflict in industrial relations, international relations, interpersonal relations, and even animal life are not wholly different from one another, and that it is, therefore, worth looking for the common element. On the other hand, we should be surprised if there were no differences; the pattern of conflict in international relations, for instance, is not the same as in industrial or interpersonal relations. Just as it is important to perceive the similarities in different situations, so it is important to perceive the differences. These differences cannot be perceived, however, without a general theory to serve as a standard of comparison."

"Before we can proceed to a formal definition of conflict we must examine another concept, that of behavior space. The position of a behavior unit at a moment of time is defined by a set of values (subset, to be technical) of a set of variables that defines the behavior unit. These variables need not be continuous or quantitatively measurable. The different values of a variable must, however, be capable of simple ordering; that is, of any two values it must be possible to say that one is 'after' (higher, lefter, brighter than) the other."

"Conflict may be defined as a situation of competition in which the parties are aware of the incompatibility of potential future positions, and in which each party wishes to occupy a position that is incompatible with the wishes of the other."

"[The loss- of-strength gradient is] the degree to which military and political power diminishes as we move a unit distance away from its home base."

"A distinction does not have to be clear to be important, and, at some point, there is a common-sense dividing line between procedural and violent conflict. Violence is most closely associated with conquest as a form of conflict settlement, though violence is descriptive of a conflict process rather than of a conflict settlement. It is quite possible, for instance, for conquest to be nonviolent, that is, for one party to be absorbed in another or for one organization to be dissolved by strictly procedural means. Departments are organized out of existence, countries are federated or united, organizations are laid down, and firms are bankrupted by purely procedural processes, without more than perhaps a trace of legal coercion lurking in the background."

"Another indication of the magnitude of the present transition is the fact that, as far as many statistical series related to activities of mankind are concerned, the date that divides human history into two equal parts is well within living memory."

"The success of Japanese development is due simply to the fact that Japan devoted a substantial portion of its resources to the growth industry, and particularly to the human resources and then commended Max Weber's emphasis on hard work and thrift. All the law and the prophets of economic development can be summed up in the old proverb that "where there's a will there's a way". The way indeed is absurdly easy and is well known. It consists merely in putting resources into growth. What could be simpler and easier! the problem however, is the will, and this. I think, we understand very little. The whole cultural milieu of society plays a role in the process of developing its will, and it is hard to separate the determining factors. A widespread puritan ethic, as Max Weber pointed out, is undoubtedly an asset, if this leads people to place a high value on hard work and thrift. On the other hand, puritanism often goes along with a resistance to social change and an unwillingness to innovate outside a narrow field of technology, and thrift alone can often lead to uncreative forms of accumulation or even to unemployment and depression. Mere accumulation is not enough. Economic development does not consist merely in the piling up of things, but in the accumulation of new kinds of things."

"It is an arithmetic, moreover, which cannot be denied even though we nearly all try to deny it. The arithmetic is simply this: Any positive rate of growth whatever eventually carries a human population to an unacceptable magnitude, no matter how small the rate of growth may be unless the rate of population growth can be reduced to zero before the population reaches an unacceptable magnitude. There is a famous theorem in economics, one which I call the dismal theorem, which states that if the only thing which can check the growth of population is starvation and misery, then the population will grow until it is sufficiently miserable and starving to check its growth. There is a second, even worse theorem which I call the utterly dismal theorem. It says that if the only thing which can check the growth of population is starvation and misery, then the ultimate result of any technological improvement is to enable a larger number of people to live in misery than before and hence to increase the total sum of human misery."

"What might be called, perhaps somewhat grandiloquently, the Epistemological Question has received rather scant attention at the hands of economists. There are, of course, a number of epistemological questions, some of which lie more in the province of the philosopher than they do the economist or the social scientist. The one with which I am particularly concerned here is that of the role of knowledge in social systems, both as a product of the past and as a determinant of the future."

"There are, of course, a number of epistemological questions, some of which lie more in the province of the philosopher than they do the economist or the social scientist. The one with which I am particularly concerned here is that of the role of knowledge in social systems, both as a product of the past and as a determinant of the future."

"Economists can take a good deal of credit for the stabilization policies which have been followed in most Western countries since 1945 with considerable success. It is easy to generate a euphoric and self-congratulatory mood when one compares the twenty years after the first World War, 1919-39, with the twenty years after the second, 1945-65. The first twenty years were a total failure; the second twenty years, at least as far as economic policy is concerned, have been a modest success. We have not had any great depression; we have not had any serious financial collapse; and on the whole we have had much higher rates of development in most parts of the world than we had in the 1920’s and 1930’s, even though there are some conspicuous failures. Whether the unprecedented rates of economic growth of the last twenty years, for instance in Japan and Western Europe, can be attributed to economics, or whether they represent a combination of good luck in political decision making with the expanding impact of the natural and biological sciences on the economy, is something we might argue. I am inclined to attribute a good deal to good luck and non-economic forces, but not all of it, and even if economics only contributed 10 percent, this would amount to a very handsome rate of return indeed, considering the very small amount of resources we have really put into economics."

"We are now in the middle of a long process of transition in the nature of the image which man has of himself and his environment. Primitive men, and to a large extent also men of the early civilizations, imagined themselves to be living on a virtually illimitable plane. There was almost always somewhere beyond the known limits of human habitation, and over a very large part of the time that man has been on earth, there has been something like a frontier... Gradually, however, man has been accustoming himself to the notion of the spherical earth and a closed sphere of human activity. A few unusual spirits among the ancient Greeks perceived that the earth was a sphere. It was only with the circumnavigations and the geographical explorations of the fifteenth and sixteenth centuries, however, that the fact that the earth was a sphere became at all widely known and accepted. Even in the thirteenth century, the commonest map was Mercator's projection, which visualizes the earth as an illimitable cylinder, essentially a plane wrapped around the globe, and it was not until the Second World War and the development of the air age that the global nature of tile planet really entered the popular imagination. Even now we are very far from having made the moral, political, and psychological adjustments which are implied in this transition from the illimitable plane to the closed sphere."

"The closed economy of the future might similarly be called the 'spaceman' economy, in which the earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system"

"The essential measure of the success of the economy is not production and consumption at all, but the nature, extent, quality, and complexity of the total capital stock, including in this the state of the human bodies and minds included in the system. In the spaceman economy, what we are primarily concerned with is stock maintenance, and any technological change which results in the maintenance of a given total stock with a lessened throughput (that is, less production and consumption) is clearly a gain. This idea that both production and consumption are bad things rather than good things is very strange to economists, who have been obsessed with tile income-flow concepts to the exclusion, almost, of capital-stock concepts."

"It is absurd to suppose we can think of nature as a system apart from knowledge, for it is knowledge that is increasingly determining the course of nature"

"It [knowledge] is clearly related to information, which we can now measure; and an economist especially is tempted to regard knowledge as a kind of capital structure, corresponding to information as an income flow. Knowledge, that is to say, is some kind of improbable structure or stock made up essentially of patterns — that is, improbable arrangements, and the more improbable the arrangements, we might suppose, the more knowledge there is."

"The idea of knowledge as an improbable structure is still a good place to start. Knowledge, however, has a dimension which goes beyond that of mere information or improbability. This is a dimension of significance which is very hard to reduce to quantitative form. Two knowledge structures might be equally improbable but one might be much more significant than the other."

"Let me first explain, then, what I mean by moral and moral science. A moral or ethical proposition, is a statement about a rank order of preference among alternatives, which is intended to apply to more than one person. A preference which applies to one person only is a taste. Statements of this kind are often called "value judgments." If someone says, "I prefer A to B," this is a personal value judgment, or a taste. If he says, "A is better than B," there is an implication that he expects other people to prefer A to B also, as well as himself. A moral proposition then is a "common value"."

"No science of any kind can be divorced from ethical considerations... Science is a human learning process which arises in certain subcultures in human society and not in others, and a subculture as we seen is a group of people defined by acceptance of certain common values, that is, an ethic which permits extensive communication between them."

"The concept of a value-free science is absurd."

"Adam Smith, who has strong claim to being both the Adam and the Smith of systematic economics, was a professor of moral philosophy and it was at that forge that economics was made. Even when I was a student, economics was still part of the moral sciences tripos at Cambridge University. It can claim to be a moral science, therefore, from its origin, if for no other reason. Nevertheless, for many economists the very term “moral science” will seem like a contradiction. We are strongly imbued today with the view that science should be wertfrei and we believe that science has achieved its triumph precisely because it has escaped the swaddling clothes of moral judgment and has only been able to take off into the vast universe of the “is” by escaping from the treacherous launching pad of the “ought.” Even economics, we learn in the history of thought, only became a science by escaping from the casuistry and moralizing of medieval thought."

"Every culture, or subculture, is defined by a set of common values, that is, generally agreed upon preferences. Without a core of common values a culture cannot exist, and we classify society into cultures and subcultures precisely because it is possible to identify groups who have common values."

"Even personal tastes are learned, in the matrix of a culture or a subculture in which we grow up, by very much the same kind of process by which we learn our common values. Purely personal tastes, indeed, can only survive in a culture which tolerates them, that is, which has a common value that private tastes of certain kinds should be allowed."

"There is a kind of second law of cultural dynamics which states simply that when anything has been done, it cannot be done again. In other words, we start off any system with a potential for novelty which is gradually exhausted. We see this in every field of human life, in the arts as well as the sciences. Once Beethoven has written the Ninth Symphony, nobody else can do it. Consequently, we find that in any evolutionary process, even in the arts, the search for novelty becomes corrupting. The "entropy trap" is perhaps the most subtle and the most fundamental of the obstacles toward realising the developed society..."

"Perhaps the most difficult ethical problem of the scientific community arises not so much from conflict with other subcultures as from its own success. Nothing fails like success because we don't learn from it. We learn only from failure."

"The organization of science into disciplines sets up a series of ghettos with remarkable distances of artificial social space between them."

"The human condition can almost be summed up in the observation that, whereas all experiences are of the past, all decisions are about the future. It is the great task of human knowledge to bridge this gap and to find those patterns in the past which can be projected into the future as realistic images."

"The troubles of the 20th century are not unlike those of adolescence -- rapid growth beyond the ability of organizations to manage, uncontrollable emotion, and a desperate search for identity. Out of adolescence, however, comes maturity in which physical growth with all its attendant difficulties comes to an end, but in which growth continues in knowledge, in spirit, in community, and in love; it is to this that we look forward as a human race. This goal, once seen with our eyes, will draw our faltering feet toward it."

"My first acquaintance with the work of Dr. Fred Polak came in the year 1954–5, when we were both fellows at the new Center for Advanced Study in the Behavioral Sciences at Stanford. Dr. and Mrs. Polak lived in a little house at the back of the garden of the house that the Bouldings rented and participated very cheerfully in the life of the Bouldings and their four young children. Many exciting things came out of that year at Stanford, such as the Society for General Systems Research and the Journal of Conflict Resolution. But looking back on the expérience after nearly twenty years, I think the most important impact on the thought of both Elise Boulding and myself were the many conversations that we had with the Polaks around the dining table and in the garden."

"[The historical] development in the international system may almost be defined as the process by which we pass from stable war to stable peace."

"Knowledge exists in minds, not in books. Before what has been found can be used by practitioners, someone must organize it, integrate it, extract the message"

"They, economics and evolution, are both examples of a larger process, which has been at work in this part of the universe for a very long time. This is the process of the development of structures of increasing complexity and improbability. The evolutionary process always operates through mutation and selection and has involved some distinction between the genotype which mutates and the phenotype which is selected. The process by which the genotype constructs the phenotype may be described as "organization". Economic development manifesto itself largely in the production of commodities, that is, goods and services. It originates, however, in ideas, plans, and attitudes in the human mind. These are the genotypes in economic development. This whole process indeed can be described as a process in the growth of knowledge. What the economist calls "capital" is nothing more than human knowledge imposed on the material world. Knowledge and the growth of knowledge, therefore, is the essential key to economic development. Investment, financial systems and economic organizations and institutions are in a sense only the machinery by which a knowledge process is created and expressed."

"[The question for the behavioral disciplines is simply] what is better, and how do we get there?"

"If there is one idea that has dominated the history of the United States, it is the idea of progress. Yet analyses of this idea are surprisingly rare. Furthermore, in spite of having been founded by a rather small revolution, the dominant dynamic of the United States has been evolutionary, through social mutation (invention), production, and selection. In this paper, therefore, I propose to look at the larger question of the nature of evolutionary change, and the conditions under which change can be identified as progress."

"It is almost as hard to define mathematics as it is to define economics, and one is tempted to fall back on the famous old definition attributed to , “Economics is what economists do,” and say that mathematics is what mathematicians do. A large part of mathematics deals with the formal relations of quantities or numbers."

"Economics, we learn in the history of thought, only became a science by escaping from the casuistry and moralizing of medieval thought."

"If the society toward which we are developing is not to be a nightmare of exhaustion, we must use the interlude of the present era to develop a new technology which is based on a circular flow of materials such that the only sources of man's provisions will be his own waste products."

"[You know you are in a part of the economy dealing with grants instead of exchange when] A gives B something and B does not give A anything in the way of an economic good."

"At the opposite pole from the gift is tribute - that is, a grant made out of fear and under threat. A threat is a statement of the form "you do something that I want or I will do something that you do not want."

"Political conflict rests to a very large extent on a universal ignorance of consequences, as the people who are benefited by any particular act or policy are rarely those who struggled for it, and the people who are injured are rarely those who opposed it."

"[In order to define the distinction between a grant and an exchange transaction, Boulding has used the net worth criterion] If there is no decrease in the net worth of either party, the transaction is exchange; if there is, it contains some grant element and is an explicit or implicit grant."

"One reason why the progressive state is 'cheerful' is that social conflict is diminished by it."

"The social system tends to be dominated by images... especially of the future, which act cybernetically, constantly guided by perceived divergences between the real and the ideal"

"The world moves into the future as a result of decisions, not as a result of plans. Plans are significant only insofar as they affect decisions."

"Equilibrium is a figment of the human imagination."

"We never like to admit to ourselves that we have made a mistake. Organizational structures tend to accentuate this source of failure of information."

"[if the automobile is replaced by public trans port] the social structure of cities will revert to the ecological pattern of 1880."

"Communication can only take place among equals."

"[The law of evolution states that] complexity increases in terms of differentiation and structure."

"Any attempt to reduce the complex properties of biological organisms or of nervous systems or of human brains to simple physical and chemical systems is foolish."

"The evolutionary vision is agnostic in regard to systems in the universe of greater complexity than those of which human beings have clear knowledge. It recognizes aesthetic, moral, and religious ideas and experiences as a species, in this case of mental structures or of images, which clearly interacts with other species in the world's great' ecosystem."

"[Boulding grasps the significance of sociobiology's emphasis on biogenetics] that there are biogenetic factors in learning capacity and potential can hardly be denied... [yet] biogenetically imposed limits to human learning... seem to be much more remote... than are the limitations imposed by the biogenetic structure.""

"Looked at from the perspective of twentieth-century earth, we see three great stages in the dynamic process of the universe. To this whole process, as it spreads out over perhaps ten billion years of time and ten billion light years of space, we give the name evolution, and we see three great patterns within it. The first is physical evolution. This presumably started with the development of the most elementary particles (whatever they may be); then of neutrons, protons, electrons, and radiations; then of elements from hydrogen to uranium and beyond formed by combining protons and electrons; then of chemical compounds; then finally of increasingly complex molecules from amino acids, and proteins to the great watershed of DNA, the beginnings of life."

"Nothing fails like success, because we do not learn anything from it. We only learn from failure, but we do not always learn the right things from failure. If there is a failure of expectations, that is, if the messages that we receive are not the same as those we expected, we can make three possible inferences."

"DNA has been aptly described as the first three-dimensional Xerox machine."

"Populations interact, some decline to extinction, and some expand. In an ice age the tundra advances on the forest, but in no sense is there a "struggle" between them. As the temperature gets colder, the forest species decline and the tundra species increase; that is all. There is neither effort nor fight. As we move toward the more complex animals, of course, both effort and fighting become more common, but even in the predator-prey relationship, there is catching and eating rather than fighting."

"Human artifacts not only include material structures and objects, such as buildings, machines, and automobiles, but they also include organizations, organizational structures like extended families . . . tribes, nations, corporations, churches, political parties, governments, and so on. Some of these may grow unconsciously, but they all originate and are sustained by the images in the human mind."

"[The information available within a system constitutes what Boulding (1978) calls the noosphere. It is constituted by the collection of plans, of representations, of procedures, of ideas for the construction of objects or of instructions to realize certain interaction patterns, including] the totality of the cognitive content, including values, of all human nervous systems, plus the prostatic devices by which the system is extended and integrated in the form of libraries, computers, telephones, post offices, and so on."

"The social dynamics of human history, even more than that of biological evolution, illustrate the fundamental principle of ecological evolution - that everything depends on everything else. The nine elements that we have described in societal evolution of the three families of phenotypes - the phyla of things, organizations and people, the genetic bases in knowledge operating through energy and materials to produce phenotypes, and the three bonding relations of threat, integration and exchange - all interact on each other."

"Dialectics in many different forms has a surprisingly good press. Most people believe that struggle is very important and that it is important to be on the right side in a conflict.... Part of the difficulty is that the human race has an enormous and by no means unreasonable passion for the dramatic, and conflict is much more dramatic than production....The awful truth about the universe - that it is not only rather a muddle, but also pretty dull - is wholly unacceptable to the human imagination. Nevertheless, it is the dull, nondialectical processes that hold the world together, that move it forward, and that provide the setting within which the dialectical processes take place. Evolution is the theatre, dialectics the play. It is a tragic error to mistake the play for the theatre, however, because that all too easily ends in the theatre burning down... Unless there is a reasonably widespread appreciation of the proper role of dialectical processes, these tend to get out of hand and become extremely destructive.... doing more harm than good."

"Physicists can only talk to other physicists and economists to economists... sociologists often cannot even understand each other."

"Canada has no cultural unity, no linguistic unity, no religious unity, no economic unity, no geographic unity. All it has is unity."

"With the development of the human race (and perhaps a little earlier), a new structure emerges, which we can call know-what. This consists of the structures in the nervous system which presumably map into some kind of images in the of the 'mind', which also map into structure in the 'real world', whatever that is. Know-what is very different from know-how. The fertilized egg certainly has the know-how to make whatever organism it knows how to make, but it is very doubtful that it knows what it is doing. The remarkable thing about know-what is that it creates know-how, as we see with the fantastic burgeoning of human artifacts under the influence of a science-based technology. Science, fundamentally, deals with know-what and this enormously increases know-how."

"One can even go beyond know-what into know-whether. This involves the evaluative structure of the human mind which enables us to make decisions and choices among different images of the future. Human behavior cannot be explained without this further development in the hierarchy that starts with simple information. This actually goes back a long way in evolution. Even the amoeba knows whether to absorb a piece of grit or a piece of food."

"The World is a very complex system. It is easy to have too simple a view of it, and it is easy to do harm and to make things worse under the impulse to do good and make things better."

"[In science any model depends on a pre-chosen taxonomy] a set of classifications into which we divide the enormous complexity of the real world... Land, labor, and capital are extremely heterogeneous aggregates, not much better than earth, air, fire, and water."

"Economics deals with the behavior of commodities rather than with the behavior of men."

"[Boulding once said, in response to a forecast that someday every American would be earning $100,000 per year] So what? Someone will still have to take out the garbage."

"I was born on January 18, 1910 at 4 Seymour Street, off. London Road, Liverpool, Lancashire, England, Great. Britain, Europe, the world, the solar system, the universe. Writing out my full address like this was a great satisfaction when I was a boy. Seymour Street had a solid row of narrow, four-story houses on both sides, each with a flight of steps leading up to the front door, and what we called an "airy," a rectangular hole in front of the basement window, often with steps leading down to a basement underneath the front door. The streets of the neighborhood spoke of the Napoleonic Wars in the early nineteenth century— St. Vincent Street, Rodney Street, Lord Nelson Street. Close by was dirty Lime Street Station; St. George's Hall, a magnificent classical structure the center of Liverpudlian splendor; the theaters; and the great Picton Library with its huge circular reading room. The neighborhood was very mixed; we belonged to the English minority in Liverpool, a city largely populated by the Irish and the Welsh."

"My father, William C. Boulding, was a working plumber in business for himself. At the back of the house was the yard, a corrugated iron shed full of pipes, wrenches, and blow torches, and other mysterious and rather frightening apparatus. He had two faithful employees, Billy Fox, who was moody and regarded as a little queer, and Billy Sankey, who was short and cheerful. They and my father always smelled strongly of some kind of grease. My father was a gentle man. I never I never heard his voice raised in anger. He had had a very hard childhood. His father died soon after he was born; his mother married again, a man known in the family legends as "Pa Hardacre," about whom endless stories were told. He was a bigamist. He drove my father out of the house at the age of twelve to earn his own living on the streets of Liverpool. He constantly mistreated my half-aunts, Ethel and Rosie. He died before I was born, but my mother's accounts of him sounded like something out of Dickens."

"The trouble with taxonomic boxes is... that that they tend to be empty, however beautiful they are on the outside."

"In modern industry, research Has come to be a kind of Church Where rubber-aproned acolytes Perform their Scientific Rites And firms spend funds they do not hafter In hope of benefits Hereafter."

"We cannot walk befor we toddle, Though we may toddle far too long, If we embrace a lovely Model That is consistent, clear, and wrong. - Experts from "Notes from Wooods Hole", unpublished, 1976."

"It is much more accurate to identify the factors of production as know-how (that is genetic information structure), energy, and materials, for, as we have seen, all processes of production involve the direction of energy by some know-how structure toward the selection, transportation, and transformation of materials into the product"

"Prediction of the future is possible only in systems that have stable parameters like celestial mechanics. The only reason why prediction is so successful in celestial mechanics is that the evolution of the solar system has ground to a halt in what is essentially a dynamic equilibrium with stable parameters. Evolutionary systems, however, by their very nature have unstable parameters. They are disequilibrium systems and in such systems our power of prediction, though not zero, is very limited because of the unpredictability of the parameters themselves. If, of course, it were possible to predict the change in the parameters, then there would be other parameters which were unchanged, but the search for ultimately stable parameters in evolutionary systems is futile, for they probably do not exist... Social systems have Heisenberg principles all over the place, for we cannot predict the future without changing it."

"...the perception of potential threats to survival may be much more important in determining behavior than the perceptions of potential profits, so that profit maximization is not really the driving force. It is fear of loss rather than hope of gain that limits our behavior"

"We should always bear in mind that numbers represent a simplification of reality."

"Integrative power [is] the ultimate power"

"The most fundamental form of integrative power is the power of love."

"[Peace praxis is] a peace process that deals with conflict integratively."

"The very act of thinking about power in our lives and experiences creates a process of revelation and self-analysis that may even make us look at ourselves in a new light... thinking about power and its complex manifestations may not simply lead to a better understanding of the abstract complexities of society, but may have an effect on one‟s own image and identity. Perhaps a warning label should be placed on the cover..."

"[The integrative system] deals with such matters as respect, legitimacy, community, friendship, affection, love, and of course their opposites, across a broad scale of human relationships and interactions."

"Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."

"Production functions involving only land, labor and capital... never work and never explain economic development."

"The right to have children should be a marketable commodity, bought and traded by individuals but absolutely limited by the state."

"The only religion that still demands human sacrifice is nationalism."

"Economists and technologists bring the "bits", but it requires the social scientists and humanists to bring the "wits.""

"Mathematics brought rigor to Economics. Unfortunately, it also brought mortis"

"Don't go to great trouble to optimize something that never should be done at all. Aim to enhance total systems properties, such as creativity, stability, diversity, resilience, and sustainability–whether they are easily measured or not."

"If we saw tomorrow’s newspaper today, tomorrow would never happen."

"“Nothing fails like success because we don't learn from it. We learn only from failure.”"

"“In any evolutionary process even in the arts the search for novelty becomes corrupting.”"

"General systems theory is considered as a formal theory (Mesarovic, Wymore), a methodology (Ashby, Klir), a way of thinking (Bertalanffy, Churchman), a way of looking at the world (Weinberg), a search for an optimal simplification (Ashby, Weinberg), didactic method (Boulding, Klir, Weinberg), metalanguage (Logren), and profession (Klir)."

"Kenneth E. Boulding was a most extraordinary economist. The narrow bounds of the economics discipline could not contain his interests and talents. In addition to economics, Professor Boulding made important contributions to the fields of , sociology, philosophy, and . His forays into subjects outside the usual concerns of economists were not an intellectual dilettantism; rather, they were a result of his conviction that an understanding of human behavior can only be accomplished by studying man in his totality. Much of Boulding's work was an attempt to move beyond the narrow economic view of humans as self-interested, rational utility maximizers to a general social science exploiting the full range of our rational, instinctual, and mystical knowledge."

"Kenneth Boulding, a well-known economist and widely-read author. Boulding used an ecological model for understanding corporations and individuals as actors within a social system. His 1956 book, The Image is an early discussion of mental models. His 1978 book, Ecodynamics: A New Theory of Societal Evolution summarizes much of his earlier work."

"Boulding was not left-wing in his politics nor involved in the radical economics of the time. In fact he was always hostile to Marx’s theory of capitalism and its emphasis on class conflict. What he did feel strongly about was the cause of peace, having become a Quaker early in life, and having been active throughout his career in a variety of ways in the cause of peace. Moreover, he himself saw peace and conflict research as his largest area of work (Boulding, 1989), and regarded his involvement in the founding of the ' and the as important lifetime achievements."

"The main development I want to discuss has already occurred: Keynesian economics is dead [maybe ‘disappeared’ is a better term]. I don’t know exactly when this happened but it is true today and it wasn’t true two years ago. This is a sociological not an economic observation, so the evidence for it is sociological. For example, you cannot find a good, under 40 economist who identifies himself and his work as ‘Keynesian’. Indeed, people even take offense if referred to in this way. At research seminars, people don’t take Keynesian theorizing seriously any more—the audience starts to whisper and giggle to one another. Leading journals aren’t getting Keynesian papers submitted any more."

"I do not see how one can look at figures like these without seeing them representing possibilities. Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia's or Egypt's? If so, what exactly? If not, what is it about the "nature of India" that makes it so? The consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else."

"So I am skeptical about the argument that the subprime mortgage problem will contaminate the whole mortgage market, that housing construction will come to a halt, and that the economy will slip into a recession. Every step in this chain is questionable and none has been quantified. If we have learned anything from the past 20 years it is that there is a lot of stability built into the real economy."

"I guess everyone is a Keynesian in a foxhole."

"For policy, the central fact is that Keynesian policy recommendations have no sounder basis, in a scientific sense, than recommendations of non-Keynesian economists or, for that matter, non-economists."

"In the present decade, the U.S. economy has undergone its first major depression since the 1930’s, to the accompaniment of inflation rates in excess of 10 percent per annum. These events have been transmitted [...] to other advanced countries and in many cases have been amplified. These events did not arise from a reactionary reversion to outmoded, 'classical' principles of tight money and balanced budgets. On the contrary, they were accompanied by massive government budget deficits and high rates of monetary expansion, policies which, although bearing an admitted risk of inflation, promised according to modern Keynesian doctrine rapid real growth and low rates of unemployment. That these predictions were wildly incorrect and that the doctrine on which they were fundamentally flawed are now simple matters of fact, involving no novelties of economic theory. The task now [...] is to sort through the wreckage, determining which features of that remarkable intellectual event called the Keynesian Revolution can be salvaged and put to use and which others must be discarded.”"

"The Keynesian Revolution was, in the form in which it succeeded in the United States, a revolution in method. This was not Keynes’s intent, nor is it the view of all of his most eminent followers. Yet if one does not view the revolution in this way, it is impossible to account for some of its most important features."

"A key element in all Keynesian models is a ‘trade-off between inflation and real output: the higher is the inflation rate; the higher is output (or equivalently, the lower is the rate of unemployment)."

"When I was on the economics faculty in Chicago, I had a sign in my office that said, “No smoking, except for Bob Lucas.” It was worth enduring the smoke to talk to Bob but not to any other economist-smoker. This behavior accorded with my view that his selection for a Nobel Prize was a great idea, one that had been anticipated by most economists for several years."

"The Keynesian econometric methodology developed by Klein and associates was criticized by Lucas in his 1976 “Critique of Econometric Policy Evaluation” on the grounds that microfounded structural equations should contain expectations of future variables. Since the parameters of these expectations should depend on the parameters of the rules followed by the policy authorities, Lucas argued that the rational expectations assumption would invalidate the practice of using fixed parameter models as policy guides. The profession responded to the Lucas critique in two different ways. The first, introduced to economists in the book Rational Expectations and Econometric Practice, was to develop appropriate econometric methods to estimate parameters in rational expectations environments. The second, explained most clearly in Kydland and Prescott’s (1996) article, “The Computational Experiment,” was to develop a new methodology,calibration, that lowered the standards of what it means for a model to be successful by requiring that a good model should explain only a limited set of empirical moments."

"Lucas's name, unlike Friedman's, is hardly a household word. He is neither a prolific writer nor easy to read; although he can write clear, forceful English when he chooses, he prefers to express himself through dense mathematics, leaving it to others to popularize his ideas. Where Friedman used his academic notoriety as a stepping stone to a wider public role, Lucas has in recent years seemed to retreat to safe, increasingly technical issues of theoretical economics. And yet for most of the 1970s there was little question that Robert Lucas was having more impact on economic thought, both through his own writings and through the extraordinary devotion of his intellectual disciples, than any other working economist. Above all, he became identified with a much stronger form of Friedman's argument against active monetary policy. Where Friedman argued that such policy would in practice do more harm than good, Lucas argued that in principle it could do nothing but harm."

"How could such a difficult, technical intellectual structure acquire the force first of a crusade, then of a dogma? [...] First, Lucas's approach to macroeconomics seemed to offer a way to heal a deep wound in the heart of economic theory. [...] When Lucas seemed to be able to do was derive business cycles from microeconomic model. [...] Second, the technicality and difficulty of Lucas's theory [...] was, in the world of academic economic, an asset rather than a liability. [...] Finally, we cannot ignore the role of political bias in making rational expectations macroeconomics attractive."

"In the 1970s, Lucas and disciples take it up a notch, arguing that we should assume rational expectations: people make the best predictions possible given the available information. But in that case, how can we explain the observed stickiness of wages and prices? Lucas argued for a “signal processing” approach, in which individuals can’t immediately distinguish between changes in their wage or price relative to others — changes to which they should respond by altering supply — and overall changes in the price level. [...] In the 1980s, the Lucas project failed — pure and simple. It became obvious that recessions last too long, and there are too many sources of information, for rational confusion to explain business cycles. Nice try, with a lot of clever modeling, but it just didn’t work."

"I think Lucas is an extremely capable man, and an undisputed intellectual leader of the school. On top of that, I think he's a very interesting and impressive human being. But I disagree with him, and I think I also disagree with his interpretation of his results. I have many, many objections."

"A lot of the Lucas critiques were the sort of thing that some of us used in debunking Friedman's positivism on the stable money supply. I thought that Lucas's Nobel Prize was richly deserved and even overdue. But it was not because of the boldness and the correctness of the New Classical theory and rational expectations (that there is some kind of expected value that a group mind gets as a result, and which is in some sense "correct"). I don't believe in macro efficiency of securities markets. I believe in their micro efficiency. Convertibles are priced about right. Black-Scholes derivatives are priced about right, because you can make a lot of money in correcting any deviation. You can't make money in a bubble, by fighting the bubble. You will lose your shirt. That means the bubble can go on, and bubbles go in both directions. Usually maybe they do not last as long in the downward direction because the correction is more severe. In fact, the supply shocks of the 1970s which made either fiscal or central policy very difficult to administer, gave poor performance to the macro system. And since the Keynesians had implicitly been boastful about the good performance, if you take credit for the sun you got to expect to be blamed for the rain. And not only was that puncturing the reputation of Keynesianism, but it was puncturing the self-esteem of economists and of Keynesian economists in particular. Because we always are looking in the mirror of the public to form our impression of how important we are."

"Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the Battle of Austerlitz. If I do that, I'm getting tacitly drawn into the game that he is Napoleon Bonaparte. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with their fundamental assumptions; your attention is attracted away from the basic weakness of the whole story. Since I find that fundamental framework ludicrous, I respond by treating it as ludicrous – that is, by laughing at it – so as not to fall into the trap of taking it seriously and passing on to matters of technique."

"He didn't really discuss my interpretations and criticisms of new classical economics. Instead he took the opportunity of the review to say that Keynesian economics was discredited by the stagflation of the '70s, as he and Sargent had already argued in their polemical piece "After Keynesian Economics" at the Nantucket conference in 1978. The idea seems to be that we were very wrong about the 1970s and therefore had no standing to criticize the new classical macroeconomics. Of course, I do not agree with that interpretation of the events of the last 15 years. In that review article Lucas didn't explain anything new. He just restated his point of view."

