Marginal Revolution

"As a child, Peter Leeson was pirate-obsessed."

That's the first sentence of the article, read more, from The Boston Globe.

Why aren't more people going to college?

Brad DeLong writes:

Altonji, Bharadwaj, and Lange do not know.

The whole post is interesting, but from this I can only conclude that Altonji, Bharadwaj, and Lange have never taught Introduction to Composition to a large group of freshman in a public university in the United States.  Anyone who has taught such a class -- or for that matter talked to anyone who has -- will have some inkling why more people are not going to college.  Herein lie the roots of growing inequality -- on the bottom side at least -- and don't let anyone induce you to take your eye off the ball by playing switcheroo and bringing up the (separate) topic of the growing wealth of the top one percent.

Economists who have endorsed John McCain's economic plan

Gary Becker, James Buchanan, Robert Lucas, Robert Mundell, Vernon Smith, Michael Boskin, John Cogan, Steven Davis, Francis X. Diebold, Martin Eichenbaum, Martin Feldstein, Kevin Hassett, Douglas Holtz-Eakin, Glenn Hubbard, Anne Krueger, Deepak Lal, Burton Malkiel, Paul W. McCracken, Allan Meltzer, Tim Muris, June O'Neill, Michael E. Porter, Kenneth Rogoff, Richard Roll, Harvey Rosen, George Shultz, Beryl Sprinkel, John Taylor, and Arnold Zellner.

I was sent that list in an email.  The opening of the statement reads:

We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.

His plan would control government spending by vetoing every bill with earmarks, implementing a constitutionally valid line-item veto, pausing non-military discretionary government spending programs for one year to stop their explosive growth and place accountability on federal government agencies.

No, I don't do endorsements but if I were tempted to (and I'm not) I would this year be even more suspicious than usual.  I feel that the candidates are trying to trick me and the one who isn't -- Hillary Clinton, whose negatives are too transparent to my eyes -- has been trying to trick everyone else. 

I'll put the rest of the letter in the first comment, but in the meantime my advice -- at least for this year -- is to vote on the basis of foreign policy.

True beyond the shores of Harvard

Blog post of the day, from Brad DeLong, excerpt:

Somebody last week--was it Jan de Vries? John Ellwood? Somebody else? I forget who, but it is not original to me--said that the right model for Harvard over the past century is Yugoslavia. Remember the story of the Yugoslavian socialist worker-managed firm? If you add another worker to the firm, that worker gets a pro-rata share of the firm's value added. The firm's value added has a component attributable to the firm's capital stock, a component attributable to the ideas embedded in the firm, a component attributable to the firm's market position, and a component attributable to the workers. Hire another worker, and only the last of these goes up: the first three do not, and so average compensation falls.

This means that a worker-managed firm is likely to shrink whenever it gets good news that makes it more productive--the larger is the value added due to ideas, capital, or market position, the more expensive does it become for the existing workers to replace workers who leave, let alone hire enough workers to expand. While a competitive market capitalist firm responds to good news about its productivity and value to society by increasing employment, a Yugoslavian-model market socialist firm responds to good news about its productivity and value to society by shrinking. On this analysis, the very success of Harvard over the past two generations together with its degree of worker management has created enormous internal pressures not to expand, the better to share out the surplus among the existing stakeholders.