A worldwide depression struck countries with market economies at the end of the 1920s. Although the Great Depression was relatively mild in some countries, it was severe in others, particularly in the United States, where, at its nadir in 1933, 25 percent of all workers and 37 percent of all nonfarm workers were completely out […]| Econlib
Origins Before 1890, the only “antitrust” law was the common law. Contracts that allegedly restrained trade (e.g., price-fixing agreements) often were not legally enforceable, but they did not subject the parties to any legal sanctions, either. Nor were monopolies illegal. Economists generally believe that monopolies and other restraints of trade are bad because they usually […]| Econlib
In a capitalistic society, profits—and losses—hold center stage. Those who own firms (the capitalists) choose managers who organize production efforts so as to maximize their income (profits). Their search for profits is guided by the famous “invisible hand” of capitalism. When profits are above the normal level, they attract additional investment, either by new firms […]| Econlib
With The Wealth of Nations Adam Smith installed himself as the leading expositor of economic thought. Currents of Adam Smith run through the works published by David Ricardo and Karl Marx in the nineteenth century, and by John Maynard Keynes and Milton Friedman in the twentieth. Adam Smith was born in a small village […]| Econlib
Economic competition takes place in markets—meeting grounds of intending suppliers and buyers.1 Typically, a few sellers compete to attract favorable offers from prospective buyers. Similarly, intending buyers compete to obtain good offers from suppliers. When a contract is concluded, the buyer and seller exchange property rights in a good, service, or asset. Everyone interacts voluntarily, […]| Econlib
George Stigler was the quintessential empirical economist. Paging through his classic microeconomics text The Theory of Price, one is struck by how many principles of economics are illustrated with real data rather than hypothetical examples. Stigler deserves a great deal of the credit for getting economists to look at data and evidence. Stigler’s two longest-held […]| Econlib
