Laffer curve

Narrative Economics: How Stories Go Viral and Drive Major Economic Events
by Robert J. Shiller
Published 14 Oct 2019

Economics has its own one-hit wonders, including the now-infamous Laffer curve. Examining how this economic narrative went viral provides further insight into how economic narratives lead to real-world results. The Laffer Curve and the Infamous Napkin The Laffer curve is a diagram famously used by economist Art Laffer at a dinner in 1974 to justify the government cutting taxes without cutting expenditures, which would please many voters, if the justification were valid. The narrative can be spotted by searching for the words “Laffer curve” (see Figure 5.1). There are two epidemic-like curves (not to be confused with the Laffer curve itself) in succession, the first rising until the early 1980s, the second rising after 2000, when it became involved with another narrative justifying government deficits, associated with the words “modern monetary theory.”

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The term maximize shareholder value is a contagious justification for aggressiveness and the pursuit of wealth, and the narratives that exploited the term are most certainly economically significant. The Laffer Curve, Supply-Side Economics, and Narrative Constellations After the Laffer curve epidemic, the Reagan administration (1981–89) reduced the top US federal income tax bracket from 70% to 28%. It also cut the top-bracket US corporate profits tax rate from 46% to 34%, and it reduced the top US capital gains tax rate from 28% to 20% in 1981 (though it returned to 28% again in 1987 during the Reagan presidency). If the Laffer curve epidemic had even a minor effect on these changes, then it must have had a tremendous impact on output and prices. For these reasons, the Laffer curve is well remembered to this day, but it was only one part of the narrative constellation now known as supply-side economics, which holds that governments can increase economic growth by decreasing regulation and lowering taxes.

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There are two epidemic-like curves (not to be confused with the Laffer curve itself) in succession, the first rising until the early 1980s, the second rising after 2000, when it became involved with another narrative justifying government deficits, associated with the words “modern monetary theory.” The Laffer curve looks like a simple diagram from an introductory economics textbook, with one important difference: it is very famous among the general public. The curve, which takes an inverted U-shape, relates national income tax revenue to the rate at which income is taxed, taking account of the fact that higher tax rates make people work less, thus decreasing national income. The concept sounds like something that most people would find dull and boring. But, somehow, the Laffer curve went viral (Figure 5.1). The Laffer curve described in the narratives that are tallied in the figure owes much of its contagion to the fact that it was used to justify major tax cuts for people with higher incomes.

10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less
by Garett Jones
Published 4 Feb 2020

No lower age limit in this system—smart 12-yr-old girls vote every election while some of their mothers—and fathers—decline to be humiliated twice.²⁶ A quadratic equation can take the form of an upside-down U, an inverted parabola, shaped just like the Laffer curve. Recall that a Laffer curve shows that if you start the tax rate off at zero and increase it from there, you’ll generate more tax revenue for a while, but eventually you’ll reach the peak. If the tax rate rises above that level—the top of the Laffer curve—you’ll push so many people into the black market or early retirement or accounting games that the government will start losing revenue. The benefits and costs of widespread citizen voting might be another Laffer curve type of relationship. If voting is purely a universal human right, and not at all a means to an end of good governance, then restricting the vote to the highly educated would be a terrible voting method, and expanding the franchise more will yield ever-greater moral benefits at no cost to society.

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It’s the buffet syndrome, an expression used in Singapore when people appear to overuse free government health care, so buffet syndrome means taking more with little regard to the cost.¹⁶ But as we’ll see in the next nine chapters, voter involvement in government has not only benefits but costs—costs that are too often ignored. My contention is that the world’s rich democracies are overall on the wrong side of the democracy Laffer curve, as Figure 1.1 suggests. Practical, nonutopian reforms exist that would: • Make a country slightly less democratic • Likely create substantial long-run economic benefits • Have little or no cost in resources • Be more likely to increase than to diminish widely embraced human rights. FIGURE 1.1. The Democracy Laffer Curve. Just as important—for matters of practicality, if nothing else—countries that enacted these reforms would still look and feel and truly be democratic.

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That means that on occasion, we’ll have to keep an eye on whether “good policy outcomes” are being smuggled into the definition of democracy. Since I want to focus on whether slightly less voter involvement would improve or worsen government outcomes, that means I need to separate out measures of voter involvement from measures of government outcomes. A Laffer Curve for Democracy? In the 1980s, economist Art Laffer—then at the University of Southern California, now a professional economic consultant—drew a picture on a napkin that changed the world. As the legend goes, Laffer drew a simple graph with the horizontal axis labeled “Tax rate” and the vertical axis labeled “Tax revenue.”

Wealth and Poverty: A New Edition for the Twenty-First Century
by George Gilder
Published 30 Apr 1981

These conventional recommendations of the Right sprang from an increasingly articulate consensus, which accorded far better with emerging world conditions and met more clearly and directly the converging crises of inflation, innovation, and growth. First, and most important, despite all its mostly irrelevant flaws, was the politically galvanic Laffer curve. The Laffer curve indicates that there are normally two different tax rates that will bring in a particular amount of revenue. For example, a zero rate will bring in no revenue, and a 100 percent rate will also bring in nothing because it would halt taxable activity. Arthur Laffer’s contribution, though, as his ebullient Boswell, Jude Wanniski made clear in The Way the World Works, was not chiefly a mathematical formula, but a vision of how to cut the Gordian knot of government growth and private-sector stagnation.

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Taxes are costs and when costs rise, profits fall, marginal suppliers fail, output declines, demand continues, and prices rise for the remaining supplies. This circuitous process operates fully within the bounds of conventional economics. The tax-push concept is both simpler and ultimately more far-reaching. From it has been developed a new general theory of inflation. Like the Laffer curve, the new theory found its fullest expression outside of the circles of academic economics. Also like the Laffer curve—at least in Wanniski’s hands—the new theory referred as much to the long historic record as to recent experience. Appearing first in a major article in Forbes magazine by then-associate editor David Warsh, assisted by Lawrence Minard, the theory produced a flood of mail and won its authors the Loeb Award for the best financial writing of 1976.

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Carrying on the torch is Kemp’s former protégé Paul Ryan, now the leading Republican budgetary expert and strategist. The chief loyalists among the supply-side economists of the Reagan era are Alan Reynolds, who is still outwitting all the demand siders in his work Income and Wealth, the irrepressible Arthur Laffer of Laffer curve fame (lower marginal tax rates tend to yield more revenues), and the indefatigably savvy and inspirational Steve Forbes. Most erstwhile supply-side allies, though, are jumping ship, with Reagan aides Bruce Bartlett, David Stockman, Martin Anderson, and Paul Craig Roberts almost hysterically insistent that they never, under any circumstances, swear to Midas, claimed that lower tax rates lead to higher revenues.

Termites of the State: Why Complexity Leads to Inequality
by Vito Tanzi
Published 28 Dec 2017

The latter would again shift, for a while the attention of many economists and policymakers back toward policies directed mainly at stimulating aggregate demand. As mentioned, a popular aspect of the supply-side revolution that would attract a lot of popular and political attention was the “Laffer curve” (see Tanzi, 2014a, for a recent evaluation). The Laffer curve became an article of faith for conservative politicians in the United States, and created strong pressures on governments to reduce tax rates and to institute what came to be called “dynamic scoring” of policies, a process that would contribute to complicating the analysis of tax policies and that at times would make fiscal deficits seem almost virtuous when they were associated with tax cuts.

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When we come to the truly high incomes, those in the top 1 percent (the income levels that have attracted most attention in current discussions, and presumably the ones most affected by the highest marginal tax rate), some who are not receiving incomes from capital sources are subjected to the highest marginal tax rate (in the United States 39.6 percent 374 Termites of the State at present, plus, in many states, the locally imposed income taxes). The common thinking, reinforced by the continuing popularity of the “Laffer curve” has been that these are the income levels where substitution effects must be most pronounced, leading to significant reductions in work incentive and efforts. The individuals exposed to the highest marginal tax rate might be in the part of the Laffer curve where effort and income fall, because of reactions to the high rates. For these people leisure definitely becomes relatively cheaper than work, even though, given their high earnings per hour, leisure may still be very expensive in spite of the tax effect.

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This led to pushes to eliminate or to reduce structural obstacles, which was often interpreted as a need to reduce taxes, economic regulations, and the power of labor unions. (g) The aforementioned Laffer curve, the largely political device that attracted the attention of economists and politicians to the role that high marginal tax rates might play in reducing incentives to work and to invest, and in reducing the potential growth of economies. The popularity of the Laffer curve, a concept that was easy to understand and to use by noneconomists and by conservative politicians, would lead to the sharp reductions in marginal tax rates that took place in several countries in the late 1980s and in the 1990s.

Free Money for All: A Basic Income Guarantee Solution for the Twenty-First Century
by Mark Walker
Published 29 Nov 2015

Clearly, we might consider increasing penalties for tax 150 FREE MONEY FOR ALL cheaters in an effort to slow down some tax evasion and so increase gross tax receipts. A second problem is that the Laffer Curve is too crude a measure for what we are interested in. Generally, rates are compared as national averages. Imagine for the moment that 35 percent is the maximum in terms of gross receipts that the United States can manage. Still, this says nothing about whether tax rates might be reconfigured to increase GNF. Consider that at present the lowest earners pay tax at the rate of 1.5 percent, while the top 1 percent pays about 29 percent.9 These different rates all contribute to the gross receipts, which is what the Laffer Curve reports on. In terms of increasing gross national freedom, the question would be whether the same 35 percent gross might be achieved by taxing the richest 1 percent at a higher rate, say, 60 percent net, and the lowest income earners at a lower rate, say, –10 percent.

