Author Archive

Summers on Arrow

February 26, 2017

Larry Summers reflects on Ken Arrow with a memory that captures well the academic life:

“My mother’s brother, the Nobel economist Kenneth Arrow, died this week at the age of 95. He was a dear man and a hero to me and many others. No one else I have ever known so embodied the scholarly life well lived.

I remember like yesterday the moment when Kenneth won the Nobel Prize in 1972. Paul Samuelson—another Nobel economist and, as it happens, also my uncle—hosted a party in his honor, to which I, then a sophomore at MIT, was invited. It was a festive if slightly nerdy occasion.

As the night wore on, Paul and Kenneth were standing in a corner discussing various theorems in mathematical economics. People started leaving. Paul’s wife was looking impatient. Kenneth’s wife, my aunt Selma, put her coat on, buttoned it and started pacing at the door. Kenneth raised something known as the maximum principle and the writings of the Russian mathematician Pontryagin. Paul began a story about the great British mathematical economist and philosopher Frank Ramsey. My ride depended on this conversation ending, so I watched alertly without understanding a word.

But I did understand this: There were two people in the room who had won Nobel Prizes. They were the two people who, after everyone else was exhausted and heading home, talked on and on into the evening about the subject they loved. I learned that night about my uncles—about their passion for ideas and about the importance and excitement of what scholars do.”


Anarchist Nobel Economics Laureate, Vernon Smith on Science and Religion

December 9, 2016

You can observe the evidence of things you cannot see? Is that right?

Exactly, yes; observations are indirect. It hit me years ago that in Hebrews 11:1, one finds wisdom for both science and religion: “Now faith is the substance of things hoped for, the evidence of things not seen.” In science, one must have faith in the believability, the truth value, of one’s theory. Where is that coming from? You don’t know it’s true, but its coherence can give you a glimpse of what you can’t actually lay eyes on. Then you find some controlled event that you can predict from that theory, and you can design an experiment, and the experiments all have to do with electrostatic fields and photographic plates and wires and transformers and batteries. Of course, none of that stuff had anything to do with an electron, but that’s what Millikan had to set up so he could look at what happens to an oil drop and infer the implications for the charge on the electron.

You get the evidence of things not seen directly. How is that so different from what happens in religion? Science is a process for learning more and more about how things work. It tells you nothing about meaning, about purpose.

I had a thought during your talk last night, and I’m reminded of it again. One of the great evangelists of the 20th century, the Reverend Dr. Billy Graham, once said, “I’ve never seen the wind …. I’ve seen the effects of the wind, but I’ve never seen the wind. There’s a mystery to it.” Was Dr. Graham onto something?

I think that’s a very good metaphor for what we’re talking about. Modern science is able to devise instruments so that it is able to show that molecules of air are moving, and that’s what we call “wind.” Billy Graham was a great American, with a powerful message for living.

I look at all this now and I see much more convergence between religion and science. I believe that reality and its recognition is going to win our allegiance if we keep our minds and hearts open. How long can Richard Dawkins keep saying, “It’s in my material brain?” He’s got to tell me what this material brain is that he thinks gives him so much understanding. He’s claiming to know things that he cannot demonstrate. But I would say, “Wait a minute. No, don’t be deceived by the language. What explains that explanation? Where is the deeper meaning?” Such superficial arguments should not deflect Christians from their belief that “Ye shall know the truth and the truth shall make you free.” That includes both religious and scientific truth.

You’ve got to ask “why,” like the child. I remember it most recently with my youngest son catching me up in that. He asked, “Daddy, why…?” I don’t remember the question. “Why so and so?” And I said, “Well, here…” and I’m describing how things work. Then the child says, “But why? Why is that?” And so then you look for something a little more fundamental. Very few questions and he’s got you to the outer limit of knowledge. He’s got you up against the wall, and you have no place to go because our knowledge is so limited and incomplete.

The Critique of Socialist Economic Planning

December 9, 2016

The Answer to Every Debate Question

February 12, 2016

Answers to the last nights debate questions and the GOP one:

1. There is no such thing as too big to fail especially big banks like Goldman Sachs and you cannot be against crony capitalism if you vote for the Ex-Im bank. American corporations doing business overseas must now bear their own costs.

2. We need to understand isolationism vs. non- interventionism, bring the troops home, and end the welfare granted to all foreign nations. Foreign aid is outlawed as unconstitutional, unjust, and un-economic. Foreign politicians have to steal their own money. The World Bank, IMF, and United Nations close their super-luxurious doors. The Defense Department is reoriented towards defense. American troops come home from all around the world. We adopt a policy of armed neutrality, remembering the Founding Fathers’ teaching that we could not have an empire abroad and a constitutional republic at home.

3. The income tax is abolished. A flat tax all the way to zero as we end the warfare-welfare industrial complex. The 40% reduction in federal revenues is matched by a 40% cut in spending. There is no need for the USG to have a military budget greater than the rest of the world combined, and the USG revenue is still quite high.

4. An end to the drug war and a focus on treatment locally without incarceration.

5. The option of competitive currencies instead of a Federal Reserve and abolishing the taxes on silver and gold to enable exchange.

6. The elimination of most if not all cabinet departments. Dept. of Energy ends as oil and gas prices plummet. The Dept. of Commerce ends as big business has to make its own way in the world, without subsidies and privileges at the expense of its competitors and customers. HUD is dead. There’s a building boom in cheap, private, apartments. The Dept. of Education revealing its total waste.

7. The federal government sells all its land, freeing up tens of millions of acres for development, mining, farming, forestry, oil drilling, private parks, etc. The government uses the revenue to pay off the national debt and other liabilities.

8. All other federal taxes are abolished, including the corporate income tax, the capital gains tax, the gasoline tax, “sin” taxes, excise taxes, etc. Businesses boom

9. Equal rights are granted to all Americans, even members of non-victim groups. There is no affirmative action, no quotas, no set-asides, no public accommodations laws. Private property and freedom of association are fully restored.

10. All tariffs, quotas, and trade agreements are put through the shredder. Americans can trade with anyone in the world, without barriers or subsidies.

Justin Ptak is an entrepreneur and a Margaret T. Rowley fellow at the Ludwig von Mises Institute.