"Lucas says: "You don't know anything," and in his more humble moments: "I don't know anything either, and therefore the government shouldn't do anything." Well, there is no well-defined criterion of the government's not doing anything. What he says the government should do and calls doing nothing is doing something very different from what the government has been doing for the last 40 years. Why is making a radical change of regime suddenly doing nothing? You see, we have had a regime that can be associated with the most successful period of capitalism in recorded history. Suddenly, he calls for a constant money growth rule. How, possibly, can one conclude that? I say, if he doesn't want "to do anything", then we should keep doing what we have been doing, for we haven't been doing that badly. To make a radical change in regime all of a sudden, gives us what we have now; a new depression. Right? We have a new regime now, or maybe we have if it is not overturned, partly because these guys come along saying that compensatory policy, that is Keynesian policy, got us in all kinds of trouble. But it didn't get us in all kinds of trouble. In effect, they say that if you don't know what you are doing, you should do something entirely different from what you have been doing. I don't understand why that is a conservative or risk-avoiding policy."

"Lucas’s “Mechanics” Lectures caught the profession by surprise. His argument enraged some economists and startled or puzzled others. It was his first word on the subject of growth. It seemed to have come completely out of the blue. And even though his interest in the possibility of market failure seemed curiously in tune with fifty years of the Keynesian tradition, it was unfamiliar enough when expressed in the vernacular of Freshwater economics that the lectures at first caused more consternation than anything else, and in most quarters they were studiously ignored. A few young researchers, however, were galvanized into immediate action. The notion that trade and migration must be strongly linked to economic growth was hardly new. Nor was the insight that cities must be central to economic progress. Perhaps the real news from Lucas’s lectures was his identification of lock-in as a potentially serious puzzle."

"Dave Barry:: Are you really Dick Armey? Dick Armey:: Yes, I am Dick Armey. And if there is a dick army, Barney Frank would want to join up."

"America’s Christian conservative movement is confronted with this divide: small-government advocates who want to practice their faith independent of heavy-handed government versus big-government sympathizers who want to impose their version of 'righteousness' on others through the hammer of law.... Our movement must avoid the temptations of power and those who would twist the good intentions of Christian voters to support policies that undermine freedom and grow government."

"Everything looks like a failure in the middle."

"Powerlessness corrupts: absolute powerlessness corrupts absolutely."

"The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop."

"If you bail out every investment bank that gets in trouble, that’s not capitalism, that’s socialism for the rich."

"Teach your children or your grandchildren Chinese. It is going to be the most important language of their lifetimes."

"Sometimes I think our central bank will keep printing money till we run out of trees."

"I am dying to find a way to invest in both North Korea and Myanmar. The major changes in these two countries are among the most exciting things I see right now, looking to the future."

"Unfortunately politicians are not very sound people or they wouldn't be politicians."

"Attacking Iraq would be madness."

"When President Bush goes on television and says certain cultures hate us for our democracy and freedom, he's just wrong. Everywhere I went in the Middle East, everyone told me how much they loved America and Americans; the hatred is directed at American policy."

"The bottom line is this is not a war we want to get into. We can win the battle of Iraq, but that is not the war. It's not a war that can be won in the traditional sense. If we succeed in ousting Saddam Hussein, what then? Who is going to run Iraq afterwards? We cannot do it. The country is a mish mash of factions who hate each other."

"I started out with $600, a second hand Volkswagen, and a wife. One was an asset and one was a liability. I will let you figure out which was which. I liquidated both, and still had the $600. I worked long hours, and spent weekends reading about markets. I simply love it. You have to love what you do, whether it be gardening, hairdressing, etc. When you love it, then the money follows. Even if it doesn’t, you will still be happy. Being happy and poor is better than being unhappy and poor."

"I did very little marketing. The key is to make your clients money. If you have a good track record, people will find you and knock on your door. Just make your clients money."

"When I was a young man working 14 hour days, I traded using outrageous and terrifying leverage. I was either very lucky, very smart or very dumb. That’s what terrifies people about commodities. Commodities themselves are no riskier than stocks. A stock on margin has more risk than a commodity fully paid for. It’s all about the degree of leverage."

"Poverty is a crime. I do not mean that it is a crime to be poor. Murder is a crime; but it is not a crime to be murdered; and a man who is in poverty, I look upon, not as a criminal in himself, so much as the victim of a crime for which others, as well perhaps as himself, are responsible."

"At the beginning of this marvelous era it was natural to expect, and it was expected, that labor-saving inventions would lighten the toil and improve the condition of the laborer; that the enormous increase in the power of producing wealth would make real poverty a thing of the past. … It is true that disappointment has followed disappointment, and that discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor. But there have been so many things to which it seemed this failure could be laid, that up to our time the new faith has hardly weakened. We have better appreciated the difficulties to be overcome; but not the less trusted that the tendency of the times was to overcome them. Now, however, we are coming into collision with facts which there can be no mistaking. From all parts of the civilized world come complaints of industrial depression; of labor condemned to involuntary idleness; of capital massed and wasting; of pecuniary distress among businessmen; of want and suffering and anxiety among the working classes. All the dull, deadening pain, all the keen, maddening anguish, that to great masses of men are involved in the words "hard times," afflict the world to-day. This state of things, common to communities differing so widely in situation, in political institutions, in fiscal and financial systems, in density of population and in social organization, can hardly be accounted for by local causes."

"That there is a common cause, an that it is either what we call material progress or something closely connected with material progress, becomes more than an inference when it is noted that the phenomena we class together and speak of as industrial depression are but intensifications of phenomena which always accompany material progress, and which show themselves more clearly and strongly as material progress goes on. Where the conditions to which material progress everywhere tends are the most fully realized—that is to say, where population is densest, wealth greatest, and the machinery of production and exchange most highly developed — we find the deepest poverty, the sharpest struggle for existence, and the most of enforced idleness."

"It is true that wealth has been greatly increased, and that the average of comfort, leisure, and refinement has been raised; but these gains are not general. In them the lowest class do not share. I do not mean that the condition of the lowest class has nowhere nor in anything been improved; but that there is nowhere any improvement which can be credited to increased productive power. I mean that the tendency of what we call material progress is in nowise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is still further to depress the condition of the lowest class. The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down."

"I propose in this inquiry to take nothing for granted, but to bring even accepted theories to the test of first principles, and should they not stand the test, freshly to interrogate facts in the endeavor to discover their law. I propose to beg no question, to shrink from no conclusion, but to follow truth wherever it may lead. Upon us is the responsibility of seeking the law, for in the very heart of our civilization to-day women faint and little children moan. But what that law may prove to be is not our affair. If the conclusions that we reach run counter to our prejudices, let us not flinch; if they challenge institutions that have long been deemed wise and natural, let us not turn back."

"It is too narrow an understanding of production which confines it merely to the making of things. Production includes not merely the making of things, but the bringing of them to the consumer. The merchant or storekeeper is thus as truly a producer as is the manufacturer, or farmer, and his stock or capital is as much devoted to production as is theirs."

"It is as to whether its services or uses are to be exchanged or not which makes a tool an article of capital or merely an article of wealth. Thus, the lathe of a manufacturer used in making things which are to be exchanged is capital, while the lathe kept by a gentleman for his own amusement is not."

"In the plan of forcing by endurance an increase of wages, there are in such methods inherent disadvantages which workingmen should not blink. I speak without prejudice, for I am still an honorary member of the union which, while working at my trade, I always loyally supported. But, see: The methods by which a trade union can alone act are necessarily destructive; its organization is necessarily tyrannical. A strike, which is the only recourse by which a trade union can enforce its demands, is a destructive contest — just such a contest as that to which an eccentric, called "The Money King," once, in the early days of San Francisco, challenged a man who had taunted him with meanness, that they should go down to the wharf and alternately toss twenty-dollar pieces into the bay until one gave in. The struggle of endurance involved in a strike is, really, what it has often been compared to — a war; and, like all war, it lessens wealth. And the organization for it must, like the organization for war, be tyrannical. As even the man who would fight for freedom, must, when he enters an army, give up his personal freedom and become a mere part in a great machine, so must it be with workmen who organize for a strike. These combinations are, therefore, necessarily destructive of the very things which workmen seek to gain through them — wealth and freedom."

"The equal right of all men to the use of land is as clear as their equal right to breathe the air — it is a right proclaimed by the fact of their existence. For we cannot suppose that some men have a right to be in this world, and others no right."

"The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return."

"There are people into whose heads it never enters to conceive of any better state of society than that which now exists."

"But there is another form of monopoly, far more general and far more insidious. The accumulation of large amounts of capital under consolidated control creates a new kind of power—essentially different from the power of increase. Increase is constructive in its nature. Power from accumulation is destructive. It is often exercised with reckless disregard, not only to industry but to the personal rights of individuals. A railroad approaches a small town as a highwayman approaches his victim. “Agree to our terms or we will bypass your town” is as effective a threat as “your money or your life.” As robbers unite to plunder and divide the spoils, the trunk lines of railroads unite to raise rates and pool their earnings. The public is then forced to pay the cost of the whole maneuver, as the vanquished are forced to pay the cost of their own enslavement by a conquering army."

"This strange and unnatural spectacle of large numbers of willing men who cannot find employment is enough to suggest the true cause to whosoever can think consecutively. For, though custom has dulled us to it, it is a strange and unnatural thing that men who wish to labor, in order to satisfy their wants, cannot find the opportunity — as, since labor is that which produces wealth, the man who seeks to exchange labor for food, clothing, or any other form of wealth, is like one who proposes to give bullion for coin, or wheat for flour. We talk about the supply of labor and the demand for labor, but, evidently, these are only relative terms. The supply of labor is everywhere the same — two hands always come into the world with one mouth, twenty-one boys to every twenty girls; and the demand for labor must always exist as long as men want things which labor alone can procure. We talk about the "want of work," but, evidently, it is not work that is short while want continues; evidently, the supply of labor cannot be too great, nor the demand for labor too small, when people suffer for the lack of things that labor produces. The real trouble must be that supply is somehow prevented from satisfying demand, that somewhere there is an obstacle which prevents labor from producing the things that laborers want. Take the case of any one of these vast masses of unemployed men, to whom, though he never heard of Malthus, it today seems that there are too many people in the world. In his own wants, in the needs of his anxious wife, in the demands of his half-cared-for, perhaps even hungry and shivering children, there is demand enough for labor, Heaven knows! In his own willing hands is the supply. Put him on a solitary island, and though cut off from all the enormous advantages which the co-operation, combination, and machinery of a civilized community give to the productive powers of man yet his two hands can fill the mouths and keep warm the backs that depend upon them. Yet where productive power is at its highest development they cannot. Why? Is it not because in the one case he has access to the material and forces of nature, and in the other this access is denied? Is it not the fact that labor is thus shut off from nature which can alone explain the state of things that compels men to stand idle who would willingly supply their wants by their labor? The proximate cause of enforced idleness with one set of men may be the cessation of demand on the part of other men for the particular things they produce, but trace this cause from point to point, from occupation to occupation, and you will find that enforced idleness in one trade is caused by enforced idleness in another, and that the paralysis which produces dullness in all trades cannot be said to spring from too great a supply of labor or too small a demand for labor, but must proceed from the fact that supply cannot meet demand by producing the things which satisfy want and are the object of labor."

"It is impossible to read the works of the economists who since the time of Smith have endeavored to build up and elucidate the science of political economy without seeing how, over and over again, they stumble over the law of wages without once recognizing it. Yet, "if it were a dog it would bite them!" Indeed, it is difficult to resist the impression that some of them really saw this law of wages, but, fearful of the practical conclusions to which it would lead, preferred to ignore and cover it up, rather than use it as the key to problems which without it are so perplexing. A great truth to an age which has rejected and trampled on it, is not a word of peace, but a sword!"

"I am no sentimental admirer of the savage state. I do not get my ideas of the untutored children of nature from Rousseau, or Chateaubriand, or Cooper. I am conscious of its material and mental poverty, and its low and narrow range. I believe that civilization is not only the natural destiny of man, but the enfranchisement, elevation, and refinement of all his powers, and think that it is only in such moods as may lead him to envy the cud — chewing cattle, that a man who is free to the advantages of civilization could look with regret upon the savage state. But, nevertheless, I think no one who will open his eyes to the facts can resist the conclusion that there are in the heart of our civilization large classes with whom the veriest savage could not afford to exchange. It is my deliberate opinion that if, standing on the threshold of being, one were given the choice of entering life as a Tierra del Fuegan, a black fellow of Australia, an Esquimau in the Arctic Circle, or among the lowest classes in such a highly civilized country as Great Britain, he would make infinitely the better choice in selecting the lot of the savage. For those classes who in the midst of wealth are condemned to want, suffer all the privations of the savage, without his sense of personal freedom; they are condemned to more than his narrowness and littleness, without opportunity for the growth of his rude virtues; if their horizon is wider, it is but to reveal blessings that they cannot enjoy. There are some to whom this may seem like exaggeration, but it is only because they have never suffered themselves to realize the true condition of those classes upon whom the iron heel of modern civilization presses with full force. As De Tocqueville observes, in one of his letters to Mme. Swetchine, "we so soon become used to the thought of want that we do not feel that an evil which grows greater to the sufferer the longer it lasts becomes less to the observer by the very fact of its duration"; and perhaps the best proof of the justice of this observation is that in cities where there exists a pauper class and a criminal class, where young girls shiver as they sew for bread, and tattered and barefooted children make a home in the streets, money is regularly raised to send missionaries to the heathen! Send missionaries to the heathen! It would be laughable if it were not so sad. Baal no longer stretches forth his hideous, sloping arms; but in Christian lands mothers slay their infants for a burial fee! And I challenge the production from any authentic accounts of savage life of such descriptions of degradation as are to be found in official documents of highly civilized countries — in reports of sanitary commissioners and of inquiries into the condition of the laboring poor."

"There is, and always has been, a widespread belief among the more comfortable classes that the poverty and suffering of the masses are due to their lack of industry, frugality, and intelligence. This belief, which at once soothes the sense of responsibility and flatters by its suggestion of superiority, is probably even more prevalent in countries like the United States, where all men are politically equal, and where, owing to the newness of society, the differentiation into classes has been of individuals rather than of families, than it is in older countries, where the lines of separation have been longer, and are more sharply, drawn. It is but natural for those who can trace their own better circumstances to the superior industry and frugality that gave them a start, and the superior intelligence that enabled them to take advantage of every opportunity, to imagine that those who remain poor do so simply from lack of these qualities. But whoever has grasped the laws of the distribution of wealth, as in previous chapters they have been traced out, will see the mistake in this notion. The fallacy is similar to that which would be involved in the assertion that every one of a number of competitors might win a race. That any one might is true; that every one might is impossible. For, as soon as land acquires a value, wages, as we have seen, do not depend upon the real earnings or product of labor, but upon what is left to labor after rent is taken out; and when land is all monopolized, as it is everywhere except in the newest communities, rent must drive wages down to the point at which the poorest paid class will he just able to live and reproduce, and thus wages are forced to a minimum fixed by what is called the standard of comfort — that is, the amount of necessaries and comforts which habit leads the working classes to demand as the lowest on which they will consent to maintain their numbers. This being the case, industry, skill, frugality, and intelligence can avail the individual only in so far as they are superior to the general level just as in a race speed can avail the runner only in so far as it exceeds that of his competitors. If one man work harder, or with superior skill or intelligence than ordinary, he will get ahead; but if the average of industry, skill, or intelligence be brought up to the higher point, the increased intensity of application will secure but the old rate of wages, and he who would get ahead must work harder still."

"But in life, as we are cognizant of it, mental development can go but a little way. The mind hardly begins to awake ere the bodily powers decline — it but becomes dimly conscious of the vast fields before it, but begins to learn and use its strength, to recognize relations and extend its sympathies, when, with the death of the body, it passes away. Unless there is something more, there seems here a break, a failure. Whether it be a Humboldt or a Herschel, a Moses who looks from Pisgah, a Joshua who leads the host, or one of those sweet and patient souls who in narrow circles live radiant lives, there seems, if mind and character here developed can go no further, a purposelessness inconsistent with what we can see of the linked sequence of the universe."

"The intelligence required for the solving of social problems is not a thing of the mere intellect. It must be animated with the religious sentiment and warm with sympathy for human suffering. It must stretch out beyond self-interest, whether it be the self-interest of the few or of the many. It must seek justice. For at the bottom of every social problem we will find a social wrong."

"How can a man be said to have a country where he has no right to a square inch of soil..."

"A great change is going on all over the civilized world similar to that infeudation which, in Europe, during the rise of the feudal system, converted free proprietors into vassals, and brought all society into subordination to a hierarchy of wealth and privilege. Whether the new aristocracy is hereditary or not makes little difference. Chance alone may determine who will get the few prizes of a lottery. But it is not the less certain that the vast majority of all who take part in it must draw blanks. The forces of the new era have not yet had time to make status hereditary, but we may clearly see that when the industrial organization compels a thousand workmen to take service under one master, the proportion of masters to men will be but as one to a thousand, though the one may come from the ranks of the thousand. "Master"! We don't like the word. It is not American! But what is the use of objecting to the word when we have the thing? The man who gives me employment, which I must have or suffer, that man is my master, let me call him what I will."

"No amount of force will break an egg-shell if exerted on one side alone. So capital could not squeeze labor as long as labor was free to natural opportunities, and in a world where these natural materials and opportunities were as free to all as is the air to us, there could be no difficulty in finding employment, no willing hands conjoined with hungry stomachs, no tendency of wages toward the minimum on which the worker could barely live. In such a world we would no more think of thanking anybody for furnishing us employment than we here think of thanking anybody for furnishing us with appetites. That the Creator might have put us in the kind of world I have sought to imagine, as readily as in this kind of a world, I have no doubt. Why he has not done so may, however, I think, be seen. That kind of a world would be best for fools. This is the best for men who will use the intelligence with which they have been gifted. Of this, however, I shall speak hereafter. What I am now trying to do by asking my readers to endeavor to imagine a world in which natural opportunities were "as free as air," is to show that the barrier which prevents labor from freely using land is the nether millstone against which labor is ground, the true cause of the difficulties which are apparent through the whole industrial organization."

"To prevent government from becoming corrupt and tyrannous, its organization and methods should be as simple as possible, its functions be restricted to those necessary to the common welfare, and in all its parts it should be kept as close to the people and as directly within their control as may be."

"More is given to us than to any people at any time before; and, therefore, more is required of us. We have made, and still are making, enormous advances on material lines. It is necessary that we commensurately advance on moral lines. Civilization, as it progresses, requires a higher conscience, a keener sense of justice, a warmer brotherhood, a wider, loftier, truer public spirit. Falling these, civilization must pass into destruction. It cannot be maintained on the ethics of savagery. For civilization knits men more and more closely together, and constantly tends to subordinate the individual to the whole, and to make more and more important social conditions."

"I ask no one who may read this book to accept my views. I ask him to think for himself. Whoever, laying aside prejudice and self-interest, will honestly and carefully make up his own mind as to the causes and the cure of the social evils that are so apparent, does, in that, the most important thing in his power toward their removal. This primary obligation devolves upon us individually, as citizens and as men. Whatever else we may be able to do, this must come first. For "if the blind lead the blind, they both shall fall into the ditch." Social reform is not to be secured by noise and shouting; by complaints and denunciation; by the formation of parties, or the making of revolutions; but by the awakening of thought and the progress of ideas. Until there be correct thought, there cannot be right action; and when there is correct thought, right action will follow. Power is always in the hands of the masses of men. What oppresses the masses is their own ignorance, their own short-sighted selfishness."

"The great work of the present for every man, and every organization of men, who would improve social conditions, is the work of education — the propagation of ideas. It is only as it aids this that anything else can avail. And in this work every one who can think may aid — first by forming clear ideas himself, and then by endeavoring to arouse the thought of those with whom he comes in contact."

"Many there are, too depressed, too embruted with hard toil and the struggle for animal existence, to think for themselves. Therefore the obligation devolves with all the more force on those who can. If thinking men are few, they are for that reason all the more powerful. Let no man imagine that he has no influence. Whoever he may be, and wherever he may be placed, the man who thinks becomes a light and a power. That for every idle word men may speak they shall give an account at the day of judgment, seems a hard saying. But what more clear than that the theory of the persistence of force, which teaches us that every movement continues to act and react, must apply as well to the universe of mind as to that of matter? Whoever becomes imbued with a noble idea kindles a flame from which other torches are lit, and influences those with whom he comes in contact, be they few or many. How far that influence, thus perpetuated, may extend, it is not given to him here to see. But it may be that the Lord of the Vineyard will know."

"The progress of civilization necessitates the giving of greater and greater attention and intelligence to public affairs. And for this reason I am convinced that we make a great mistake in depriving one sex of voice in public matters, and that we could in no way so increase the attention, the intelligence and the devotion which may be brought to the solution of social problems as by enfranchising our women."

"I am firmly convinced, as I have already said, that to effect any great social improvement, it is sympathy rather than self-interest, the sense of duty rather than the desire for self-advancement, that must be appealed to. Envy is akin to admiration, and it is the admiration that the rich and powerful excite which secures the perpetuation of aristocracies."

"As man is so constituted that it is utterly impossible for him to attain happiness save by seeking the happiness of others, so does it seem to be of the nature of things that individuals and classes can obtain their own just rights only by struggling for the rights of others."

"Those who are most to be considered, those for whose help the struggle must be made, if labor is to be enfranchised, and social justice won, are those least able to help or struggle for themselves, those who have no advantage of property or skill or intelligence, — the men and women who are at the very bottom of the social scale. In securing the equal rights of these we shall secure the equal rights of all. Hence it is, as Mazzini said, that it is around the standard of duty rather than around the standard of self-interest that men must rally to win the rights of man. And herein may we see the deep philosophy of Him who bade men love their neighbors as themselves. In that spirit, and in no other, is the power to solve social problems and carry civilization onward."

"The aim of protection, in short, is to prevent the bringing into a country of things in themselves useful and valuable, in order to compel the making of such things. But what all mankind in the individual affairs of every-day life, regard as to be desired is not the making of things, but the possession of things."

"The needs of labor require more than kind words, and are not to be satisfied by such soft phrases as we address to a horse when we want to catch him that we may put a bit in his mouth and a saddle on his back. Let me ask those who are disposed to regard protection as favorable to the aspirations of labor, to consider whether it can be true that what labor needs is to be protected? To admit that labor needs protection is to acknowledge its inferiority; it is to acquiesce in an assumption that degrades the workman to the position of a dependent, and leads logically to the claim that the employee is bound to vote in the interest of the employer who provides him with work. There is something in the very word "protection" that ought to make workingmen cautious of accepting anything presented to them under it. The protection of the masses has in all times been the pretense of tyranny — the plea of monarchy, of aristocracy, of special privilege of every kind. The slave owners justified slavery as protecting the slaves."

"When we consider that labor is the producer of all wealth, is it not evident that the impoverishment and, dependence of labor are abnormal conditions resulting from restrictions and usurpations, and that instead of accepting protection, what labor should demand is freedom. That those who advocate any extension of freedom choose to go no further than suits their own special purpose is no reason why freedom itself should be distrusted."

"Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war."

"Trade has ever been the extinguisher of war, the eradicator of prejudice, the diffuser of knowledge."

"My primary object is to defend and advance a principle in which I see the only possible relief from much that enthralls and degrades and distorts, turning light to darkness and good to evil, rather than to gage a philosopher or weigh a philosophy. Yet the examination I propose must lead to a decisive judgment upon both."

"The respect for authority, the presumption in favor of those who have won intellectual reputation, is within reasonable limits, both prudent and becoming. But it should not be carried too far, and there are some things especially as to which it behooves us all to use our own judgment and to maintain free minds. For not only does the history of the world show that undue deference to authority has been the potent agency through which errors have been enthroned and superstitions perpetuated, but there are regions of thought in which the largest powers and the greatest acquirements cannot guard against aberrations or assure deeper insight. One may stand on a box and look over the heads of his fellows, but he no better sees the stars. The telescope and the microscope reveal depths which to the unassisted vision are closed. Yet not merely do they bring us no nearer to the cause of suns and animal-cula, but in looking through them the observer must shut his eyes to what lies about him. That intension is at the expense of extension is seen in the mental as in the physical sphere. A man of special learning may be a fool as to common relations. And that he who passes for an intellectual prince may be a moral pauper there are examples enough to show."

"The rights of men to the use of land are not joint rights: they are equal rights. Were there only one man on earth, he would have a right to the use of the whole earth or any part of the earth. When there is more than one man on earth, the right to the use of land that any one of them would have, were he alone, is not abrogated: it is only limited. The right of each to the use of land is still a direct, original right, which he holds of himself, and not by the gift or consent of the others; but it has become limited by the similar rights of the others, and is therefore an equal right."

"Men must have rights before they can have equal rights. Each man has a right to use the world because he is here and wants to use the world. The equality of this right is merely a limitation arising from the presence of others with like rights. Society, in other words, does not grant, and cannot equitably withhold from any individual, the right to the use of land. That right exists before society and independently of society, belonging at birth to each individual, and ceasing only with his death. Society itself has no original right to the use of land. What right it has with regard to the use of land is simply that which is derived from and is necessary to the determination of the rights of the individuals who compose it. That is to say, the function of society with regard to the use of land only begins where individual rights clash, and is to secure equality between these clashing rights of individuals."

"The primary error of the advocates of land nationalization is in their confusion of equal rights with joint rights, and in their consequent failure to realize the nature and meaning of economic rent… In truth the right to the use of land is not a joint or common right, but an equal right; the joint or common right is to rent, in the economic sense of the term. Therefore it is not necessary for the state to take land, it is only necessary for it to take rent. This taking by the commonalty of what is of common right, would of itself secure equality in what is of equal right — for since the holding of land could be profitable only to the user, there would be no inducement for any one to hold land that he could not adequately use, and monopolization being ended no one who wanted to use land would have any difficulty in finding it."

"It is not merely the authority of Mr. Spencer as a teacher on social subjects that I would discredit; but the blind reliance upon authority. For on such subjects the masses of men cannot safely trust authority. Given a wrong which affects the distribution of wealth and differentiates society into the rich and the poor, and the recognized organs of opinion and education, since they are dominated by the wealthy class, must necessarily represent the views and wishes of those who profit or imagine they profit by the wrong. That thought on social questions is so confused and perplexed, that the aspirations of great bodies of men, deeply though vaguely conscious of injustice, are in all civilized countries being diverted to futile and dangerous remedies, is largely due to the fact that those who assume and are credited with superior knowledge of social and economic laws have devoted their powers, not to showing where the injustice lies but to hiding it; not to clearing common thought but to confusing it."

"Stepping out of their proper sphere and arrogating to themselves an authority to which they have no claim, professed teachers of spiritual truths long presumed to deny the truths of the natural sciences. But now professed teachers of the natural sciences, stepping in turn out of their proper sphere and arrogating to themselves an authority to which they have no claim, presume to deny spiritual truths. And there are many, who having discarded an authority often perverted by the influence of dominant wrong, have in its place accepted another authority which in its blank materialism affords as efficient a means for stilling conscience and defending selfish greed as any perversion of religious truth. Mr. Spencer is the foremost representative of this authority. Widely regarded as the scientific philosopher; eulogized by his admirers as the greatest of all philosophers — as the man who has cleared and illuminated the field of philosophy by bringing into it the exact methods of science — he carries to the common mind the weight of the marvelous scientific achievements of our time as applied to the most momentous of problems. The effect is to impress it with a vague belief that modern science has proved the idea of God to be an ignorant superstition and the hope of a future life a vain delusion."

"As there are many to whom the beauty and harmony of economic laws are hidden, and to whom the inspiring thought of a social order in which there should be work for all, leisure for all, and abundance for all — in which all might be at least as true, as generous and as manful as they wish to be — is shut out by the deference paid to economic authorities who have as it were given bonds not to find that for which they profess to seek, so there are many to-day to whom any belief in the spiritual element, in the existence of God and in a future life, is darkened or destroyed, not so much by difficulties they themselves find, but by what they take to be the teachings of science."

"We have tested, in matters where ordinary intelligence and knowledge are competent to judge, the logical methods and intellectual honesty of the foremost of those who in the name of science eliminate God and degrade man, taking from human life its highest dignity and deepest hope. Now, if in simple matters we find such confusion, such credulity, such violation of every canon of sound reasoning as we have found here, shall we blindly trust in deeper matters — in those matters which always have and always must perplex the intellect of man? Let us rather, as I said in the beginning, not too much underrate our own powers in what is concerned with common facts and general relations. While we may not be scientists or philosophers we too are men. And as to things which the telescope cannot resolve, nor the microscope reveal, nor the spectrum analysis throw light on, nor the tests of the chemist discover, it is as irrational to accept blindly the dictum of those who say, "Thus saith science!" as it is in things that are the proper field of the natural sciences to bow before the dictum of those who say, "Thus saith religion!""

"I care nothing for creeds. I am not concerned with any one's religious belief. But I would have men think for themselves. If we do not, we can only abandon one superstition to take up another, and it may be a worse one. It is as bad for a man to think that he can know nothing as to think he knows all. There are things which it is given to all possessing reason to know, if they will but use that reason. And some things it may be there are, that — as was said by one whom the learning of the time sneered at, and the high priests persecuted, and polite society, speaking through the voice of those who knew not what they did, crucified — are hidden from the wise and prudent and revealed unto babes."

"Why should charity be offered the unemployed? It is not alms they ask. They are insulted and embittered and degraded by being forced to accept as paupers what they would gladly earn as workers. What they ask is not charity, but the opportunity to use their own labor in satisfying their own wants. Why can they not have that? It is their natural right. He who made food and clothing and shelter necessary to man's life has also given to man, in the power of labor, the means of maintaining that life; and when, without fault of their own, men cannot exert that power, there is somewhere a wrong of the same kind as denial of the right of property and denial of the right of life — a wrong equivalent to robbery and murder on the grandest scale. Charity can only palliate present suffering a little at the risk of fatal disease. For charity cannot right a wrong; only justice can do that. Charity is false, futile, and poisonous when offered as a substitute for justice."

"In any country, however new and vast, it would be possible to change "scarcity of labor" into "scarcity of employment" by increasing the price put on the use of land. If three families settled a virgin continent, one family could command the services of the others as laborers for hire just as fully as though they were its chattel slaves, if it was accorded the ownership of the land and could put its own price on its use. Wakefield proposed only that land should be held at what he called "a sufficient price "— that is, a price high enough to keep wages in new colonies only a little higher than wages in the mother-country, and to produce not actual inability to get employment on the part of laborers, but only such difficulty as would keep them tractable, and ready to accept what from his standpoint were reasonable wages. Yet it is evident that it would only require a somewhat greater increase in the price of land to go beyond this point and to bring about in the midst of abundant natural opportunities for the employment of labor, the phenomena of laborers vainly seeking employment. Now, in the United States we have not attempted to create "scarcity of employment" by Wakefield's plan. But we have made haste by sale and gift to put the public domain in the hands of private owners, and thus allowed speculation to bring about more quickly and effectually than he could have anticipated, more than Wakefield aimed at. The public domain is now practically gone; land is rising to European prices, and we are at last face to face with social difficulties which in the youth of men of my time we were wont to associate with "the effete monarchies of the Old World.""

"Under existing conditions in the civilized world, the great struggle among men is for the possession of wealth. Would it not then be irrational to expect that the science which treats of the production and distribution of wealth should be exempt from the influence of that struggle? Macaulay has well said that if any large pecuniary interest were concerned in disputing the attraction of gravitation, that most obvious of all facts would not yet be accepted. What, then, can we look for in the teaching of a science which directly concerns the most powerful of "vested rights" — which deals with rent and wages and interest, with taxes and tariffs, with privileges and franchises and subsidies, with currencies and land tenures and public debts, with the ideas on which trade unions are based and the pleas by which combinations of capitalists are defended? Economic truth, under existing conditions, has not merely to overcome the inertia of indolence or habit; it is in its very nature subject to suppressions and distortions from the influence of the most powerful and vigilant interests. It has not merely to make its way; it must constantly stand on guard."

"All large political questions are at bottom economic questions."

"We cannot think with precision unless in our own minds we use words with precision."

"All of his speeches were with high moral enthusiasm and humanitarian fervor."

"He was curious and he was alertly attentive to all that went on around him. He had that rarest of all attributes in the scholar and historian — that gift without which all education is useless. He had mother wit. He read what he needed to read, and he understood what he read. And he was fortunate; he lived and worked in a rapidly developing society. George had the unique opportunity of studying the formation of a civilization — the change of an encampment into a thriving metropolis. He saw a city of tents and mud change into a fine town of paved streets and decent housing, with tramways and buses. And as he saw the beginning of wealth, he noted the first appearance of pauperism. He saw degradation forming as he saw the advent of leisure and affluence, and he felt compelled to discover why they arose concurrently."

"I have already read Henry George's great book and really learnt a great deal from it. Yesterday evening I read with admiration the address about Moses. Men like Henry George are rare unfortunately. One cannot imagine a more beautiful combination of intellectual keenness, artistic form and fervent love of justice. Every line is written as if for our generation. The spreading of these works is a really deserving cause, for our generation especially has many and important things to learn from Henry George."