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Bakshi and Zhiwu Chen, “The Spirit of Capitalism and Stock-Market Prices,” The American Economic Review, 1996, 133–157, 133. 4. “Per Capita Income by State.” 5. Lawrence Blume and Steven Durlauf, The New Palgrave Dictionary of Economics (New York: Palgrave Macmillan, 2008). 6. Mathias Trabandt and Harald Uhlig, “The Laffer Curve Revisited,” Journal of Monetary Economics 58, 4 (2011): 305–327. Mathias Trabandt and Harald Uhlig, How Do Laffer Curves Differ across Countries? (National Bureau of Economic Research, 2012), http:// www.nber.org/papers/w17862. 7. Jon Gruber and Emmanuel Saez, “The Elasticity of Taxable Income: Evidence and Implications,” Journal of Public Economics 84, 1 (2002): 1–32. 8.

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Raising Revenue from High-Income Households: Should States Continue to Place the Lowest Tax Rates on Those with the 244 REFERENCES Highest Incomes?. Political Economy Research Institute, University of Massachusetts at Amherst, 2012. https://ideas.repec.org/p/uma/perips/ revenue_peri_march5.html. Trabandt, Mathias, and Harald Uhlig. How Do Laffer Curves Differ across Countries?. National Bureau of Economic Research, 2012. http://www. nber.org/papers/w17862. ———. “The Laffer Curve Revisited.” Journal of Monetary Economics 58, 4 (2011): 305–327. Turgot, Anne Robert Jacques, and Peter Diderik Groenewegen. The Economics of ARJ Turgot. The Hague, Netherlands: Martinus Nijhoff, 1977. US Census Bureau. “Current Population Survey.”

Samuelson Friedman: The Battle Over the Free Market
by Nicholas Wapshott
Published 2 Aug 2021

“Hence a tax cut may in the long run imply little (or even no) loss in federal revenues, and hence no substantial increase in the long run public debt.”28 In 1992, in the fourteenth edition of his primer, Samuelson corrected that assumption, writing that the “Laffer-curve prediction that revenues would rise following the tax cuts has proven false.”29 Samuelson had made a deadly cameo appearance in the debate about the virtues of the Laffer Curve when, in 1971, he gave a lecture at a conference in Chicago titled “Why They are Laughing at Laffer.” “In one of my writings I referred to him as Dr. Arthur Laffer, thinking naturally that he was a Stanford PhD,” wrote Samuelson.

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“Not only has the public share of GNP dropped in percentage terms,” he wrote, “its money magnitude has not even kept up with the rising prices of public goods and services.”38 He was also sharply critical of cutting taxes as a means of shaming legislators into cutting government expenditure. “To conservatives this is a no-lose deal. If productivity and capital formation pick up, fine. Even if they do not, you have scaled down the scope of government. If some poor people get hurt, who said life is fair?”39 For those who fell in behind the logic of the Laffer Curve, tax cuts seemed to be a magic bullet that would solve the discrepancy between taxation and spending without inflicting too much pain. Friedman warned that it would be spending cuts rather than tax cuts that would truly boost economic growth. While some who advocated cutting tax rates claimed the lower rates would yield higher revenue, the ultimate aim should be not to raise revenue but to lower revenue and lower public spending.

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If it is, that is a failure of monetary policy, not of fiscal policy.41 In the event, the Reagan tax cuts—making income tax lower than at any time since the 1920s—were not matched by cuts in spending: on the contrary. Above all, his ambition to bring the Cold War to an end by outspending the Soviet Union on defense made balancing the budget impossible. Therefore, despite the promise of the Laffer Curve and “trickle-down economics,” in which the taxes saved by the rich were claimed to eventually benefit those further down the economic food chain, Reagan’s tax cuts did not increase revenue but led to a ballooning of the federal deficit—funded by borrowing, or printing money. Before long, with federal tax revenues slumping by 6 percent in real terms—a reduction of at least $200 billion in 2012 dollars over the first four years—Reagan agreed that taxes should be slyly increased.

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank
by John Tamny
Published 30 Apr 2016

The late Nobel Laureate Milton Friedman didn’t get everything right on the economic front, as future chapters will reveal. However, he was quite correct in asserting that when tax cuts lead to higher federal revenues, taxes haven’t been cut enough.13 The Laffer curve, which correctly asserts that a lower rate of taxation leads to greater growth and higher federal revenues, is a tautological reality, as the 1920s, 1960s, and 1980s make plain. At the same time, it’s well past time to consign the Laffer curve to the proverbial dustbin of history. While the fiscal focus should always and everywhere be on reducing the tax burden, it should be on reducing it so much that revenues actually decline.

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In response, they’ve generally offered a variation of the argument Stephen Moore made in a 2004 op-ed for National Review: The Reagan way was spurned throughout the 1980s as “voodoo economics” (one of George Bush Sr.’s few memorable comments). Many college textbooks to this day even argue that Reagan’s economic policies were flawed because they created record budget deficits. But the textbooks don’t mention that as the national debt rose by $2 trillion, national wealth rose by $8 trillion. They also don’t mention that the Laffer curve worked: Lower tax rates did generate more tax revenues at the federal, state, and local levels. Federal tax collections rose from $500 billion in 1980 to $1 trillion in 1990.3 Moore, like Hayward and the late Brookes, is fabulous. One could learn a great deal by reading his columns and books.

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Government is a barrier to production, and its waste enriches the political class, all the while destroying limited credit that would otherwise fund huge economic advances. Higher federal revenues represent a hideous bug in the supply-side tax-cutting argument, not a feature. It’s time to cut taxes to a rate that actually pushes revenues well below the Laffer curve. CHAPTER EIGHT Why “Senator Warren Buffett” Would Be a Credit-Destroying Investor It is the leap, not the look, that generates the crucial information. —George Gilder BACK IN THE EARLY PART of the twentieth century, when the automobile industry was in its infancy, there were more than two thousand car companies in operation.

The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay
by Emmanuel Saez and Gabriel Zucman
Published 14 Oct 2019

At the bottom of the ranking, in 2017, we find the United States, Italy, and Germany, three countries with corporate income tax rates close to or above 30% that year.17 The tax havens that impose low effective tax rates, between 5% and 10%, collect much more tax (relative to the size of their economy) than large countries that have rates in the 30s. The lower the rate, the higher the revenue! We see here a striking illustration of “Laffer-curve” logic, named after the supply-side economist Arthur Laffer who popularized it in the 1970s. On this view, slashing tax rates boosts revenues. Even a rate of 0%, which on first blush may seem too low, can bring big bucks for small countries. The governments of the British Virgin Islands and Bermuda charge flat fees—and generate serious revenue—on the creation of the hundreds of thousands of shell companies they attract precisely because of their zero tax rate.

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On purely logical grounds anything is possible, depending on how sensitive people are to taxation. But whatever rate corresponds to peak revenue, it seems we should never want to go beyond it. If we did it would mean collecting less revenue than with a lesser tax rate. No society should ever want to be on the “wrong” side of the Laffer curve, where revenues fall as tax rates rise. Right? In this chapter, we want to explain why democratic governments may reasonably decide to pick tax rates that are above the revenue-maximizing rate for the rich, why destroying part of the tax base can be in the interest of the community. If this notion seems crazy to you, it’s because too much of the discussion about taxes has been based on napkin diagrams that ignore history, politics, and power relationships in a market economy.

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Policymakers understood, well before Laffer’s napkin, that faced with marginal tax rates of 90% even the most profit-driven individuals would be discouraged from raking in more income. From the presidency of Franklin Roosevelt to that of Dwight Eisenhower, it was clear that the top marginal income tax rates did not add revenue. They were of the “wrong” side on the Laffer curve. They destroyed income. This was not a bug: it was the goal of the policy. The quasi-confiscatory top rates championed by Roosevelt and his successors in office were meant to reduce the income of the super-rich and thereby compress the income distribution. Recall that they applied to extraordinarily high incomes only, the equivalent of more than several million dollars today.

Who Owns the Future?
by Jaron Lanier
Published 6 May 2013

It’s not a phony big data problem of the kind being used to build instant business empires. That confusion is one of the great confusions of our historical moment. The original Laffer curve had the merit of showing two peaks on either side of its valley. That betrayed an acknowledgment that there can be multiple equilibriums. The latest replacement, the absolute faith in austerity, doesn’t even acknowledge that. To accept it is to be completely hypnotized by the illusions of easy complexity. It is senseless to speak in the abstract about whether the Laffer curve is true or false. It is a hypothesis about peaks and valleys on a landscape of real-world possibilities, and these might or might not exist.

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Since the Reagan era, a highlight of the conservative playbook has been to claim that lowering taxes raises tax revenues. Their claim is that lower taxes stimulate business growth independently of any other variables. That is precisely a claim that there can be more than one equilibrium. This is the famous Laffer curve, which was promoted by one late 20th century president, Ronald Reagan, and ridiculed by another, George H. W. Bush, as “voodoo economics.” It’s counterintuitive, no? On the face of it, lowering taxes should lower the amount of money brought in by taxes. A remarkable, decades-long, and maniacal public relations campaign has brought about a general atmosphere in which the idea is respectable.

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A remarkable, decades-long, and maniacal public relations campaign has brought about a general atmosphere in which the idea is respectable. While there are huge problems with the way the idea is understood and the way it has influenced policy, the ascendance of a nonlinear, systemic sensibility into popular folklore bodes well. If the public can “get” the Laffer curve, then the public can probably also gain a more honest and balanced sensibility of the nonlinear nature of the big challenges we face. A serious attempt to find a Laffer peak, a long-term lower tax rate with higher revenues,* would have to be as experimental and long term as the quest to improve weather predictions.

An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy
by Marc Levinson
Published 31 Jul 2016

The claims that high marginal tax rates were to blame for the slowdown of the 1970s and that lowering rates would restore the economy to its previous glory were untested. So was the assertion that lower tax rates would draw money out of tax shelters and into the sunlight, where it could be taxed.12 Nor was there empirical support for the so-called Laffer Curve, supposedly first drawn on a napkin at a Washington restaurant by economist Arthur Laffer. The Laffer Curve was intended as a graphic illustration of how lower tax rates could stimulate so much economic activity that government revenue would rise. As an abstract proposition, Laffer’s theory was not controversial; everyone agreed that it was possible for tax rates to get so high that people would no longer bother to earn more income, at which point tax receipts would began to fall.

