Economists From The United States

"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."

"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."

"Do-gooders fail to realize that most good is not done in the name of good but done in the name of self-interest."

"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."

"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."

"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."

"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."

"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."

"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."

"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."

"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."

"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."

"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.""

"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."

"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?"

"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."

"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."

"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."

"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."

"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."

"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."

"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."

"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."

"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."

"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?"

"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."

""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."

"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."

"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."

"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."

"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."

"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."

""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."

"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."

"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."

"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."

"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 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."

"In the long run, the most important changes required to make globalization work are reforms to reduce the democratic deficit."

"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."

"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'."

"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."

"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."

"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."

"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."

"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."

"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 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."

"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."