Steven K. Vogel — Rethinking Stigler’s Theory of Regulation: Regulatory Capture or Deregulatory Capture?

Much government regulation does not fit the logic of Stigler’s theory of anti-competitive regulatory capture. In a new book, Steven Vogel of Berkeley argues that the theory of regulation needs to account for the phenomenon of captured regulators bent on deregulating—and that the critical consideration facing regulators is no longer how to enhance competition, but how different governance models favor different actors.

Rent capture.

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Rethinking Stigler’s Theory of Regulation: Regulatory Capture or Deregulatory Capture?
Steven K. Vogel | Il Han New Professor of Asian Studies and a Professor of Political Science at the University of California, Berkeley

Douglas A. Irwin — Stigler on Monopolies: “Competition is a Tough Weed, Not a Delicate Flower”

Many of Stigler’s views on monopoly and antitrust were consistent through the decades. Even after his concerns of monopoly began to recede, he continued to believe that monopolies and oligopolies were still prevalent in the American economy and that they “should be a source of serious concern for public policy.”...

ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
Stigler on Monopolies: “Competition is a Tough Weed, Not a Delicate Flower”
Douglas A. Irwin | John French Professor of Economics in the Social Sciences in the Department of Economics at Dartmouth College and Visiting Professor at The University of Chicago Booth School of Business

Lars P. Syll — What it takes to make economics a real science

Robert Gordon quote that sums it up by attacking George Stigler's claim that rigor supersedes relevance in economics. This would make economics a branch of mathematics and logic rather than a science that describes the world of facts and events that has a history. 

Under Stigler's view, which is the dominant view in conventional economics, economics is not a "real" science like other sciences but that rather a bogus one that only looks like a science. 

Conventional economics is better categorized as applied mathematics instead of science, and conventional economists approach it as such. They should just call it by it right name and let others do economic science without criticizing them for prioritizing relevance over rigor.

Lars P. Syll’s Blog

What it takes to make economics a real science

Lars P. Syll | Professor, Malmo University

Lars P. Syll — What mainstream economists are embarrassed to admit

Economics as politics.

Lars P. Syll’s Blog
What mainstream economists are embarrassed to admit
Lars P. Syll | Professor, Malmo University

Two on economics and politics from Brad DeLong

Should-reads if you are into economics and US politics. The significant issues are now being put on the table.

On second thought, make the first one a must-read.

WCEG — The Equitablog
Thursday Musings on Macroeconomic Policy and “The Right”
Brad DeLong

Ken Rogoff Fakes Right, Goes Left, and Heads Down the Sideline Toward Global Social Democracy and a Truly Human World…

Brad DeLong

Brad DeLong — Noah Smith, Paul Romer, "Mathiness", and Baking the Politics into the Microfoundations...

Brad DeLong explains what Paul Romer's recent paper is about. It's a smackdown of ideological economics directed at the Chicago School (George Stigler, Robert Lucas, etc.) Are key neoclassical assumptions "innocent" sophistry based on a Noble Lie? Or is it the Big Lie?

Grasping Reality
Noah Smith, Paul Romer, "Mathiness", and Baking the Politics into the Microfoundations...

Brad DeLong | Professor of Economics, UCAL Berkeley

Bill Black — Gary Becker’s Nobel Prize for Getting It all Wrong: The Family

George Stigler celebrated Gary Becker as theoclassical economics’ schwerpunkt that led their blitzkrieg assault on other social sciences. Stigler proudly called economics the “Imperial” discipline. The idea that imperialism was a desirable trait is a typical example of Stigler’s blindness to history and human suffering. Stigler famously proclaimed that economics alone was actually a social “science” because only it had a theory of human motivation (maximizing self-interest)....

In this five part series I discuss these four areas and Becker’s role with regard to financial crises. Stigler was incorrect about other social sciences lacking a theory of human motivation or ignoring rationality and incentives. The series will become part of the book that I am co-authoring with Wesley Marshall on economists and economics that studies the manifold failures of recipients of the Sveriges Riksbank Prize. Theoclassical economics’ reductionist dogma of human motivation is one of its great weaknesses of these Prize winners. One of the ironies that I will develop in this series of articles about Becker’s embarrassing forays into other disciplines is that he abandons the dogma that all behavior is self-interested in his work on the family, uses the dogma in the fields of crime and addiction where it makes particularly poor sense and produces a series of errors, and inadvertently demonstrates the circularity of the dogma in his work on discrimination and on “rational addiction.”