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Many supply-side advocates subsequently disclaimed having predicted that lower marginal tax rates would lead to higher tax receipts. Bruce Bartlett, a deputy assistant Treasury secretary in the Reagan administration, eventually traced the claim to work done in 1975 by Norman B. Ture, then an economic consultant and later undersecretary of the Treasury during Reagan’s first year in office. See Bruce Bartlett, “The Laffer Curve: Part 1,” Tax Notes, July 16, 2012. On the irrelevance of budget deficits, see Robert Ortner, Voodoo Deficits (New York: Dow Jones Irwin, 1990), 41–80. 11. Gilder, Wealth and Poverty, 12, 20, 45, 188. 12. The top US tax rate on investment income was 70 percent during the 1970s, and the top tax rate on wage income was 50 percent.

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Rates on capital gains, such as profits on the sale of stock held for more than one year, were lower throughout that decade, and a portion of capital gains income was excluded from taxation. While dividends on shares were taxed at the higher rates, this did not affect investments in startup companies, which often do not pay dividends. 13. Arthur Laffer, “The Laffer Curve: Past, Present, and Future,” Heritage Foundation Backgrounder 1765, June 1, 2004; Don Fullerton, “On the Possibility of an Inverse Relationship Between Tax Rates and Government Revenues,” working paper 467, National Bureau of Economic Research, April 1980. 14. “America’s New Beginning: A Program for Economic Recovery,” (Washington, DC: White House, 1981); Reagan address to Congress, July 27, 1981. 15.

The Finance Curse: How Global Finance Is Making Us All Poorer
by Nicholas Shaxson
Published 10 Oct 2018

Also see Annette Alstadsæter, Niels Johannesen and Gabriel Zucman, ‘Who owns the wealth in tax havens? Macro evidence and implications for global inequality’, Working Paper 23805, NBER, National Bureau of Economic Research, September 2017. A qualifier: the Laffer curve does sometimes work for tiny tax havens like Bermuda, where the business of handling corporate profit shifting can be the largest sector of the economy. 8. An example of the UK using the Laffer curve to ‘skew and distort’ the evidence: in 2012 the government produced estimates designed to show that increasing the top rate of income tax from 45 to 50 pence in the pound in 2010 had raised hardly any revenue and argued it may have actually reduced revenue by stifling ‘business’, driving rich people overseas and encouraging tax dodging.

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After thundering about the role of lobbyists and big money in politics, he got re-elected with extensive help from a shadowy lobbying firm which, according to a US Senate deposition, bypassed campaign finance rules to help him.4 After being elected, Brownback signed into law the biggest tax cut in Kansas history, slashing personal and business taxes.5 ‘We’ll have a real live experiment, and we’re right next to some other states that haven’t lowered taxes,’ Brownback said. The tax cuts, he promised, would be ‘a shot of adrenaline’ in the heart of the Kansas economy. He flew in Arthur Laffer, a gravel-voiced economist famous for the Laffer curve, an economics graph that the academic drew on a cocktail napkin for Dick Cheney in a hotel lobby in 1974. The curve resembles the blunt nose cone of a rocket pointing up. The idea is that at a zero per cent tax rate you get no revenue – but you also get nothing at 100 per cent because nobody will do any work.

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Things got so bad that the Kansas supreme court ruled that educational spending was unconstitutionally low, and in June 2017 the Republican-controlled state legislature reversed many of the cuts. Brownback then quietly discontinued quarterly reporting on state GDP growth rates while publicly urging newly elected president Donald Trump to replicate his tax cuts nationwide – which Trump did. There’s a long and dishonourable history to the Laffer curve: suffice to say that the theory falls apart in practice, and Kansas is just the latest piece of evidence in an immense file that has proved it useless as a general guide to policy. You might think, for instance, that cutting corporate tax rates would indeed curb corporations’ appetite for schemes to escape taxation, but if anything the opposite has happened: huge worldwide cuts in corporation tax rates since the 1980s have been accompanied by a rising tide of corporate tax planning (cheating) – a fivefold surge in tax-related profit-shifting in the last fifteen years alone, now costing governments $300–650 billion per year, with developing countries particularly hard hit.

Keynes Hayek: The Clash That Defined Modern Economics
by Nicholas Wapshott
Published 10 Oct 2011

Reagan’s personal experience of high income taxes led him to believe tax cuts would inspire Americans to work harder, a policy advocated by EPAB member Arthur Laffer.60 Over dinner in December 1974 with President Ford’s chief of staff, Donald Rumsfeld, and his deputy, Dick Cheney, Laffer had argued that there was an optimum income tax rate that would reap the maximum revenue. He illustrated his reasoning by drawing a bell curve on a napkin, showing where the sweet spot might lie. The “Laffer curve” instantly became the hastily drawn device used by economists around Reagan to convince others that tax cuts would boost revenues. Sharply cutting income taxes, the Reaganites argued, would increase personal spending, which would in turn increase demand through a “trickle-down” effect on the whole economy.

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A third key element to Reaganomics, also promoted by Laffer, was “supply-side economics,” the notion that a booming economy could best be achieved by encouraging producers to supply more and cheaper goods by cutting industry regulations and corporate taxes rather than relying on “demand-led” growth spurred by Keynesian public spending. Laffer was graceful enough to point out that, despite his name being attached to it, the Laffer curve was not his invention and that others, notably Keynes, had beaten him to the punch. “Nor should the argument seem strange that taxation may be so high as to defeat its object,” Keynes had written in 1933, “and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget.”

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While between 1978 and 1982 the economy grew at 0.9 percent in real terms, between 1983 and 1986 it soared to 4.8 percent. That growth, in turn, translated into jobs, and by the time Reagan left office in January 1989 the jobless figure was at 5.3 percent.65 But that was not the whole story. Despite the Laffer curve, the income tax cuts took a sharp toll on revenue. In 1982, Reagan, alarmed by the fast-increasing budget deficit, rescinded various tax breaks on high earners, increasing taxation by a postwar record of $37 billion, or 0.8 percent of GDP.66 The monetarists claimed victory nonetheless. Inflation had been purged from the system and the free forces of capitalism had been released.

Licence to be Bad
by Jonathan Aldred
Published 5 Jun 2019

With Jude Wanniski, an editor at the Wall Street Journal, were the Chicago University economist Arthur Laffer, Donald Rumsfeld (then Chief of Staff to President Ford) and Dick Cheney, then Rumsfeld’s deputy and a former Yale classmate of Laffer’s.33 While discussing President Ford’s recent tax increases, Laffer pointed out that, like a 0 per cent income tax rate, a 100 per cent rate would raise no revenue because no one would bother working. Logically, there must be some tax rate between these two extremes which would maximize tax revenue. Although Laffer does not remember doing so, he apparently grabbed a napkin and drew a curve on it, representing the relationship between tax rates and revenues.fn2 The ‘Laffer curve’ was born and, with it, the idea of ‘trickle down economics’. The key implication which impressed Rumsfeld and Cheney was that, just in the way that tax rates lower than 100 per cent must raise more revenue, cuts in income tax rates more generally could raise revenue. In other words, there could be winners, and no losers, from tax cuts.

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Although the effects of the big Reagan tax cuts are still disputed (mainly because of disagreement over how the US economy would have performed without the cuts), even those sympathetic to trickle-down economics conceded that the cuts had negligible impact on GDP – and certainly not enough to outweigh the negative effect of the cuts on tax revenues. But the Laffer curve did remind economists that a ‘revenue-maximizing top tax rate’ somewhere between 0 per cent and 100 per cent must exist. Finding the magic number is another matter: the search continues today. It is worth a brief dig into this research, not least because it is regularly used to veto attempts to reduce inequality by raising tax on the rich.

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TRUST IN NUMBERS Entertaining and insightful on the ideas behind the global financial crisis: Lanchester, J. (2010). Whoops! London, Penguin. Sprawling but unmissable, and influential, on the flaws in bell-curve thinking: Taleb, N. (2010). The Black Swan. London, Penguin. 9. YOU DESERVE WHAT YOU GET On the rise of the Laffer curve and, more generally, the political/cultural shift towards markets in the US: Rodgers, D. (2011). Age of Fracture. Harvard, Harvard University Press. There are several excellent books on inequality, but few combine accessibility, insight and encyclopaedic knowledge as well as: Atkinson, A. (2015).

Markets, State, and People: Economics for Public Policy
by Diane Coyle
Published 14 Jan 2020

The empirical results from applications of the theory depend on estimates of the elasticity of top incomes with respect to the tax rate or, in other words, how much is effort discouraged by high tax rates? Thomas Piketty and his co-authors have argued the rate could be as high as 80%, but other economists, such as Greg Mankiw, argue the marginal tax rate should actually decline at high levels of income. Box 6.4. The Laffer curve The relationship between rates of taxation and government revenue is sometimes known as the Laffer curve, after economist Arthur Laffer, who popularized it during the 1970s and 1980s in his advocacy for lower tax rates. He believed reducing income tax rates in the US from their then prevailing levels would increase tax revenue. Laffer, a conservative, is sometimes mocked, but there is logic to the curve.

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However, empirical estimates put the revenue-maximizing tax rate around 70% (which is higher than the top marginal rate of income tax currently prevailing in most countries). The Laffer curve, more broadly, refers to the relationship between rates of taxation for any type of tax and the revenues raised, and depending on the tax can take other shapes rather than the hump shape in the diagram. Don Fullerton (2008), “Laffer Curve,” in The New Palgrave Dictionary of Economics, eds. Steven N. Durlauf and Lawrence E. Blume. It is further argued by those who oppose high top rates of tax that high earners are now footloose between countries, so if one country imposes too high a rate its rich residents will move elsewhere.

