There’s a certain type of argument that surfaces whenever someone does well for themselves. You know the one. The successful business owner, the surgeon, the software engineer who took a risk on a startup that paid off. They’re making good money, maybe even great money, and someone inevitably steps forward to say: “Sure, but do they really need all that? Isn’t it a little greedy to keep so much when others have so little?” The framing is tidy. Almost intuitive. After all, if someone has more than they need and refuses to share, that sounds an awful lot like the …

Greed. The word carries a wealth (pun very much intended) of meaning with it. It’s considered to be one of the seven Deadly Sins. It’s the hungry, avaricious desire for more, particularly when you already have plenty. And it’s almost always used in a way that directs that impulse at material wealth. Money, most commonly. More than that, the word greed connotes a callous sort of selfishness that, at a minimum, disregards the wants and well-being of others or, more commonly, is outright hostile to them. It’s also a word we hear a lot these days. Aside from the Hollywood …

What would you do if you had a bigger budget? Maybe you really would have taken that vacation, upgraded your running shoes, or bought steak instead of ground beef if you’d had room in your budget to do it. But if you don’t, well, those options are removed. Individuals are constrained by the limits of their resources, full stop. Taxation tightens those constraints even further. As we mentioned in our last post, every tax changes behavior. When you tax something, you get less of it. Tax income, and people work less or find ways to shield their earnings. Tax investments, …

You know the rules. Death and taxes—the two certainties of life, as the saying goes. Benjamin Franklin supposedly said it first, though the idea is older than that. And there’s a certain amount of truth in it. Taxes are everywhere. Here in the United States, we have taxes on income, taxes on spending, taxes on businesses, taxes on property. If we invest our money and it makes a return, that gets taxed, too. Certain items get taxed at higher rates than others. There are taxes on imports. And if we’ve managed to accrue a bit of property and savings to …

Think about the last person you hired to do something you could have figured out on your own. Maybe a plumber. An accountant. Someone to handle your social media. At some point, you sat down, weighed how long it would take you to learn the thing, how long it would take you to do the thing, and how much it would cost you to just have someone who already knows what they’re doing handle it. And you hired them. Or maybe it wasn’t even that formalized. You simply understood that a certain task wasn’t worth your time to do yourself, …

For most of human history, if you wanted something from far away, you had two options: Go find it yourself or take it from someone else who already did. Conquest was the preferred method. Armies marched, ships sailed, empires expanded, and people died—all because someone somewhere wanted resources they didn’t have at home. But over time, we figured out that you don’t actually need to conquer your neighbors to get what they have. You can just trade with them instead. It’s simpler, it’s easier, and it’s a lot less expensive. This shift from conquest to commerce represents one of the …

Austrian economist Joseph Schumpeter had a gift for memorable phrases. When he described capitalism’s relentless cycle of renewal as “creative destruction,” he captured something profound in just two words that initially seem to contradict each other. But there’s no contradiction. The term brilliantly encompasses both sides of innovation’s equation: the creation of something new and the destruction—or disruption, as we tend to say now—of what came before. And crucially, the order matters. Creation comes first. Destruction follows only when something better emerges to replace it. In our last post, we explored why innovation faces opposition and how it generates wealth …

“This time, it’s different.” You’ve probably heard some version of this lately. AI is going to eliminate jobs. Automation will make human workers obsolete. Unlike all those previous technological shifts, this one will actually leave people with nowhere to go. Except people have been saying “this time, it’s different” for centuries. And they’ve always been wrong. The Roman historian Pliny the Elder tells a remarkable story. A glassmaker came before Emperor Augustus with an invention—flexible glass that could be hammered back into shape after being dented or dropped. He demonstrated this “vitrum flexile” by throwing it on the floor before …

In our last post, we explored how the 2008 financial crisis happened because policymakers thought they could manage the economy like a machine—setting interest rates, guiding lending, engineering outcomes. They couldn’t. The knowledge problem meant they were making decisions based on information they simply didn’t have and couldn’t have. But there’s another piece to this puzzle, one that’s just as important for understanding what went wrong: moral hazard. The term sounds technical, but the concept is straightforward. Moral hazard happens when someone gets to make decisions but doesn’t have to live with the full consequences of those decisions. When the …

“If we could just get the right people in charge, we could fix this.” It’s tempting, isn’t it? When the economy tanks and people lose their jobs and homes, wouldn’t it be better if smart, well-intentioned experts could just… manage things? Set the right interest rates, guide money to the right places, make sure loans go to people who can actually pay them back, stop bubbles before they get too big? This idea—that economies work like machines you can tune and adjust—shaped pretty much every decision that led to the 2008 financial crisis. There’s just one problem: economies aren’t machines. …