New Economic Perspectives
Gary Becker’s Nobel Prize for Getting It all Wrong: The Family
William K. Black | Associate Professor of Economics and Law, UMKC

Theoclassical economics can simultaneously shrink the “pie” and in the infamous words of Citicorp’s ode to “plutonomy”:

“In a plutonomy there … are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the ‘non-rich’, the multitudinous many, but only accounting for surprisingly small bites of the national pie.”

Becker never evinced the slightest understanding of how discrimination systematically denies its victims the ability to make “the most of life.”

Bill does an excellent job of showing how Becker was both an intellectual fool and an ideological tool, not to mention being emotionally impoverished and morally deviant*. So much for his "rationality." And as Bill adds, "I need to emphasize that I am not making any of this up." Summary, "All of this is incoherent and bizarre."

On the Nobel Sveriges Riksbank Prize: "Economics is the only discipline in which one can achieve top honors for being proven disastrously wrong and having relied on obvious logical and theoretical flaws and abundant evidence."

*Confounding morality with efficiency is deviant. It is tantamount to claiming that morality is amorality. But such is the logic of maximizing self-interest "rationally."
 

Chris Lehmann — Neoliberalism, the Revolution in Reverse

Weekend reading: Articulate smack-down of neoliberalism based on its history.

The Baffler
Neoliberalism, the Revolution in Reverse
Chris Lehmann

William K. Black — Nobel Schizophrenia over the Georges: Stigler and Akerlof

This is a strong contender for Bill's most powerful post to date. ID's two of the main culprits of the neoliberal fiasco — George Stigler and Gary Becker — and shows how their (ersatz) Nobel prizes are a travesty.

It's an indictment of the entire orthodox economics profession. Let's see who responds, or if Bill is just ignored.

New Economic Perspectives
Nobel Schizophrenia over the Georges: Stigler and Akerlof
William K. Black | Associate Professor of Economics and Law, UMKC

See also Three Passages From Akerlof & Romer’s 1993 Article That Should Have Prevented The Crisis.

George Stigler and the labor theory of value

Stigler got it all backwards.

George Stigler is a neoliberal ideologue and gets paid well for it.

Naked Keynesianism

George Stigler and the labor theory of valueMatias Vernengo | Associate Professor of Economics, University of Utah

Rumplestatskin — Thinking Like Coase, Not an Economist

I have often railed against the economic approach to social organisation problems which can be described as ‘assume first ask questions later’. There are too few good economists following more scientific methods of sound reasoning and the reliance on evidence in light of real world institutional structures.The first approach is often called ‘thinking like an economist’....

You will notice the strong links Coase makes to his descriptive model and ‘business practices’, a phrase you may never read in a whole economics degree.

Coase’s scepticism is so important today, when the dominant ‘economic way of thinking’ is to apply marginalist equilibrium models to ever more obscure situations (a la Gary Becker). Unless one can be certain that the model is capturing the important characteristics of this particular market or social institution, the results of some manipulation to the model will have no relevance to the realities one is trying to understand....

The Coase Theorem is actually the George Stigler Theorem and Coase rejected it.

Unfortunately, like his work on The Problem of Social Cost, Coase has been repeatedly misinterpreted by other economists. When you read about the Coase Theorem, you are probably reading about George Stigler’s interpretation of Coase’s discussions around social costs (externalities).... 

On his work about the Nature of the Firm, he recently noted that firm organisation is really a sociological problem, not an economic problem. Which seems so obvious since internal firm decisions are rarely priced, nor do they take place within an environment of market-style contracts. 

Rarely now do we see the type of common sense thinking that the ‘accidental economist’ Ronald Coase showed throughout his long career. In fact, I would be surprised if a Coase was beginning his career today that he would be able to break into the profession at all, given it’s obsession with formalisation of mathematical models, and disdain for verbal reason informed by real world conditions.

Naked Capitalism
Thinking Like Coase, Not an Economist

Rumplestatskin | Economist