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(Diamond and Hausman), 324 Italy, 20, 85, 107, 114, 115 Japan, 116, 198, 203; behavioral policy unit in, 173, 185; economic planning and industrial policy in, 21, 131–32; irrigation management in, 148; nuclear energy disaster in, 86; postwar reconstruction of, 99; value of a statistical life in, 326 job market, 163 John Deere, 150–51 Kahneman, Daniel, 173, 179, 195 Kaldor, Nicholas, 14, 181 Kaldor-Hicks compensation, 14–15 Kay, John, 120, 124 Kazakhstan, 116 Keillor, Garrison, 182 Kenya, 238, 330 Keynes, John Maynard, 21, 99, 333 Kindle (e-reader), 150 Klinenberg, Eric, 156–57 Kuznets, Simon, 21 labor unions, 22, 35, 110, 118, 121, 220, 223 Laffer, Arthur, 230 Laffer curve, 230 Lake Wobegon effect, 182 Lamont, Norman, 165 Lancaster, Kelvin, 13 land reform, 166 law and economics movement, 33 Lawrence of Arabia (film), 62 Lawson, Nigel, 110 legitimacy, 145 Lewis, Michael, 303 libraries, 243 licensing, 2, 3, 31, 61, 67, 168, 241, 262; for fishing, 149; occupational, 70, 71, 263; of utilities, 103 life insurance, 203 lighthouses, 28, 142 light water reactor, 130 limited-profit corporations, 113 Lipsey, Richard, 13 Littlechild, Stephen, 122 lobbying, 49, 56, 62, 68, 80, 241–42, 256, 263–71 logging, 138, 270, 322 The Logic of Collective Action (Olson), 267 London Underground, 278, 308 Lorenz curve, 215 loss aversion, 173, 181, 199 luxury goods, 163, 165, 248 Lyft, 78–80, 263 Macmillan, Harold, 119 macroeconomic policy, 6, 21 malaria, 329 Manchester, England, 157 Mankiw, Greg, 231 marginal costs, 104 marginal effective tax rate, 234, 235, 236–37, 239 marginal rate of substitution (MRS), 39 marginal rate of technical substitution (MRTS), 37, 40 market definition, 57–58 market design, 81 market distribution, 239, 251 market failure, 1, 8, 13; conditions conducive to, 146; efficiency and, 44; in electric industry, 85; externalities as, 25; in health care, 245; industrial policy justified by, 128; government failure and, 16–18, 293–94, 302–3; Pigouvian response to, 31, 211; price of exit and, 160–61; regulation justified by, 72, 98–99 “market for lemons,” 73–74, 209 market research, 189 Marshall, Alfred, 157, 304 Marshall Plan, 21, 100 Massachusetts, 151 Matthew effect, 318 Mazzucato, Mariana, 132 McCloskey, Deirdre, 301 means testing, 206, 233–34, 235, 237, 252 Medicaid, 210, 249–50 Medicare, 210, 249, 250 mergers, 52, 55, 58, 59–60, 121 merit goods, 29 meta-analysis, 332 Metcalfe’s law, 92 Mexico, 198 micromort, 326–27 microlife, 326–27 Microsoft, 91, 93, 94, 124 Milanovic, Branko, 218 minimum wages, 206, 220, 236, 239–40 Ministry of International Trade and Industry (MITI, Japan), 131 missing markets, 101, 128, 209 Mitterrand, François, 102, 107 monetary policy, 56 monitoring, 65, 94, 113, 145; of agents by principals, 284–85; asymmetric information and, 35, 146, 285; in cartels, 57; in competition policy, 55; cost of, 303; of free riding, 155; in markets, 32, 35, 291 monopoly, 13, 47–49, 51, 57–58, 174.

Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street Are Destroying Investor Confidence and Your Portfolio
by Sal Arnuk and Joseph Saluzzi
Published 21 May 2012

We sincerely hope that our regulators, in their haste to cut risk and sales practice abuses, didn’t also neuter our economy. The Case for Higher Cost Markets: The Stock Market Toll Paradox The Laffer Curve in economics shows that tax revenues drop as the tax rate approaches 100%—people just stop working. A corollary to the Laffer Curve is that tax revenues also decline when tax rates approach 0%. The implication then is that there is an optimum point of taxation. We argue that like the Laffer Curve in economics, there is an optimum point for spreads and commissions (“tolls”) in micro markets. That just like Goldilocks and the Three Bears, one toll rate was too high (pre-Reg ATS), the current toll rate is too low, and there must be toll rates somewhere in between that are “just right” (and will likely vary from stock to stock).

…

Michael, 38 Gonzalez, Victor, 38 Gorelick, Rich, 39 Grant, Jeremy, 116, 154 Grasso, Richard, 71, 76, 209 NYSE (New York Stock Exchange), 77 Great Depression, 160 Greenberg, Herb, 45 Grier, Mark, 38, 195 growth of HFT (high frequency trading), 13-14 H Haldane, Andy, 28 Harlow, Poppy, 163 Harris, Lawrence, 104, 170, 210 HFT (high frequency trading), 10-13, 15, 24-26 affect on the market, 243-244 affecting asset valuations, 246 concerns of institutional investors, 252-253 growth of, 13-14 how the world learned about HFT, 34-36 internalization in dark pools, how it hurts investors, 132-133 liquidity market center inducements for, 238-239 predatory trading taking advantage of unfair practices, 244-246 revenues, 187 HFTs (high frequency traders), 2 hidden orders, 112 information for sale on, 113-115 broker reactions, 117-119 NASDAQ, 117 hot potato trading, 178 Houtkin, Harvey, 51, 52, 57 I I-Only orders, 70 illegal activity, Pipeline, 125-127 incomplete trading data, 279-281 Instinet, 11, 52-53 regulations, 68 Instinet Crossing Network, 128 institutional investors, 224-225 concerns about HTF, 252-253 institutional orders, 143 Intel, 210 internalization of dark pools, pain for investors, 132-133 International Organization of Securities Commissions, 75 International Securities Exchange (ISE), 52 investors institutional investors, 224-225 pain caused by HFT internalization of dark pools, 132-133 pain caused by Latency Arbitrage, 133-136 retail investors, 223-224 IPO market, 200-202 collapse of, 198-200 decline in success rate, 207, 209 difficulties of, 203 ISE (International Securities Exchange), 52 Island ECN, 51, 69, 104 issuer costs, stock market, 205 issuer disclosure, 206 ITCH, NASDAQ, 103 ITCH feed, 112 Ivry, Bob, 100 J Jefferies, 128 Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues, 17, 164-168 Flash Crash (May 6, 2010), 182-187 reaction to Joint Committee’s report, 187-191 K Kaufman, Senator Ted, 37-38, 162, 191, 195 Kennedy, President, 188 Ketchum, Richard, 54 Kim, Edward, 195-196, 221 Kirilenko, Andrei, 180, 189 Kisling, Whitney, 100 Knight, 26 Knight Capital, 58 Kroft, Steve, 41 L Laffer Curve, 211 large trader reporting rule, 92-93 latency arbitrage, 31, 248-250, 264-268, dark pools, pain for investors, 133-136 market integrity, 251-252 speed, 250 “Latency Arbitrage: The Real Power Behind Predatory High Frequency Trading,” 135-136, 247-254 Leuchtkafter, R.T., 152 Levine, Josh, 51, 71, 104 Levitt, Arthur, 68, 71, 74, 86, 208 Liebowitz, Larry, 41 Liesman, Steve, 35, 189 liquidity HFT (high frequency trading), 186 NYSE (New York Stock Exchange), 209 liquidity demanders, 173 liquidity providers, 155 liquidity rebate traders, 235-236 liquidity vacuum, 28 Liquidnet, 129 Lo, Andrew, 108 locals, 157 low latency, NYSE (New York Stock Exchange), 99 LRPs (Liquidity Replenishment Points), NYSE (New York Stock Exchange), 281-282 Lupien, Bill, 128-129 Lyons, Richard, 185 M machine readable news, 121-123 Madoff, Bernie, 19, 71 Madoff Ponzi scheme, 153 Madoff Securities, 71 Major, 141-143 maker/taker model, 104-107, 259-263 elimination of, 228 Manaster, Steven, 185 Mann, Steven, 185 market access proposal, 78 market center inducements for high frequency traders, 238-239 market data proposal, 78 market data revenue, 268-269 market integrity, Latency Arbitrage, 251-252 market makers, 15 market structure and latency arbitrage, 30-32 market structure, complexity of, 148-150 Maschler, Sheldon, 51 McCaughan, Jim, 220 McNamee, Roger, 220 McTague, Jim, 40 “Measuring Arbitrage in Milliseconds,” 134 Milstream, 126 Momentum Ignition, 32-34 Morgan Stanley, 106-107, 261 MS Pool, 130 MS Pool, 130 Mutual Fund Investor Confidence Restoration Act, 32 mutual funds, 128 N Nanex, 181-182 Narang, Manoj, 41 NASDAQ, 49-50, 54 colocation, 100 flash orders, 59 hidden orders, 113-115, 117 ITCH, 103 price fixing, 208 problems for, 54-55 Totalview-ITCH product, 274-276 National Association of Securities Dealers, 156 National Association of Securities Dealers Automated Quotation system.

The Economic Singularity: Artificial Intelligence and the Death of Capitalism
by Calum Chace
Published 17 Jul 2016

It argues that increasing taxes on the rich does deter economic activity, and may actually result in lower government revenues, as the rich look harder for ways to reduce their tax burden.[cccxiv] The Laffer Curve Unfortunately, the data is muddy, which enables both sides to marshal apparently convincing arguments. And as is so often the case, the truth lies somewhere between them. We do know that there is a level of taxation beyond which further increases are ineffective, or even self-defeating. The Laffer Curve plots tax rates against the revenue they raise. At 100%, no-one would work, so that is an inefficient rate; 99% would not be much better. Sadly we just don’t know for sure what the optimal level is, either in general, or in a specific country at a specific time.

