An Economic Philosophy

Better not to have at all than to conserve. There is in waste an infinite utility. And in scarcity an infinite disutility. There is in declining block rate electric utility pricing, in the all-you-can-eat buffet, in the inclusion of lump-sum gas and electric charges in apartment rental payments, in airlines with a chronic 50% load […]

It’s about Price, not Competition

One thing we are going to encounter a lot as the anti-big-tech crusade gets under way is the confusion of pricing problems with competition problems. Consider the attack on Apple’s promotion of its own apps on its App Store. This looks like a competition problem: Apple is using its proprietary App Store infrastructure unfairly to […]

Why Progressives Once Fought Tariffs as They Fought Monopolies

The Nineteenth Century understood very well that tariffs have the same effect on consumers as do monopolies. Tariffs prevent foreign competitors from undercutting the prices of domestic companies, because the foreign competitors must now pay the tariffs, and that in turn allows domestic companies to raise prices. It is for this reason that in the […]

The Streets Should Be Free. Let’s Decongest While Keeping Them That Way.

In her column on congestion pricing, Emily Badger exhibits the unquestioning acceptance of the legitimacy of the price system that lamentably characterizes so much work by progressives today. She argues that because driving has a cost, drivers should be asked to pay that cost through congestion pricing, and she suggests that our current system, in […]

Congestion Pricing Is Just the Latest in Progressives’ Betrayal of the Regulatory State

Once upon a time, most ways into New York City were tolled. Then the original progressive movement hit. Progressive economists like Harold Hotelling argued persuasively that because the marginal cost of running another motorist over a bridge was near zero, there was no economic reason for which everyone who wanted to drive over the bridge […]

The Big and the Bad

That firm size tells us little about propensity to innovate is nicely illustrated by contrasting AT&T and Verizon with Amazon. AT&T and Verizon have rightly been criticized for what looks like intentional underinvestment in broadband, made possible by their oligopoly power. Comes now Amazon, planning to invest billions to provide global broadband access via satellite, […]

Boeing Shows Us Why Prices Are Too Important for Private Enterprise to Decide Alone

The sad tale of Boeing’s pricing of essential safety features for the 737 MAX 8 as product options is an object lesson in why pricing should always be a public-private project. Many firms engage in price discrimination: charging different prices for the same product. The ideal way to do that is to generate reliable information […]

Amazon, MFNs, and Second-Best Antitrust

Antitrust advocates are hailing Amazon’s decision to stop requiring third-party sellers to offer products on Amazon at the lowest prices they charge for their products anywhere. But the decision is decidedly second-best: consumers would be much better off were government to regulate Amazon’s fees, and allow the platform to keep those “most-favored-nation” (MFN) rules. The […]