"There's a sense in which all taxes are antagonistic to free enterprise … and yet we need taxes. We have to recognize that we must not hope for a Utopia that is unattainable. I would like to see a great deal less government activity than we have now, but I do not believe that we can have a situation in which we don't need government at all. We do need to provide for certain essential government functions — the national defense function, the police function, preserving law and order, maintaining a judiciary. So the question is, which are the least bad taxes? In my opinion the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago."

"Each generation repeats its leaders. Each sees men endowed with superior inventiveness, energy, and genius for business, inspired by love of power and possession, launch selfish schemes-Carnegies, Rockefellers, Goulds [...] Each generation has had its Henry George, its Bellamy, its Bryan, intent on persuading mankind that he had found the way, could lead men to the good life. In each generation employer and employee have faced the decision-war or cooperation."

"People do not argue with the teaching of George; they simply do not know it. And it is impossible to do otherwise with his teaching, for he who becomes acquainted with it cannot but agree."

"An important recurring theme in George is the purposeful corruption of the science of economics in order to serve and apologize for wealthy special interests. As a self trained economist, the academics preferred to ignore the uncomfortable realities George’s work exposed."

"Henry George, the eminent social philosopher of a century ago, turned the attention of planners and economists, however briefly, to the indefeasible factor of land scarcity. Capital and labor can increase; land cannot. Accordingly, George was the apostle of the single tax. It aimed most directly at land speculators. His insights would focus now on the limitations on the use of land imposed by zoning. If John Jones wants an acre protecting his house, he is laying claim to something that cannot expand in size. Since land, in George's analysis, is forever limited, it must be thought of and treated as common property. And therefore the rental value of one acre should constitute a tax (the single tax) on the person who sequesters it for himself. A strong case can be made for the amenities of zoning laws. But they have an effect on the availability of housing, and on its cost. One result is that housing costs are increasing faster than inflation. But is the Henry George factor likely to be espoused in political platforms? It cannot happen soon because too many interests are vested in zoning laws. But sharp political eyes should be trained on the question, in search of a viable formulation designed to fight against homelessness for grandchildren who cannot be expected to pay the projected cost of housing."

"Noam Chomsky recently wrote that America thinks that it owns the world. That is definitely the view of the Bush administration. But the fact of the matter is that the US owes the world. The US “superpower” cannot even finance its own domestic operations, much less its gratuitous wars except via the kindness of foreigners to lend it money that cannot be repaid. I sometimes wonder if the bankrupt “superpower” will be able to scrape together the resources to bring home the troops stationed in its hundreds of bases overseas, or whether they will just be abandoned."

"The US is not a superpower. The US is a financially dependent country that foreign lenders can close down at will."

"If we add state capitalism to the [[George W. Bush|[George W.] Bush]] administration’s success in eroding both the US Constitution and the power of Congress, we may be witnessing the final death of accountable constitutional government."

"All of America’s wars except the first—the war for independence — were wars for Empire. Keep that fact in mind as you hear the Memorial Day bloviations about the brave men and women who served our country in its times of peril."

"When a country armed to the teeth with nuclear weapons and overwhelmed by its own exceptionalism and indispensability has political and media lunatics equating a bait-click commercial marketing scheme with Pearl Harbor, that country is a recipe for the end of the world."

"The military/security complex has resurrected its Cold War enemy so necessary for its outsized budget and power and intends to keep Russia as The Enemy."

"All of this self-serving is driving America and its vassals to war with Russia, which might also mean with China. The war would be nuclear and be the end of the West, an act of self-genocide. The US national security establishment is so crazed that Trump’s efforts to get off the war track and onto a peace track are characterized as treason and a threat to US national security."

"The Russians are aware that the accusations and demonization that they experience are fabrications. They no longer see the problem as one of misunderstandings that diplomacy can overcome. What they see now is the West preparing its populations for war. It is this perception for which the West is solely responsible that makes the situation today far more dangerous than it ever was during the long Cold War."

"As strategic and Russian studies are largely funded by the military/security complex, the universities are also complicit in the march toward nuclear war. Republicans are as dependent as Democrats on funding from the military/security complex and the Israel Lobby."

"Paul Craig Roberts characterizes the resulting attitudes [of Western and U.S. intellectuals] as a "fusion of moral scepticism with the demand for moral perfection...""

"Paul Craig Roberts, a former Assistant Secretary of the Treasury in the Reagan Administration, has migrated from the Wall Street Journal editorial page to the world of 9/11 conspiracy theory and Putin worship."

"Roberts' history of false-flag assertions is certainly well known... Roberts' piece will intrigue that narrow readership fond of fact-lite, rancidly-posited dot-connecting exercises, and repel just about everyone else."

"I resolved that no revolutionary movement was going to be brought into being in the USA unless I brought it into being."

"The ruling British elite are like animals--not only in their morality, but in their outlook on knowledge. They are clever animals, who are masters of the wicked nature of their own species, and recognize ferally the distinctions of the hated human species. Nonetheless, obsessively dedicated to being such animals, they can not [sic] assimilate those qualities unique to true human beings."

"The objective of my life is to contribute to bringing men and women out of the wretched condition of sensuous donkeys and incompletely human 'silver souls' to contribute to making of our species a race of 'golden souls.'"

"According to a variety of very authoritative sources, Henry A. Kissinger is not a Jew, but a faggot. I will not tolerate any denial of civil rights to a person who happens to be homosexual. Ordinarily, a homosexual is like an ordinary person suffering the affliction of nasty boils; one recognizes the distinction between the person and the affliction.… Henry A. Kissinger is no ordinary, common, garden-variety of homosexual. His heathen sexual inclinations are merely an integral part of a larger evil.… Think of Nero, and then of Kissinger, and then of Nero, and then of Roy M. Cohn. That is the kind of faggot Henry Kissinger is."

"During late Autumn 1956, in connection with a marketing study, I forecast the imminence of a major U.S. economic recession, triggered by the over-stretching of a post-1954 credit-bubble centered in financing of automobiles, housing, and analogous consumer goods. This recession broke out in February 1957 statistics, and was generally, if reluctantly acknowledged to have occurred several months later. The recession-spiral lasted into mid-1958, and was followed by a prolonged stagnation until an upturn appeared under the Kennedy administration."

"The presently existing global financial and monetary system will disintegrate during the near term. The collapse might occur this spring, or summer, or next autumn; it could come next year; it will almost certainly occur during President William Clinton's first term in office; it will occur soon. That collapse into disintegration is inevitable, because it could not be stopped now by anything but the politically improbable decision by leading governments to put the relevant financial and monetary institutions into bankruptcy reorganization."

"The record shows, that for nearly thirty years, elements of the U.S. Department of Justice have been engaged in world-wide political targeting of me and my associates. This includes early 1970s operations run in conjunction with Secretary of State Henry A. Kissinger's U.S. State Department. During the last ten years or so of that period, some U.S. officials, and others, have challenged the relevant agencies with some of the evidence which shows, that those prosecutions and correlated harassment of me and my associates, had been clearly fraudulent, politically motivated targeting."

"President Carter impresses me as a mean, slightly degenerate man whose wealth probably consisted, or spiritually at least, in two junked cars in his front yard. That's the kind of redneck degenerate a man who goes to an Allman Brothers rock concert, which is a drug nest, before going to teach his Sunday school sermons at a Southern Baptist school, that is Jimmy Carter. Jimmy Carter is your all-around basic, ignorant, boorish scoundrel.… Jimmy Carter was somebody who Mr. Nice, David Rockefeller, put up there in the White House and he liked the job, with that dumb wife of his and his daughter who was his national security advisor."

"[The Leesburg Garden Club is a] nest of Soviet fellow travelers clacking busybodies in a Soviet jellyfish front, sitting here in Leesburg oozing out their funny little propaganda and making nuisances of themselves."

"The modern institution of the presidency is the primary political evil Americans face, and the cause of nearly all our woes. It squanders the national wealth and starts unjust wars against foreign peoples that have never done us any harm. It wrecks our families, tramples on our rights, invades our communities, and spies on our bank accounts. It skews the culture toward decadence and trash. It tells lie after lie. Teachers used to tell school kids that anyone can be president. This is like saying anyone can go to Hell. It’s not an inspiration; it’s a threat."

"The presidency is presumed to be the embodiment of Rousseau’s general will, with far more power than any monarch or head of state in pre-modern societies. The US presidency is the apex of the world’s biggest and most powerful government and of the most expansive empire in world history. As such, the presidency represents the opposite of freedom. It is what stands between us and our goal of restoring our ancient rights."

"The presidency is seemingly bound by law, but in practice it can do just about anything it pleases. It can order up troops anywhere in the world, just as Clinton bragged in his acceptance speech at the Democratic convention. It can plow up a religious community in Texas and bury its members because they got on somebody’s nerves at the Justice Department. It can tap our phones, read our mail, watch our bank accounts, and tell us what we can and cannot eat, drink, and smoke. The presidency can break up businesses, shut down airlines, void drilling leases, bribe foreign heads of state or arrest them and try them in kangaroo courts, nationalize land, engage in germ warfare, firebomb crops in Colombia, overthrow any government anywhere, erect tariffs, round up and discredit any public or private assembly it chooses, grab our guns, tax our incomes and our inheritances, steal our land, centrally plan the national and world economy, and impose embargoes on anything anytime. No prince or pope ever had this ability."

"James Buchanan made a great statement on behalf of the right of revolution. Grant restored the gold standard. Harding denounced US imperialism in Haiti. But overall, my favorite president is William Henry Harrison. He keeled over shortly after his inauguration."

"What does greatness in the presidency mean? It means waging war, crushing liberties, imposing socialism, issuing dictates, browbeating and ignoring Congress, appointing despotic judges, expanding the domestic and global empire, and generally trying his best to be an all-round enemy of freedom. It means saying with Lincoln, 'I have a right to take any measure which may best subdue the enemy.'"

"John Randolph had only been a Senator for a few days when he gave an extraordinary speech denouncing John Quincy Adams. 'It is my duty,' said Randolph, 'to leave nothing undone that I may lawfully do, to pull down this administration.... They who, from indifference, or with their eyes open, persist in hugging the traitor to their bosom, deserve to be insulted... deserve to be slaves, with no other music to soothe them but the clank of the chains which they have put on themselves and given to their offspring.' John Randolph said this in 1826. This was a time, writes de Tocqueville, when the presidency was almost invisible. If we cannot say this and more today, when the presidency is dictator to the world, we are not authentic conservatives and libertarians. Indeed, we are not free men."

"What people don't remember is that Hitlerism was about more than just militarism, nationalism, and consolidation of identity politics. It also involved a substantial shift in German domestic politics away from free enterprise, or what remained of it under Weimar, toward collectivist economic planning."

"Stock markets are never better performing than during a hyperinflation. Interest rates are rock bottom, but only through artificial means. Gross Private Domestic Investment is still falling off a cliff, having already completely erased ten years of investment from the record of history. Here is a fundamental factor that suggests that terrible things are still to come our way. And I guess I'll have to put this in italics because the point seems to be lost in the shuffle: unemployment is still rising, even soaring straight to double digits! The sociology of this intrigues me to no end. Unemployment is one of the human elements that journalists are supposed to glom onto. Oh, look at poor Bob and Jane and how they lost their jobs and have nowhere to go, etc., etc. Talk about human interest! Where are the weepy stories about the plight of people wandering around with no work? Instead, we get happy clappy stories about how things are not nearly as bad as they might be had the great and powerful Obama of Oz not appeared to save the day. There is also the remarkable spin that things are getting worse, yes, but at a slower pace than before – an observation that might be most commonly heard in Hell."

"The right path to health-care reform is the market path (no subsidies, no monopolies such as drug patents, no licensure, no anything) that tends toward universal distribution at very low prices and relentless improvement in service. The wrong path is to make health care run the same way as the post office. Obama seems to favor the latter path, even though he admits that it is the least well-performing one. This is surely the definition of fanaticism. If the mobs aren't angry, they should be."

"In a market-based labor contract, there is no exploitation. People come to agreement based on their own perceptions of mutual benefit. A person who believes it is better to work for $1 an hour rather than sit at home doing nothing is free to make that contract. In fact, a person who works for a negative wage—who pays for an internship, for example—is free to make that deal too.I propose to you, then, a definition of exploitation that comes from the writings of William H. Hutt: violence or threat of violence implied in the negotiation of anything affecting the life of a worker or employer. In that sense, the present system is exploitation. Workers are robbed of wages. Employers are robbed of profits. Poor people and young people especially are robbed of opportunity."

"We live in anti-liberal times, when individual choice is highly suspect. The driving legislative ethos is toward making all actions required or forbidden, with less and less room for human volition. Simply put, we no longer trust the idea of freedom. We can't even imagine how it would work. What a distance we have traveled from the Age of Reason to our own times."

"From a historical point of view, the injustice against blacks was perpetrated mostly by governments. Private business does not go in for race-based policies, because it means excluding paying customers. And this is precisely why racialists, nationalists, and hard-core bigots have always opposed liberal capitalism: it includes and excludes based on the cash nexus and without regard to features that collectivists of all sorts regard as important. In the imagined utopias of the national socialists, the champions of commerce are hanged from lampposts as race traitors and enemies of the nation."

"In the end, what is really needed is a fundamental rethinking of the notion that the state rather than private markets must monopolize the provision of justice and security. This is the fatal conceit. No power granted to the state goes unabused. This power, among all possible powers, might be the most important one to take away from the state."

"It’s not as if there’s infinite wealth. There are thousands of new luxury units coming on the market, and the question is, who will buy them? If people start losing jobs, who can afford to pay 2, 3, 4, 5 million dollars? Do you know 10,000 new investment bankers on Wall Street?"

"I think globalization actually maintains and fosters various elements of national and cultural identities. I don’t think everything is being homogenized. If anything, your food, your culture, and your ethnicity might become part of the globalized world, and thus absorbed by other countries."

"Janera:: Do you think then that it’s good that the French are abolishing the headscarves or the yarmulke? Roubini: I’m not in favor of restricting what people wear. It’s counterproductive and creates more separation. The effect of the French policy is that children will attend a religious school and won’t be exposed to the secular education that France offers. They won’t learn the value of western modern secular values."

"The challenge we face is how to integrate the Muslim world into the global economy. Asia has become part of it, but not Africa or the Middle East.One could realistically think about a Marshall Plan with respect to this part of the world, to succeed in integrating the Muslim and Arab world into the global economy as we did in Europe after World War II. For example, we’ve wasted hundreds of billions of dollars on the Iraq war. Had we taken a third of this money and invested it into a Marshall Plan for the Middle East, the benefits would have been ten times more than wasting it on a war."

"Reckless people have deluded themselves that this was a subprime crisis. But we have problems with credit-card debt, student-loan debt, auto loans, commercial real estate loans, home-equity loans, corporate debt and loans that financed leveraged buyouts... We have a subprime financial system, not a subprime mortgage market."

"Our biggest financiers are China, Russia and the gulf states. These are rivals, not allies."

"The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown."

"(During the Italian crisis, about the proposal of replacing Silvio Berlusconi with Angelino Alfano, as the new Prime Minister of Italy) Replacing Berlusconi with one of his servile lackeys is unacceptable. Italy needs a credible government run by a respected & competent leader (2011-11-08"

"Cryptocurrencies have given rise to an entire new criminal industry, comprising unregulated offshore exchanges, paid propagandists, and an army of scammers looking to fleece retail investors. Yet, despite the overwhelming evidence of rampant fraud and abuse, financial regulators and law-enforcement agencies remain asleep at the wheel."

"We cannot achieve price stability, maintain economic growth and have financial stability at the same time. So in the end we will have an economic and financial collapse."

"There’s no denying that a collapse in stock prices today would pose serious macroeconomic challenges for the United States. Consumer spending would slow, and the U.S. economy would become less of a magnet for foreign investors. Economic growth, which in any case has recently been at unsustainable levels, would decline somewhat. History proves, however, that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse."

"The economic repercussions of a stock market crash depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers."

"Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

"House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas."

"To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above."

"Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much. However, careful economic analysis does have one important benefit, which is that it can help kill ideas that are completely logically inconsistent or wildly at variance with the data. This insight covers at least 90 percent of proposed economic policies."

"It was a global depression, had many causes, the whole story requires you to look at the whole international system. But policy errors in United States, as well as abroad, did play an important role. And in particular as I said, the Federal Reserve failed in this first challenge in both parts of its mission. It did not use monetary policy aggressively to prevent deflation and the collapse in the economy, so it failed in its economic stability function. And it didn't adequately perform its function as lender of last resort allowing many bank failures and a resulting contraction in credit and also with the money supply. So, in that respect, again, the Fed did not fulfill its intended mission."

"I want to make sure you keep your eyes on the ball, that is, the two basic missions of a central bank. The first is maintaining macroeconomic stability: maintaining stable growth and keeping inflation low and stable. The principal policy tool for maintaining macroeconomic stability is monetary policy. In normal times, the Fed and other central banks use open market operations—purchases and sales of securities in markets—to move interest rates up or down, and in doing so try to create a more stable macroeconomic environment. The second part of a central bank's mission is maintaining financial stability. Central banks are focused on trying to ensure that the financial system functions properly, and in particular, they want to prevent, if possible, and if not, to mitigate the effects of a financial crisis or a financial panic."

"We did stop the meltdown. We avoided what would have been, I think, a collapse of the global financial system. That was obviously a good thing. But one thing that I was always sure of and the Federal Reserve was always sure of was that a collapse of some of these big financial firms was going to have very serious collateral consequences. There were people arguing even as late as September 2008, “Well, why don't you just let the firms collapse? There is a system that can take care of it: bankruptcy. Why don't you let them fail?” We never thought that was a good option. Particularly, if the whole system had collapsed, we would have had extraordinarily serious consequences."

"Obviously, based on the crisis and what happened and the effects that we're still feeling, it's now clear that maintaining financial stability is just as an important a responsibility as monetary and economic stability. And indeed, this is, you know, very much a return to the—where the Fed came from in the beginning. Remember the reason that Fed was created was to try to reduce the incidents of financial panics, so financial stability was the original goal of creation of the Fed. So now we sort of come full circle."

"For nearly eight years, Ben has led the Fed through some of the most daunting economic challenges of our lifetime. . . . [W]hen faced with a potential global economic meltdown, he has displayed tremendous courage and creativity. He took bold action that was needed to avert another Depression - helping us stop the free fall, stabilize financial markets, shore up our banks, get credit flowing again. And all this has made a profound difference in the lives of millions of Americans. . . . [Now] more families are able to afford their own home; more small businesses are able to get loans to expand and hire workers; more folks can pay their mortgages and their car loans. It’s meant more growth and more jobs."

"The stark truth about Ben Bernanke’s “historic” policy of global liquidity support was that it involved handing trillions of dollars in loans to that coterie of banks, their shareholders and their outrageously remunerated senior staff. Indeed, as we shall see, we can itemize precisely who got what. To compound the embarrassment, though the Fed is a national central bank, at least half the liquidity support it provided went to banks not headquartered in the United States, but located overwhelmingly in Europe. If in intellectual terms the crisis was a crisis of macroeconomics, if in practical terms it was a crisis of the conventional tools of monetary policy, it was by the same token a deep crisis of modern politics. However unprecedented and effective the Fed’s actions might have been, even for those politicians whose support for globalization was unfailing, its practical implications were barely speakable. Though it is hardly a secret that we inhabit a world dominated by business oligopolies, during the crisis and its aftermath this reality and its implications for the priorities of government stood nakedly exposed. It is an unpalatable and explosive truth that democratic politics on both sides of the Atlantic has choked on."

"The one sure mark of a con, though, is the promise of free money."

"If you look at the speeches he gave just before he left the Fed, it's pretty much “After me - the Deluge. I'm getting out while my reputation's intact”."

"To the deficit commission, a depression is the solution to the problem, not a problem."

"if you increase living standards you make labor more productive. This is why Asia today is becoming more productive than the United States."

"You could say that GDP (National Income) and prosperity and wealth grows fastest when income tax rates are highest. And wealth slows, the economy slows, when taxes are cut. That's counter intuitive but if you look at any chart comparing tax rates and economic growth rates that's what you find. The 19th century knew it, the 18th century knew it but today you have a kind of counter revolution of junk economics that is basically anti-labor economics."

"Well, companies themselves have been causing this crisis as much as speculators, because companies like Amazon, like Google, or Apple especially, have been borrowing money to buy their own stock. Corporate activists, stockholder activists, have told these companies, we want you to put us on the board because we want you to borrow at 1 percent to buy your stock yielding 5 percent. You’ll get rich in no time. So these stock buybacks by Apple and by other companies at high prices can push up their stock price in the short term. But when prices crash, their net worth is all of a sudden plunging... this morning in the stock market was a huge wipeout of borrowed money on which people thought the market would go up, and the Federal Reserve would be able to inflate prices."

"The job of the Federal Reserve is to increase the price of wealth and stocks and real estate relative to labor. The Federal Reserve is sort of waging class war. It wants to increase the assets of the 1 percent relative to the earnings of the 99 percent, and we’re seeing the fact that this, the effect of this class war is so successful it’s plunged the economy into debt, slowed the economy, and led to the crisis we have today."

"The end of America’s unchallenged global economic dominance has arrived sooner than expected, thanks to the very same Neocons who gave the world the Iraq, Syria and the dirty wars in Latin America... The United State['s]... violent regime change warfare against Venezuela and Syria – and threatening other countries with sanctions if they do not join this crusade – is driving European and other nations to create their alternative financial institutions...."

"The Deep State is reacting with shock at how this right-wing real estate grifter has been able to drive other countries to defend themselves by dismantling the U.S.-centered world order. To rub it in, he is using Bush and Reagan-era Neocon arsonists, John Bolton and now Elliott Abrams, to fan the flames in Venezuela. It is almost like a black political comedy. The world of international diplomacy is being turned inside-out. A world where there is no longer even a pretense that we might adhere to international norms, let alone laws or treaties."

"The Neocons who Trump has appointed are accomplishing what seemed unthinkable not long ago: Driving China and Russia together... After the crescendo of pretenses and deceptions over Iraq, Libya and Syria, along with our absolution of the lawless regime of Saudi Arabia, foreign political leaders are coming to recognize what world-wide public opinion polls reported even before the Iraq/Iran-Contra boys turned their attention to the world’s largest oil reserves in Venezuela: The United States is now the greatest threat to peace on the planet."

"It is worthwhile to note that our global imposition of the mythical “efficiencies” of forcing Latin American countries to become plantations for export crops like coffee and bananas rather than growing their own wheat and corn has failed catastrophically to deliver better lives, especially...in Central America.... witness the caravans and refugees across Mexico. Of course, our backing of the most brutal military dictators and crime lords has not helped either. Likewise, the IMF has been forced to admit that its basic guidelines were fictitious from the beginning...It is as if the IMF now operates out of a small room in the basement of the Pentagon in Washington... It’s now out in the open..."

"When Biden gave his speech last week, there was a very marked change, right in the middle of it. The very beginning was very calm, offering means of improvement for the American economy, and a set of proposals that were so wonderful that they don’t have the chance of being enacted. And that was simply to co-opt what calls itself the left wing of the Democratic Party, if that’s not an oxymoron. And when all of a sudden, his body language changed, his voice changed, and there was just an anger towards Russia and towards China, a visceral anger that brought back the whole 30 years of his tenure in Congress... he’s escalating the cold war against Russia and China, in the belief that somehow if he can impose sanctions and punish them economically, that will lead to a fall of the government. Well, you can see what he’s projecting here."

"There was actually no liquidity crisis whatsoever... the reason that the regular newspapers don't report it is the loans violated every element of the Dodd-Frank laws that were supposed to prevent the Fed from making loans to particular banks that were not part of a liquidity crisis... these three banks, Chase Manhattan, Goldman Sachs – which used to be a brokerage firm – and Citibank, that the Federal Reserve laws and the Dodd-Frank Act explicitly prevent the Fed from making loans to particular banks... month after month, the Fed was pumping money into JP Morgan and Citibank and Goldman... these really weren't Citibank and Morgan Chase; it was to their trading affiliates. Now this is exactly what Dodd-Frank was supposed to prevent..."

"As President Biden explained, the current U.S.-orchestrated military escalation (“Prodding the Bear”) is not really about Ukraine. Biden promised at the outset that no U.S. troops would be involved. But he has been demanding for over a year that Germany prevent the Nord Stream 2 pipeline from supplying its industry and housing with low-priced gas and turn to the much higher-priced U.S. suppliers.... So the most pressing U.S. strategic aim of NATO confrontation with Russia is soaring oil and gas prices, above all to the detriment of Germany. In addition to creating profits and stock-market gains for U.S. oil companies, higher energy prices will take much of the steam out of the German economy."

"It’s a tectonic shift [the decline of an empire and the rise of another one]. Let’s look at this from Russia’s point of view. This is everything that Russia has been aiming at and insisting upon for the last five years. President Putin and Foreign Minister Lavrov have been leading the understanding that the world needs to be de-dollarized, that the United States has declared an economic war against Russia, China and their allies, really against Eurasia. So, in effect, by drawing the sanctions — not only the sanctions — but the most important thing is by seizing Russia’s foreign holdings in the United States, its treasury bond holdings and the bank deposits."

"What the United States has done itself is exactly what both Lavrov and President Xi of China have been saying the world must move towards. They’ve been saying we must have a multinational world, multipolar world. We must be de-dollarized. We must cut free of the dollar and isolate, protect ourselves from the United States’ ability to use sanctions, to interrupt our economic activity, to use oil to threaten any country that doesn’t follow U.S. policy from having their energy reserves cut off, to protect countries that don’t produce their own food from being able to buy food and feed themselves... So everybody thought for the last five years: How will Russia and China and their allies, India, Iran, create this new world order? Well, the United States... has destroyed itself."

"And now this foreign exchange is going to be not recycled to the U.S. to support the dollar. It’s going to be spent on gold and on mutual currency swaps. Well, what that means is that the dollar no longer has the free ride, no longer has the free support. And other countries will protect themselves against the depreciating dollar by doing what the United States did against Germany in 1921 after World War I, a century ago, by imposing special tariffs against depreciating currencies. So they get it, the game is over. And it’s not over because Russia and China and India and Iran defeated America. It was the self-defeating policies of this blindly arrogant, greedy, Republican, Democratic, deep state philosophy."

"President Biden has indeed got a regime change, but the regime change is in the United States itself. When Biden said last week, well, we’ve got to make America make a lot of great sacrifices to support the Nazis in Ukraine... Biden really may succeed in rolling back the economy to the mid-19th century. And that basically is not just Biden, of course, it’s the people around him. And ultimately it’s the deep state. Whether you’re a Republican or a Democrat, their policy is identical... You could say that American foreign policy is based on accelerating global warming because Biden said the future is oil and coal."

"America is basically the blob, the State Department, the C.I.A., the national security state, and its ideology is to shift economic planning away from government to Wall Street and other financial centers in England and France. And I don’t see that financialization and neoliberalism changing. That’s their religion. And you’re going to have, instead of the reform that you’d like to see, you’re going to see an increasingly violent vicious fight against anyone proposing this reform, just as they fought against Allende in Chile and against against Cuba and as they’re fighting against China and Russia today."

"Is the proxy war in Ukraine turning out to be only a lead-up to something larger, involving world famine and a foreign-exchange crisis for food- and oil-deficit countries? Many more people are likely to die of famine and economic disruption than on the Ukrainian battlefield. It thus is appropriate to ask whether what appeared to be the Ukraine proxy war is part of a larger strategy to lock in U.S. control over international trade and payments. We are seeing a financially weaponized power grab by the U.S. Dollar Area over the Global South as well as over Western Europe. Without dollar credit from the United States and its IMF subsidiary, how can countries stay afloat? How hard will the U.S. act to block them from de-dollarizing, opting out of the U.S. economic orbit? U.S. Cold War strategy is not alone in thinking how to benefit from provoking a famine, oil and balance-of-payments crisis. Klaus Schwab’s World Economic Forum worries that the world is overpopulated – at least with the “wrong kind” of people. As... Bill Gates has explained: “Population growth in Africa is a challenge.”"

"It is unlikely that German industrialists will act to prevent their country’s de-industrialization, given the US/NATO stranglehold on Eurozone politics and the past 75 years of political meddling by US officials. German company heads are more likely to try and survive with as much personal and corporate wealth intact as they can in the wake of Germany being turned into a Baltic-state-type economic wreckage.... Of course the Nord Stream pipelines are recoverable. That is precisely why US political pressure from Secretary of State Blinken has been so insistent that Germany, Italy and other European countries double down on isolating their economies from trade and investment with Russia, Iran, China and other countries whose growth the US is trying to disrupt..."

"The European political leaders are unwilling to resist U.S. demands. All they can do is complain at their mistreatment. That has led to a split between German and other European businessmen and the European political parties. The problem is that Europe cannot withdraw from NATO without dissolving the European Union, which commits military policy to NATO and hence to an immense balance-of-payments drain to purchase high-priced U.S. arms as well as other necessities. If the question is how long Germany and Europe can put political and military loyalty to the United States over their own economic prosperity and employment, the answer by the Greens is that “shock therapy” will help make Europe greener. At first glance that is right as heavy industry is shut down. But it seems that Europe’s fuel of the future is coal and cutting down its forests."

"Blaming today’s price inflation on workers earning too much is simply an excuse to impose a new class war against labor. It is obvious that wage levels did not force up prices for oil, gas, fertilizer and grain. These price rises are the result of U.S. sanctions. But the central claim of today’s neoliberal economic orthodoxy is that all problems are caused by labor being too greedy, and putting its own living standards above the ideal of creating a wealthy rentier class to lord it over them.... The economy is to be Thatcherized – all by riding the crest of the American anti-Russian sanctions and claiming that this creates a crisis requiring dismantling of public infrastructure and its privatization and financialization."

"Privatization and of the U.S. economy has obliged employers and labor to bear the rentier costs, including higher housing prices and rising debt overhead, that are part and parcel of today’s neoliberal policies. The resulting loss of industrial competitiveness is the major block to its re-industrialization. After all, it was these charges that deindustrialized the economy in the first place, making it less competitive in world markets and spurring the offshoring of industry by raising the cost of basic needs and doing business. Paying such charges also shrinks the domestic market, by reducing labor’s ability to buy what it produces. Trump’s tariff policy does nothing to address these problems, but will aggravate them by accelerating price inflation."

"Debts that can't be paid, won't be paid. p 25"

"The taproots feeding financial power are real estate rent, natural resource rent and monopoly rent.... Instead of investing in plant and equipment to hire more labor to produce more output, money is made financially... "fictitious capital."... In alliance with other rent-extracting sectors, finance acts above the industrial economy to indebt it then rake off debt service, inflating prices to housing, education and infrastructure. p 390-391"

"Labor may be paid more and more, but its rising wages are stripped away to pay the Finance, Insurance and Real Estate (FIRE) sector. p 391"

"One way or another, today's debts will not be paid.... As long as savings mainly by the 1% takes the form of debt claims on the rest of society, they will grow exponentially to hold the 99% in deepening debt..."

"If debts to creditors are paid by forced privatization, the public domain and infrastructure will be turned into rent-extraction tollbooth opportunities and economies will be impoverished by rentier austerity."

"The neoliberal strategy is a new Dark Age of enclosures and privatization that will bury the Enlightenment's drive to free economies from rentier privilege.... In this war the financial powers and other rentiers fight... precisely because they realize there is no moral justification for income and wealth obtained by extractive means instead of earned productivity."

"Those who obtain or inherit predatory wealth and privilege realize the ultimate means of imposing austerity and demolishing the power of democracies is deception, junk economics...."

"To prevent this pro-rentier end of history it is necessary for populations to revive the long classical fight to free economies. The alternative is neofeudalism. p. 435"

"The most serious problems lie in the financial sphere, where the economy’s debt overhead has grown more rapidly than the ‘real’ economy’s ability to carry this debt. … The essence of the global financial bubble is that savings are diverted to inflate the stock market, bond market and real estate prices rather than to build new factories and employ more labor."

"Overconsumption by US citizens, US buy-outs of foreign companies and dollars the Pentagon spends abroad all end up in foreign central banks. These governments face a hard choice: either recycle the dollars back to America by buying US Treasury bonds or let the “free market” force up their currencies relative to the dollar – thereby pricing their exports out of world markets, creating domestic unemployment and business failures. US-style free markets hook them into a system that forces them to accept unlimited dollars. Now they want out. … The US is the world’s largest debtor, yet has avoided the pain of “structural adjustments” imposed on other debtor nations. US interest rate and tax reductions in the face of exploding trade and budget deficits are seen as the height of hypocrisy in view of the austerity programmes that Washington has forced on other countries via the International Monetary Fund and other vehicles."