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utm_content=buffer71a7e&utm_medium=social&utm_source=plus.google.com&utm_campaign=buffer [ccciii] http://www.fastcoexist.com/3052595/how-finlands-exciting-basic-income-experiment-will-work-and-what-we-can-learn-from-it [ccciv] http://www.latimes.com/world/europe/la-fg-germany-basic-income-20151227-story.html [cccv] http://www.vox.com/2016/1/28/10860830/y-combinator-basic-income [cccvi] https://en.wikipedia.org/wiki/Sodomy_laws_in_the_United_States#References [cccvii] http://blogs.wsj.com/washwire/2015/03/09/support-for-gay-marriage-hits-all-time-high-wsjnbc-news-poll/ [cccviii] http://www.huffingtonpost.com/2009/05/06/majority-of-americans-wan_n_198196.html [cccix] http://blogs.seattletimes.com/today/2013/08/washingtons-pot-law-wont-get-federal-challenge/ [cccx] http://www.bbc.co.uk/news/magazine-35525566 [cccxi] https://medium.com/basic-income/wouldnt-unconditional-basic-income-just-cause-massive-inflation-fe71d69f15e7#.3yezsngej [cccxii] http://streamhistory.com/die-rich-die-disgraced-andrew-carnegies-philosophy-of-wealth/ [cccxiii] http://www.forbes.com/sites/greatspeculations/2012/12/05/how-i-know-higher-taxes-would-be-good-for-the-economy/#5b0c080b3ec1 [cccxiv] http://taxfoundation.org/article/what-evidence-taxes-and-growth [cccxv] https://en.wikipedia.org/wiki/Laffer_curve [cccxvi] http://www.bbc.co.uk/news/uk-politics-26875420 [cccxvii] A minor character in Shakespeare’s Henry VI called Dick the Butcher has the memorable line, “First thing we do, let’s kill all the lawyers.” It seems Shakespeare was not fond of lawyers: http://www.spectacle.org/797/finkel.html [cccxviii] https://www.thersa.org/action-and-research/rsa-projects/public-services-and-communities-folder/basic-income/ [cccxix] http://www.icalculator.info/news/UK_average_earnings_2014.html [cccxx] http://www.telegraph.co.uk/finance/economics/12037623/Paying-all-UK-citizens-155-a-week-may-be-an-idea-whose-time-has-come.html [cccxxi] http://www.marketwatch.com/story/most-americans-are-one-paycheck-away-from-the-street-2015-01-07 [cccxxii] http://www.federalreserve.gov/econresdata/2014-economic-well-being-of-us-households-in-2013-executive-summary.htm [cccxxiii] http://www.theguardian.com/business/2016/jan/18/richest-62-billionaires-wealthy-half-world-population-combined [cccxxiv] http://www.bbc.co.uk/news/magazine-26613682 [cccxxv] I’m indebted to Dr Justin Stewart, an investor, for prodding me to address the issue of assets more closely.

The Narrow Corridor: States, Societies, and the Fate of Liberty
by Daron Acemoglu and James A. Robinson
Published 23 Sep 2019

But later, when “royal authority” consolidated itself, economic policies would be “ruinous to the worldly affairs of the people.” Nowhere were the economic implications of Khaldun’s generational theory more evident than in his discussion of taxation, which we turn to next. Ibn Khaldun Discovers the Laffer Curve It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments. With this statement Khaldun anticipated Reaganomics, the economic doctrines that were promulgated by the American president Ronald Reagan in the early 1980s.

…

As a result, when tax rates get punitively high, not only economic activity but even tax revenues start falling. This is clear to see in the extreme cases where the tax rate approaches 100 percent, so that the government takes everything and very little incentive is left to generate income; despite the very high tax rates, there won’t be any tax revenues. Wanniski named this hump-shaped relationship the Laffer curve in honor of the man who had sketched it out. The exciting implication for Rumsfeld and Cheney was the prospect that you could reduce tax rates while increasing tax revenues as people responded to the more powerful incentives created by lower taxes—the biggest win-win situation of all time, which quickly came to be incorporated into President Reagan’s economic policy.

…

Needless to say, in a world where real tax rates are quite a bit lower than 100 percent, such as in the United States when Reagan became president, whether or not tax cuts actually increase tax revenues is open to doubt. Khaldun’s analysis of the economic dynamics created in the Middle East was on firmer empirical grounds, and his idea of the Laffer curve was somewhat different from the one that Laffer explained to Rumsfeld and Cheney. It was based on his generational theory. To start with, a new dynasty, since it still has asabiyyah, “imposes only the taxes as are stipulated by religious law, such as charity taxes, the land tax, and the poll tax.”

Hawai'I Becalmed: Economic Lessons of the 1990s
by Christopher Grandy
Published 30 Sep 2002

By 1983, the rate of consumer price inflation had fallen to 3.2% compared to 13.5% only three years earlier. Others pointed to Reagan’s “supply-side” tax cuts. Reagan won the 1980 election in part on promises of lowering taxes and increasing defense spending. The top marginal income tax rate was 70% in that year, and Reagan popularized the notion of the Laffer curve. Economist Arthur Laffer supposedly sketched a graph on a cocktail napkin one evening that related the rate of taxation to the amount of tax revenue collected. The Three Pinpricks
27 Figure 10 Average Annual Growth in U.S. Real Gross Domestic Product, 1980–1992 Percent Change from Year-Earlier Quarter Source: U.S.

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See also Passenger Services Act
129 Kaua‘i, 15, 23, 24, 87 Keith, Kent, 58n. 13 Kelley, Richard, 65 Kennan, John, 98 Kent, Noel J., 8n. 1 Keynesian fiscal policy, 27, 36–37, 38, 39, 44n. 5 King, Charles, 65 Koki, Stan, 82, 84 Krueger, Alan, 98 Krugman, Paul, 30–31, 33n. 18 Kuwait, 23 La Croix, Sumner, ix, x Laffer curve, 26 Land Use Commission. See LUC land use regulation, 1, 4, 18, 48, 51–52, 79, 104, 105 Laney, Leroy, 43 Leppert, Thomas, 66 lessons of 1990s, 7, 101, 104, 108–110 Lingle, Linda, 5, 77, 79–81, 82, 84–85, 106, 119–122 Long-Term Capital Management, 74 Loui, Patricia, 65 low-income tax credit, 67, 99, 115 LUC (Land Use Commission), 18, 51, 52, 58n. 13, 67, 70, 116 Lucas, Robert, 102n. 8 mainland economy, 30, 34, 56, 74, 82, 91, 96, 99; recession, 3, 6, 23, 26–30, 33n. 17, 36, 105, 112–113; unemployment, 26, 30, 41, 56, 99 Mak, James, ix, x, 53, 54 Malaysia, 33n. 18, 71, 72, 73, 93 Malcolm, Donald, 65 maritime regulation, 48, 50–51, 79, 105, 111 mass transit.

When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants
by Steven D. Levitt and Stephen J. Dubner
Published 4 May 2015

Seems like we have a lousy track record with pop singers—anybody remember when Levitt announced that Thomas Dolby was releasing a new record, an announcement that turned out to be 100 percent wrong? I guess we should give up pop singers and stick to crack dealers, real-estate agents, and poker cheats. How Much Tax Are Athletes Willing to Pay? (SJD) The Laffer curve is a unicorn-y concept that seeks to explain the rate of taxation at which revenues will fall because earners either move away or decide to earn less (or cheat more, I guess). If I were a tax scholar interested in this concept, I would be taking a good, hard look at the current behavior of top-tier professional athletes.

…

“If this pay-per-view and other things take off like we think they may, I can’t imagine Pacquiao will ever again fight in the U.S.” There are of course other factors at play besides taxes—gambling, for one, which is a big reason that Macau has become such a boxing center. But whatever you think of the Laffer curve, it’s hard to ignore the variance in tax rates around the world, especially for athletes who might earn a lot of money in a short time. In January, the golfer Phil Mickelson said he was “going to have to make some drastic changes” to deal with federal and California tax hikes (he lives in California).

