Wednesday, February 02, 2005

Thinking about what matter most

If the last ice age subsided 15,000 years ago and if the material condition of humanity began its stunning ascent 300 years ago, then the last 2% are the stand-out years that raise all of the interesting analytical questions.

The intuition is that, very roughly, a virtuous cycle is at work: economic freedom begets prosperity and prosperous people demand economic freedoms. The evidence for this view has been accumulating. My favorite contribution is the recent Cato Journal piece by Gwartney, Holcombe and Lawson. The policy implications cannot be overstated.

We are also lucky to be alive at a time when such analyses are possible and are being well done. In the same issue of the Cato Journal as the GHW piece, there is one byMeir Kohn ("Value and Exchange") that tracks the most recent evolution of economic thinking.