"Europe is to be turned into a banana republic by taxing labor – not finance, insurance or real estate (FIRE). Governments are to impose heavier employment and sales taxes while cutting back pensions and other public spending. … The financial privatization and credit-creation monopoly that governments have relinquished to banks is now to really pay off – at the price of breaking up Europe. … The unelected members of the European Central Bank have taken over planning power from elected governments. Beholden to its financial constituency, the ECB has convinced the EU commission to back the new oligarchic power grab. … In sum, the Neoliberal Revolution seeks to achieve in Europe what the United States has achieved since real wages stopped rising in 1979: doubling the share of wealth enjoyed by the richest 1%. This involves reducing the middle class to poverty, breaking union power, and destroying the internal market as a precondition."

"So the Bush-Obama administration has taken a fiscal stance diametrically opposed to that of the patron saint of free enterprise. While escalating war in Afghanistan and maintaining over 850 military bases around the world, the administration has run up the national debt that Smith decried. By shifting the tax burden off property and off rent-seeking monopolies – above all, off the financial sector – this policy has raised America’s cost of living and doing business, thereby undercutting its competitive power and running up larger and larger foreign debt."

"So the game plan is not merely to free the income of the wealthiest class to “offshore” itself into assets denominated in harder currencies abroad. It is to scrap the progressive tax system altogether. … How stable can a global situation be where the richest nation does not tax its population, but creates new public debt to hand out to its bankers? … The “solution” to the coming financial crisis in the United States may await the dollar’s plunge as an opportunity for a financial Tonkin Gulf resolution. Such a crisis would help catalyze the tax system’s radical change to a European-style “Steve Forbes” flat tax and VAT sales-excise tax.... More government giveaways will be made to the financial sector in a vain effort to keep bad debts afloat and banks “solvent.” As in Ireland and Latvia, public debt will replace private debt, leaving little remaining for Social Security or indeed for much social spending. … The bottom line is that after the prolonged tax giveaway exacerbates the federal budget deficit – along with the balance-of-payments deficit – we can expect the next Republican or Democratic administration to step in and “save” the country from economic emergency by scaling back Social Security while turning its funding over, Pinochet-style, to Wall Street money managers to loot as they did in Chile. And one can forget rebuilding America’s infrastructure. It is being sold off by debt-strapped cities and states to cover their budget shortfalls resulting from un-taxing real estate and from foreclosures. Welcome to debt peonage. This is worse than what was meant by a double-dip recession. It will be with us much longer."

"In America, despite the amazing rise in productivity we’ve had in the last 30 years, real wages have actually gone down. All of the increase in productivity has been taken by the finance, insurance, and real estate sector, called the FIRE sector, almost all of it by the financial sector. … So instead of having industrial capitalism a century ago, we have a finance capitalism that actually is stifling industrial capitalism here. So what Alan Greenspan and others call the postindustrial economy is really neo-feudalism. It’s a financialized economy where all of the surplus goes to the banks."

"[The World Bank]... was set up basically by the United States in 1944, along with its sister institution, the International Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent on the United States. To make sure that no other country or group of countries – even all the rest of the world – could not dictate U.S. policy. American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this veto power was to make sure that any policy was, in Donald Trump’s words, to put America first. “We’ve got to win and they’ve got to lose.”"

"Most World Bank loans are for transportation, roads, harbor development and other infrastructure needed to export minerals and plantation crops. The World Bank doesn’t make loans for projects that help the country develop in its own currency. By making only foreign currency loans, in dollars or maybe euros now, the World Bank says that its clients have to repay by generating foreign currency. The only way they can repay the dollars spent on American engineering firms that have built their infrastructure is to export – to earn enough dollars to pay back for the money that the World Bank or IMF have lent. This is what John Perkins’ book about being an economic hit man for the World Bank is all about. He realized that his job was to get countries to borrow dollars to build huge projects that could only be paid for by the country exporting more – which required breaking its labor unions and lowering wages so that it could be competitive in the race to the bottom that the World Bank and IMF encourage."

"When China sends its students to the United States, especially when it sends central bankers and planners to the United States to study (and be recruited), they are told by the U.S. “Do as we say, not as we have done.” The United States is not telling China... how to get rich in the way that it did, by protective tariffs, by creating its own money and by making other countries dependent on it. The United States does not want you to be independent and self-reliant. The United States wants China to let itself become dependent on U.S. finance in order to invest in its own industry... The neoliberal plan is not to make you independent, and not to help you grow except to the extent that your growth will be paid to US investors or used to finance U.S. military spending around the world to encircle you and trying to destabilize you in Sichuan to try to pry China apart. Look at what the United States has done in Russia, and at what the International Monetary Fund in Europe has done to Greece, Latvia and the Baltic states. It is a dress rehearsal for what U.S. diplomacy would like to do to you, if it can convince you to follow the neoliberal US economic policy of financialization and privatization. De-dollarization is the alternative to privatization and financialization."

"Nearly half a millennium ago Niccolo Machiavelli’s The Prince described three options for how a conquering power might treat states that it defeated in war but that “have been accustomed to live under their own laws and in freedom: … the first is to ruin them, the next is to reside there in person, the third is to permit them to live under their own laws, drawing a tribute, and establishing within it an oligarchy which will keep it friendly to you.”[Niccolo Machiavelli, The Prince (1532), Ch 5:] Machiavelli preferred the first option, citing Rome’s destruction of Carthage. That is what the United States did to Iraq and Libya after 2001. But in today’s New Cold War the mode of destruction is largely economic, via trade and financial sanctions such as the United States has imposed on China, Russia, Iran, Venezuela and other designated adversaries. The idea is to deny them key inputs, above all in essential technology and information processing, raw materials, and access to bank and financial connections, such as U.S. threats to expel Russia from the SWIFT bank-clearing system.The second option is to occupy rivals. This is done only partially by the troops in America’s 800 military bases abroad. But the usual, more efficient occupation is by U.S. corporate takeovers of their basic infrastructure, owning their most lucrative assets and remitting their revenue back to the imperial core."

"America no longer has the monetary power and seemingly chronic trade and balance-of-payments surplus that enabled it to draw up the world’s trade and investment rules in 1944-45. The threat to U.S. dominance is that China, Russia and Mackinder’s Eurasian World Island heartland are offering better trade and investment opportunities than are available from the United States with its increasingly desperate demand for sacrifices from its NATO and other allies...The most glaring example is the U.S. drive to block Germany from authorizing the Nord Stream 2 pipeline to obtain Russian gas for the coming cold weather. Angela Merkel agreed with Donald Trump to spend $1 billion building a new LNG port to become more dependent on highly priced U.S. LNG. (The plan was cancelled after the U.S. and German elections changed both leaders.) But Germany has no other way of heating many of its houses and office buildings (or supplying its fertilizer companies) than with Russian gas."

"The only way left for U.S. diplomats to block European purchases is to goad Russia into a military response and then claim that avenging this response outweighs any purely national economic interest."

"As hawkish Under-Secretary of State for Political Affairs, Victoria Nuland, explained in a State Department press briefing on January 27: “If Russia invades Ukraine one way or another Nord Stream 2 will not move forward.” The problem is to create a suitably offensive incident and depict Russia as the aggressor."

"China, like Russia, has been reducing its dollar holdings as much as possible, just keeping enough to prevent the currency from being destabilized by the dollar inflows. China, Russia are buying gold instead of U.S. dollars as much as possible. China is trying to escape from buying Treasury securities. Why would any government want to buy Treasury securities yielding 0.1% when the dollars coming into China are trying to make loans or buying countries, making 15% profit or interest a year? Nobody would want that situation to continue. China doesn’t want it to continue. As long as it [China] is part of an international economy that is dollarized, it [China] is forced to take a loss, a sacrifice, year after year, subsidizing the U.S. economy. The only way that it can avoid that is to isolate itself from the U.S. dollar. No country until this time since 1945 has ever had the critical mass to be able to do it. That is the objective, the stated objective of Russia, China and their allies. Of course, they don’t want to buy treasury bills. That doesn’t mean that, yes, they found a wonderful investment making 0.1% a year and subsidizing the United States. That is not what China or any other country wants."

"America’s plan to block Nord Stream 2 was really part of its strategy to block Western Europe (“NATO”) from seeking prosperity by mutual trade and investment with China and Russia... European trade and investment prior to the War to Impose Sanctions had promised a rising mutual prosperity between Germany, France and other NATO countries vis-à-vis Russia and China. Russia was providing abundant energy at a competitive price, and this energy was to make a quantum leap with Nord Stream 2. Europe was to earn the foreign exchange to pay for this rising import trade by a combination of exporting more industrial manufactures to Russia and capital investment in developing the Russian economy, e.g. by German auto companies and financial investment. This bilateral trade and investment is now stopped – and will remain stopped for many, many years, given NATO’s confiscation of Russia’s foreign reserves kept in euros and British sterling, and Europe’s Russophobia being fanned by U.S. propaganda media."

"There are essentially two types of society: mixed economies with public checks and balances, and oligarchies that dismantle and privatize the state, taking over its monetary and credit system, the land and basic infrastructure to enrich themselves but choking the economy, not helping it grow."

"The decline of the West is not necessary or historically inevitable. It is the result of choosing policies dictated by its rentier interests. ...The threat posed to society by rentier interests is the great challenge of every nation today: whether its government can restrict the dynamics of finance capitalism and prevent an oligarchy from dominating the state and enriching itself by imposing austerity on labor and industry. So far, the West has not risen to this challenge."

"Oligarchic control of government has been a major distinguishing feature of Western civilization ever since classical antiquity. And the key to this control has been opposition to strong government – that is, civil government strong enough to prevent a creditor oligarchy from emerging and monopolizing control of land and wealth, making itself into a hereditary aristocracy, a rentier class living off land rents, interest and monopoly privileges that reduce the population at large to austerity. ... To save themselves from being swept into the whirlpool of economic destruction now engulfing the West, countries in the world’s rapidly growing Eurasian core are developing new economic institutions based on an alternative social and economic philosophy. With China being the largest and fastest growing economy in the region, its socialist policies are likely to be influential in shaping this emerging non-Western financial and trading system."

"The reaction to the sabotage of three of the four Nord Stream 1 and 2 pipelines in four places on Monday, September 26, has focused on speculations about who did it and whether NATO will make a serious attempt to discover the answer. Yet instead of panic, there has been a great sigh of diplomatic relief, even calm. ...Disabling these pipelines ends the uncertainty and worries on the part of US/NATO diplomats that nearly reached a crisis proportion the previous week, when large demonstrations took place in Germany calling for the sanctions to end and to commission Nord Stream 2 to resolve the energy shortage..."

"The German public was coming to understand what it will mean if their steel companies, fertilizer companies, glass companies and toilet-paper companies were shutting down. These companies were forecasting that they would have to go out of business entirely – or shift operations to the United States – if Germany did not withdraw from the trade and currency sanctions against Russia and permit Russian gas and oil imports to resume, and presumably to fall back from their astronomical eight to tenfold price increase... If policymakers were to put German business interests and living standards first, NATO’s common sanctions and New Cold War front would be broken. Italy and France might follow suit. That prospect made it urgent to take the anti-Russian sanctions out of the hands of democratic politics."

"Look at what’s happened in Florida — in the last two months the insurance rates have doubled, tripled, and quadrupled so much that people are now unable or unwilling to buy new homes in Florida because the insurance rates are so high... Nobody could really afford that... The government getting into subsidized insurance has been a disaster. The one area that the government has got into are [beachfront] houses for millionaires. These houses, because they’re near the ocean — there [are] hurricanes, they [are] flooded again, and again, and again. So the government will (not quite every year, but every few years) for free, keep giving a 1 million dollars to rebuild a house. 5 years later, [it will] happen again, another 1 million dollars to [rebuild] the house. The government insurance for real estate is spent for the One Percent of the population that has beachfront property and it’s utterly corrupt."

"This plan will work."

"We have parts of our system which are overwhelmed by regulation. It wasn't the absence of regulation that was the problem. It was despite the presence of regulation you got huge risks built up."

"Hyperinflation is not going to happen in this country, will never happen... The Fed putting so much money into the system is not going to create the risk of hyperinflation in the future. We have a strong independent Federal Reserve with a very strong mandate from the Congress, and they will do what's necessary to keep inflation low and stable over time."

"We believe in a strong dollar … Chinese financial assets are very safe."

"I believe deeply that it's very important to the United States, to the economic health of the United States, that we maintain a strong dollar."

"So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law. And that's why these Wall Street banks fought so hard to get the current head of the Fed reappointed, [[Jerome Powell|[Jerome] Powell]], because they know that he's going to do what [Timothy] Geithner did under the Obama administration. He's loyal to the New York City banks, and he's willing to sacrifice the economy to help the banks."

"The criterion of efficiency dictates that choice of alternatives which produces the largest result for the given application of resources."

"If there were no limits to human rationality administrative theory would be barren. It would consist of the single precept: Always select that alternative, among those available, which will lead to the most complete achievement of your goals."

"The techniques of the practitioner are usually called 'synthetic'. He designs by organizing known principles and devices into larger systems."

"Most of the propositions that make up the body of administrative theory today share, unfortunately, this defect of proverbs. For almost every principle one can find an equally plausible and acceptable contradictory principle."

"Broadly stated, the task is to replace the global rationality of economic man with a kind of rational behavior that is compatible with the access to information and the computational capacities that are actually possessed by organisms, including man, in the kinds of environments in which such organisms exist."

"Over Christmas, Allen Newell and I created a thinking machine."

"It is not my aim to surprise or shock you – but the simplest way I can summarize is to say that there are now in the world machines that think, that learn and that create. Moreover, their ability to do these things is going to increase rapidly until – in a visible future – the range of problems they can handle will be coextensive with the range to which the human mind has been applied."

"Before we can establish any immutable 'principles' of administration, we must be able to describe, in words, exactly how an administrative organization looks and exactly how it works."

"The world you perceive is drastically simplified model of the real world."

"Whereas economic man maximizes - selects the best alternative from among all those available to him, his cousin, administrative man, satisfices - looks for a course of action that is satisfactory or "good enough.""

"Economic man deals with the "real world" in all its complexity. Administrative man recognizes that the world he perceives is a drastic simplified model... He makes his choices using a simple picture of the situation that takes into account just a few of the factors that he regards as most relevant and crucial."

"A major task in organizing is to determine, first, where the knowledge is located that can provide the various kinds of factual premises that decisions require."

"Before a science can develop principles, it must possess concepts. Before a law of gravitation could be formulated, it was necessary to have the notions of “acceleration” and “weight.”"

"The first task of administrative theory is to develop a set of concepts that will permit the description, in terms relevant to the theory, of administrative situations. These concepts, to be scientifically useful, must be operational; that is, their meanings must correspond to empirically observable facts or situations."

"In the process of decision those alternatives are chosen which are considered to be appropriate means of reaching desired ends. Ends themselves, however, are often merely instrumental to more final objectives. We are thus led to the conception of a series, or hierarchy, of ends. Rationality has to do with the construction of means-ends chains of this kind."

"The fact that goals may be dependent for their force on other more distant ends leads to the arrangement of these goals in a hierarchy - each level to be considered as an end relative to the levels below it and as a mean to the levels above it."

"The function of knowledge in the decision-making process is to determine which consequences follow upon which of the alternative strategies. It is the task of knowledge to select from the whole class of possible consequences a more limited subclass, or even (ideally) a single set of consequences correlated with each strategy."

"It is impossible for the behavior of a single, isolated individual to reach a high degree of rationality. The number of alternatives he must explore is so great, the information he would need to evaluate them so vast that even an approximation to objective rationality is hard to conceive. Individual choice takes place in rationality is hard to conceive... Actual behavior falls short in at least three ways, of objective rationality:"

"# Rationality requires a complete knowledge and anticipation of the consequences that will follow on each choice. In fact, knowledge of consequences is always fragmentary"

"#Since these questions lie in the future, imagination must supply the lack of experienced feeling in attaching value to them. But values can be only imperfectly anticipated."

"# Rationality requires a choice among all possible alternative behaviors. In actual behavior, only a very few of all these possible alternatives come to mind."

"Roughly speaking, rationality is concerned with the selection of preferred behavior alternatives in terms of some system of values, whereby the consequences of behavior can be evaluated."

"Organizations and institutions permit stable expectations to be formed by each member of the group as to the behavior of the other members under specified conditions."

"Organizations and institutions provide the general stimuli and attention-directors that channelize the behaviors of the members of the group, and that provide those members with the intermediate objectives that stimulate action."

"The behaviour of individuals is the tool with which the organisation achieves its targets."

"In order to survive, the organization must have an objective that appeals to its customers, so that they will make the contributions necessary to sustain it. Hence, organization objectives are constantly adapted to conform to the changing values of customers, or to secure new groups of customers in place of customers who have dropped away. The organization may also undertake special activities to induce acceptance of its objectives by customers - advertising, missionary work, and propaganda of all sorts."

"We will likely also find that the nature of the problem to be solved will be a principal determinant of the mix. With our growing understanding of the organization of judgmental and intuitive processes, of the specific knowledge that of the specific knowledge that is required to perform particular judgmental tasks, and of the cues that evoke such knowledge in situations in which it is relevant, we have a powerful new tool for improving expert judgment. We can specify the knowledge and the recognition capabilities that experts in a domain need to acquire, and use these specifications for designing appropriate learning procedures."

"The principle of bounded rationality [is] the capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world — or even for a reasonable approximation to such objective rationality."

"In these two essays [the papers of 1955 and 1956] the focus is upon ways of simplifying the choice problem to bring it within the power of human computation... The key to the simplification of the choice process in both cases is the replacement of the goal of maximizing with the goal of satisficing, of finding a course of action that is ‘good enough’. I have tried, in these two essays, to show why this substitution is an essential step in the application of the principle of bounded rationality."

"Administration is not unlike play-acting. The task of the good actor is to know and play his role, although different roles may differ greatly in content. The effectiveness of the performance will depend on the effectiveness of the play and the effectiveness with which it is played. The effectiveness of the administrative process will vary with the effectiveness of the organization and the effectiveness with which its members play their parts."

"If by motivation we mean whatever it is that causes someone to follow a particular course of action, then every action is motivated — by definition. But in most human behavior the relation between motives and action is not simple; it is mediated by a whole chain of events and surrounding conditions. We observe a man scratching his arm. His motive (or goal)? To relieve an itch."

"Decision making processes are aimed at finding courses of action that are feasible or satisfactory in the light of multiple goals and constraints."

"At the time of its initial publication, Public Administration helped to define this field of study and practice by introducing two major new emphases: an orientation toward human behavior and human relations in organizations, and an emphasis on the interaction between administration, politics, and policy. Without neglecting more traditional concerns with organization structure, Simon, Thompson, and Smithburg viewed administration in its behavioral and political contexts. The viewpoints they express still are at the center of public administration's concerns."

"By public administration is meant, in common usage, the activities of the executive branches of national, state, and local governments; independent boards and commissions set up by the congress and state legislatures; government corporations, and certain agencies of a specialized character. Specifically excluded are judicial and legislative agencies within the government and nongovernmental administration."

"The function of knowledge in the decision-making process is to determine which consequences follow upon which of the alternative strategies."

"The capacity of the human mind for formulating and solving complex problems is very small compared with the size of the problems whose solution is required for objectively rational behavior in the real world—or even for a reasonable approximation to such objective rationality."

"The first consequence of the principle of bounded rationality is that the intended rationality of an actor requires him to construct a simplified model of the real situation in order to deal with it. He behaves rationally with respect to this model, and such behavior is not even approximately optimal with respect to the real world. To predict his behavior we must understand the way in which this simplified model is constructed, and its construction will certainly be related to his psychological properties as a perceiving, thinking, and learning animal."

"A number of proposals have been advanced in recent years for the development of ‘general systems theory’ which, abstracting from properties peculiar to physical, biological, or social systems, would be applicable to all of them. We might well feel that, while the goal is laudable, systems of such diverse kinds could hardly be expected to have any nontrivial properties in common. Metaphor and analogy can be helpful, or they can be misleading. All depends on whether the similarities the metaphor captures are significant or superficial. It may not be entirely vain, however, to search for common properties among diverse kinds of complex systems... The ideas of feedback and information provide a frame of reference for viewing a wide range of situations, just as do the ideas of evolution, of relativism, of axiomatic method, and of operationalism... hierarchic systems have some common properties that are independent of their specific content..."

"In an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."

"We are organization watchers in our role as citizens. Increasing attention has been fixed in recent years upon the functioning of society’s organizations: its large corporations and its governments. Hence this could also be described as a book for Everyman–for it proposes a way of thinking about organizational issues that concern us all."

"Human beings, viewed as behaving systems, are quite simple. The apparent complexity of our behavior over time is largely a reflection of the complexity of the environment in which we find ourselves."

"Definition of design = Everyone designs who devise courses of action aimed at changing existing situations into preferred ones. The intellectual activity that produces material artifacts is no different fundamentally from the one that prescribes remedies for a sick patient or the one that devises a new sales plan for a company or a social welfare policy for a state."

"Decision theory can be pursued not only for the purposes of building foundations for political economy, or of understanding and explaining phenomena that are in themselves intrinsically interesting, but also for the purpose of offering direct advice to business and governmental decision makers. For reasons not clear to me, this territory was very sparsely settled prior to World War II. Such inhabitants as it had were mainly industrial engineers, students of public administration, and specialists in business functions, none of whom especially identified themselves with the economic sciences. Prominent pioneers included the mathematician, Charles Babbage, inventor of the digital computer, the engineer, Frederick Taylor and the administrator, Henri Fayol. During World War II, this territory, almost abandoned, was rediscovered by scientists, mathematicians, and statisticians concerned with military management and logistics, and was renamed “operations research” or “operations analysis.” So remote were the operations researchers from the social science community that economists wishing to enter the territory had to establish their own colony, which they called “management science”."

"During and after World War II, a large number of academic economists were exposed directly to business life, and had more or less extensive opportunities to observe how decisions were actually made in business organizations. Moreover, those who became active in the development of the new management science were faced with the necessity of developing decision-making procedures that could actually be applied in practical situations. Surely these trends would be conducive to moving the basic assumptions of economic rationality in the direction of greater realism."

"Now the salient characteristic of the decision tools employed in management science is that they have to be capable of actually making or recommending decisions, taking as their inputs the kinds of empirical data that are available in the real world, and performing only such computations as can reasonably be performed by existing desk calculators or, a little later electronic computers. For these domains, idealized models of optimizing entrepreneurs, equipped with complete certainty about the world - or, a worst, having full probability distributions for uncertain events - are of little use. Models have to be fashioned with an eye to practical computability, no matter how severe the approximations and simplifications that are thereby imposed on them... The first is to retain optimization, but to simplify sufficiently so that the optimum (in the simplified world!) is computable. The second is to construct satisficing models that provide good enough decisions with reasonable costs of computation. By giving up optimization, a richer set of properties of the real world can be retained in the models... Neither approach, in general, dominates the other, and both have continued to co-exist in the world of management science."

"In Administrative Behavior, bounded rationality is largely characterized as a residual category — rationality is bounded when it falls short of omniscience. And the failures of omniscience are largely failures of knowing all the alternatives, uncertainty about relevant exogenous events, and inability to calculate consequences. There was needed a more positive and formal characterization of the mechanisms of choice under conditions of bounded rationality... Two concepts are central to the characterization: search and satisficing."

"We need to augment and amend the existing body of classical and neoclassical economic theory to achieve a more realistic picture of economic process."

"If we accept values as given and consistent, if we postulate an objective description of the world as it really is, and if we assume that the decision maker's computational powers are unlimited, then two important consequences follow. First, we do not need to distinguish between the real world and the decision maker's perception of it: he or she perceives the world as it really is. Second, we can predict the choices that will be made by a rational decision maker entirely from our knowledge of the real world and without a knowledge of the decision maker's perceptions or modes of calculation. (We do, of course, have to know his or her utility function.)"

"Modem mainstream economic theory bravely assumes that people make their decisions in such a way as to maximize their utility. Accepting this assumption enables economics to predict a great deal of behavior (correctly or incorrectly) without ever making empirical studies of human actors."

"First, most producers are employees of firms, not owners. Viewed from the vantage point of classical [economic] theory, they have no reason to maximize the profits of firms, except to the extent that they can be controlled by owners. Moreover, profit-making firms, nonprofit organizations, and bureaucratic organizations all have exactly the same problem of inducing their employees to work toward organizational goals. There is no reason, a priori, why it should be easier (or harder) to produce this motivation in organizations aimed at maximizing profits than in organizations with different goals. If it is true in an organizational economy that organizations motivated by profits will be more efficient than other organizations, additional postulates will have to be introduced to account for it."

"Organizations are systems of coordinated action among individuals and groups whose preferences, information, interests, or knowledge differ. Organization theories describe the delicate conversion of conflict into cooperation, the mobilization of resources, and the coordination of effort that facilitate the joint survival of an organization and its members."

"Global rationality, the rationality of neoclassical theory, assumes that the decision maker has a comprehensive, consistent utility function, knows all the alternatives that are available for choice, can compute the expected value of utility associated with each alternative, and chooses the alternative that maximizes expected utility. Bounded rationality, a rationality that is consistent with our knowledge of actual human choice behavior, assumes that the decision maker must search for alternatives, has egregiously incomplete and inaccurate knowledge about the consequences of actions, and chooses actions that are expected to be satisfactory (attain targets while satisfying constraints)."

"If we want a theory explaining how people play billiards, we do not want a theory of perfect billiard balls; we want a theory of what heuristics a human billiard player uses in order to plan and make a (often not quite accurate) shot. These heuristics and actions do not involve solving the differential equations of the billiard board; they involve rules of thumb and it is these practice guides to action we are trying to discover in order to explain the behavior."

"We distinguish diagrammatic from sentential paper-and-pencil representations of information by developing alternative models of information-processing systems that are informationally equivalent and that can be characterized as sentential or diagrammatic. Sentential representations are sequential, like the propositions in a text. Diagrammatic representations are indexed by location in a plane. Diagrammatic representations also typically display information that is only implicit in sentential representations and that therefore has to be computed, sometimes at great cost, to make it explicit for use. We then contrast the computational efficiency of these representations for solving several.illustrative problems in mathematics and physics."

"In view of the dramatic effects that alternative representations may produce on search and recognition processes, it may seem surprising that the differential effects on inference appear less strong. Inference is largely independent of representation if the information content of the two sets of inference rules [one operating on diagrams and the other operating on verbal statements] is equivalent—i.e. the two sets are isomorphs as they are in our examples"

"[Even Darwin’s] natural selection only predicts that survivors will be fit enough, that is, fitter than their losing competitors; it postulates satisficing, not optimizing."

"Computers were within my sphere of attention, but only computers used as number crunchers. In spite of the "giant brain" metaphor, there is little suggestion in this 1950 talk that the most important application of computers might lie in imitating intelligence symbolically, not numerically."

"The true line is not between “hard” natural science and “soft” social sciences, but between precise science limited to highly abstract and simple phenomena in the laboratory and inexact science and technology dealing with complex problems in the real world."

"Since my world picture approximates reality only crudely, I cannot aspire to optimize anything; at most, I can aim at satisficing. Searching for the best can only dissipate scarce cognitive resources; the best is the enemy of the good. (p.361)"

"The empirical research of the last fifteen years on the structure of large organizations seems to confirm the hypothesis of Herbert Simon that human cognitive limits are a basic limiting factor in determining organization structures ."

"Herbert A. Simon's scientific output goes far beyond the disciplines in which he has held professorships: political science, administration, psychology and information sciences. He has made contributions in the fields of science theory, applied mathematics, statistics, operations research, economics and business and public administration (and), in all areas in which he has conducted research, Simon has had something of importance to say."

"He used to give us a hard time. He likes to take on the devil's advocate role. In his Sciences of the Artificial he's pretty balanced."

"He was rightly complaining about some, if not a lot, of the economic literature at the time that he was moving away from economics. I have a couple of comments. I think a lot of the models that we have now, with the dynamics and the uncertainty, address a lot of the observations that were troubling Herb Simon. He is, by the way, a big proponent of positive economic methods."

"All that most economists know about Herbert Simon is that he wrote about bounded rationality and organizational behavior."

"Much of the pioneering work in organization theory was written about public organizations, or with public organizations in mind. When Weber wrote about bureaucracy, he was thinking of the Prussian civil service. Philip Selznick began his scholarly career writing about the New Deal Tennessee Valley Authority in TVA and the Grass Roots (1953). Herbert Simon’s first published article (1937) was on munipical government performance measurement, and Simon also coauthored early in his career a book called Public Administration (1950) and a number of papers (e.g., Simon, 1953) published in Public Administration Review."

"I'm not saying it wasn't a crime. I just saying it's not pedophilia. When I was in college I had sex with under age girls. That doesn't make me a pedophile."

"There are no checks and balances if the gov is wrong, if a private entrepreneur makes a mistake, he goes bankrupt, the losses are cut, if he bets wrong, he loses, if the gov bets wrong, they just get bigger, they just appropriate more money, it's a bottomless pit, because they either get it from the tax payers or run it off a printing press."

"When private industry makes a mistake, it gets corrected and goes away. As governments make mistakes, it gets bigger, bigger and bigger and they make more, more and more because as they run out of money, they just ask for more and so they get rewarded for making mistakes. In the meantime that is exactly what we are doing by subsidizing companies which are failing, we have a reverse Darwinism, we've got survival of the unfittest, the companies and people that have made terrible mistakes are being rewarded and other people are being punished and being taxed."

"The real bubble in China is in US Treasuries, in US dollars."

"Nobody is entitled to someone else's money, that is the bottom line. People think they are entitled to it because they think they paid into it, nobody paid into anything, it was a fraud. Every single dollar that the gov collected in social security taxes, has already been spent, there is nothing there, there is no money, so the only money the government gets to make current payment is the money it can take from people who are still working. Its a transfer from the working poor in many cases to the retired rich. We don't have the money, I feel bad for the fact people made promises we can't keep, I feel bad for the people that invested with Bernie Madoff and lost their money, but its the same principle, its the same Ponzi scheme. We have to put an end to it, we have to find real solution to these problems because if we keep on denying that they exist and keep on spending money, we're going to destroy the value of everyone's benefits."

"[Consumer credit] is like giving yourself a blood transfusion from your left arm to your right. Nothing is accomplished, except the possibility of spilling blood on the floor. But it's not even that benign."

"What America has succeeded in creating is not an economy impervious to shocks, but merely one which enables their consequences to be postponed to a later date."

"Too many people in Connecticut are struggling right now, and the last thing we need is meddling politicians making things worse. Only by cutting deficit spending, reducing burdensome regulations, and letting people keep more of their hard-earned dollars will we get our economy back on track."

"I'm interrupting my career. It's not like I want my new career in politics. But I'm willing to interrupt it the same way that somebody interrupted their career and joined World War II and went off to fight the Nazis. I don't think that I'm that heroic, and I don't think I'm risking as much as a soldier. But it's the same principle."

"While it's refreshing to see Chris Dodd finally realize that we need to end the politicization of the Federal Reserve, his latest proposal merely repeats the mistakes that have created this crisis."

"Transferring regulatory authority from one unaccountable agency to another will not solve any problems."

"Existing regulators had all the powers they needed, and more, and they failed miserably to foresee and prevent this crisis. Chris Dodd is now asking us to put all our eggs in one basket and trust a "super regulatory agency." He should know better than to centralize power in the hands of Washington bureaucrats - it's precisely the arrangement that caused our current problems. I think most Connecticut voters know that we need fewer czars in Washington, not more. As long as Fannie and Freddie and Congress are meddling with the economy, changing the structure of the regulators is basically rearranging deck chairs on the Titanic."

"Dodd's proposal takes regulatory authority away from one unaccountable institution and gives it to another even bigger one. This will not solve our problems."

"If anyone was questioning whether or not Peter Schiff was truly a Republican, he's certainly made it clear today. After eight years of the Bush Administration's lax regulation and market-first mentality, the last thing we need is to further reduce regulation and allow Wall Street to run the show. Chris Dodd is leading the way to put a balance back into a system that for years has been too far out of whack and ensure that consumers are protected first and foremost."

"Schiff likes to say he 'predicted' the financial collapse, but with ludicrous theories like these, we're predicting that he'll never be a U.S. Senator."

"Paying attention to the CPI and the others is like leaving your house on a rainy day without carrying an umbrella because a government weather report told you it was sunny."

"...it is the natural tendency of market economies to lower prices that makes them so successful."

"Real economic growth emanates from increased productivity, which tends to hold prices down."

"The process of dumbing people down so they’ll buy official figures showing inflation “under control” at levels of 1 to 2 percent or so (when it is actually more like 8 to 9 percent) is actually a fairly recent development."

"Today, of course, our current inflation problem is firmly rooted in the irresponsible monetary policies of maestro Greenspan."

"The Constitution denies the states the power to make anything other than gold or silver coins legal tender in payment of debts."

"And the reason the federal government wasn’t given that power [to create paper money or issue bills of credit] was because the framers didn’t want it to have the power to create inflation. They had just experienced it firsthand with the Continental dollar, which ended up being worth around 10 cents and gave rise to the expression “not worth a Continental.”"