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.: and bin Laden bounty, 57–59 and IRS, 12–14 tax code written by, 158–60 conspicuous consumption, 184–85 contests, 91 addictions, 92–94 motto for U.S., 96–99 rigged, 136 Twitter, 94–96 Cook, Phil, 246 Cope, Myron, 215, 216 corporate sponsorships, 81 cover-ups, 121, 157 Cowen, Tyler, 329, 331–33 Cowher, Bill, 218 Craig, Larry, 45 crime: and abortion, 288 bank robberies, 223–26 “broken windows” theory of, 163 burglary, 242 child abduction, 133 in China, 226–28 gun deaths, 245–51 and gun laws, 243–45 intruders, 241–43 priming criminals, 228–29 prison sentences, 128, 224, 242, 245, 248, 260 street gangs, 229–36, 246–47, 248–49 and The Wire, 229–33 volatile rates of, 244 Cuban, Mark, 329, 333 cyclists, Tour de France, 151–53 Cyrus, Miley, 306 Daily Show, The, 273–74 Dal Bó, Ernesto, 33–34 Daly, John, 277 dangerous activities: horseback riding, 101–3 obesity as result of, 116–19 walking drunk, 101 Daschle, Tom, 158, 160 Dawkins, Richard, 286 decision making, 120–21, 208–9 democracy, alternative to, 29–31 Dennett, Daniel, 286 dental wisdom, 275–76 diapers, cloth vs. disposable, 167 diminishing marginal returns, 203 disasters, and charitable giving, 324–28 discrimination, statistical, 321–22 divorce, statistics on, 345 Dohmen, Thomas, 212 Doleac, Jennifer, 320–21 Donohue, John, 288 doomsday prophets, 109–10 doping, in Tour de France, 151–53 driving: and the environment, 166–67 incivility in, 161–64 drugs, prescription, prices of, 51–54 Duke, Annie, 188 Duncan, Arne, 103–4 Duskiewicz, Bernie, 348–49 ecological invalidity, 335 economics: behavioral, 120, 122, 206, 308–9 invisible hand in, 315 morality vs., 288 visible hand in, 319–22 writing about, 287–88 Edlin, Aaron, 88 Ehrenreich, Barbara, 329, 333–34 Ehrlich, Paul, 109, 114 Eikenberry (funeral director), 46 Endangered Species Act, 165–66 Engelberger, Perfect, 40 environment: cloth vs. disposable diapers, 167 and conspicuous consumption, 184–85 and driving, 166–67 eating meat, 179–84 Endangered Species Act, 165–66 global warming, 87–89, 179–84 greenhouse gas (GHG) emissions, 171–72, 177, 180 locavores, 168–72 and packaging, 175–78 paper vs. plastic bags, 167 petroleum extraction, 109–16 Prius “green halo,” 185 and profitability, 172–74 saving the rain forest, 174–75 veganism, 179–84 Ericsson, Anders, 199, 201 escort (high-end call girl), 261–67 evaluation function (EV), 197 experts, ten thousand hours of practice, 199, 201–2 Fanning, Dakota, 305 fear of strangers, 130–33 Feinstein, Dianne, 53 Feldman, Paul, 69 feminist movement, 346–47 Ferraz, Claudio, 33 films, animated, 305–7 Finan, Frederico, 33 first-grade data hound, 219–20 fishing, 348–49 flight attendants, 19–20 food: chicken wings, 75–77 decayed, 177 deliciousness of, 170 kiwifruits, 77–80 locavores, 168–72 nutritional value of, 170 and obesity, 116–18 packaging of, 175–78 poor service, 272–73 rancid chicken, 307–11 shrimp, 341–44 transportation inefficiencies of, 170–72 wasting, 177–78 football: Immaculate Reception, 216 loss aversion, 206–9 Pittsburgh Steelers, 212–19 rookie symposium, 239–41 Fox, Kevin, 253 Frakes, Michael, 117 Frankfurt, Harry, 276 Freakonomics (Levitt & Dubner), 1–2, 37, 40, 54, 69, 101, 105, 135, 160, 223, 253–4, 261, 274, 277, 280, 297–98, 305, 322, 351 Freakonomics.com, 1–4, 8, 233 Freakonomics radio, 268–69 Frederick, Shane, 341–43 Freed, Pam, 342 Friedman, Milton, 23 Frost, Robert, 218 Fryar, Irving, 239–40 Fryer, Roland, 228, 288, 328–29, 337, 339 Fuller, Thomas, 194–95 Gacy, John Wayne Jr., 39 Gagné, Éric, 149 gambling: on athletes, 73 backgammon, 195–98 blackjack, 189–91 on horse racing, 191, 220–22 how not to cheat, 153–55 Internet poker, 127–30, 157 on newspaper circulation, 233 one card away from final table, 192–95 Rochambeau (Rock, Paper, Scissors), 188–89 on teams, 125–26 unbreakable record, 192 World Series of Poker, 187–88, 192–95 GAME (Gang Awareness Through Mentoring and Education), 248–49 gas, moratorium on, 311–14 gas prices, 86–90 Gates, Bill, 16 Geiger, Bernice, 224 Geithner, Tim, 158 gender identity, 228 Gladstone, Bernard, 258, 259 global warming, 88–89, 179–84 Gly-Oxide, 275–76 God, in book titles, 285–87 Goeree, Jacob, 31 Goldstein, Dan, 335 golf, 198–206 Goodall, Chris, 167 Good to Great (Collins), 283–84, 285 Goolsbee, Austan, 160 Gordon, Phil, 187–89, 192, 193 Goss, Pat, 200–201 government: and gambling income, 129 paying politicians, 32–36 voting mechanisms, 29–31 Greatest Good, 28, 300–301 Greene, Mean Joe, 216 greenhouse gas (GHG) emissions, 171–72, 177 Grossman, Michael, 116 Gruber, Jonathan, 117 Grzelak, Mandi, 268–69 guns: anonymous tips about, 247 athletes carrying concealed weapons, 240–41 concealed weapons laws, 242 D.C. ban on, 243–45 deaths from, 245–51 illegal use of, 245 ownership of, 245 shooting intruders with, 241–43 Hagen, Ryan, 314–19 happiness, 122–23, 344–47 Harold’s Chicken Shack, 75–77 Harris, Franco, 216 Hatcher, Teri, 305 hate mail, cost of, 49–51 health care: British National Health Service, 26–29 decisions in, 122 Hemenway, David, 249–50 Henderson, Kaya, 160 herd mentality, 143–46 Hitchens, Christopher, 286 hoaxes, 282–83 Holmes, Santonio, 214–16 home, building your own, 170 home field advantage, 209–12 homelessness, 330–31 horseback riding, 101–3 horse racing, 220–22 housing prices, 67–69 Hurricane Katrina, 42–43, 325–28 Hussein, Saddam, 58 identity, concept of, 162–63 Immaculate Reception, 216 impure altruism, 328 incentives, 17, 32–36, 65, 95–96, 110, 113, 122, 136, 166, 337–40 inefficiencies, transportation, 170–72 INS (Immigration and Naturalization Service), Form N-400, 237–38 In Search of Excellence (Peters and Waterman), 284 Internet poker, 127–30, 157 iPad, 124–25 Irfan, Atif, 130–32 irrational decisions, 120–21 IRS, 11–14, 159–60, 257 Jackson, Vincent, 215 Jacob, Brian, 160 Jagger, Mick, 74 Jarden Zinc, 63 J.F.K. airport, 21–22 Jines, Linda Levitt: brother’s eulogy for, 297–301 father’s interventions, 289–97 and Freakonomics, 277, 297–98 Jingjing Zhang, 31 Johnson, Larry, 207 Johnston, David Cay, 11–12 Kaczynski, Ted (Unabomber), 287 Kahneman, Daniel, 3, 119–24, 206 Katrina (popular name), 42–43 Kennedy, Bobby, 279 Kentucky Derby, 220–22 Keyes, Alan, 279 KFC, 272–73 Killefer, Nancy, 158 kiwifruits, 77–80 Kormendy, Amy, 169 Kranton, Rachel, 162 Kulkarni, Ganesh, 140–41 Laffer curve, 72 LaGuardia Airport, 21–23 LaHood, Ray, 21, 103–6 Lake George, boat accident on, 118–19 Lancaster, Barbara, 219 Landsburg, Steven, 259 Lane, Mary MacPherson, 173 Las Vegas: blackjack, 189–91 poker, 127–30, 153–58, 187–89, 192–95 risk aversion in, 126–27 Lee, Jennifer 8., 41 Lee Hsien Loong, 32 Leeson, Peter, 314–19 Levitt, Michael, “When a Daughter Dies,” 289–97 libraries, public, 14–16 lies of reputation, 137–40 Limberhand (masturbator), 45–46 List, John, 125, 165, 228, 327–28, 338 lobbyists, 62–63 locavores, 168–72 loss aversion, 206–9 Loveman, Gary, 127 ludicity (ludic fallacy), 335 Ludwig, Jens, 246–48 Maass, Peter, 109, 114 Madoff, Bernie, 133 Malthus, Rev.

Economic Origins of Dictatorship and Democracy
by Daron Acemoğlu and James A. Robinson
Published 28 Sep 2001

For these reasons, the citizens, who form the majority in democracy, determine the level of taxation and redistribution by trading off the benefits from redistribution and the costs from distortions (i.e., the leaks in the bucket). Economists often discuss these distortions in terms of the “Laffer Curve,” which is the relationship between the tax rate and the amount of tax revenues. The Laffer Curve is shaped like an inverted U. When tax rates are low, increasing the tax rate increases tax revenues. However, as tax rates increase, distortions become greater and eventually tax revenues reach a maximum. After this point, increases in the tax rate actually lead to decreases in tax revenues because the distortions created by taxation are so high.

…

One factor that may limit the ability of the citizens to get the policies they want in democracy is that the elites may have power out of proportion to their numbers (e.g., through lobbying or the control of parties, as analyzed in the appendix to Chapter 4). But, there is an equally important economic factor that limits what the citizens can do, which we referred to as the Laffer Curve in Chapter 4. It is easiest to discuss this in the context of income redistribution. If taxes are very high, this stifles economic activity and creates such deep economic distortions that there is not much output left. Therefore, democracy is naturally restrained in applying high taxes, trying to ensure that these taxes do not distort the allocation of resources too much and do not induce the elites to withdraw their assets from economic activity, thus reducing tax revenues.

…

Given the availability of a targeted transfer to themselves, the citizens would simply redistribute all the income they raise from capital and land using this targeted transfer; hence, we have Tr = 0 in democracy. Next, because the citizens are no longer taxing themselves, their most preferred taxes are those that maximize the net tax receipts, the right-hand side of (9.18) – in other words, the citizens would now like to be at the top of the Laffer Curve, which relates total tax revenue to tax rate. Therefore, the citizens’ most preferred taxes can be computed simply by solving the following maximization problem: max {τ K r K − C K (τ K )r K + τ L v L − C L (τ L )v L } τ K ,τ L The first-order conditions are straightforward and give the most preferred taxes p p for the poor, τ K , τ L , implicitly as:  p C K τ K = 1 (9.19)   p C L τ L = 1 which maximize their net tax revenues.

