Judged by the huge strides that people all over the world have made in overcoming poverty and want, it is only a slight exaggeration to say that little of economic consequence happened before the last three centuries. Before that, most of the world not only took poverty for granted, but also assumed that little could […]| Econlib
The marginal tax rate is the rate on the last dollar of income earned. This is very different from the average tax rate, which is the total tax paid as a percentage of total income earned. In 2003, for example, the United States imposed a 35 percent tax on every dollar of taxable income above […]| Econlib
Intellectual property is normally defined as the set of products protected under laws associated with copyright, patent, trademark, industrial design, and trade secrets. The U.S. Constitution expressly allows for intellectual property protection, albeit for a limited time, in the form of protection of “writings and discoveries” in order to promote “science and useful arts.” This […]| Econlib
K-12 In the 1980s, economists puzzled by a decline in the growth of U.S. productivity realized that American schools had taken a dramatic turn for the worse. After rising every year for fifty years, student scores on a variety of achievement tests dropped sharply in 1967. They continued to decline through 1980. The decline was […]| Econlib
The European Union (EU) includes twenty-seven countries and 490 million people. In 2005, the EU had a $13 trillion (€11 trillion) economy, a single market, and for some member countries, a single currency. A growing number of political and economic decisions are made on a pan-European level in Brussels. The origins of the EU are […]| Econlib
Most of the energy consumed in America today is produced from the combustion of fossil fuels, primarily oil, coal, and natural gas. Energy can be generated, however, in any number of ways. Figure 1 indicates the sources of energy employed by the American economy as of February 2004. Figure 1 U.S. Energy Sources, 2004 The economy […]| Econlib
One of the most fundamental requirements of a capitalist economic system—and one of the most misunderstood concepts—is a strong system of property rights. For decades social critics in the United States and throughout the Western world have complained that “property” rights too often take precedence over “human” rights, with the result that people are treated […]| Econlib
The earth’s natural resources are finite, which means that if we use them continuously, we will eventually exhaust them. This basic observation is undeniable. But another way of looking at the issue is far more relevant to assessing people’s well-being. Our exhaustible and unreproducible natural resources, if measured in terms of their prospective contribution to […]| Econlib
“ Innovation”: creativity; novelty; the process of devising a new idea or thing, or improving an existing idea or thing. Although the word carries a positive connotation in American culture, innovation, like all human activities, has costs as well as benefits. These costs and benefits have preoccupied economists, political philosophers, and artists for centuries. Nature […]| Econlib
Businesses complain about regulation incessantly, but many citizens, consumer advocates, and nongovernmental organizations (NGOs) think it absolutely necessary to protect the public interest. What is regulation? Why do we have it? How has it changed? This article briefly provides some answers, concentrating on experience with regulation in the United States. Regulation consists of requirements the […]| Econlib
Investment is one of the most important variables in economics. On its back, humans have ridden from caves to skyscrapers. Its surges and collapses are still a primary cause of recessions. Indeed, as can be seen in Figure 1, investment has dropped sharply during almost every postwar U.S. recession. As the graph suggests, one cannot […]| Econlib
The most basic laws in economics are the law of supply and the law of demand. Indeed, almost every economic event or phenomenon is the product of the interaction of these two laws. The law of supply states that the quantity of a good supplied (i.e., the amount owners or producers offer for sale) rises […]| Econlib