"Legitimate economic expansions, financed by actual savings, do not need busts. It is only the inflation-induced varieties that sow the seeds of their own destruction."

"Inflation is the unhappy result of our monetary mismanagement and the ultimate cause of the coming economic collapse."

"While we’ve been buying time, things have gone from bad to worse. We have debased our currency so much it is already beyond control. We just haven’t felt the full impact yet because we have had massive artificial support from abroad."

"Stocks that are selected conservatively and pay high cash dividends [higher than bonds] are, in fact, my favorite investment alternative, especially where there is the prospect of currency profits...."

"Non-dividend-paying growth stocks can be attractive but should be viewed as speculation rather than investing."

"If Enron had been forced to pay cash dividends, it could never have pulled that caper off!"

"It can be argued that the U.S. brokerage and investment banking industry has transformed the modern American stock market into nothing more than a mechanism for transferring wealth from shareholders to management."

"Mutual funds are an overrated investment heavily promoted by Wall Street."

"If you think mutual funds aren’t a flagrant enough example of conflict of interest, try hedge funds."

"By historical standards and given the gloomy corporate profits outlook in an environment of high corporate debt and rising interest rates, the Dow Jones Industrial Average is considerably overvalued at late-2006 levels and should be avoided. I say that, even setting aside the imminent prospect of a collapsed dollar and the recession and hyperinflation that would accompany it."

"Here’s why I would recommend against [selling the U.S. stock markets short]....Retail brokers normally require investors to hold any short-sale proceeds in U.S. dollars, usually earning no interest. The dollar, seen through my famously jaundiced eye, could lose more purchasing power than the security you sold short lost value....I’ve got a much better idea, which is to borrow dollars and spend them to acquire foreign income-producing assets, using the income to pay the interest."

"In the perspective of previous bear markets, notably those of the 1930s and the 1970s, the prospects look even worse. Economic conditions now are as bad as or worse than what existed then."

"Borrowing to build factories is not the economic equivalent of borrowing to buy television sets, and it’s amazing just how few modern economists can see the difference...Borrowing to produce is the way poor countries become rich. Borrowing to consume is the way rich countries become poor. A vivid example of the latter is the stream of container ships unloading at U.S. ports and going back empty because we have nothing to ship."

"… it is precisely because it is not a democracy that China will likely be so successful...What is of vital importance for economic success is economic freedom, meaning the protection of private property, the rule of law, and minimal regulation and taxation, not the right to vote."

"It is a common misconception that low wages are the main factor influencing prices. The reality is that low capital costs, and the absence of taxation and regulation, are far more important."

"Think about all the rules and regulations American businesses have to deal with. How can we compete with nations that don’t impose those excessive burdens? Does anyone think that the United States could ever have become a great power with all the rules, regulations, and taxation that exist today?"

"In the long run, the euro as a fiat currency may very well fail like the U.S. dollar. (2006, before Greece)"

"One of the biggest attractions of the euro is that it is seen as the most likely candidate to replace the dollar as the reserve currency."

"You Own Your Own Life... To lose your Life is to lose your Future, to lose your Liberty is to lose your Present …and to lose the product of your Life and Liberty is to lose that portion of your Past that produced it A product of your Life and Liberty is your Property."

"What is scarce is money. The lack of money to spend on goods is what keeps the unemployed resources from producing more goods. Work, moreover, instead of being a curse, is desired more than anything else because the alternative is not enjoyment of leisure but the suffering of unemployment and deprivation. Of course, if people could get income without they would not object too much (although their self-respect in feeling they are useful members in society who are earning their income is too easily underestimated). But it is only by finding work they can obtain the necessary income they need."

"The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and withdrawal of money, shall be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine what is sound and what is unsound ...Government should adjust its rates of expenditure and taxation such that total spending is neither more or less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is deficit, greater borrowing, "printing money," etc., then these things in themselves are neither good or bad, they are simply the means to the desired ends of full employment and price stability."

"The scholars who understand it hesitate to speak out boldly for fear people will not understand. The people, who understand it quite easily, also fear to speak out while they wait for the scholars to speak out first. The difference between our present situation and that of the story is that it is not the emperor but the people who are periodically made to go naked and hungry and insecure and discontented - a ready prey to less timid organizers of discontent for the destruction of the civilization."

"Economics has gained the title Queen of the Social Sciences by choosing solved political problems as its domain"

"The General Theory caught most economists under the age of 35 with the unexpected virulence of a disease first attacking and decimating an isolated tribe of south sea islanders. Economists beyond 50 turned out to be quite immune to the ailment. With time, most economists in between began to run the fever, often without knowing or admitting their condition."

"Herein lies the secret of the General Theory. It is a badly written book, poorly organized; any layman who, beguiled by the author's previous reputation, bought the book was cheated of his five shillings. It is not well suited for classroom use. It is arrogant, bad-tempered, polemical, and not overly generous in its acknowledgments. It abounds in mares' nests or confusions. In it the Keynesian system stands out indistinctly, as if the author were hardly aware of its existence or cognizant of its properties; and certainly he is at his worst when expounding its relations to its predecessors. Flashes of insight and intuition intersperse tedious algebra. An awkward definition suddenly gives way to an unforgettable cadenza. When finally mastered, its analysis is found to be obvious and at the same time new. In short, it is a work of genius."

"Science is not art. Yet, despite the lack of complete identity between art and science, there is much in common among different creative processes."

"Just as Hegel is said to have understood his philosophy for the first time when he read its French translation, Vilfredo Pareto could have learned what it was he meant exactly to say when he read Bergson's 1938 classic."

"I was lucky to enter economics in 1932. Analytical economics was poised for its take-off. I faced a lovely vacuum that young economists today can hardly imagine. So much remained to be done. Everything was still in an imperfect state. It was like fishing in a virgin lake: a whopper at every cast, but so many lovely new specimens that the palate never cloyed."

"The existence of analogies between central features of various theories implies the existence of a general theory which underlies the particular theories and unifies them with respect to those central features. This fundamental principle of generalization by abstraction was enunicated by the eminent American mathematician E. H. Moore more than thirty years ago. It is the purpose of the pages that follow to work out its implication for theoretical and applied economics."

"The general method involved may be very simply stated. In cases where the equilibrium values of our variables can be regarded as the solutions of an extremum (maximum or minimum) problem, it is often possible regardless of the number of variables involved to determine unambiguously the qualitative behavior of our solution values in respect to changes of parameters."

"In the preface to the reissue of Risk, Uncertainty and Profit, Frank Knight makes the penetrating observation that under the conditions envisaged above the velocity of circulation would become infinite and so would the price level. This is perhaps an over-dramatic way of saying that nobody would hold money, and it would become a free good to go into the category of shell and other things which once served as money. We should expect too that it would not only pass out of circulation, but it would cease to be used as a conventional numeraire in terms of which prices are expressed. Interest bearing money would emerge. Of course, the above does not happen in real life, precisely because uncertainty, contingency needs, non-synchronization of revenues and outlay, transaction frictions, etc., etc., all are with us. But the abstract special case analyzed above should warn us against the facile assumption that the average levels of the structure of interest rates are determined solely or primarily by these differential factors. At times they are primary, and at other times, such as the twenties in this country, they may not be. As a generalization I should hazard the hypothesis that they are likely to be of great importance in an economy in which there is a “quasi-zero" rate of interest. I think by this hypothesis one can explain many of the anomalies of the United States money market in the thirties."

"Figure 12-6 pulls together in a simplified way the main elements of income determination. Without saving and investment, there would be a circular flow of income between business and the public: above, business pays out wages, interest, rents, and profits to the public in return for the services of labor and property; and below, the public pays consumption dollars to business in return for goods and services. Realistically, we must recognize that the public will wish to save some of its income, as shown at the spigot Z. Hence, businesses cannot expect their consumption sales to be as large as the total of wages, interest, rents, and profits."

"I think the acceptance of "mathematical expectation of utility" or its "arithmetic mean" was an unthinking carryover from the mathematical theory of the law of large numbers as applied to asymptotic processes."

"Needless to say, the partial equilibrium assumptions involved in the domestic demand schedules and the neglect of aggregative relations constitute a serious defect of such a model except as a rough first approximation to the answers in especially favorable cases. Good economic theory will recognize these limitations rather than be predisposed to neglect them."

"Dynamic process analysis also liberates economists from the necessity of having separate theories of the “turning-points” in addition to theories of cumulative upward and downward swings. Even a simple theory of inventory cycles, or acceleration-multipliers, can explain all four phases of an idealized cycle. At its best, dynamic analysis can enrich our understanding of possibilities without leading to credulity in new, over-narrow, monistic dogmas concerning the cyclical process."

"Econometrics may be defined as the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference."

"Marx did do original work in analyzing patterns of circular inter-dependency among industries. Such work gains few converts and is not very helpful in promoting revolution or counterreactions. But like all pioneering effort it deserves the commendation of later craftmen, and it deserves further development. There is half-truth in Schumpeter's adaption of Clemenceau: "Marxian economics is too hard to be left to the Marxians." Only half, because the present paper is seen to involve little worse than school algebra and to be well within the frontier of modern economic theory."

"Remember that our goal is not the abolition of all business cycles--even if that were feasible, it might not be desirable. Instead we aim to wopie out persistent slump or unsought inflation. If only capitalism had succeeded in the past in this more modest goal, how different would have been the course of human history!"

"As old problems are conquered, we expect to turn up new problems. A discipline lives on its unsolvved problems; and so, for better or worse, economics is likely to be a lively subject for as many years ahead as man can see."

"Perhaps all we can expect of a public body, charged with grave responsibilities, is that it should in its public utterances make out cases stronger than it really believes in. Or perhaps, because its opposition deals in overly strong criticisms, it may for political reasons and for understandable psychological reasons provide overly strong rebuttals. Or perhaps it is the case that the authorities believe that there are no sensible reasons to doubt the following view: The way to maximize growth, to maximize the long-run degree of achieved employment, to maximize equity among the various social groups that could be affected by price level changes is, in the absence of important cost pressures and even more in their presence, for the Federal Reserve to insist upon the attainment of essentially stable long-run price levels."

"In the absence of perfect certainty, the futures prices needed for making the requisite wealth-like comparisons are simply unavailable. So it would be difficult to make operational the theorist’s desired measures. But operational practicality aside, if the theorist specifies in detail the dynamic technology of his model, he will meet none of the pitfalls that come from an attempt to summarize his model by various crude aggregations. The contradictions that result from over-crude aggregation should never be confused with the technical relations that hold at the firm and family level or with the market capitalizations which hold in competitive security and asset markets."

"Economic theory is a mistress of even too tempting grace."

"In every actuarial situation of mathematical probability, no matter how large the numbers in the sample, we are left with a finite sample: in the appropriate limit law of probability there will necessarily be left an epsilon of uncertainty even in so-called risk situations."

"I will tell you a secret. Economists are supposed to be dry-as-dust, dismal fellows. This is quite wrong, the reverse of the truth. Scratch a hard-boiled economist of the libertarian persuasion and you find a Don Quixote underneath. No lovesick maiden ever pined for the days of medieval chivalry with such sentimental impracticality as some economists long for the return to a Victorian marketplace that is completely free. Completely free? Well, almost so. There must, of course, be the constable to ensure that voluntary contracts are enforced and to protect the property rights of each molecule which is an island unto itself."

"And make no mistake about it: Smith was right. Most of the interventions into economic life by the State were then harmful both to prosperity and freedom. What Smith said needed to be said. In fact, much of what Smith said still needs to be said: good intentions by government are not enough; acts do have consequences that had better be taken into account if good is to follow."

"Complete freedom is not definable once two wills exist in the same interdependent universe. We can sometimes find two situations in which Choice A is more free than Choice B in apparently every respect and at least as good as B in every other relevant sense. In such singular cases I will certainly throw in my lot with the exponents of individualism. But few situations are really of this simple type; and these few are hardly worth talking about, because they will already have been disposed of so easily. In most actual situations we come to a point at which choices between goals must be made: Do you want this kind of freedom and this kind of hunger, or that kind of freedom and that kind of hunger? I use these terms in a quasi-algebraic sense, but actually what is called "f reedom" is really a vector of almost infinite components rather than a one-dimensional thing that can be given a simple ordering."

"Libertarians fail to realize that the price system is, and ought to be, a method of coercion. Nature is not so bountiful as to give each of us all the goods he desires. We have, by the nature of things, to be coerced out of such an expectation. That is why we have policemen and courts. That is why we charge prices which are high enough relative to limited money, to limit consumption."

"Before Rousseau, people made the mistake of treating children as merely adults shrunk small. The Bible and Freud go farther and tell us that an adult is merely a child grown large. Man is imperfect, and so is woman. And so is We, Incorporated, who paternalistically put restraints upon ourselves. Not even an individual's perfections are his alone; like his imperfections, they are group-made. We entered a world we never made, and leave one we did not unmake."

"Carry the notion of the individual to its limit and you get a monstrosity, just as you do if you carry the notion of a group to its limit."

"The stock market has forecast nine of the last five recessions."

"For better or worse, the picture album whose pages I have been turning is that of the main stream of international economics. Many of its advances lie in what the historian of science Thomas Kuhn would call 'normal' rather than 'revolutionary' science. It is hard to imagine having had too good an education and too good a research environment. And yet as we grapple with the ever-changing problems of the modern world that are arising in the deliberations of this World Congress, we know we must put aside the pictures and souvenirs of the past, and we must turn a youthful eye out to meet the emerging universe."

"The very name of my subject, economics, suggests economizing or maximizing. But Political Economy has gone a long way beyond home economics. Indeed, it is only in the last third of the century, within my own lifetime as a scholar, that economic theory has had many pretensions to being itself useful to the practical businessman or bureaucrat. I seem to recall that a great economist of the last generation, A. C. Pigou of Cambridge University, once asked the rhetorical question, “Who would ever think of employing an economist to run a brewery?” Well, today, under the guise of operational research and managerial economics, the fanciest of our economic tools are being utilized in enterprises both public and private."

"With the assistance of mathematics, I can see a property of the ninety-nine dimensional surfaces hidden from the naked eye. If an increase in the price of fertilizer alone always increases the amount the firm buys of caviar, from that fact alone I can predict the answer to the following experiment which I have never seen performed and upon which I have no observations: an increase in the price of caviar alone will increase the amount the firm buys of fertilizer. In thermodynamics such reciprocity or integrability conditions are known as Maxwell Conditions; in economics they are known as Hotelling conditions in honor of Harold Hotelling’s 1932 work."

"There is really nothing more pathetic than to have an economist or a retired engineer try to force analogies between the concepts of physics and the concepts of economics. How many dreary papers have I had to referee in which the author is looking for something that corresponds to entropy or to one or another form of energy. Nonsensical laws, such as the law of conservation of purchasing power, represent spurious social science imitations of the important physical law of the conservation of energy; and when an economist makes reference to a Heisenberg Principle of indeterminacy in the social world, at best this must be regarded as a figure of speech or a play on words, rather than a valid application of the relations of quantum mechanics."

"An American economist of two generations ago, H. J. Davenport, who was the best friend Thorstein Veblen ever had (Veblen actually lived for a time in Davenport’s coal cellar) once said: “There is no reason why theoretical economics should be a monopoly of the reactionaries.” All my life I have tried to take this warning to heart, and I dare call it to your favorable attention."

"I used to joke to Bob Solow that the distance between me and Joan Robinson is less than the distance between Joan Robinson and me. His reply was, “You’ll never convince her of that.” Still one lives in hope."

"Inside every classical economist is a modem economist trying to get out. In rereading the Wealth of Nation is, it seems to me that with a little midwifery sleight of hand, one can extract from Adam Smith a valuable model that vindicates him from criticisms of Ricardo and Marx and from the general supercilious discounting of Smith as an unoriginal theorist who is logically fuzzy and eclectically empty."

"The small investor can now, for the first time, invest in common stocks and bonds in an efficient and convenient way. I am talking about people who don't have $ 10 million; who don't want to take unnecessary gambles; who operate under no Napoleonic delusions of being able to pick winners that will quadruple their money; who begrudge every minute devoted to keeping tax and personal records, and wish to think about their investments only at New Year's and when preparing their tax returns. Disinterested experts in finance prescribe for such people as follows: 1. Depending on your tolerance for the irreducible risks involved in owning common stocks, decide what portion of your nest egg you wish to keep in common stocks: 0, 100, 30 or 70 per cent. No one can decide this for you. You must decide at what point you'll sleep best at night, and whether eventually stocks will provide a better inflation hedge than they have done these last dozen years. ( Many will settle for 50-50. ) 2. For what common stocks you do decide to own, follow the golden rules of prudence : Diversify broadly, hold down costly turnover, keep all fees (and book- keeping !) minimal. 3. The same rules (diversification, etc.) apply to your holdings of tax-free and ordinary bonds. If you have taxable income of $ 20,000 or more, probably the bulk of your bonds should be " municipals " -i.e., state and local issues that escape all Federal tax because Congress refuses to close this loophole. Less affluent people will probably do as well in local savings accounts as in anything else. Now you know what to do. How do you do it?"

"The recent market run-up that appreciated run-of-the-mill shares also chanced to send up those token gold holdings. Pure luck, undeserved and unlikely to reoccur. Good questions outrank easy answers."

"Mathematics is the handmaiden of the sciences. But mathematics also has a life of her own, gaining as much in her own development and fulfillment from the sciences as she gives to them. To help describe how apples and planets fall, and how ropes hang, Newton and Leibniz developed the calculus. By serendipity, that mode of analysis permitted economists to perfect the theory of general equilibrium two centuries later."

"Yes, Keynes was a genius. Yes, some of his ideas were inchoate and would not have lent themselves usefully to diagramming and symbolic manipulation. Yes, by the time of the Radcliffe committee many of his British admirers were still frozen in the Model T version of his system. And yes, Keynes resented excessive simplifying of his paradigms. Nevertheless, in science it is not the incoherent, inchoate and ineffable that has a cash value. If that were so, Goethe would be a greater scientist than either Einstein or Newton. What matters is the Kuhnian paradigm that people who are not geniuses can use. That which so many scholars independently agreed upon cannot be independent of the text that Keynes wrote down for them to read. What is remarkable is not the cogency of the case that Leijonhufvud manages to muster, which is rather flimsy, but rather how strong was the latent demand in the 1970s for a work to debunk Keynesianism. Harry Johnson put the same point in a different way."

"An optimist who lived at a time when the world economy was running so badly that clever gimmicks could still work wonders, Keynes's object was to save capitalism from itself. In the end, his prescription in its most simple form self-destructed, as the obligation to run a full-employment humanitarian state caused modern economies to succumb to the new disease of stagflation - high inflation along with joblessness and excess capacity. Economists of the most diverse views are constantly asking themselves: What would Keynes advise if he were now alive. And usually - whether the economist is a free-marketeer like Friederick von Hayek or one with strong interventionist leanings like John Kenneth Galbraith - they pay Keynes the supreme compliment of believing that if brought back to earth, Maynard would be favoring just what each of them happens to favor. One also might wonder what Lord Keynes would prescribe for the huge structural deficit of Ronald Reagan, with the crowding out of investment that it implies once the American economy reattains high levels of employment."

"After 1929 it was the sturdy middle classes, and not just the lumpen proletariat, who were down and out. It was not all that unfashionable or disreputable to be bankrupt. By the last Hoover years, the states and localities had run out of money for relief. In middle-class neighborhoods like mine, you constantly had children at the door, asking by mouth or with a note for a dime, a quarter, or a potato: saying, in a believable fashion, we are starving."

"I can claim that in talking about modern economics I am talking about me. My finger has been in every pie. I once claimed to be the last generalist in economics, writing about and teaching such diverse subjects as international trade and econometrics, economic theory and business cycles, demography and labor economics, finance and monopolistic competition, history of doctrines and locational economics."

"I reproach myself for a gross error. But I would reproach myself more if I had persisted in an error after observations revealed it clearly to be that. I made a deal of money in the late 1940s on the bull side, ignoring Satchel Paige’s advice to Lot’s wife, “Never look back.” Rather I would advocate Samuelson’s Law: “Always look back. You may learn something from your residuals. Usually one’s forecasts are not so good as one remembers them; the difference may be instructive.” The dictum “If you must forecast, forecast often,” is neither a joke nor a confession of impotence. It is a recognition of the primacy of brute fact over pretty theory. That part of the future that cannot be related to the present’s past is precisely what science cannot hope to capture. Fortunately, there is plenty of work for science to do, plenty of scientific tasks not yet done."

"My mind is ever toying with economic ideas and relationships. Great novelists and poets have reported occasional abandonment by their muse. The well runs dry, permanently or on occasion. Mine has been a better luck. As I have written elsewhere, there is a vast inventory of topics and problems floating in the back of my mind. More perhaps than I shall ever have occasion to write up for publication. A result that I notice in statistical mechanics may someday help resolve a problem in finance."

"The museums of science are replete with fossils of species that could not last the course. The leading-coinciding-lagging indicators might be buried forever in old footnotes. But occasionally Sleeping Beauty is brought back to life by the kiss of a new Prince Charming."

"What is truly discouraging — or reassuring? — is the considerable evidence that the universe of those who seek to be "timers," and vary the fractional shares of their portfolios committed to common stocks in the hope of enlarging average long-term total return, in fact fail to achieve on the average any plus gain in comparison with simply buying and holding a fixed fraction of common stocks."

"The goals, methods, and strategies of what borders on science is different from the gyration of fashion and the incommensurability of arts and music in different epochs. Because this different process of cumulative science is imperfect, historians and philosophers of science intermittently downplay this difference."

"The moral I take to be this. The virtues of alternative modern paradigms in science have to be evaluated in modern times and with modern methods. Until one schemata comes to dominate the other, Whig Historians will have interest in a diversified portfolio of archeological researches. As one paradigm loses out in the Darwinian jungle of science, what survives competitively in the agenda for dogmengeschicte cannot help but be altered."

"Let us summarise the lessons learned. 1. Though achieving private-property perfect competition will achieve productive efficiency, moving toward it may have made matters worse. And, in the land-enclosure problem, the transition must make things worse before they get better when lands are virtually homogeneous. 2. In the realistic case where lands differ in quality, partial privatisation may also worsen efficiency - even though ultimately efficiency will be enhanced by the deregulation process. 3. However, in the realistic case, an optimal choice of lands to be first privatised could be first to improve the commons. The rule for a 'perfectly-discriminating deregulator' to follow is evidently this: privatise those lands first whose 'imputed labour share'- as measured by the MP/AP fraction- is the lowest. That way, the first bit of deregulation can do more good than harm, as labour is transferred away from low marginal-product locations; that way, if there is inevitable transition harm, it can be kept to a minimum. There would seem to be a presumption that things get worse before they get better in such a programme of moving toward laissez-faire."

"There were many Moliére characters speaking Keynesian prose in the depression years before 1936. What Keynes’s General Theory gave us, which Ohlin’s inspired journalisms could not at all offer, was a new manageable paradigm that we could explicitly express — and test, and criticize, and improve, ... , and be bewitched by. Long before Kuhn, Schumpeter used to insist that old theories are not killed by simple facts: It takes a new theory to kill an old one. The mind cannot operate in terms of a melange of sensations. It needs a road map to perceive patterns of regularity and persistence."

"As a theorist I have great advantages. All I need is a pencil (now a ball pen) and an empty pad of paper. There are analysts who sit and look vacantly out the window, but after the age of 20 I was not one of them. I ought to envy the new generation who have grown up with the computer, but I don’t. None of them known to me sits idly at the console, improvising and experimenting in the way that a composer does at the piano. That ought to become increasingly possible. But up to now, in my observation, the computer is largely a black box into which researchers feed raw input and out of from which they draw various summarizing measures and simulations. Not having access to look around in the box, the investigator has less intuitive familiarity with the data than used to be the case in the bad old days."

"It is some relief to move from the exalted realm of philosophical ethics to the mundane realm of scientific methodology. However, I rather shy away from discussions of Methodology with a capital M. To paraphrase Shaw: Those who can do science; those who can’t prattle about its methodology."

"A scientist earns the only mortality worth having. Of the good scholar we say: Rex numquam moritur."

"I will not waste ink on face-saving tautologies. When the governess of infants caught in a burning building reenters it unobserved in a hopeless mission of rescue, casuists may argue; "She did it only to get the good feeling of doing it. Because otherwise she wouldn't have done it." Such argumentation (in Wolfgang Pauli's scathing phrase) is not even wrong. It is just boring, irrelevant, and in the technical sense of old-fashioned logical positivism "meaningless.""

"Orthodox biologists are like orthodox economists. When confronted by tensions between their paradigms and reality, they work to explain away the aberrations."

"Darwin's evolution is indeed mere sound and fury, signifying nothing normative, rather than denoting a process of meaningful Spencerian triumph. Natural selection is not an empty tautology about survival of those who survive. It is a lawful process subject to shrewd predictions and testable refutations. But in general it does not act to maximize any scalar magnitude. Many of its subprocesses do eschew submaximal configurations, and some may approximate efficiency criteria, but the resultant of them all is only positivistic!"

"Social Darwinism is a perverted borrowing from what can be validly established for biology. When I contemplate strong claims by a Richard Posner that law has evolved historically a la Pareto, or arguments that a Coase Theorem ensures that deadweight loss is at its feasible minimum, I fear that von Neumann and Morgenstern are spinning in their graves and Charles Darwin is wondering why he left his barnacles, pigeons, and earthworms. An unsupported claim by an economist- Darwinist does not acquire validity from a cited analogy with evolution. Truth must find its own legs to stand on."

"Error is a virus that tends to spread. As I have already hinted, the categories of circulating capital and of the wage fund tended and still tend to get confounded together."

"To the student of economic history the preponderant truth is that technical change has since 1750 tended to raise market clearing real wage rates. This property of the Age After Newton is hard to understand and explicate if you believe that sterile congealed-dead-labor is embodied in machines almost infinitely substitutable for live labor; equally confusing to you will be the truth that inventions which are labor saving may at the same time be wage raising! The doctrines of equated rates of surplus value moved Marxians backward from square one in the understanding of the laws of motion of the capitalistic system or the system of the Mixed Economy."

"Economics, even classical economics, is not a finished business. There are still issues relevant to the present debate that have not been definitively explored."

"The Coase-Samuelson generation were brought up witnessing the great debate between von Mises and Lerner-Lange concerning the feasibility of socialist rational pricing to produce Utopia. (That was a reprise of earlier Pareto-Barone-Wieser-Taylor debates.) Many contemporaries believed Lerner-Lange triumphed in the debate. I came to believe that Friedrich Hayek was the true victor. Under static conditions where all is known or knowable (to whom?), whatever optimal states laissez-faire might occasion, so could some computer solution or some algorithms of play the game of competition also achieve. But in the real world all is changing, even in the time it takes me to write this sentence. Hayek has been persuasive — not in Whig ideology or in declaring that moderate reform of laissez-faire leads inevitably down the road to totalitarian socialism but — in arguing that experience suggests that only with heavy dependence on market pricing mechanisms can there be realized quasi-efficient and quasi-progressive organization of societies involving humans as Darwinian history has bequeathed them. If a reader does not find the Hayek dynamic arguments persuasive, I will not here argue the matter further."

"The vogue of vulgar and vague Coaseism, one hypothesizes, is strongest among libertarians and other devotees of laissez-faire who believe to find in it ammunition against regulation and voters' activism. Whether this hypothesis is close to or wide off the mark is of no importance. What does matter is how much deadweight-loss obtains in real life."

"What sex is to the biology classroom, stocks and investment riskiness is to the sophomore economics lecture hall."

"I tell no secret when I repeat that fame and reputation are much a matter of luck and chance."

"The pre-1800 pattern of commercial panics had to be a case of NON MACRO-EFFICIENCY of markets. We’ve come a long way, baby, in two hundred years toward micro efficiency of markets: Black-Scholes option pricing, indexing of portfolio diversification, and so forth. But there is no persuasive evidence, either from economic history or avant garde theorizing, that MACRO MARKET INEFFICIENCY is trending toward extinction: The future can well witness the oldest business cycle mechanism, the South Sea Bubble, and that kind of thing. We have no theory of the putative duration of a bubble. It can always go as long again as it has already gone. You cannot make money on correcting macro inefficiencies in the price level of the stock market."

"Most of mainstream economics is not "big-picture economics." Our journals and textbooks are full of the grimy details about inventory cycles or the deadweight losses incident to taxes and regulation. Besides, most big pictures are wrong."

"Years ago Arthur Koestler edited The God That Failed, whose chapters report the disillusionment of one true believer after another in the promise of Marxian prophecies under the impact of contemporary actuality. It would be boring sawing of saw dust to elaborate on that god that failed. More relevant to the present moment of global economic chaos is an antipodal-polar archetype. I am speaking about the god of pure libertarian capitalism."

"Years ago, I wrote aphoristically: “Inside a classical economist, you discern a neoclassical economist trying to get in.” My archetypical tableaux flesh out this heuristic perception. And, in my considered opinion, these explications cast cogent doubts on that view popular in the 1950s and early 1960s that “going back to the classics” somehow offered a different and better alternative to the post-neoclassical mainstream paradigms."

"An economy’s inventory of produced inputs is both complex and simple. Maintaining and improving upon congeries of productive inputs is an indispensable part of economic progress. All such time-phased processes will not evolve automatically: cave-people rose and fell in material well-being; eons passed without much cumulative change; great diversity of performance characterized geographically separated societies. Attempts to generalize simple family’s or related-families’ habit formation to large-group polities—à la utopian experimental cults or in the Lenin-Stalin and Mao pattern have not hitherto succeeded in organizing production with approximate Pareto-Optimality efficiency features. Gradual evolution toward near laissez-faire market mechanism responding to individual’s self-interest, history suggests and advanced economic theory second guesses, will incur areas of market failure and will generate and perpetuate considerable degrees of economic and political inequalities. Just as there is no asymptotic communist utopia, neither is an asymptotic laissez-faire utopia."

"Economics never was a dismal science. It should be a realistic science."

"You must realize how bad, temporarily, capitalism had become in public opinion. I remember seeing a poll of small town attitudes in local newspapers. They asked questions like "should we nationalize the banking system?" More than half of those editors, about the most conservative group in the world, were in favor of nationalizing the banking system. Father Coughlin, the Detroit demagogue who turned anti-Semitic, complained about "fountain pen money, the perpetrator of great wealth, the money changers in the temple." It was kind of a crude expansionism. Huey Long and "every man a millionaire," or whatever it was. So I would say that Keynes thought of himself as saving the system. And lots of the New Dealers ― original New Dealers, Veblenites, technocrats ― did not like Keynesian economics. They said "that is using palliatives, it's not getting rid of the wicked capitalistic ethos." Keynes told Roosevelt when he came here in 1933 that he needed to spend so much more per month in deficit spending. He gave very precise figures with great self-confidence."

"Modigliani's theory was a powerful searchlight on what was happening... It is the best explanation of what has actually been happening in the great swing of American life since the 1950's."

"However, one last caution. What has happened in Japan for 12 long years warns that an affluent society like America’s might not be immune to a self de-energization of its optimism and free spending. Do not bet on worst case scenarios. But do not ignore them completely either."

"The proof of the pudding is in the eating. There was a widespread myth of the 1970s, a myth along Tom Kuhn’s (1962) Structure of Scientific Revolutions lines. The Keynesianism, which worked so well in Camelot and brought forth a long epoch of price-level stability with good Q growth and nearly full employment, gave way to a new and quite different macro view after 1966. A new paradigm, monistic monetarism, so the tale narrates, gave a better fit. And therefore King Keynes lost self esteem and public esteem. The King is dead. Long live King Milton! Contemplate the true facts. Examine 10 prominent best forecasting models 1950 to 1980: Wharton, Townsend–Greenspan, Michigan Model, St. Louis Reserve Bank, Citibank Economic Department under Walter Wriston’s choice of Lief Olson, et cetera. … M did matter as for almost everyone. But never did M alone matter systemically, as post-1950 Friedman monetarism professed."

"A later writer, such as Leijonhufvud, I knew to have it wrong, when he later argued the merits of Keynes’s subtle intuitions and downplayed the various (identical!) mathematical versions of The General Theory. The so-called 1937 Hicks or later Hicks–Hansen IS–LM diagram will do as an example for the debate."

"I would guess that most MIT Ph.D.’s since 1980 might deem themselves not to be “Keynesians.” But they, and modern economists everywhere, do use models like those of Samuelson, Modigliani, Solow, and Tobin. Professor Martin Feldstein, my Harvard neighbor, complained at the 350th Anniversary of Harvard that Keynesians had tried to poison his sophomore mind against saving. Tobin and I on the same panel took this amiss, since both of us since 1955 had been favoring a “neoclassical synthesis,” in which full employment with an austere fiscal budget would add to capital formation in preparation for a coming demographic turnaround."

"Often I’ve stated how I hate to be wrong. That has aborted many a tempting error, but not all of them. But I hate much more to stay wrong. Early on, I’ve learned to check back on earlier proclamations. One can learn much from one’s own errors and precious little from one’s triumphs. By September of 1945, it was becoming obvious that oversaving was not going to cause a deep and lasting post-war recession. So then and there, I cut my losses on that bad earlier estimate."