Money and Government: The Past and Future of Economics
by Robert Skidelsky
Published 13 Nov 2018

UK public sector net investment, current budget deficit and net borrowing, 1956–2014 156 14. UK public spending and tax revenue, 1950–2000 157 15. The discomfort index in the OECD, 1959–1976 163 16. UK monetary policy and inflation, 1970–2009 189 17. Oil prices and UK CPI inflation, 1970–1985 189 18. The Laffer curve 191 19. IS-LM model 203 20. Keynesian and neo-classical views of the economy 204 21. The Phillips Curve, 1948–1957 205 22. Expectations-augmented Phillips Curve 207 23. The Sargent-Lucas Phillips Curve 210 xiii F ig u r e s 24. Output growth in the advanced economies during the Great Moderation 215 25.

…

This removed the Keynesian rationale for budget deficits. However, the Reagan Administration was much more relaxed about deficits than its Thatcherite colleagues in Britain. On the one hand, following the Friedman doctrine, the US Treasury saw no causal 190 t h e t h e ory a n d p r ac t ic e of mon e ta r i sm Figure 18. The Laffer curve Total tax revenue Rmax 0% T*% 100% Tax rate connection between public deficits and inflation. The second reason was much more important: Reagan had been elected on a programme of cutting taxes and increasing defence spending. The enactment of both, together with the Volcker recession, caused the deficit to rise from 2.8 per cent of GDP in 1980 to 6.3 per cent in 1983.

…

The enactment of both, together with the Volcker recession, caused the deficit to rise from 2.8 per cent of GDP in 1980 to 6.3 per cent in 1983. The tax cuts and increased military spending amounted to a big Keynesian demand boost. But in the post-Keynesian world this ‘Keynesian effect’ could not be acknowledged. Instead, the large deficits were justified on ‘supply-side’ grounds. The famous Laffer curve, supposedly drawn on a napkin by the economist Arthur Laffer at a boozy dinner in 1974, suggested that tax reductions would have positive supply-side effects. The logic was simple. Government revenue must be zero at a tax rate of 0 per cent, and also at a rate of 100 per cent, since no one would then bother to work.

A Generation of Sociopaths: How the Baby Boomers Betrayed America
by Bruce Cannon Gibney
Published 7 Mar 2017

(Here’s where TV’s suspension of disbelief became crucial, both for the actor-president and for the voters who elected him.) The government would return dollars to the people, the people would use them more productively than the government, and the economy would grow so much that even at a lower tax rate it would provide as much or more in total taxes paid. This theory, instantiated in a graph now called the “Laffer Curve” and originally inscribed on a cocktail napkin (and presumably under the influence of the cocktail that came with the napkin), was instantly ridiculed as “voodoo economics.” Here’s the difficulty: To halve taxes but still collect the same total dollars, the economy would have to essentially double.

…

The only unambiguous benefit would be a near-term increase in consumption. Therefore, the program required an electorate that cherished consumption above all, was willing to overlook long-term consequences in favor of short-term gain, had no compunctions about stripping benefits from the most vulnerable, and could tolerate the magical thinking of the Laffer Curve while discounting the large body of evidence counseling against these strategies. As it happened, just such an electorate was at hand. CHAPTER SEVEN THE BOOMER ASCENDANCY The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.

…

The distinctions between “intragovernmental debt” and “debt owed to the public” will be covered later in this chapter—what’s important for now is how quickly and substantially debts have risen.15 The debt began really growing in the 1980s, substantially the product of tax cuts whose goal was to “starve the beast”—the beast being the government generally and its social welfare system in particular.16 Not surprisingly, social programs failed to vanish in response to tax cuts. Moreover, Reagan hugely increased defense spending (feeding the beast) while endorsing the implausible Laffer Curve, which said that the tax cuts would pay for themselves (making the beast’s food free, presumably). Reagan lowered taxes but ended up starving nothing. In 1985, a White House official concluded that “we didn’t starve the beast… it’s still eating quite well—by feeding off future generations.”17 Over the years, the Boomer-dominated political system continued its bizarre debt-dietary policy—all binge, no purge—resisting major cuts to government programs while embracing virtually all tax relief (for Boomers), and deficits and debt grew accordingly.

The Age of Entitlement: America Since the Sixties
by Christopher Caldwell
Published 21 Jan 2020

He was having dinner at the Two Continents restaurant, across the street from the White House, with Wall Street Journal opinion writer Jude Wanniski and two aides to President Gerald Ford, Richard Cheney and Donald Rumsfeld. Laffer was claiming that, on top of the collateral inefficiencies they provoked, high tax rates could actually cost the government money. The “Laffer Curve” was not terribly rigorous. Its origins in a restaurant rather than a classroom are evident from the napkin itself, which is now in the possession of the National Museum of American History. It shows the independent variable—the tax rate—on the y, not the x, axis, as would be normal in academic economics.

…

“The national debt tripled under Reagan”: John Patrick Diggins, Ronald Reagan: Fate, Freedom, and the Making of History (New York: Norton, 2007), 178. “The answer to a government”: Ronald Reagan, “Address Before a Joint Session of the Congress on the Program for Economic Recovery,” April 28, 1981. Online at reaganlibrary.gov. Its origins in a restaurant: “Laffer Curve Napkin,” National Museum of American History. Online at americanhistory.si.edu. “embrace the role of Scrooge”: Quoted in Bruce Bartlett, “Taxes and a Two-Santa Theory,” National Observer, March 6, 1976. Online at wallstreetpit.com. His article was widely read: Ibid. fall of Rome: Jude Wanniski, The Way the World Works (Washington, D.C.: Regnery Gateway, 1998 [1978]), 31.

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Phillips (1867), 206 James, Henry, 136 James, LeBron, 254 James, William, 9, 278 Jameson, Fredric, 140 Japan, 70, 105, 135, 174 Jeffries, Leonard, 157–158 Jencks, Charles, 140 Jenner, Bruce, 256 Jim Crow, 8, 23, 24, 34, 99, 144, 147, 254, 257 Jobs, Laurene, 203 Jobs, Steve, 127, 139, 203 Joel, Billy, 49 Johnson, Dorian, 262–264 Johnson, Kelly, 134 Johnson, Lyndon B., 5, 8, 144, 176, 180, 279 civil rights and, 19, 31, 32, 67, 244 Great Society programs and, 68, 69, 81, 103, 104, 109, 122 immigration and, 113–114 presidential election of 1964 and, 19 Vietnam War and, 66–70, 73, 178 Johnson, Earvin (“Magic”), 254 Johnson, Micah Xavier, 266 Johnson, Simon, 181 Jolie, Angelina, 205 Jolson, Al, 41 Jones, Tom, 273 Jospin, Lionel, 176 Journal of Economic Perspectives, 124 Joy of Sex, The (Comfort), 49 JPMorgan Chase, 180, 211 Kahneman, Daniel, 212, 213 Kaiser, Robert G., 37 Kakutani, Michiko, 255 Kalven, Harry, Jr., 15–16, 222 Kaplan, Roberta, 224, 225, 227 Katzenbach, Nicholas, 114, 115 Kelleher, John, 76 Kelly, Kevin, 139 Kelman, Steven, 75–76 Kelso, Louis, 128–129 Kemp, Jack, 102, 106, 118, 180 Kennedy, Anthony, 124, 228–229 Kennedy, Edward “Ted,” 114–116, 123 Kennedy, Jackie, 38 Kennedy, John F., 38, 114, 275 assassination of, 4–6, 8, 19 civil rights and, 67 Southeast Asia and, 67 speech to Air Force Academy by, 133 Kennedy, Randall, 268 Kennedy, Robert F., 82 Kerry, John, 84 Khe Sanh, Vietnam, 74 Kimball, Roger, 269, 273 King, Martin Luther, Jr., 133, 171, 257, 268, 269 assassination of, 29, 82 holiday, 148–152 “I Have a Dream” speech by, 19, 101, 120 letter from Birmingham City Jail (1963) by, 120–121 nonviolent philosophy of, 151–152 on Vietnam War, 27 King, Rodney, 29, 259, 261 King & Spalding, 225 Kinks “Muswell Hillbilly,” 133 (see also Davies, Ray) Kinsey, Alfred Sexual Behavior in the Human Male, 191 Klarman, Michael, 228 Klarman, Seth, 224, 228 Koch, Charles and David, 227 Kok, Wim, 176 Koppel, Ted, 153, 154 Korean War, 41, 69, 70 Kristol, Irving, 78 Kubrick, Stanley, 135 Kuhn, Thomas The Structure of Scientific Revolutions, 4 Laffer, Arthur, 104–105, 204 Laffer Curve, 105 Laos, 67 Lau v. Nichols (1974), 171 Laura and John Arnold Foundation, 209 Leadership Conference on Civil Rights, 123 Leary, Timothy, 80 Lee, Robert E., 149 LePage, Paul, 246–247 Lesbian and Gay Teachers Association, 168 lesbianism, 59 (see also gay rights, homosexuality, sexuality) Lessig, Lawrence Code, 199 Letter from Birmingham City Jail, 1963 (King), 120–121 leveraged buyouts, 128–129 Levy, Ariel, 225 Lexus (corporation), 224 liberalism, 96, 100, 163, 164 Life magazine, 84 Lilla, Mark, 93 Limbaugh, Rush, 190 Lincoln, Abraham, 5, 149–150, 269 Lockheed, 133, 134 Lombardi, Vince, 94 Long, Gavin, 266 Los Angeles, California, 28, 29, 31, 178, 241, 259 Los Angeles Dodgers, 153–156 Los Angeles Times, 117, 154, 219, 245, 257 Louisville Courier-Journal, 236 LSD (lysergic acid diethylamide), 80 Luxemburg, Rosa, 225 Lyotard, Jean-François, 140 MacArthur, Douglas, 70 Macy’s, 224 Maddow, Rachel, 222, 236 Maher, Bill, 279 Mahler, Gustav, 130 Mailer, Norman, 48 Malcolm X, 26–28, 148, 151 Mandabach, Paul, 151 Manhattan (film), 130 Mann, Barry, 46 Mansfield, Harvey C., 258 Marbury v.

