Visualize Liberty

Arnold Kling a GMU economist has a theory of the business cycle he calls Recalculation.  It says structural changes in the economy change the numbers of workers needed in different roles and that excess unemployment occurs while the transition gets sorted out.  Whatever one thinks of this as a business cycle theory, Bryan Caplan, another libertarian economist at GMU, asks an interesting question.  Say the libertarian dream was realized, tomorrow.  How would the labor market change in the short run and in the post-Recalculation equilibrium?

Here is the link for Caplan’s thoughts: visualize_laiss.html

Harry “attempts to explain the mechanism merely enrage him” White

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One response to “Visualize Liberty

  1. H-atetmmeh-W:

    I don’t know if it’s new or not, but I tend to agree with the general “recalculation” modeling approach, multipliers included. As far as “libertopia” is concerned, I’m sure there would be a great number of unintended consequences. As I’ve stated, I’m only willing to travel a limited distance down the libertarian road, which I’ll eventually get to in an independent post. The reader comments posted for the article provide a reasonably funny range of potential outcomes, had me laughing pretty good.

    I will add this comment though, which I’ve been muddling over for a bit. I’d recently heard it argued that there is no such thing as “unemployment” per se, only an unwillingness to work at a wage at which jobs would begin to become available. I have to admit that the idea is pretty compelling. How many of my post holes might get dug if a post-hole digging fella showed up at my doorstep asking $4 per hour. Of course, my daddy always said, you hire the fence builder by the post, not the hour.

    HT

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