"My notion of a fruitful economic science would be that it can help us explain and understand the course of actual economic history. A scholar who seriously addresses commentary on contemporary monthly and yearly events is, in this view, practicing the study of history—history in its most contemporary time phasing."

"Instead of attenuating this paper’s theses, heterogeneity amplifies its importance. Contemplate a scenario where Schumpeter’s fruitful capitalist destruction harms a really sizeable fraction of the future U.S. population and, say, improves welfare of another group and does that so much as to justify a calculation that the winners could be made to transfer some of their gains and thereby leave no substantial U.S. group net losers from free trade. Should noneconomists accept this as cogent rebuttal if there is no evidence that compensating fiscal transfers have been made or will be made? Marie Antoinette said, “Let them eat cake.” But history records no transfer of sugar and flour to her peasant subjects. Even the sage Dr. Greenspan sometimes sounds Antoinette-ish. The economists’ literature of the 1930s—Hicks, Lerner, Kaldor, Scitovsky and others, to say nothing of earlier writings by J.S. Mill, Edgeworth, Pareto and Viner—perpetrates something of a shell game in ethical debates about the conflict between efficiency and greater inequality. Policy aside and ethical judgments aside, mainstream trade economists have insufficiently noticed the drastic change in mean U.S. incomes and in inequalities among different U.S. classes. As in any other society, perhaps a third of Americans are not highly educated and not energetic enough to qualify for skilled professional jobs. If mass immigration into the United States of similar workers to them had been permitted to actually take place, mainstream economists could not avoid predicting a substantial drop in wages of this native group while the new immigrants were earning a substantial rise over what their old-country real wages had been."

"An evolving discipline–whether it be history or economics or astrophysics or immunology–is ever dynamically changing. Two steps forward and X steps back, so to speak. Periodically, the scholarly group registers more or less self-confidence, self-esteem, and complacency. We careerists are happiest when recent past achievements have seemed to be successful, but when still there are completable tasks dimly visible ahead."

"Here is my advice. When in doubt, give my new efforts a hearing. Many feel a calling to break new ground; in the end, few will end upfinding their efforts chosen. But the yea-sayer does do less harm than the naysayer, in that the Darwinian process of adverse testing will in time (most likely?) separate the useful from the useless, the trivial from the profound."

"I had a great admiration for Pigou. I thought that, in many ways, he was not only a faithful follower of Alfred Marshall, but he was also a more fertile developer of the Marshallian tradition than Marshall himself. … Whitehead said to me:“Don’t you think that Pigou was an overrated economist? Wasn’t Foxwell a better man?” Since I am an honest man, I said to Whitehead:“No, I think Pigou was a much more important economist than Foxwell.”"

"I think Marshall was a great economist, but he was a potentially much greater economist than he actually was. It was not that he was lazy, but his health was not good, and he worked in miniature."

"Arrow’s general impossibility theorem does not disprove the existence of the Bergsonian social welfare function, neither does it disprove the existence of the Benthamite hedonistic function."

"I return to economics and to economists, and to the question of why the profession’s directions have evolved in the manners evident from this book. A major conservative economist once explained that a source of his antipathy to government traced back to the defeat of his southern ancestors by a larger north economy. Here is a similar factoid. Joan Robinson once wrote that her opposition to having the U.K. enter the European Market was due to the fact that she “had more friends in [Nehru’s] India than on the continent.”"

"We economists love to quote Keynes’s final lines in his 1936 General Theory—for the reason that they cater so well to our vanity and self-importance. But to admit the truth, madmen in authority can self generate their own frenzies without needing help from either defunct or avant-garde economists. What establishment economists brew up is as often what the Prince and the Public are already wanting to imbibe. We guys don’t stay in the best club by proffering the views of some past academic crank or academic sage."

"My final words are cut short by this audience’s well-fed drowsiness. I will leave as a question for later discussion: Will hedge funds make our golden years more golden, or will the new concoctions of option engineers, instead of reducing risks by spreading them optimally (in fact, by making possible about 100 to 1 over leveraging), result in microeconomic losses for pension funds and, maybe someday, even threaten the macro system with lethal financial implosions?"

"What then is it that, since 2007, has caused Wall Street capitalism's own suicide? At the bottom of this worst financial mess in a century is this: Milton Friedman-Friedrich Hayek libertarian laissez-faire capitalism, permitted to run wild without regulation. This is the root source of today's travails. Both of these men are dead, but their poisoned legacies live on."

"Scholars still debate whether Columbus brought syphilis to the New World or vice versa. But it cannot be doubted that the 2008 world meltdown carries on its label the words Made in America."

"Well, I will say this. And this is the main thing to remember. Macroeconomics -- even with all of our computers and with all of our information -- is not an exact science and is incapable of being an exact science. It can be better or it can be worse, but there isn't guaranteed predictability in these matters."

"Well, I'd say, and this is probably a change from what I would have said when I was younger: Have a very healthy respect for the study of economic history, because that's the raw material out of which any of your conjectures or testings will come. And I think the recent period has illustrated that. The governor of the Bank of England seems to have forgotten or not known that there was no bank insurance in England, so when Northern Rock got a run, he was surprised. Well, he shouldn't have been. But history doesn't tell its own story. You've got to bring to it all the statistical testings that are possible. And we have a lot more information now than we used to."

"When I once called myself a “Sunday painter” dabbling in stochastic finance, that was not meant to belittle finance theory as a branch of serious economic theory. Such a peculiar view was expressed again and again by the late Milton Friedman, a dizzy view that I still find incomprehensible."

"From the beginning I could not believe that the “efficient market” hypothesis was dependent on a pure Brownian motion white noise or any truly random random walk. Place a minuscule colloidal molecule on a horizontal table that covers unlimited acres. Bombard it from every direction with thousands of minute atoms; and then if you wait long enough that original molecule can have traveled a billion miles in one direction. That’s truly a random Bachelier-Einstein walk, but not my notion of economic fluctuations."

"Moral: To understand economics you need to know not only fundamentals but also its nuances. Darwin is in the nuances. When someone preaches “Economics in one lesson,” I advise: Go back for the second lesson."

"Moral: free markets do not stabilize themselves. Zero regulating is vastly suboptimal to rational regulating. Libertarianism is its own worst enemy!"

"Markets are not perfect, which is true even for rationally regulated markets. Nevertheless, over the last thousand years every attempt to organize sizeable societies without important dependence on markets has generated its own failure ..."

"Paul Samuelson is omnipresent in American and even world economics; like Joyce's Humphrey Chimpeden Earwicker or Melville's Confidence Man,. he appears at every turn of history and in every disguise."

"Paul’s work combined breadth and intensity. On the one hand, his structures were grounded in a very wide knowledge of the nature of mathematical systems used to describe natural phenomena. On the other, he studied individual questions in economics, sometimes at a very detailed level."

"As an intellectual and economist, there were two Samuelsons. There was the mathematical savant who had learned his trade at the feet of Viner, Leontief, Schumpeter and, above all, Wilson. This work had raised him above most of his contemporaries, enabling him to speak with the authority of one of the leading economists of his generation. However, his more popular work was not just a distillation of his abstract theories; it rested not on complex mathematical arguments but involved careful data analysis and familiarity with the way that economic institutions worked. This was the Samuelson, mentored by Hansen during the Second World War, who wrote Economics and whose views were sought by the press and government."

"I got to know Paul Samuelson well during 2001-02 when I was a visiting professor at MIT. I would pause every now and then at his office to chit-chat about things. He was into his grey years by then and seemed a bit lonely. His interests were voracious — from the intricacies of science to the lives of people and he liked to chat. My last proper conversation with him was on May 15, 2002. I was photocopying something at MIT, when he stopped and said that it was his birthday that day. The Harvard Club would open a special champagne for him and he asked me if my wife and I would come to the Harvard Club. For an economist, that’s the equivalent of Einstein asking a physicist to dinner. I, of course, said yes, expecting lots of people there. It turned out to be a dinner with Samuelson, his charming wife Richa and the two of us. It was one of the most memorable evenings of my life. We — truth be told, mainly he —talked about art, history and, of course, economics."

"For virtually my entire career in finance—now more than 61 years—two of the greatest economists of the past century have played a major role in my understanding of the financial markets. One is John Maynard Keynes, the legendary British theorist and author. The other is Paul Samuelson, the prolific generator of ideas and the first American to win (in 1970) the Nobel Memorial Prize in the Economic Sciences."

"The readers of this space know Paul Samuelson as a witty, informed and often acerbic commentator on current affairs, as a “liberal” supporter of the economic policies of the Kennedy and Johnson years, and as a critic of current Nixon economic policy. Millions of college graduates know Paul Samuelson for his economics textbook, which has been the leading elementary text in the United States for two decades, has sold nearly 3 million copies, and is almost surely the best-selling book on economics ever published in the Western world. Professional economists know Paul Samuelson as a mathematical economist who has ranged widely and deeply, who has helped to reshape and improve the theoretical foundations of our subject. This is the work for which this remarkably versatile man won the Nobel Prize. In the words of the announcement, the prize was awarded “for the scientific work through which he has developed static and dynamic economic theory and actively contributed to raising the level of analysis in economic science.”"

"Reference to the textbook and its writer was often made with a lofty sense of intellectual and literacy superiority; that has not been true in modern times in economics. The dominant influence, now fully respected, is that of Paul Samuelson. He is celebrated for his research, for his public advocacy, his stand for socially acceptable economic policy. He has not been sufficiently celebrated for this really phenomenal achievement: the basic economic education of successive generations. There are few Americans of any public distinction who do not owe some of their knowledge and position to Samuelson, and his influence is by no means confined to the United States. In ultimate teaching effect in economics, he has no rival"

"Another big influence was Samuelson's Foundations, which I read when I stated here at Chicago. It's a "how-to-do-it" book. a great book for first-year graduate students. It says, "Here's the way you do it." It lets you in on the secret of how you play the game, as opposed to cutting you off with big words. I think the combination of Samuelson's book plays Friedman's class was what got me going."

"The only way I feel I understand something is if I can write it down in a model and make it work. I felt that from the beginning. That's why I liked Samuelson's book. He'll take these incomprehensible verbal debates that go on and on and never end and just end them; formulate the issue in such a way that the question is answerable, and then get the answer."

"Samuelson says I was wrong and he was right, and he froths at the mouth when people talk about the lighthouse example. He says Coase is wrong; he doesn't overcome the free rider problem. Who are the free riders? The foreign ships going past the British coast which do not call at a British port. Using Samuelson's approach, what do you do? Do you ask the foreign governments to give you a subsidy? Do you tax people in Britain because the foreign ships are getting help without paying for it? What do you do? My approach is to compare the alternatives. People like Samuelson like to set up a perfect world and say that the market does not bring us to this point and imply that the government should do something. They stop their analysis at that point."

"Between meals I arranged a light, informal trivia competition. Had answers been counted, he would have won hands down. He even knew the third president—of Finland—a question I threw in as a joke."

"Generally speaking, Samuelson's contribution has been that, more than any other contemporary economist, he has contributed to raising the general analytical and methodological level in economic science. He has in fact simply rewritten considerable parts of economic theory. He has also shown the fundamental unity of both the problems and analytical techniques in economics, partly by a systematic application of the methodology of maximization for a broad set of problems. This means that Samuelson's contributions range over a large number of different fields."

"Of course, one can go back to high school or, in my case, junior college and find roots; there are some indeed, but my professional beginnings were in the Berkeley that existed just before World War II and the scholarship I won to MIT. There I met the dazzling wunderkind Paul Samuelson. When I was browsing in the Berkeley library and came across early issues of Econometrica, Samuelson’s contributions caught my eye. When I got an opportunity to go to MIT, it was the possibility of working with Samuelson that confirmed all my choices. I was attached to him as a graduate assistant from the outset, and I tried to maximize my contact with him, picking up insights that he scattered on every encounter. Working with Samuelson, who was at the forefront of interpreting Keynesian theory for teaching and policy application, I was put immediately in the midst of two challenging contests—one to gain acceptance for a way of thinking about macroeconomics and another to gain acceptance for a methodology in economics, namely, the mathematical method. Later, both challenges were to be overcome, but for ten or twenty years opposition was fierce. Once Samuelson’s Economics became a widely used text in first courses in the subject, Keynesian economics was firmly embedded. There was no turning back from that achievement. The successive student generations turned more toward the mathematical approach in graduate school, and they taught or did research in this vein. That eventually established the mathematical method, first in the United States, then in Europe, Japan, India, and other centers. Much of the foundation was built in Europe, and many of the American masters at mathematical economics were immigrants, but Samuelson, Friedman, and others gave it a native-born American flavor, and the approach truly caught on in this country."

"He knows history. If he had a Hungarian sitting at his side at the dinner table, he would quote easily names of politicians or novelists of the Austrian–Hungarian empire of the late 19th century. He also understands the significance of the history of a country. This is a rare quality at a time when the education of economists has become excessively technical."

"[Paul] mentioned that he had heard about a piece I had written on Irving Fisher. I have no idea how he heard about it, but I offered to send him a copy and within a few days I got back a letter. [Paul] read the paper and wanted to set down his own interpretation, but then he closes the letter with a remarkable line that I treasure: ‘Do disregard my heresies and follow your own star.’"

"In the world of music, it is a rarity to find a person who is both a gifted composer and a top conductor. So it is in economics as well. Paul is that rarity. When Paul is writing, the sun is always out. His writing—ever eloquent, ever stirring—is done with the kind of verve that one seldom finds today."

"In contrast to the natural sciences, where Isaac Newton and Albert Einstein made their major contributions, most economics masterpieces were written when the authors were middle aged. Adam Smith, Karl Marx, John Maynard Keynes, and Milton Friedman come to mind. However, Paul started much earlier, in his 20s; and, even now, his new articles influence the fields of economics and finance."

"Samuelson is an artist; he brought undergraduates pretty well up to the level of the state of knowledge in the profession."

"There have been hedgehogs; there have been foxes; and then there was Paul Samuelson. (...) I’m referring, of course, to Isaiah Berlin’s famous distinction among thinkers – foxes who know many things, and hedgehogs who know one big thing. What distinguished Paul Samuelson as an economic thinker, making him like nobody else, past or present, was the fact that he knew – and taught us – many big things. No economist has ever had so many seminal ideas."

"One recent history of economic thought (Jürg Niehans’s A History of Economic Theory) devotes twenty-four pages to Samuelson’s ideas. Adam Smith only gets thirteen. Samuelson’s work on stock markets and the random walk takes up less than two of those twenty-four pages. He was “the last generalist in economics,” as he liked to say, and for him financial market studies were just a side project that he at times seemed deeply ambivalent about. His intervention was, however, crucial to the triumph of the random walk. Here was one of the most important economists of all time, and he didn’t think the relationship between coin flips and the stock market was a dinner-speech triviality."

"A few years ago, I had the good fortune of running across a first edition of Paul's textbook (not the recent reprint of the original text, but an actual 1948 edition). It was a real find. I bought the volume in an online auction for, if my recollection is correct, $35. Talk about consumer surplus! I would have gladly paid many times that. At the next Boston Fed meeting, I took the book along to get Paul to sign it. Below is the book's title page, along with Paul's gracious inscription."

"John Maynard Keynes may have had more influence on policy makers, Milton Friedman on citizens, Kenneth Arrow on economic theory, but Samuelson had more influence on the way economics is done today, and the purposes to which it is put, than any other economist of the twentieth century."

"He was influential. He influenced students through his textbook, and he influenced the entire economics profession through his dissertation, published as "Foundations of Economic Analysis." Readers of this blog will tend to disapprove of his influence, in that it promoted Keynes and the use of mathematical modeling. Perhaps Milton Friedman was more influential on policy. But Samuelson was more influential on the internal dynamics of the economics profession. On that score, I would say that he was without peer in this century. […] Compared with later generations of economists, he was more nuanced in his thinking and not as capable a mathematician."

"Many principles of economics were hidden in obscure verbiage of previous generations; he reformulated and extended them with crystal clarity in the language of mathematics."

"Arrow’s Impossibility Theorem is quite surprising. It shows that three very plausible and desirable features of a social decision mechanism are inconsistent with democracy: there is no “perfect” way to make social decisions. There is no perfect way to “aggregate” individual preferences to make one social preference. If we want to find a way to aggregate individual preferences to form social preferences, we will have to give up one of the properties of a social decision mechanism described in Arrow’s theorem."

"Schumpeter emphasizes a “demand-side” explanation for such clustering of innovation. One might also consider a complemen tary “supply-side” explanation: since innovators are, in many cases, working with the same components, it is not surprising to see simultaneous innovation, with several innovators coming up with essentially the same invention at almost the same time. There are many well-known examples, including the electric light, the airplane, the automobile, and the telephone."

"Google will make us more informed. The smartest person in the world could well be behind a plow in China or India. Providing universal access to information will allow such people to realize their full potential, providing benefits to the entire world."

"He who enlists a man's mind wields a power even greater than the sword or the scepter."

"It may strike us as odd that the idea of gain is a relatively modern one; we are schooled to believe that man is essentially an acquisitive creature and that left to himself he will behave as any self-respecting businessman would. The profit motive, we are constantly being told, is as old as man himself. Nothing could be further from the truth."

"Nobody wanted this commercialization of life."

"The Wealth of Nations may not be an original book, but it is unquestionably a masterpiece."

"Even today — in blithe disregard to his actual philosophy — Smith is generally regarded as a conservative economist, whereas in fact, he is more avowedly hostile to the motives of businessman than most New Deal economists."

"David Ricardo saw that the escalator worked with different effects on different classes, that some rode triumphantly to the top, while others were carried up a few steps and then kicked back down to the bottom."

"But while Ricardo, the economist, walked like a god (although he was a modest and retiring person), Malthus was relegated to a lower status."

"The distribution of wealth, therefore, depends on the laws and customs of society."

"But despite the clarion words of the Manifesto, the demonic note was not a call for a revolution of communism; it was a cry born only of frustration and despair."

"But the process of social change was not merely a matter of new inventions pressing on old institutions: it was a matter of new classes displacing old ones."

"The worker is no longer the slave to his reproductive urge. He is a free bargaining agent who enters the market to dispose of the one commodity he commands — labor power — and if he gets a rise in wages he will not be so foolish as to squander it in a self-defeating proliferation of his numbers. The capitalist faces him in the arena. His greed and lust for wealth are caustically described in those chapters that leave the abstract world for a look into 1860 England. But it is worth noting that he is not money hungry from mere motives of rapacity; he is an owner-entrepreneur engaged in an endless race against his fellow owner-entrepreneurs; he must strive for accumulation, for in the competitive environment in which he operates, one accumulates or one gets accumulated. The stage is set and the characters take their places. But now the first difficulty appears. How, asks Marx, can profits exist in such a situation? If everything sells for its exact value, then who gets an unearned increment?"

"In the periods of crisis, the bigger firms absorb the smaller ones, and when the industrial monsters eventually go down, the wreckage is far greater than when the little enterprises buckle."

"For one who has read the works of Marx it is frightening to look back at the grim determination with which so many nations steadfastly hewed to the very course which he insisted would lead to their undoing."

"The book was called Imperialism; it was a devastating volume. For here was the most important and searing criticism which had ever been levied against the profit system. The worst that Marx had claimed was that the system would destroy itself; what Hobson suggested was that it might destroy the world. He saw the process of imperialism as a relentless and restless tendency of capitalism to rescue itself from a self-imposed dilemma, a tendency that necessarily involved foreign commercial conquest and that thereby inescapably involved a constant risk of war. No more profound moral indictment of capitalism had ever been posed."

"Very few of the heroes of the Golden Age of American finance had much interest in the solid realities of what underlay their structure of stocks and bonds and credits."

"But like Marx, Veblen badly underestimated the capacity of a democratic system to correct its own excesses."

"It was the unemployment that was the hardest to bear. The jobless millions were like an embolism in the nation's vital circulation; and while their indisputable existence argued more forcibly than any text that something was wrong with the system, the economists wrung their hands and racked their brains and called upon the spirit of Adam Smith, but could offer neither diagnosis or remedy."

"Keynes disdained inside information — in fact, he once declared that Wall Street traders could make huge fortunes if only they would disregard their "inside" information — and his own oracles were nothing but his minute scrutiny of balance sheets, his encyclopedic knowledge of finance, his intuition into personalities, and a certain flair for trading."

"Economic freedom is a highly desirable state — but in bust and boom we must be prepared to face the its consequences."

"If an economy in the doldrums could drift indefinitely, the price of government inaction might be graver by far than the consequences of bold unorthodoxy."

"The secret to economic growth lay in the fact that that each generation attacked Nature not only with its own energies and resources, but with the heritage of equipment accumulated by its forebears."

"To one American family out of four, the idea of capitalism as a benign system of comfort, dignity, and personal advance is only a myth, or worse, a bitter mockery."

"The change began with John Stuart Mill and the Utopians. When Mill pointed out that economics had no ultimate solution to the problem of distribution, that society might do with the fruits of its toil as it saw fit, he introduced into the mechanical calculus of the market a conflicting calculus of moral judgment."

"It is from the scope and wisdom of the economists of the past that we must reap the knowledge with which to face the future."

"History, as it comes into our daily lives, is charged with surprise and shock."

"Unlike modern man, who dreams of the world he will make, pre-modern man dreamed of the world he left."

"There was no simple riddance to the power of a dangerous political idea; no assassination possible to avert a disruptive change in technology; no natural death to be counted on to stop an economic change that ripped up ancestral estates or stirred up class discontent."

"Karl Marx did not call for an opposition to the forces of history. On the contrary he accepted all of them, the drive of technology, the revolutionizing effects of democratic striving, even the vagaries of capitalism, as being indeed the carriers of a brighter future."

"The basic function of the military — to achieve victory over the enemy — has been rendered obsolete by the fact that "victory" and defeat are almost certain to be achieved simultaneously."

"The total amount of electric power generated by India would not suffice to light up New York City."

"Today and over the foreseeable future,traditional capitalism throughout most of the world has been thrown on a defensive from which it is doubtful that it can never recover."

"It is one of the dangerous self-deceptions of our society to pretend that mechanisms of control do not really exist, and to maintain, without qualification, that we are an economically "free" people."

"In the end the question is: Who is to be master, man or his machines? As long as the control over technology rests primarily on economic calculation, the victor is not likely to be man."

"For it is certain that the future will bring realities for which our traditional optimism fails to prepare us and against which our economic momentum fails to arm us."

"The rise of the welfare state, on the one hand, and of the military bureaucracy, on the other, are instances of the manner in which technology is enforcing a socialization of life."

"We may make progress only by freeing ourselves from the rut of the past, but without this rut an orderly society would hardly be possible in the first place."

"In an age which no longer waits patiently through this life for the rewards of the next, it is a crushing spiritual blow to lose one's sense of participation in mankind's journey, and to see only a huge milling-around, a collective living-out of lives with no larger purpose than the days which each accumulates. When we estrange ourselves from history we do not enlarge, we diminish ourselves, even as individuals. We subtract from our lives one meaning which they do in fact possess, whether we recognize it or not. We cannot help living in history. We can only fail to be aware of it. If we are to meet, endure, and transcend the trials and defeats of the future — for trials and defeats there are certain to be — it can only be from a point of view which, seeing the future as part of the sweep of history, enables us to establish our place in that immense procession in which is incorporated whatever hope humankind may have."

"We should say we think a big element in the process of seeking peace [in the Middle East] is the acceptance of Israel's existence and so we´re going to go around to all our friends in Europe and Asia and elsewhere and say let´s accept Israel´s right to exist - and a way of doing that is to move our embassy to west Jerusalem. As long as the embassy is in Tel Aviv, it sort of says we´re camping out."

"[A] revenue-neutral carbon tax would benefit all Americans by eliminating the need for costly energy subsidies while promoting a level playing field for energy producers."

"Many of today's trading relationships actually make America more globally competitive. . . . Raising tariffs among the United States, Canada and Mexico will only weaken a well-oiled manufacturing machine that is driven by the high level of integration the three economies have in their supply chains. This integration makes the region as a whole more competitive vis-à-vis the world."

"Few people did as much to shape the trajectory of American diplomacy and American influence in the 20th century as George Shultz. He was a gentleman of honor and ideas, dedicated to public service and respectful debate, even into his 100th year on Earth. That's why multiple Presidents, of both political parties, sought his counsel. I regret that, as President, I will not be able to benefit from his wisdom, as have so many of my predecessors."

"Gorbachev's impressionability also showed up in economics. He had been aware, from his travels outside the Soviet Union before assuming the leadership, that "people there . . . were better off than in our country." It seemed that "our aged leaders were not especially worried about our undeniably lower living standards, our unsatisfactory way of life, and our falling behind in the field of advanced technologies." But he had no clear sense of what to do about this. So Secretary of State Shultz, a former economics professor at Stanford, took it upon himself to educate the new Soviet leader. Shultz began by lecturing Gorbachev, as early as 1985, on the impossibility of a closed society being a prosperous society: "People must be free to express themselves, move around, emigrate and travel if they want to. . . . Otherwise they can't take advantage of the opportunities available. The Soviet economy will have to be radically changed to adapt to the new era." "You should take over the planning office here in Moscow," Gorbachev joked, "because you have more ideas than they have." In a way, this is what Shultz did. Over the next several years, he used his trips to that city to run tutorials for Gorbachev and his advisers, even bringing pie charts to the Kremlin to illustrate his argument that as long as it retained a command economy, the Soviet Union would fall further and further behind the rest of the developed world. Gorbachev was surprisingly receptive. He echoed some of Shultz's thinking in his 1987 book, Perestroika: "How can the economy advance," he asked, "if it creates preferential conditions for backward enterprises and penalizes the foremost ones?""

"Any further spread of nuclear weapons multiplies the possibilities of nuclear confrontation and magnifies the danger of diversion. Thus, if proliferation of weapons of mass destruction continues into Iran and remains in North Korea in the face of all ongoing negotiations, the incentives for other countries to follow the same path will become overwhelming. Considerations as these have induced former Senator Sam Nunn, former Secretary of Defense William Perry, former Secretary of State George Shultz, and I -- two Democrats and two Republicans -- to publish recommendations for systematically reducing and eventually eliminating reliance on nuclear weapons. We have a record of strong commitment to national defense and security. We continue to affirm the importance of adequate deterrent forces, and we do not want our recommendations to diminish essentials for the defense of free peoples while a process of adaptation to new realities is going on. At the same time, we reaffirm the objective of a world without nuclear weapons that has been proclaimed by every American President since President Eisenhower."

"George left us at a moment when our national arguments are too often vindicated by passion rather than reason, by the debasement of the adversary rather than the uplifting of purposes. He also believed that if you were blessed with great gifts, you had a responsibility to apply yourself, and if you cared about your country, you had a duty to defend and improve it. He was skilled in presenting his convictions, but above all practiced the art of making controversy superfluous by encouraging mutual respect. Trust, George used to say, is the coin of the realm."

"When current events set us thinking about which former Washington policymaker might have something interesting to say about this story or that story, the name of George Shultz inevitably comes to mind."

"Economic freedom is extraordinarily important. It’s the freedom to do with your resources what you believe you should do. My dream has always been to make poor people rich, not rich people poor."

"While discussing President Ford's ‘WIN’ (Whip Inflation Now) proposal for tax increases, I supposedly grabbed my napkin and a pen and sketched a curve on the napkin illustrating the trade-off between tax rates and tax revenues. Wanniski named the trade-off ‘The Laffer Curve.’"

"I used the so-called Laffer Curve all the time in my classes and with anyone else who would listen to me to illustrate the trade-off between tax rates and tax revenues."

"The Laffer Curve, by the way, was not invented by me."

"In 1994, Estonia became the first European country to adopt a flat tax, and its 26 percent flat tax dramatically energized what had been a faltering economy. Before adopting the flat tax, the Estonian economy was literally shrinking. In the eight years after 1994, Estonia experienced real economic growth - averaging 5.2 percent per year."

"People do not work, consume, or invest to pay taxes. They work and invest to earn after-tax income, and they consume to get the best buys after tax. Therefore, people are not concerned per se with taxes, but with after-tax results. Taxes and after-tax results are very similar, but have crucial differences."

"Countries with the highest tax rates probably also have the highest unemployment rates. High tax rates certainly do not guarantee fiscal solvency."

"Over the past 100 years, there have been three major periods of tax-rate cuts in the U.S.: the Harding-Coolidge cuts of the mid-1920s; the Kennedy cuts of the mid-1960s; and the Reagan cuts of the early 1980s. Each of these periods of tax cuts was remarkably successful as measured by virtually any public policy metric."

"The minimum wage is the black teenage unemployment act. It is the guaranteed way of holding the poor, the minorities and the disenfranchised out of the mainstream is if you price their original services too high."

"You know, without China there is no Wal-Mart and without Wal-Mart there is no middle class and lower class prosperity in the United States."

"Sound money is the sine qua non of a prosperous society."

"Which would you rather have, capital lined up on your borders, trying to get into your country or trying to get out of your country? We are the capital magnet of this planet and we are the savior for not only people, for not only freedom, but also for capital."

"The trade deficit is the capital surplus and don't ever think of having a capital surplus as being a bad thing for our country."

"If you like the post office and the Department of Motor Vehicles and you think they're run well, just wait till you see Medicare, Medicaid and health care done by the government."

"Resources don’t miraculously materialize out of thin air,… there is no free lunch."

"And you can’t have a prosperous economy when the government is way overspending, raising tax rates, printing too much money, over regulating and restricting free trade. It just can’t be done."

"In the 1990's, we had the largest cut in government spending as a share of GDP in the history of the U.S. In the 1990's, we were doing free trade, we passed NAFTA, we went through there. We were for lowering interest rates and controlling money far better. And we weren't regulating nearly as much. We had welfare reform and all of those wonderful things. We had the biggest tax cut in our nation's history. Any comparison between today and the 1990's, it's totally inappropriate. Bill Clinton, as bad a person as he was, was a good president."

"You can never bail someone out of trouble without putting someone else into trouble."

"Stimulus packages don’t work. Every president that I have ever heard of has wanted a free lunch. They just don’t get it."

"I don’t think we have to do it by government spending. My view is I’ve never heard of a poor person spending himself into prosperity. The government doesn’t create resources. The government redistributes them, and it redistributes them from workers and producers to people they get the resources based on some characteristic of the work effort. So what you really need to do is I think you need to incentivize producers, and what you need to go along, and my way of going would be Simpson-Bowles. Something to lower the tax rates, broaden the base, get rid of the loopholes. I mean really get a production base that officially starts, and that’s the way you really get out of this depression. The way we did in the Eighties to be honest with you."

"As my former colleague Milton Friedman used to say, ‘Government spending is taxation, pure and simple.’ Governments, when they spend the money, not only add to demand, they also reduce demand by taking the resources from the rest of society."

"Government doesn’t create resources. Government redistributes resources. For everyone the government bails out, there is someone they put into trouble dollar for dollar. You can’t bail someone out of trouble without putting someone else into trouble."

"Governments are raising taxes for austerity and that doesn’t work. Poor people cannot spend themselves into wealth and governments cannot tax their economies into prosperity. If you tax people who work, and pay people who don’t work, don’t be surprised if you find a lot of people not working…"

"Both sides have a bad incentive. The people you tax, who do work, they are going to stop working. The people who learn to live getting income without working, they are going to work less too."

"Have you ever heard of a poor person spending himself into prosperity?"

"It's not Republican, it's not Democrat. Honestly, it's not liberal, it's not conservative ... It's economics … If you tax people who work and you pay people who don't work, don't be surprised when you get a lot of people not working."

"California is the highest-tax state in the nation and has been for a long time. It has the highest paid teachers in the nation, by far — $400 a month more than New Jersey — and yet California is the third lowest state on test scores for fourth and eighth grade English and math in the nation, and has been at the low level for a long, long time."

"The states that have large in-migrations of Hispanics are Florida, Texas and California. And Florida and Texas are way above average in educational achievement, while California’s the lowest, just about."

"As my former colleague Milton Friedman often said, ‘Government spending is taxation.’ Beyond the essential services government provides — such as roads, courts, schools, police and fire services, and the military — government spending doesn’t actually create resources. It just redistributes resources. For every beneficiary of government largesse, there’s someone who pays for that largesse."

"The notion of a Keynesian spending multiplier is right out of an Aesop fable. And who ever heard of a poor person spending himself into prosperity? No one!"

"Nations with the greatest stimulus spending had the deepest recessions — while those with the least stimulus spending performed the best. The bigger the spending stimulus, the slower the recovery. I also showed historically that spending has never been associated with faster growth of the US economy."

"In the 1970s, the more Congress spent, the higher unemployment rose, and it was not until government spending and taxes were cut in the early 1980s that unemployment started its long-term decline."

"People don’t work to pay taxes, they work to consume."

"Whoever heard of a poor man spending himself into wealth? It’s dumb. But we try stimulus spending all of the time."

"You can't grow an economy, frankly, by over-taxing it."

"Don’t confuse fiscal discipline with party label. All those parties are all fiscally unsound. I mean, every Republican wants to spend more. Every Democrat wants to spend more. It is not their money… They’re spending your money and my money."

"Rise the minimum wage is the best way of hurting the poor."

"I have never heard of an economy being taxed into prosperity."

"The idea of cutting tax rates to spur business comes from the economist behind Ronald Reagan’s ‘Reaganomics’ tax cuts, Arthur Laffer… The Laffer Curve delivers a simple, seemingly obvious message: When the tax rate is zero percent, government will collect nothing from the earnings it taxes. When the tax rate is 100 percent, the curve also shows the government collecting zero revenue because there will presumably be no earnings: who would work if they kept absolutely none of what they earned?"

"Laffer, 74, is best remembered for the ‘Laffer Curve,’ which he scribbled on a napkin in 1974 to illustrate the negative effect of high tax rates on government revenues. If you hike taxes beyond a certain rate—a sweet spot, so to speak—then you end up collecting less revenue, he argued."

"It just isn't going to work, and it's very interesting that the man who invented this type of what I call a voodoo economic policy is Art Laffer, a California economist."

"Wars fought exclusively on foreign soil do have marginally higher real output growth than peacetime periods, but real growth during all other wars is sharply below peacetime levels. Evidence for foreign and domestic wars is consistent with monetarist, fiscalist, and mixed theories of wartime booms."

"In a modern democracy, not only can a libertarian be elitist; a libertarian has to be elitist. To be a libertarian in a modern democracy is to say that nearly 300 million Americans are wrong, and a handful of nay-sayers are right."

"Through the lens of the Jock/Nerd Theory of History, the welfare state doesn’t look like a serious effort to "equalize outcomes." It looks more like a serious effort to block the "revenge of the nerds"—to keep them from using their financial success to unseat the jocks on every dimension of social status."

"Mussolini wasn’t just another socialist; he was the Lenin of Italy – the leader of the hard-line revolutionary faction. And Mussolini wasn’t just a “newspaperman”; he was the editor of Avanti!, the official newspaper of the Socialist Party."

"For socialists, of course, Mussolini’s apostasy proves nothing except his supreme evil. For everyone else, though, Mussolini’s origin story puts his subsequent career in a whole new light. Outsiders can easily see what insiders deny: The apostate fruit rarely falls far from the orthodox tree."

"Yes, Mussolini realized that socialism plus nationalism had more mass appeal than socialism alone. Yes, Mussolini realized that socialism would be stronger if it allied with the Church instead of destroying it. Yes, Mussolini realized that full-fledged mass expropriation of private property would devastate the economy. And yes, Mussolini realized that the word “socialism” alienated millions of Italians who would otherwise be receptive to his message. But this doesn’t make Mussolini a radical socialist who betrayed everything he believed in. It makes him a radical socialist who dropped some peripheral socialist dogmas that stood between him and absolute power. If he’d kept the socialist label and avoided alliance with Hitler, Mussolini might now be a left-wing icon as big as Che Guevara."

"Bioethics is to ethics as astrology is to astronomy."

"Personally, then I have no reason to lash out at the education system. Quite the contrary. Yet a lifetime of experience, plus a quarter century of reading and reflection, convince me that our education system is big waste of time and money. Almost every politician vows to spend more on education. As an insider, I can't help gasping, "Why? You want to waste even more?""

"Magic isn't real. There has to be a logical reason explanation for the effect of Ivory Tower achievement on Real World success. And here it is: despite the chasm between what students learn and what workers do, academic success is a strong signal of worker productivity. The labor market doesn't pay you for the useless subjects you master; it pays for preexisting traits you reveal by mastering them."

"Statistical discrimination may be unfair and ugly, but it's hardly weird or implausible. Why is it any more weird or implausible to claim employers statistically discriminate on the basis of educational credentials?"

"Prove to me that you have the right to exist!"

"All acts, and only those acts, that coercively harm others are evil."

"There is no moral authority for government other than to enforce the Universal Ethic."

"Don’t ask from whom the economy hides; it hides from you!"

"That was a documentary!"

"We weren't on the wrong side. We are the wrong side."

"The American public was lied to [about the Vietnam War] month by month by each of these five administrations [Truman, Eisenhower, Kennedy, Johnson, Nixon]. It's a tribute to the American public that their leaders perceived that they had to be lied to. It's no tribute to us that it was so easy to fool the public."

"I took that opportunity to tell him something that, er, I had long thought of telling somebody that was about to enter the world of really high secrecy. And I said, 'Henry, you're about to get a lot of clearance higher than top secret that you did not know existed. That's going to have a sequence of effects on you. First, a great exhilaration that you're getting all this amazing information that you didn't know even existed. And the next phase is you'll feel like a fool for not having known about any of this. but that won't last long. Fairly soon, you'll come to think that everyone else is foolish. What would this expert be telling me if he knew what I knew? So in the end, you stop listening to them."

"EVERY attack now made on WikiLeaks and Julian Assange was made against me and the release of the Pentagon Papers at the time."

"The question really arises is it a republic if you can keep it, question have we kept it? And the answer is no! No we have not kept it. Since 2001 we have in effect an elected monarchy. And ah, meaning a country which Nixon's view 'when a president does it, it is legal'. The president says it's not illegal. That is the attitude long after Nixon of John Yoo, who was the advisor to George W. Bush, of David Addington, Bush Cheney's legal advisor. Essentially there are no limits on presidential power except those which he chooses to put on himself. Obama following on, has in effect decriminalized torture which is as illegal and criminal as anything can be under international law and domestic law, a number of domestic laws and international laws, which we have ratified to investigate, and follow-up if there is any credible charge. Obama has chosen not to investigate or indict any higher up for that process of torture."

"Chelsea Manning is again acting heroically in the name of press freedom, and it’s a travesty that she has been sent back to jail for refusing to testify to a grand jury. An investigation into WikiLeaks for publishing is a grave threat to all journalists’ rights, and Chelsea is doing us all a service for fighting it. She has already been tortured, spent years in jail, and has suffered more than enough. She should be released immediately."

"I've always been with the one who rebels against false values. My heroes now are Ralph Nader and Daniel Ellsberg."

"Technological change is beneficial only when other jobs replace the ones lost."

"Can we reverse these deeply rooted sources of inequality? Or are they just endemic to a capitalist economy?"

"The economic illusion is the belief that social justice is bad for economic growth."

"But of course you can have your cake and eat it, too - if you decide to bake a second cake. And you may well find that baking two cakes does not take twice the work of baking one."

"In practice, a good deal of the outcomes produced by the market reflect nothing more than luck - good or bad."

"American critics of welfare statism are often surprised to learn that countries like West Germany, with a much more comprehensive welfare state and a statistically "larger" public sector, have fewer government employees per capita than the United States does."

"Keynes, like Freud and Marx, deserves to be read in the original, not through the glosses of his lesser disciples."

"In America, we build public housing by creating lucrative inducements to private developers, and then wax indignant at the public waste."

"It is more than a little ironic that "capital accumulation" once a rather tendentious Marxian view of a supposed capitalist obsession, should have become - of all things - Wall Street's own slogan."

"If social security depresses savings rates, it is only because it is unfunded."

"When laissez-faire creates instability, the move to a freer market can be something less than pure gain."

"If got a big head start on the 707 from multibillion-dollar military contracts to develop an air force transport, is that a sin against free trade?"

"Technological advance often thrives in sheltered and subsidized markets, which defy free trade."

"In a world where technology and capital are highly transferable, there is a real risk that comparative advantage comes to be defined as whose labor force will work for the lowest wage."

"We are already well down the road toward a managed-trade regime. It would be far better to acknowledge that reality, and seek a set of reasonable rules, than to pretend that Ricardian trade is the norm and allow mercantilist states to overwhelm U.S. industry and ratchet down wages, in the name of free trade."

"Henry Ford, in a sense, was the first Keynesian. He paid his assembly workers high wages so they could afford to buy his cars."

"Not surprisingly, extensive effort in Britain and America goes into finding tax shelter. the system is "efficient" for the shelter industry, not for the economy."

"The total impact of the Reagan tax cuts on capital lowered the effective cost of capital to American industry by an estimated 1.2 percent. Unfortunately, the Laffer curve did not work as advertised. Lower tax rates did not produce more tax revenues. They produced deficits."

"Political conservatives have focused on tax reduction as an economic growth strategy for three reasons. First it is self-serving; it saves rich people lots of money. Second, it comports with their ideological allegiance to laissez-faire economics. And third, tax incentives are less intrusive to business-as-usual than any other form of government planning."

"By default, we have created a "system" of nursing-home care for the aged in which middle-class people pay exorbitant rates to for-profit nursing-home entrepreneurs - and then when private resources are consumed and the patient qualifies as a pauper, the nursing home begins billing Medicaid. This is precisely the antithesis of social citizenship; instead of the poor being accorded the dignity associated with the middle class, equality of treatment is achieved by making the middle class undergo pauperization."

"Britain, with the most completely socialized health system in the West, now spends the lowest fraction of GNP on health care of any major nation. There are frequent complaints of excessive waits for elective surgery and other inconveniences, but British citizens live slightly longer than Americans, on average, and our overall health conditions are comparable."

"Why, then, should we have to lower our living standards? What is the mysterious source of the economic loss? If productivity is increasing, why should we sacrifice services and wages?"

"I have tried to suggest that injustice is not necessary economics;that the economics can work, and has often worked, when the constituency for it is animated. The politics of equality - that is a little harder."

"Kuttner then enumerates the limitations of markets. Deregulation of airlines, for example has led both to a loss of service and to higher average fares. Nor are free markets really free. They come to be dominated by giants, like Time Warner and Rupert Murdoch."

"Britain still thinks it's 1999."

"Myths are not the stuff of which sensible policy is made."

"[B]elief in multiculturalism by the elites suits many Muslims just fine. Unlike immigrants who come to America in pursuit of the American dream, many Muslims come to Britain and other European countries determined not to assimilate into cultures they despise. They insist that neither British food is served, nor traditional British tolerance practiced, in the schools their children attend, demands the authorities find reasonable. Many of those children, unlike first-generation Americans, hold to their traditional ways with greater tenacity than their parents. This is especially true of young Muslim men eager to maintain their traditional dominance over women, a role threatened by the fact that Muslim girls are outperforming boys in school and in the workplace."

"Blair likes to say that his party is best when it is bold. So is he--and when he has an unconflicted view of the right and wrong of an issue."

"Blair is not at his best when his vision of what is right is blurred."

"Well, I think there are people who are getting work that they wouldn't otherwise have. For many of them apparently, it fits in with their lifestyles, so that they can make their own schedules. I think you've got a company that is expanding and delivers, what? A hundred million parcels a year. So somebody's happy with the service, and somebody's happy doing the job."

"Well it seems to me absolutely scandalous to try to set wage levels which wipe out jobs. I mean these are people who are not on the dole. They want to work and if you price them out of the market its gonna be a lot worse for them and for the economy."

"I started delivering flowers for 25 cents a shot so don't tell me about the shop floor."

"Spare me a lecture from somebody in parliament to somebody who started out delivering flowers for 25c a shot."

"Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper."

"You can see the computer age everywhere but in the productivity statistics."

"Suppose someone sits down where you are sitting right now and announces to me that he is Napoleon Bonaparte. The last thing I want to do with him is to get involved in a technical discussion of cavalry tactics at the Battle of Austerlitz. If I do that, I'm getting tacitly drawn into the game that he is Napoleon Bonaparte. Now, Bob Lucas and Tom Sargent like nothing better than to get drawn into technical discussions, because then you have tacitly gone along with their fundamental assumptions; your attention is attracted away from the basic weakness of the whole story. Since I find that fundamental framework ludicrous, I respond by treating it as ludicrous – that is, by laughing at it – so as not to fall into the trap of taking it seriously and passing on to matters of technique."

"If you see something that needs doing, do it. It is not easy for me to explain what I mean by this guideline, but I think it has been deeply ingrained in me for a long time. I rather believe that I was once promoted to Acting Corporal at the age of 19 because of this trait. I suppose that it entails a partial contradiction of the conventional injunction to get your priorities straight before acting. To my mind, the priorities are not so certain that one ought to pass up any opportunity to get something useful done. Perhaps it also reflects my belief that much more good is done by tinkering than by starting over from scratch. I claim for this approach that it fits in with the Hippocratic injunction to the doctor to "do no harm" and that gradient methods are a good all-purpose method for local optimization. What about global optimizations? Good point. I suppose I worry that enthusiastic seekers after global maxima run the risk of falling off steep cliffs. On the bad side, I know I sometimes find myself doing meaningless busywork when I could presumably spend my time at something more useful. My wife reminds me that once, when we discovered that the automatic wake-up mechanism in our hotel room was not working, I spent an hour and a half trying to fix it. (I got it to work. Once.) No recipe for coping is perfect."

"Well, I certainly was not going to study physics, and I knew I was not going to study biology, but I could have become a sociologist or an anthropologist. However, I found sociology a little soft. I think that somewhere in my mind, I probably already had the notion – which turned out to be right – that if I was going to be a social scientist of some kind, I would like a rigorous social science. The analytical aspect of economics already appealed to me. That must have been so. It was not really a matter of chance. But if my wife had said ‘oh, no, economics was terribly boring’, I would probably have found something else to do."

"More generally, Schumpeter seemed to be playing the role of grand seigneur, and he tended to flatter where flattery was not due, no doubt satirically. All this went along with his reputation as a casual and easy grader. We used to say that he threw the exam books up a staircase: the ones that stuck at the top got an A, the ones that fell to the bottom an A minus. I was surprised to learn that in Austrian universities he had the reputation of a stern taskmaster."

"In recollecting Schumpeter, it is hard to tear oneself away from the exotic manner, the dubious politics, the carefully crafted image, the hidden self-doubts, the convoluted life story, the complicated relations to three wives and several non-wives."

"In my view—and that of most contemporary economists, I believe—Schumpeter’s most original and most lastingly significant book was Theory of Economic Development, which appeared in 1911 (and was translated into English in 1934). It was at the University of Czernowitz, not far from the beginning of his career as an economist, that he worked out his conception of the entrepreneur, the maker of “new combinations,” as the driving force and characteristic figure of the fits-and-starts evolution of the capitalist economy. He was explicit that, while technological innovation was in the long run the most important function of the entrepreneur, organizational innovation in governance, finance, and management was comparable in significance."

"I think that this is Schumpeter’s main legacy to economics: the role of technological and organizational innovation in driving and shaping the growth trajectory of capitalist economies."

"It is possible to see Keynesian and Schumpeterian ideas as complementary. Keynes is about short-run economic fluctuations brought about by erratic variations in the willingness of investors and governments to spend; Schumpeter is about the long-run trajectory driven by the erratic march of technological progress. This complementarity only became clear later, after both men had died, when economic growth became an explicit objective of public policy and topic of systematic analysis. Schumpeter was left frustrated by the younger generation’s affinity for his rival. In any case, the “preliminary volume” never materialized. The world turns. Today, some sixty years after their deaths, Schumpeter’s star probably outshines Keynes’s. The business cycle has receded in importance, partly because the large industrial economies have sprouted a more stable structure, and partly because the lessons that Keynes taught have been learned by central banks and finance ministries. Instead, long-term economic growth has moved to the top of the political and intellectual agenda, and that was Schumpeter’s topic. As Robert Lucas memorably put it, once you have begun to think about economic growth, it is hard to think about anything else. It is a pity that troubled old Schumpeter did not live to see the triumph of his obsession."

"I don't think that Solow, in particular, has ever tried to come to grips with any of these issues except by making jokes."

"Creativity thinks up new things. Innovation does new things. The difference speaks for itself. Yet the fluent advisers to business seldom make the distinction. They tend to rate ideas more by their novelty than by their practicability."

"People don't want to buy a quarter-inch drill, they want a quarter-inch hole."

"Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others, which are thought of as seasoned growth industries, have actually stopped growing. In every case the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management."

"The difference between marketing and selling is more than semantic. Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it."

"The historic fate of one growth industry after another has been its suicidal product provincialism."

"I do not mean that selling is ignored. Far from it. But selling, again, is not marketing. As already pointed out, selling concerns it with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And it does not, as marketing invariably does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse, and satisfy customer needs. The customer is somebody "out there" who, with proper cunning, can be separated from his loose change."

"In business, the followers are the customers. To produce these customers, the entire corporation must be viewed as a customer-creating and customer satisfying organism. Management must think of itself not as producing products but as providing customer creating value satisfactions. It must push this idea (and everything it means and requires) into every nook and cranny of the organization."

"A precondition for political change lies in the disjuncture between the existing social system and the redistribution of power toward those actors who would benefit most from a change in the system."

"The relative stability of the system is... largely determined by its capacity to adjust to the demands of the actors affected by changing political and environmental conditions."

"Powerful groups set constraints on and may even determine the actions of state authority. They constitute the society that is protected by the state; their particular concept of justice reigns. The definition and functioning of property rights tend to advance their interest and welfare. ...the basic domestic function of the state is to define and protect property rights of individuals and groups. ...The primary external function of the state is to protect the property rights and personal security of its members vis-à-vis the citizens and actions of other states."

"It would be premature to suggest that the nation-state is dead or dying."

"Both the control of territory and the political domination of one state over another have profound consequences for international economic relations. However... market power or economic power has itself become a principal means by which states seek to organize and manipulate the international division of labor to their own advantage."

"Until the modern era there was no single international system, but rather several international systems, with little or no contact with another."

"[In] the definition of international system... There is some "form of control" that regulates behavior and may range from informal rules of the system to formal institutions. ...A view prevalent among many scholars of political science is that the essence of international relations is precisely the absence of control... a condition of anarchy..."

"Every dominant state, and particularly an empire, promotes a religion or ideology that justifies its domination over other states in the system."

"Ultimately...the hierarchy of prestige in an international system rests on economic and military power."

"One of the principal functions of war, and particularly... hegemonic war, is to determine the international hierarchy of prestige and thereby determine which states will in effect govern the international system."

"How can the human race, whether for selfish or more cosmopolitan ends, understand and control the seemingly blind forces of history?"

"I was certain that I was not a Marxist, but I did believe firmly that a connection between economics and politics existed."

"There is a pressing need to integrate the study of international economics with the study of international politics to deepen our comprehension of the forces at work in the world."

"These two opposed forms of social organization, the modern state and the market, have evolved together through recent centuries, and their mutual interactions have become increasingly crucial to the character and dynamics of international relations in our world."

"The parallel existence and mutual interaction of "state" and "market" in the modern world create "political economy"; without both state and market there could be no political economy."

"Does the functioning of the world economy tend to concentrate wealth and power, or does it tend to diffuse it?"

"One reason for the primacy of the market in shaping the modern world is that it forces a reorganization of society in order to make the market work properly . When a market comes into existence, as Marx fully appreciated, it becomes a potent force driving social change."

"When once asked what was missing from his classic textbook, Nobel laureate Paul Samuelson is reported to have responded, "the class struggle.""

"A market is not politically neutral; its existence creates economic power which one actor can use against another."

"The core of the Marxist critique of capitalism is that although the individual capitalist is rational (as liberals assume), the capitalist system itself is irrational."

"The world economy diffuses rather than concentrates wealth."

"The opposing tendencies of concentration and spread are of little consequence in the liberal model of political economy."

"A prolonged and massive increase in aggregate wealth per capita has taken place over several centuries."

"The clustering of technological innovation in time and space helps explain both the uneven growth among nations and the rise and decline of hegemonic powers."

"The dreams of "leaving it up to the market" or of returning to a politically neutral gold standard cannot succeed because the nature of the monetary system has a profound impact on the interests of powerful groups and states. Affected groups and states will always try to intervene in the operation of the system to make it serve their interests."

"Trade is the oldest and most important economic nexus among nations. Indeed, trade along with war ha been central to the evolution of international relations."

"Many critics see international trade as a form of cultural imperialism that must be strictly controlled."

"Specialization makes the welfare of the society vulnerable to the market and to political forces beyond national control."

"In many societies the domestic social costs of adjustment to changing patterns of comparative advantage are believed to outweigh the advantages of further trade liberalization."

"The multinational corporation and international production reflect a world in which capital and technology have become increasingly mobile, while labor has remained relatively immobile."

"Structuralism argues that a liberal capitalist world economy tends to preserve or actually increase inequalities between developed and less developed economies."

"The competitive nation-state system, with all its capacity for good and evil, is spreading in the Third World and is transforming that world."

"Through exploitation of its influence over global financial affairs, the United States has been able to cover the costs of its hegemonic position, preserve a false domestic prosperity, and mask the consequences of its relative political and economic decline."

"In the abstract world of American economists, equations run both ways; they believe that by changing the sign of a variable from plus to minus or from minus to plus or the price and quantity of x or y, the direction of historical movement can be reversed."

"In short, the elimination of the financial legacy of Reaganomics could force the United States to make some exceptionally difficult choices indeed."

"The historical record suggests that the transition to to a new hegemon has always been attended by what I have elsewhere called hegemonic war."

"The economic success of the Reagan Administration was largely dependent upon the pyramiding of massive debt and the siphoning of capital from the rest of the world."

"Despite its increased dependence on the international economy, America continues to behave as if it were either a closed economy or the leader whom everyone else should automatically follow."

"Japanese refer to Europe as a "museum" and America as a "farm.""

"Liberal economists conceive of societies as black boxes connected by exchange rates; as long as exchange rates are correct, what goes on inside the black box is regarded as not very important."

"Among the many factors that make a return to halcyon days of the first decades of the postwar era virtually impossible is the decline of clearly defined political leadership."

"That's where all the foreign aid (which might be defined as a transfer from poor people in rich countries to rich people in poor countries) went as well. The U.S. government still squanders about $20 billion a year this way, and European governments spend proportionally even more; it's all gone straight down a giant rathole."

"The desire to tell the truth is only one condition for being an intellectual. The other is courage, readiness to carry on rational inquiry to wherever it may lead … to withstand … comfortable and lucrative conformity."

"The process of writing is a process of learning; and much has become clearer to me in the attempt to transform my original rough notes into what I hope is an intelligible presentation."

"One would think that the record of already existing regulatory agencies is sufficiently eloquent in showing that it is Big Business that does the regulating rather than vice versa."

"But when reason and the study of history began revealing the irrationality, the limitations, and the merely transitory nature of the capitalist order, bourgeois ideology as a whole and with it bourgeois economics began abandoning both reason and history."

"Much if not all we know about the complex mechanism responsible for the development (and stagnation) of productive forces, and for the rise and decay of social organizations, is the result of the analytical work undertaken by Marx and by those whom he inspired."

"If society has a technical need, that helps science forward more than ten universities."

"By elevating the dictum of the market to the role of the sole criterion of rationality and efficiency, economics denies even all "respectability" to the distinction between essential and non-essential consumption, between productive and unproductive labor, between actual and potential surplus."

"Indeed, I find it illuminating to consider to what extent our "classical conditions" for economic growth are satisfied in the current, monopolistic phase of capitalism."

"Schumpter's daring and dashing entrepreneur is now a legendary figure from the distant past - if not from the mythology of capitalism - or is to be found only in the demimonde of business, founding new ice cream parlors or "deep freeze subscription clubs"."

"many seemingly independent businessmen or craftsman are more or less well paid retainers of larger corporations, such as the cobbler, operating a United States shoe machine or an automobile dealer holding a license of the General Motors Corporation."

"It has been estimated that even in the absence of net investment, the mere substitution of modern machinery for worn-out equipment in the United States would cause an annual productivity increase of approximately 1.5 percent."

"Indeed, the "whole bourgeoisie" on whose behalf the government was acting as its "committee" was a composite of a vast multitude of businessmen appearing as a conglomeration of many different and divergent groups and interests."

"In a capitalist country foreign trade, like any other trade, is carried on by individual firms, and individual firms cannot be guided in their activities by "global"considerations, by concern with the impact of their operations on the economy as a whole."

"That the means of imperialist policy overshadow almost entirely its original ends has tremendous implications."

"They lived in abysmal misery, yet they had no prospect of a better tomorrow. They existed under capitalism, yet there was no accumulation of capital."

"Whatever market for manufactured goods emerged in colonial and dependent countries did not become the "eternal market" of these countries. Thrown wide open by colonization and by unequal treaties, it became an appendage of the "internal market" of Western capitalism."

"For it is no railways, roads, and power stations that give rise to industrial capitalism: it is the emergence of industrial capitalism that leads to the building of railways, to the construction of roads, and to the establishment of power stations."

"The principal impact of foreign enterprise on the development of the underdeveloped countries lies in hardening and strengthening the sway of merchant capitalism, in slowing down and indeed preventing its transformation into industrial capitalism."

"The present Indian government, however, is neither able or willing to accept the challenge and to provide the leadership in breaking the resistance of urban and rural interests."

"It is in underdeveloped world that he central, overriding fact of our epoch becomes manifest to the naked eye: the capitalist system, once a mighty engine of economic development, has turned into a no less formidable hurdle to human advancement."

"As Hegel well knew, the ascent of reason has never followed a straight line."

"In fact, all the additional knowledge gained by an irrationally constituted society may but enlarge and enhance the powers of death and destruction."

"To contribute to the emergence of a society in which development will supplant stagnation, in which growth will take the place of decay, and in which culture will put an end to barbarism is the noblest, and, indeed, the only true function of intellectual endeavor."

"The real reason that physicians are rotten investors is that it never occurs to them that finance is a science, just like medicine."

"The brokerage and mutual fund business form a financial colossus that bestrides modern financial, and increasingly, social and political life."

"We tend to think of the stock and bond markets as relatively recent historical phenomena, but, in fact, there have been credit markets since human civilization first took root in the Fertile Crescent."

"At a very early stage in history we are encountering "survivorship bias" - the fact that only the best results tend to show up in the history books."

"The rub here is that buying when prices are low is always a very scary proposition. The low prices that produce high future returns are not possible without catastrophe and risk."

"When the barbarians are at the gates, interest rates rise and bond prices fall precipitously."

"Owning a portfolio of value stocks is the equivalent of wearing a Nehru jacket over a pair of bell bottom trousers."

"And lest I offend art lovers, it should be pointed out that even an old master, bought from the the artist for $100 and sold 350 years later for $10,000,000, has returned only 3.34% per year."

"In fact, using entirely reasonable assumptions, you can make the Dow's discounted market value almost anything you want it to be."

"The Gordon Equation is as close as being a physical law, like gravitation or planetary motion, as we will ever encounter in finance."

"The worst possible time to invest is when the skies are the clearest."

"Value stock returns are impossible to estimate using the traditional methods, because most of the excessive return arises from the slow improvement in valuations that occurs as doggy stocks become less doggy over time."

"In finance as in life, there is often a huge chasm between what is expected and what actually transpires."

"Most great financial innovators come from humble circumstances - nothing arouses fascination with financial assets quite like their absence."

"In fact, the nation's biggest investment pools are the retirement funds of the large corporations and governmental bodies, such as the California Public Employees Retirement System (CALPERS), which manages an astounding $170 billion. These plans receive a level of professional management that even the nations wealthiest investors can only dream of."

"when a famous investor publishes a newsletter, it's a sure tip-off that his techniques have stopped working."

"In other words, since you cannot successfully time the market or select individual stocks, asset allocation should be the major focus of your investment strategy, because it is the only factor affecting your investment risk that you can control."

"It is one thing to coolly design a portfolio strategy on a sheet of paper or computer monitor, and quite another to actually deploy it."

"We tend to think of technological progress as an ever accelerating affair, but it just isn't so."

"The advent of modern communication technology has simply facilitated the rapid dissemination of increasingly trivial information."

"Human beings are not very good at taking losses or admitting failure."

"The wealthy are different than you and I: they have many more ways of having their wealth stripped away."

"Wealthy investors should realize that they are the cash cows of the investment industry, and that most of the exclusive investment vehicles available to them - separate accounts, hedge funds, limited partnerships, and the like - are designed to bleed them with commissions, transactional costs, and other fees."

"Journalism attracts people with exceptional linguistic talent, but I have found that very few have the mathematical sophistication to appreciate the difference between skill and luck."

"It is often said that a monkey could run an index fund. Nothing could be further fro the truth. Precisely tracking an index requires a very high degree of market savvy, discipline and nerve."

"If markets were truly efficient, then you shouldn't be able to make any money rebalancing."

"Investment planning and execution are two completely different animals."

"Ninety-nine percent of what you read about investing in magazines and newspapers, and 100% of what you hear on television is worse than useless."

"Investing is not a destination. It is an ongoing journey through its four continents - theory, history, psychology and business."

"In one experience I remember vividly, there was a rich range of shades. It must have been late 1941 or early 1942. Jews were required to wear the Star of David and to obey a 6 p.m. curfew. I had gone to play with a Christian friend and had stayed too late. I turned my brown sweater inside out to walk the few blocks home. As I was walking down an empty street, I saw a German soldier approaching. He was wearing the black uniform that I had been told to fear more than others - the one worn by specially recruited SS soldiers. As I came closer to him, trying to walk fast, I noticed that he was looking at me intently. Then he beckoned me over, picked me up, and hugged me. I was terrified that he would notice the star inside my sweater. He was speaking to me with great emotion, in German. When he put me down, he opened his wallet, showed me a picture of a boy, and gave me some money. I went home more certain than ever that my mother was right: people were endlessly complicated and interesting."

"People who make a difference do not die alone. Something dies in everyone who was affected by them. Amos made a great deal of difference, and when he died, life was dimmed and diminished for many of us. There is less intelligence in the world. There is less wit. There are many questions that will never be answered with the same inimitable combination of depth and clarity. There are standards that will not be defended with the same mix of principle and good sense. Life has become poorer. There is a large Amos-shaped gap in the mosaic, and it will not be filled. It cannot be filled because Amos shaped his own place in the world, he shaped his life, and even his dying. And in shaping his life and his world, he changed the world and the life of many around him."

"There's literally no difference between a physician recognizing a disease from a "facial expression", and a little child pointing to something and saying "doggie"."

"No one ever made a decision because of a number. They need a story."

"I placed too much faith in underpowered studies. As pointed out in the blog, and earlier by Andrew Gelman, there is a special irony in my mistake because the first paper that Amos Tversky and I published was about the belief in the “law of small numbers,” which allows researchers to trust the results of underpowered studies with unreasonably small samples. We also cited Overall (1969) for showing “that the prevalence of studies deficient in statistical power is not only wasteful but actually pernicious: it results in a large proportion of invalid rejections of the null hypothesis among published results.” Our article was written in 1969 and published in 1971, but I failed to internalize its message. My position when I wrote “Thinking, Fast and Slow” was that if a large body of evidence published in reputable journals supports an initially implausible conclusion, then scientific norms require us to believe that conclusion. Implausibility is not sufficient to justify disbelief, and belief in well-supported scientific conclusions is not optional. This position still seems reasonable to me – it is why I think people should believe in climate change. But the argument only holds when all relevant results are published. I knew, of course, that the results of priming studies were based on small samples, that the effect sizes were perhaps implausibly large, and that no single study was conclusive on its own. What impressed me was the unanimity and coherence of the results reported by many laboratories. I concluded that priming effects are easy for skilled experimenters to induce, and that they are robust. However, I now understand that my reasoning was flawed and that I should have known better. Unanimity of underpowered studies provides compelling evidence for the existence of a severe file-drawer problem (and/or p-hacking). The argument is inescapable: Studies that are underpowered for the detection of plausible effects must occasionally return non-significant results even when the research hypothesis is true – the absence of these results is evidence that something is amiss in the published record..."

"And there is something else, which is very important, I think. Which is that almost all psychological hypotheses are true, that is, in the sense that, you know, directionally, if you have a hypothesis that A really causes B, that it's not true that A causes the opposite [of] B. Maybe A just has very little effect, but hypotheses are true mostly, except mostly they're very weak, they're much weaker than you think..."

"You should inform your gut and then trust it."

"The first advice is to slow down, and not follow your first impulses."

"A recurrent theme of this book is that luck plays a large role in every story of success; it is almost always easy to identify a small change in the story that would have turned a remarkable achievement into a mediocre outcome."

"Intelligence is not only the ability to reason; it is also the ability to find relevant material in memory and to deploy attention when needed."

"disbelief is not an option. The results are not made up, nor are they statistical flukes. You have no choice but to accept that the major conclusions of these studies are true."

"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth."

"It is the of the information that matters for a good story, not its completeness. Indeed, you will often find that knowing little makes it easier to fit everything you know into a coherent pattern."

"The lesson is clear: estimates of causes of death are warped by media coverage. [...] The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the messages to which we are exposed."

"There is a deep gap between our thinking about statistics and our thinking about individual cases."

"It took Francis Galton several years to figure out that and regression are not two concepts – they are different perspectives on the same concept. The general rule is straightforward but has surprising consequences: whenever the correlation between two scores is imperfect, there will be regression to the mean."

"Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance."

"Subjective confidence in a judgement is not a reasoned evaluation of the probability that this judgement is correct. Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true."

"He's taking an inside view. He should forget about his own case and look for what happened in other cases."

"There is no evidence that risk takers in the economic domain have an unusual appetite for gambles on high stakes; they are merely less aware of risks than more timid people are."

"He weights losses about twice as much as gains, which is normal."

"Many unfortunate human situations unfold [...] where people who face very bad options take desperate gambles, accepting a high probability of making things worse in exchange for a small hope of avoiding a large loss. Risk taking of this kind often turns manageable failures into disasters."

"A rare event will be overweighted if it specifically attracts attention. [...] And when there is no overweighting, there will be neglect."

"Unless there is an obvious reason to do otherwise, most of us passively accept decision problems as they are framed and therefore rarely have an opportunity to discover the extent to which our preferences are frame-bound rather than reality-bound."

"A plausible interpretation is that higher income is associated with a reduced ability to enjoy the small pleasures of life. [...] There is a clear contrast between the effects of income on experienced well-being and in life satisfaction. Higher income brings with it higher satisfaction, well beyond the point at which it ceases to have any positive effect on experience. [...] Life satisfaction is not a flawed measure of their experienced well-being, as I thought some years ago. It is something else entirely."

"Experienced well-being is on average unaffected by marriage, not because marriage makes no difference to happiness, but because it changes some aspects of life for the better and others for the worse."

"Nothing in life is as important as you think it is when you are thinking about it."

"Although humans are not irrational, they often need help to make more accurate judgements and better decisions. [...] [They] also need protection from others who deliberately exploit their weaknesses [...]."

"The confidence we experience as we make a judgment is not a reasoned evaluation of the probability that it is right. Confidence is a feeling, one determined mostly by the coherence of the story and by the ease with which it comes to mind, even when the evidence for the story is sparse and unreliable. The bias toward coherence favors overconfidence. An individual who expresses high confidence probably has a good story, which may or may not be true."

"We often interact with professionals who exercise their judgment with evident confidence, sometimes priding themselves on the power of their intuition. In a world rife with illusions of validity and skill, can we trust them? How do we distinguish the justified confidence of experts from the sincere overconfidence of professionals who do not know they are out of their depth? We can believe an expert who admits uncertainty but cannot take expressions of high confidence at face value. As I first learned on the obstacle field, people come up with coherent stories and confident predictions even when they know little or nothing. Overconfidence arises because people are often blind to their own blindness."

"Most of us view the world as more benign than it really is, our own attributes as more favorable than they truly are, and the goals we adopt as more achievable than they are likely to be. We also tend to exaggerate our ability to forecast the future, which fosters overconfidence. In terms of its consequences for decisions, the optimistic bias may well be the most significant cognitive bias. Because optimistic bias is both a blessing and a risk, you should be both happy and wary if you are temperamentally optimistic."

"Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person -- you already feel fortunate. Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders -- not average people. They got to where they are by seeking challenges and taking risks. They are talented and they have been lucky, almost certainly luckier than they acknowledge."

"The mystery is how a conception that is vulnerable to such obvious counterexamples survived for so long. I can explain it only by a weakness of the scholarly mind that I have often observed in myself. I call it theory-induced blindness: Once you have accepted a theory, it is extraordinarily difficult to notice its flaws. As the psychologist Daniel Gilbert has observed, disbelieving is hard work."

"Caring for people often takes the form of concern for the quality of their stories, not for their feelings. Indeed, we can be deeply moved even by events that change the stories of people already dead. We feel pity for a man who died believing in his wife’s love for him when we hear that she had a lover for many years and stayed with her husband only for his money. We pity the husband although he had lived a happy life. We feel the humiliation of a scientist who made a discovery that was proved false after she died, although she did not feel the humiliation. Most important, we all care intensely for the narrative of our own life and very much want it to be a good story, with a decent hero."

"An experiment about your next vacation will allow you to observe your attitude to your experiencing self: At the end of the vacation, all pictures and videos will be destroyed. Furthermore, you will swallow a potion that will wipe out all your memories of the vacation. How would this affect your vacation plans? How much would you be willing to pay for it, relative to a normally memorable vacation? My impression is that the elimination of memories greatly reduces the value of the experience.Imagine a painful operation during which you will scream in pain and beg the surgeon to stop. However, you are promised an amnesia-inducing drug that will wipe out any memory of the episode. Here again, my observation is that most people are remarkably indifferent to the pains of their experiencing self. Some say they don’t care at all. Others share my feeling, which is that I feel pity for my suffering self but not more than I would feel for a stranger in pain.I am my remembering self, and the experiencing self, who does my living, is like a stranger to me."

"A huge part of Danny's work is on how we think – and how profoundly irrational we can be. That, too, is transforming business, however slowly, and explains the million copies he has sold of his new book. But, in the great sweep of history, I suspect he will be most remembered as the man who made happiness respectable."

"I've called Daniel Kahneman the world's most influential living psychologist and I believe that is true. He pretty much created the field of behavioural economics and has revolutionised large parts of cognitive psychology and social psychology. His central message could not be more important, namely, that human reason left to its own devices is apt to engage in a number of fallacies and systematic errors, so if we want to make better decisions in our personal lives and as a society, we ought to be aware of these biases and seek workarounds. That's a powerful and important discovery."

"The world is not the way they tell you it is."

"It is amazing how stupid one can be in graduate school, because while I was puzzling through L1(Y) = Y/V = M1, the income velocity of money, I missed all the fun."

"In fact, a crowd of men acts like a single woman."

"All you need is a hell of an aperceptive mass, an IQ of 150, and a dollop of ESP, and you can ignore the headlines, because you anticipated them months ago."

"In Freud's crowd, the individuals fasten on an object, substitute it for their ego ideal, and all those with the same ego ideal identify themselves with each other in their ego. Remove the object and you get anxiety."

"But the investors who really follow the market, the ones who call up all the time, ninety percent of them really don't care whether they make money or not."

"It is a parable of pure capitalism, never jam today and a case of jam tomorrow; but as any of the Smiths will tell you, anyone who has ever sold IBM has regretted it."

"The strongest emotions in the marketplace are greed and fear."

"You can be in love with that piece of paper if you want to, but that piece of paper doesn't love you,..."

"You have to go for the quantum jumps."

"This is the way things are, and the Game has been so successful that, like everything, it will get more and more successful until it stops being successful."

"Nothing works all the time and in all kinds of markets."

"Wall Street, as you already know, is part of Marshall McLuhan's vision of the world in the Electric Age, that is, a global village dependent on oral-aural communication."

"Prices have no memory, and yesterday has nothing to do with tomorrow."

"The reason everybody signed up for a computer was that everybody else was signing up for a computer."

"Most accountants are honorable men, trying to do a job. But they are hired by corporations, not by investors."

"Somebody has to be on the other side."

"All the funds simply can't get through the exit door at the same time."

"When the Rothchilds got the word about the battle of Waterloo - in the movie it was by carrier pigeon - they didn't rush down and buy British consols, the government bonds. They rushed in and sold, and then, in the panic, they bought."

"what moves is what is already moving. Sort of Newtonian."

"When there is no game, don't play,..."

"The phrase " the Gnomes of Zurich" was coined by George Brown, the Deputy Prime Minister of Great Britain."

"Currencies do not vote."

"Godliness is in league with riches."

"One of the most distressing tasks of a university president is to pretend that the protest and outrage of each new generation of undergraduates is really fresh and meaningful. In fact, it is one of the most predictable controversies that we know. The participants go through a ritual of hackneyed complaints, almost as ancient as academe, while believing that what is said is radical and new."

"The university is being called upon to educate previously unimagined numbers of students; to respond to the expanding claims of national service; to merge its activities with industry as never before. Characteristic of this transformation is the growth of the knowledge industry, which is coming to permeate government and business, and to draw into it more and more people raised to higher and higher levels of skill. The production, distribution and consumption of knowledge is said to account for 29 percent of gross national product, and knowledge production is growing at about twice the rate of the rest of the economy. What the railroads did for the second half of the last century, and the automobile for the first half of this century, may be done for the second half of this century by the knowledge industry; and that is, to serve as the focal point for national growth."

"[Students] aren't what we ideally would like to see them. They are not independent and individualistic, but they do fit the needs of our emerging industrial society. ... the employers will love this generation, that they are not going to press very many grievances, there won't be much trouble, they are going to do their jobs, they are going to be easy to handle. There aren't going to be riots. There aren't going to be revolutions. There aren't going to be many strikes."

"The university and segments of industry are becoming more and more alike. As the university becomes tied into the world of work, the professor—at least in the natural and some of the social sciences—takes on the characteristics of an entrepreneur...The two worlds are merging, physically and psychologically...The campus and society are undergoing a somewhat reluctant and cautious merger, already well advanced. M.I.T. is at least as much related to industry and government as Iowa State ever was to agriculture."

"Kerr, however, also had wit. The perfect university, he observed, provided sex for students, sports for alumni, and parking for faculty."

"Kerr's wit extended even to the traumatic events that led to his firing. Following FBI investigations, black-listing, and machinations by Governor Reagan to stack the University of California Board of Regents against him, Kerr was removed from his office as Chancellor. A few months later, at a building-dedication ceremony at UC Santa Barbara, Kerr spoke (as previously scheduled), and in his remarks, he mentioned that he had left office just as he had entered it: "fired with enthusiasm.""

"It is true that I described antisocial, parsimonious, sanctimonious, and wasteful behavior by the owners over the years, but baseball's problem is structural, not individual. Put any individual into a position of power with an opportunity to make tens of millions of dollars in an industry that is on a cultural pedestal and protected from all forms of competition, and the odds are against the second coming of Lee Iacocca or Ralph Nader."

"Baseballs exemption from antitrust statutes, based on the notion that it was not involved in interstate commerce, erroneous back in 1922 and more so in the 1950s, became even more anomalous in 1957, when the Supreme Court declared football to be subject to the antitrust statutes and stated that baseball's exemption was "unreasonable, illogical and inconsistent.""

"With today's high salaries, long term contracts, and corporate penetration of the ownership ranks, it is commonplace to hear commentators rue baseball's growing commercialization, claiming it is undermining the aesthetics and competitive spirit of the game. In fact baseball's growing commercialism has been a constant since the 1860s."

"Perhaps if movie theaters also played the national anthem before their main attractions, the Internal Revenue Service would allow Hollywood studios to depreciate their actors."

"Baseball's owners must be the only U.S. citizens whose parents never told them the story of the boy who cried wolf. Their perennial cry of evaporating profits and imminent catastrophe in the presence of rapidly growing revenues and escalating franchise values is hard to take seriously."

"Between 1903 and 1991 the value of the Yankees appreciated at a compound annual rate of 11.4 percent."

"Nobody ever said that capitalism guarantees profit."

"It is well to recall that in 112 years of major league baseball, there has been only one bankruptcy filing."

"While Babe Ruth's $80,000 in 1930 was eighty times the average U.S. income, Don Mattingly's $3.4 million in 1991 was 160 times the average."

"How is it that the average CEO in Japan receives an annual income of $300,000 while the average CEO in the United States earns $2.8 million?"

"Consider for instance, the facts that Jose Canseco was picked in the fifteenth round of the amateur draft, Roger Clemens the twelfth, Ryne Sandberg the twentieth, and Nolan Ryan the tenth."

"Before becoming governor, Nelson Rockefeller offered to buy the Dodgers to keep them in New York."

"Baseball performance is an outcome of opposing forces."

"The first baseball game ever televised was a battle for fourth place in the Ivy League between Columbia and Princeton on May 17, 1939."

"Baseball's popularity and, more so, it's revenues continue to increase."

"Some owners are competent, effective business people who care about the game. Many others do not share these attributes."

"The activity of rooting for baseball and other sports teams is one of the strongest expressions of community remaining in our society."

"Peoples views on how the government should conduct its financial operations are heavily influenced by their political philosophies."

"In this country, the number of individuals on the government payroll certainly underestimates the importance of government."

"Only empirical work - analysis based on observation and experience as opposed to theory - can answer the question of how labor force behavior is affected by changes in the tax system. Even intense armchair speculation on this matter must be regarded with considerable skepticism."

"It may be worthwhile to spend a few million dollars to determine the efficacy of program that would involve spending billions of dollars."

"A social welfare function is simply a statement of how society's well-being relates to the well- being of its members."

"The First Welfare Theorem holds only if all consumers and firms are price takers. If some individuals or firms are price makers (they have the power to affect prices), then the allocation of resources will generally be inefficient."

"It must be emphasized that free ridership is not a fact; it is an implication of the hypothesis that people maximize a utility function that depends only on their own consumption of goods."

"Dioxin is the outcome of the operations of markets. Does this mean that having dioxin in the environment is efficient?"

"Government is essentially a big computer that elicits from citizens their preferences and uses this information to produce social decisions."

"Government grows because low-income individuals use the political system to redistribute income toward themselves."

"Public decision making is complicated and not well understood. Contrary to simple methods of democracy, there appear to be forces pulling government expenditures away from levels that would be preferred by the median voter."

"From a theoretical point of view, lifetime income would be ideal, but the practical problems in estimating it are enormous."

"Plato argued that in a good society the ratio of the richest to the poorest person's income should be at the most four to one."

""Welfare" in the United States is a patchwork of more than 80 programs that provide benefits primarily to low-income individuals. These programs are means tested - only individuals whose financial resources fall below a certain level can receive benefits."

"In an experiment in Illinois, members of a randomly selected group of unemployed individuals were offered a bonus of $500 if they found a job within 11 weeks and kept that job for four months. On average, people who were offered the bonus received UI for one week less than the control group, and the program saved more on UI benefits than it spent on bonuses."

"The mere ability to postpone taxes may not seem all that important, but its consequences are enormous."

"During the 1980's, the top statutory marginal income tax rate in the United States fell from 70 percent to 28 percent."

"A second justification for corporate taxation is that the corporation receives a number of special privileges from society, the most important of which is limited liability of the stockholders. The corporation tax can be viewed as a user fee for this benefit."

"If it makes sense to transfer income from rich to poor people within a generation, why shouldn't we transfer income from rich to poor generations?"

"Some argue that an income tax is unfair because it taxes capital income twice: once when the original income is earned, and again when the investment produces a return."

"Why should the central government be in the business of giving unconditional grants to states and localities? The usual response is that such grants can equalize the income distribution. It is not clear that this argument stands up under scrutiny. Even if a goal of public policy is to help poor people, it does not follow that the best way to do so is to help poor communities. After all, the chances that a community with a low average income will probably have some relatively rich members and vice versa. If the goal is to help the poor, why not give them the money directly?"

"Whenever social costs are shifted onto economically and politically weaker sections of society without compensation, a redistribution of the costs of production, hence real income is involved."

"Had there been a computer in 1872... it would probably have predicted that there would be so many horse-drawn vehicles that it would be impossible to clear up all the manure."

"Social costs... are all direct and indirect losses sustained by third persons or the general public as a result of unrestrained economic activities."

"To ignore social costs because they require an evaluation by society... and to leave social losses out of account because they are 'external' and 'non-economic' in character, would be equivalent to attributing no or ‘zero’ value to all social damages which is no less arbitrary and subjective a judgement than any positive or negative evaluation of social costs."

"They (social costs) are damages or diseconomies sustained by the economy in general, which under different institutional conditions could be avoided. [. . .] if these costs were inevitable under any kind of institutional arrangement they would not really present a special theoretical problem. [. . .] to reveal their origin, the study of social costs must always be an institutional analysis. Such an analysis raises inevitably the question of institutional reform and policy."

"Capitalism must be regarded as an economy of unpaid costs, ‘unpaid’ in so far as a substantial portion of the actual costs of production remains unaccounted for in entrepreneurial outlays; instead they are shifted to, and ultimately borne by, third persons or by the community as a whole."

"K. William Kapp's book "The Social Costs of Private Enterprise" was one of the first economic treatise that called attention to the ecological and social external costs of the market economy. His book is considered one of the origins of and a foundation for ecological economics."

"A rational man must be guided by the incentive system within which he operates. No matter what his own personal desires, he must be discouraged from certain activities if they carry penalties and attracted toward others if they carry large rewards. The carrot and the stick guide scientists and politicians as well as donkeys."

"Whether one is a conservative or a radical, a protectionist or a free trader, a cosmopolitan or a nationalist, a churchman or a heathen, it is useful to know the causes and consequences of economic phenomena."

"Economists are neither distinctively good nor bad, no more or less virtuous or brave or generous or faithful than the sum of mankind, and certainly no more modest."

"Footnotes are not an occasional token of respect for an obsolete and purposeless tradition. It will come as a shock to many, I am sure, even to realize that references can be checked."

"And anyway, although a fancy theory is not so good as a simple one (more things can go wrong with the fancy one), a fancy theory is better than none. Let the reader try to contrive an alternative explanation of the fact that prices of washing machines vary relatively more than prices of automobiles. He may come up with a rule such as the more expensive the commodity, the less its price varies, which seems to fit our facts-in fact, it makes the same prediction. But quite aside from the fact that it has no logical basis, this alternative explanation will often be wrong: the price of sugar varies much less than that of tea, although sugar costs less per pound. This is not a contradiction of our theory, which in a fuller version says that the aggregate amount spent on a commodity governs the amount of search."

"The user of a theory has a simpler task: his not to reason why, his but to sigh and try. If the right element in the diverse situations has been isolated, the theory will work: it will yield predictions better than those which can be reached with any alternative theory."

"Economic theories are infinitely diverse in their predictive power. Entirely too many have zero predictive power-they are statements of tautologies. Thus the statement that to maximize profits one should operate a firm where marginal revenue equals marginal cost is a mere mathematical statement of the condition for a maximum. The example we gave of search theory is not a tautology because we can identify the factors that influence costs and returns.· Some theories have negative power: they predict the opposite of what happens (and then become useful in the hands of a sophisticated user)."

"The essence of scientific progress is to edge up this ladder from ignorance to knowledge, and it is complicated by the fact that the ladder keeps getting longer!"

"A modern economic system is of extraordinary complexity. Imagine a three-dimensional jigsaw puzzle, consisting of roughly 100 million parts. Some parts touch against, let us say, 1,000 other parts. (That is, each family deals at one time or another with that many employers, banks, retail stores, domestic servants, and so on.) Other parts touch—let us be conservative—50,000 other parts (firms that sell to retailers and buy from other firms and hire laborers and so on). It would be enough of a task to fit these 100 million pieces together, but the real difficulties have yet to be mentioned. The pieces change shape quite often—a family has twins; a firm does the next best thing and invents a new product. The economist has the interesting task of predicting (in the aggregate) each of these movements. Meanwhile a busy set of people—congressmen, members of regulatory bodies, central bankers, and the like—are changing the rules on who or what the jigsaw pieces will be and how they are shaped. And of course there are other jigsaw puzzles (foreign economies) of comparable complexity, and these other puzzles are connected at literally a million points with our puzzle."

"Prices instruct us on what people desire, but prices do not tell us why those things are desired. Our desires are accepted as a datum by economists: desires are some amalgam of biological needs, the cultural values of the society in which we grow up, and our own experiments."

"So the price system gives innumerable messages on the state of supply and demand for each commodity or service at each place where it is bought or produced. If a city is in short supply for windows (following a hailstorm) or has an excess supply of workers, the movements of prices and wages communicate the facts to other communities. Some messages are swift and others slow."

"For consumers, the price message is clear: economize on goods that are in short supply relative to demand, and splurge on those in ample supply: eat raspberries in summer, and ski in winter. But the accommodating is not done just by consumers: resorts in the Caribbean are much cheaper in July than in January, precisely because people are not so eager to vacation in hot, humid places."

"Unexpected changes, on the contrary, lead to windfall gains or losses for those who are in the right or wrong places at a given time."

"One should hardly have to tell academicians that information is a valuable resource: knowledge is power. And yet this occupies a slum dwelling in the town of economics. Mostly it is ignored."

"Some important aspects of important aspects of economic organization take on a new meaning when they are considered from the viewpoint of the search of information."

"Price dispersion is a manifestation — and, indeed, it is the measure — of ignorance in the market. Dispersion is a biased measure of ignorance because there is never absolute homogeneity in the commodity if we include the terms of sale within the concept of the commodity. Thus, some automobile dealers might perform more service, or carry a larger range of varieties in stock, and a portion of the observed dispersion is presumably attributable to such differences. But it would be metaphysical, and fruitless, to assert that all dispersion is due to heterogeneity."

"The great disservice of the leaders of Negro opinion was to direct the discontent at the white population. It was proper to demand political rights that only a majority could confer. It was proper to ask the white population to assist in the rise of the Negro—a small enough restitution for the unreversible mistakes of the past. But it was a terrible disservice to identify the white man as the main obstacle to the rise of the Negro."

"Lacking education, lacking a tenacity of purpose, lacking a willingness to work hard, he will not be an object of employers' competition. What leader of Negro thought is fostering the ancient virtues of diligence and honesty and loyalty? It is so much easier to seek quotas for Negroes?"

"Consider the Negro as a neighbor. He is frequently repelled and avoided by the white man, but is it only color prejudice? On the contrary, it is because the Negro family is, on average, a loose, morally lax group, and brings with its presence a rapid rise in crime and vandalism. No statutes, no sermons, no demonstrations, will obtain for the Negro the liking and respect that sober virtues commend. And the leaders of Negro thought: they blame the crime and immorality upon the slums and the low income—as if individual responsibility could be bought with a thousand dollars a year."

"The state --the machinery and power of the state-- is a potential resource or threat to every industry in the society. With its power to prohibit or compel, to take or give money, the state can and does selectively help or hurt a vast number of industries. That political juggernaut, the petroleum industry, is an immense consumer of political benefits, and simultaneously the underwriters of marine insurance have their more modest repast. The central tasks of the theory of economic regulation are to explain who will receive the benefits or burdens of regulation, what form regulation will take, and the effects of regulation upon the allocation of resources."

"Regulation may be actively sought by an industry, or it may be thrust upon it. A central thesis of this paper is that, as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit. There are regulations whose net effects upon the regulated industry are undeniably onerous; a simple example is the differentially heavy taxation of the industry's product (whiskey, playing cards). These onerous regulations, however, are exceptional and can be explained by the same theory that explains beneficial (we may call it "acquired") regulation."

"Two main alternative views of the regulation of industry are widely held. The first is that regulation is instituted primarily for the protection and benefit of the public at large or some large subclass of the public. In this view, the regulations which injure the public -as when the oil import quotas increase the cost of petroleum products to America by $5 billion or more a year- are costs of some social goal (here, national defense) or, occasionally, perversions of the regulatory philosophy. the second view is essentially that the political process defies rational explanation: "politics" is an imponderable, a constantly and unpredictably shifting mixture of forces of the most diverse nature, comprehending acts of great moral virtue (the emancipation of slaves) and of the most vulgar venality (the congressman feathering his own nest)."

"Unlike the members of the physical and biological sciences, the economist is asked to explain his work in a manner that is interesting and convincing to a weary listener. Yet there is no reason to believe that the explanation of our economic and social world is inherently simpler than the explanation of our physical world."

"The delicate and intricate pattern of competition and cooperation in the economic behavior of the hundreds of thousands of citizens of Stockholm offers a challenge to the economist that is perhaps as complex as the challenges of the physicist and the chemist."

"Early in my professional life, I found that many areas of economics attracted me. I started working and publishing in price theory by 1938. In 1946, I published an early work on linear programming (The Cost of Subsistence) which solved the problem only approximately; George Dantzig soon presented the exact solution. In the 1940s, I began empirical work on price theory, starting with a test of the kinked oligopoly demand curve theory of rigid prices."

"In the 1950s, I proposed the survivor method of determining the efficient sizes of enterprises, and worked on delivered price systems, vertical integration, and similar topics."

"It was in the 1960s that I began the detailed study of public regulation. My interests were aroused, and my faith in the cliches of the subject destroyed, as so often with other subjects, by the discussions with my friend, Aaron Director. This wonderful man is that rarest of scholars: a clear-headed, imaginative, erudite man who enjoys the task of constructing luminous and original theories but does not even write them down!"

"I do not conceal my lack of admiration for a pain fully long list of redistributive measures undertaken by modern governments. Many serve no ethically accepted purpose such as compassion for the needy; indeed, they serve only as recognition of which groups possess or lack political influence."

"A useful role exists for the economist is making calculations of the prospective costs and/or benefits of alternative policies. This role is precisely the one Keynes had in mind, I assume, when he expressed the hope that we would become useful after the fashion of dentists."

"Dr. Smith and all of his sensible disciples have believed that people would not strive to do anything well unless there were a reasonable measure of agreement between the success of their efforts and the rewards they would receive."

"We are entitled to be disappointed, but not to be surprised, by the persistence of governmental intervention in economic life. A school of thought attributes great influence to public opinion in the movements toward or away from laissez-faire. Among the many members of this school one may mention Albert Venn Dicey, John Maynard Keynes, and Milton Friedman."

"In spite of assigning little influence of economists' preachings on actual public policy, I do not believe that economists' influence is negligible. The reconciliation of these views lies in the fact that economists are scientists as well as preachers. Our science seeks to understand how economic institutions and economic systems work, and no informed person can deny that we have made much progress in this work."

"George’s most distinctive contributions to the Chicago school involved studies of the actual effects of government regulations, such as in the electric utility and financial sectors."

"I recall an incident involving the late George Stigler at a conference in Spain in the 1980s. Hearing that I had written a book on reason and natural law, Stigler started to ridicule reason, going so far as to say that there is as much reason in a monkey's antics as in any human act. At that point I asked him whether he was trying to tell me something about how he wrote his books; he gave me a blank stare and stormed out of the room."

"We have among us a class of mammon worshippers, whose one test of conservatism, or radicalism, is the attitude one takes with respect to accumulated wealth. Whatever tends to preserve the wealth of the wealthy is called conservatism, and whatever favors anything else, no matter what, they call socialism."

"They have two distinguishing characteristics. The vast majority of them are laborers, and, as a rule, they expect the violent overthrow of existing institutions by revolution to precede the introduction of the socialistic state. I would not, by any means, say that they are all revolutionists, but the most of them undoubtedly are... The most general demands of the social democrats are the following: The state should exist exclusively for the laborers; land and capital must become collective property, and production be carried on unitedly. Private competition, in the ordinary sense of the term, is to cease."

"Even before Haymarket, ordinarily sober observers of the political scene, such as the economist Richard Ely, responded to the anarchists with alarm. In an article written just before the bombing but not published until shortly after it, Ely characterized the philosophy of the anarchists as one of "gunpowder, petroleum, and dynamite, and their cry is away with religion, away with the family, away with the state." Warning his readers that "doubtless two or three hundred thousand" men and women in the United States were either committed anarchists or sympathizers (an estimate surely inflated by fear), Ely concluded anxiously that "in times of excitement or restlessness, when men in a frenzy of anger are looking about for someone to lead them, those who have been trained in this party may do great damage." Ely and others greatly exaggerated the terrorist nature of anarchism."

"Lack of specificity around stakeholder identity remains a serious obstacle to the further development of stakeholder theory and its adoption in actual practice by business managers. Nowhere is this shortcoming more evident than in stakeholder theory's treatment of the constituency known as 'community."

"The stakeholder concept was originally defined as "those groups without whose support the organization would cease to exist." The list of stakeholders originally included shareowners, employees, customers, suppliers, lenders and society. Stemming from the work of Igor Ansoff and Robert Stewart (in the planning department at Lockheed) and, later Marion Doscher and Stewart at SRI, the original approach served an important information function in the SRI corporate planning."

"While there have been many criticisms of the research in corporate social responsibility, perhaps the most troubling issue is the very nature of 'corporate social responsibility' as if the concept were needed to augment the study of business policy. Corporate social responsibility was often looked at as an “add on” to “business as usual” and the phrase often heard from executives is “corporate social responsibility is fine, if you can afford it. We need to understand the complex interconnections between economic and social forces. Isolating "social issues" as separate from the economic impact which they have, and conversely isolating economic issues as if they had no social effect, misses the mark both managerially and intellectually. Actions aimed at one side will not address the concerns of the other. Processes, techniques and theories that do not consider all of these forces will fail to describe and predict the business world as it really is."

"A stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization's objectives."

""Stakeholder Management" as a concept, refers to the necessity for an organization to manage the relationships with its specific stakeholder groups in an action-oriented way."

"Historically, moves to new ways of moral decision making depend on and occur in pockets of people of good will, who can explore with each other novel ways of relating without threatening or being threatened."

"Somewhere in the past. organizations were quite simple, and 'doing business' consisted of buying raw material from suppliers, converting into products, and selling it to customers... For the most part owner-entrepreneurs founded such simple business and worked along with members of their families. The family-dominated business still accounts for a large portion of the business start today."

"A number of factors coalesced to make larger and larger firms more economical. The development of new production processes, such as assembly line, means that jobs could be specialized and more work could be accomplished. New technologies and sources of power became readily available. Demographic factors began to favor concentration of production in urban areas. These and other social and political forces require larger amounts of capital, well beyond the scope of most individual owner-manager-employee."

"We are in need of new concepts... which reorient our way of looking at the world to encompass present and future changes. I believe [in] the predominant framework for modern corporation... the corporation is viewed as a resource-conversion entity, taking raw material and converting tme into products, with dollars measuring the transaction. Returns are provided to owners in the form of dividends or capital appreciation in the marketplace."

"Freeman is the acknowledged father of the stakeholder approach. His Strategic Management: a Stakeholder Approach (1984) introduced the concept of stakeholders, all of those individuals or groups other than shareholders (or owners) who have a stake in the particular decision or action of companies. The book proved to be a landmark in the development of stakeholder theory, a theory of management and business ethics that emphasises morality and ethicality in managing organisations. This theory was a departure from the dominant Anglo-Saxon approach that grants priority to shareholders and independence of management. Nowadays, the stakeholder approach is mentioned in virtually every publication on corporate governance and corporate social responsibility. By interacting with their stakeholders and societal context, organisations are able to establish their (social) responsibility system, enforced in part through laws and regulations but also increasingly voluntarily through company codes and business principles. The stakeholder theory is applied within various scientific disciplines ranging from business to law, from politics to health."

"There is no need to enlarge upon the importance of a realistic theory explaining how individuals choose among alternate courses of action when the consequences of their actions are incompletely known to them. It is no exaggeration to say that every choice made by human beings would meet this description if attention were paid to the ultimate implications."

"Among economic phenomena which have in some way been tied up with the existence of uncertainty, three classes may be distinguished: (1) those which by their very definition are concerned with uncertainty; (2) those which are not related to uncertainty by definition but nevertheless have no other conceivable explanation; (3) those whose relation to uncertainty is more remote and disputable."

"The businessman may be compared with two other types of individuals who are essentially concerned with behavior under uncertainty ― the scientist and the statistician. The scientist must choose, on the basis of limited information, among the innumerable logically conceivable laws of nature, a limited number. He cannot know whether his decisions are right or wrong, and, indeed, it is none too clear what is meant by those terms. There is a long history of attempts to reduce scientific method to system, including many which introduce probability theory, but it cannot be said that any great formal success has attended these efforts. If we were to compare the businessman to the scientist, we would be forced to the melancholy conclusion that little of a systematic nature can be said about the former’s decision-making processes. The statistician typically finds himself in situations more similar to that of the businessman. The problem of statistics can be formulated roughly as follows. It is known that one out of a number of hypotheses about a given situation is true. The statistician has the choice of one of a number of different experiments (a series of experiments can be regarded as a single experiment, so that drawing a sample of any size can be included in this schema), the outcome of any one of which is a random variable with a probability distribution depending on which of the unknown hypotheses is correct. On the basis of that outcome, the statistician must take some action (accept or reject a hypothesis, estimate the mean of a distribution to be some particular value, accept or reject a lot of goods, recommend a change in production methods, and so on), the consequences of which depend on the action taken and on the hypothesis that is actually true."

"Traditional welfare economics shows that there are certain of these combinations that will be preferred by all the voters, which permits us to eliminate the others without too much discussion. However, there will always remain an irreducible kernel of possibilities among which the choice rests on a combination or aggregation of individual ethical attitudes about distribution."

"Ever since I encountered Hicks’s Value and Capital while I was still a graduate student, I had the aim of completing and extending his vision of the economic system in its purest form. This was not because I believed that the economic world was perfectly competitive or that it was clearly self-equilibrating; after all, Chamberlin, Robinson, and Keynes were dominant intellectual influences, and I had the even more powerful influence of the facts of massive unemployment and large corporations. But the idea that the economic world was a general system, with all parts interdependent, seemed (and seems) to me to be an essential of good analysis. I regret what appears to be a revival of single-market thinking both among monetarists and among some of the younger empirical analysts. Then as now, the only game in town that offered a general system of economic interdependence was general competitive equilibrium, an idea to which the name of Leon Walras is imperishably linked. At least, such a system would provide a starting point for analysis of the market’s imperfections."

"L. Walras first formulated the state of the economic system at any point of time as the solution of a system of simultaneous equations representing the demand for goods by consumers, the supply of goods by producers and the equilibrium condition that supply equal demand on every market."

"Perhaps as important is the relation between the existence of solutions to a competitive equilibrium and the problems of normative or ."