Abundance
by Ezra Klein and Derek Thompson
Published 18 Mar 2025

CLICK HERE TO SIGN UP Already a subscriber? Provide your email again so we can register this ebook and send you more of what you like to read. You will continue to receive exclusive offers in your inbox. Notes Introduction: Beyond Scarcity 1. Laffer Curve Napkin, National Museum of American History, Smithsonian Institution, September 14, 1974, https://www.si.edu/object/laffer-curve-napkin%3Anmah_1439217; “Can Countries Lower Taxes and Raise Revenues?,” Economist, June 18, 2019, https://www.economist.com/graphic-detail/2019/06/18/can-countries-lower-taxes-and-raise-revenues. 2. President Jimmy Carter, State of the Union Address Delivered Before a Joint Session of the Congress, January 19, 1978, https://www.presidency.ucsb.edu/documents/the-state-the-union-address-delivered-before-joint-session-the-congress-1. 3.

The Once and Future Liberal: After Identity Politics
by Mark Lilla
Published 14 Aug 2017

We must never forget that Trump defeated both of America’s major political parties, starting with the one he nominally belonged to. It was an extraordinary spectacle. The Breaker of the Idols did not come from the left or from the right. He came from below. He was unconstrained by piety toward the Gipper, by fealty toward the cause, by deep study of the Laffer Curve, or by adherence to the principle of noncontradiction. He spoke truth more often than his critics gave him credit for, but the way a child sometimes does, by accident, and then embarrasses the adults in the room. Standing before closed manufacturing plants and crowds of unemployed workers he declared that free labor markets and trade agreements were destroying more wealth than they created for such people.

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society
by Binyamin Appelbaum
Published 4 Sep 2019

Laffer and Wanniski, picking up where Mundell had left off, told Cheney the economy needed a tax cut. Laffer told Cheney that cutting tax rates would generate so much economic activity that the government would actually collect more revenue. To illustrate the point, Laffer grabbed a cocktail napkin and sketched a curve that looked like the nose of an airplane. Wanniski dubbed it the “Laffer curve” and made it so famous that the Smithsonian museum now displays a replica inscribed by Laffer. The curve illustrated the claim that high tax rates are counterproductive. Higher tax rates produce higher revenues until a certain point — the nose of the airplane — but as rates are raised above that point, revenues fall.

…

See Truman Bewley, Why Wages Don’t Fall During a Recession (Cambridge: Harvard University Press, 1999), 1. Chapter 4. Representation Without Taxation * In the public mind, the assertion that cutting taxes was a free lunch came to be regarded as the central claim of supply-side economics, but supply-siders did not regard 100 percent revenue recovery as a universal property of tax cuts. The Laffer curve went up and it went down — some cuts would pay for themselves, others not. And the claim was generally more complicated than “the government will collect more revenue.” It actually had three parts: some revenue would be recouped from faster economic growth; that growth also would reduce government spending on safety-net programs; and the increase in savings would hold down interest rates, reducing the government’s borrowing costs.

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Bush, ref1; and China, ref1; and Bill Clinton, ref1; counterrevolution to, ref1, ref2, ref3, ref4, ref5, ref6; and government spending, ref1, ref2, ref3, ref4; and Walter Heller, ref1, ref2; and inflation, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10; and interest rates, ref1; and Marshall Plan, ref1; on monetary policy, ref1, ref2, ref3, ref4, ref5, ref6, ref7; and New Zealand, ref1; and Richard Nixon, ref1, ref2; and Barack Obama, ref1, ref2; on saving, ref1; and stagflation, ref1, ref2; and taxation, ref1, ref2, ref3, ref4, ref5, ref6; textbooks on, ref1, ref2; Paul Volcker on, ref1 Keyserling, Leon, ref1, ref2, ref3 Kissinger, Henry, ref1, ref2, ref3 Koopmans, Tjalling, ref1 Korean War, ref1 Kreps, Juanita, ref1 Krueger, Alan B., ref1 Krugman, Paul, ref1 Kuznets, Simon, ref1, ref2, ref3 labor unions: attacks on, ref1, ref2, ref3; Arthur Burns on, ref1; corruption in, ref1; decline in, ref1; government compensation for job loss, ref1; government intervention in disputes, ref1, ref2; government support for, ref1; and inflation, ref1; membership in, ref1; and safety rules, ref1, ref2; George Stigler on, ref1; Margaret Thatcher on, ref1; Paul Volcker on, ref1 Laffer, Arthur: forecasting model of, ref1, ref2; Laffer curve, ref1, ref2, ref3; and Proposition ref1, ref2; and Ronald Reagan, ref1, ref2; and supply-side economics, ref1, ref2, ref3, ref4; on taxation, ref1, ref2, ref3, ref4, ref5, ref6, ref7 Lagos, Ricardo, ref1 Laird, Melvin, ref1, ref2 Laker, Freddie, ref1, ref2 Larosière, Jacques de, ref1 Latin America, ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 Lawson, Nigel, ref1, ref2 Letelier, Orlando, ref1, ref2 Levine, Michael, ref1, ref2, ref3, ref4, ref5 Li, K.

The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us
by Robert H. Frank, Philip J. Cook
Published 2 May 2011

W hereas Milton Friedman and his fol­ lowers at the University of Chicago waged a lonely battle through the 1950s and 1960s to persuade policy makers that taxation impedes economic growth, by the time Ronald Reagan assumed office in 1981, the sale had been closed. Indeed, Reagan administration officials went so far as to embrace the "Laffer curve," a relationship claiming to show that reductions in tax rates would so stimulate the economy that total tax revenues would actually rise. Events of the past decade have cast doubt on the empirical validity of the notion that tax rate reductions cause enduring economic growth. Our analysis of the allocative effects of winner-take-all mar­ kets suggests that, on theoretical grounds, the equity-efficiency trade­ off ought never to have been expected in the first place.

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See Education Fair Labor Standards Act, 1 8 1 Fairness norms, 1 7 Fallows, James, 1 96, 1 97 Fashion, 4, 27, 77-79, 174175 Fawcett Books, 63 Fax machines, 52 Federal Communications Com­ mission (FCC), 30 Federal 'ilade Commission (FTC), 97 Fields, Vema, 1 94 Film industry, 2, 1 8, 19, 30, 37, 43, 52, 6 1 , 72-75, 1 90, 193-195 , 1 98, 1 99, 20 1 , 206-209 Fisher, George, 7 1 Fleming, Peggy, 1 96 Flood, Curt, 80 Florida State University, 1 66 Flutie, Doug, 135 Fools Die (Puzo), 64 Football, 6, 10, 79, 8 1-82, 137, 168- 1 7 1 Ford, Danny, 80 Ford, Henry, 47 Ford Motor Company, 3 6 France, 4 Free agency, 6, 8 1 , 82 Friedland (Meissonier), 84 Friedman, Milton, 123, 2 1 4 Fryer, Gary, 1 66 Index 265 Gabler, Neil, 204 Harvard University, 1 1 , 28, 1 48, Gabriel, 'llip, 204 Geis, Bernard, 140 Gemini Consulting, 73 Genetic screening and manipulation, 1 84-187 Geologists, 26 Gergen, David, 40 Germany, 4 executive compensation and promotion in, 70, 7 1 , 217 savings rate in, 2 1 3 Getty Oil, 3 1 Gibson, Mel, 74 Gift giving, 42 Gilovich, Tom, 105 Gleason, Jackie, 193 Godfather, The (Puzo), 63 Golden parachutes, 2 1 8-2 19 Goldman, Ron, 206 Golf, 39 Gomez, Andres, 38 Goode, Willi am ]., 3, 38 Graduate Records Examination, 3 1 Graf, Steffi, 24 Gray Eagles (Unkefer), 3 8-39 Greed, 5, 69, 80 Greenfield , Jeff, 1 97 Gregg, Alan, 159 Gretzky, Wayne, 59, 82 Griffin, Alfredo, 8 1 Grisham, John, 65, 198 Gymnastics, 13 1-133 1 52-155 Health care finance, 220-22 1 Heller, ] oseph, 1 93 Henderson, Rickey, 80 Henrich, Christy, 133 High-definition Tv, 27, 34 Higher education: See Education Hirsch, Fred, 4 1 Hockey, 59, 82, 17 1 , 172, 1 8 1 Holmes, Geoffrey, 75 Holtz, Lou, 79 Holyfield, Evander, 25 Home Box Office (HBO), 73 Honda, 36 Honeymooners, The (television series), 193 Horse racing, 23, 29 Hruska, Roman, 160 Human capital theory, 89-9 1 , 94 Huntley, Chet, 76, 200 Huston, Aletha c., 207 Habit formation, 4� 1 Hackett, Paul, 80 Handball, 25, 26 Hanks, Tom, 75 Harding, Tonya, 1 45, 1 96 "Harrison Bergeron" (Vonnegut), 2 1 1 Iacocca, Lee, 59 IBM Corporation, 33, 7 1 , 95 Income inequality growth in, 5-7, 89-99 minor-league superstars, 85-99 runaway top incomes, 6 1-84, 79-82, 2 1 6--2 1 8 trends in, 86--87 Income tax, 15, 2 1 3 , 2 1 4 Independent contracting, rise of, 57 India, 4 Indonesia, 4 Inequality Uencks), 90 Information revolution, 49-53, 59, 120 266 Index 1 89, 190, Kids Say the Darndest Things 1 94 Interior, Department of the, 30 International trade, 5, 6, 28 Internet, 52 Investment banking industry, 3 , 94--95, 147 Invisible-hand theory, 105, 201 (Linkletter), 140 KIng, AJexande� 139-140 KIng, Stephen, 65 KIngston, Paul, 3 6, 1 49 Knopf, AJfred A. , Inc., 200 Koppel, Ted, 76 Krabbe, Katrin, 134 Krantz, Judith, 9-10, 1 8, 64 Krugman, Paul, 86 Kuttner, Robert, 87 Informers, The (Ellis), Jamail, Joe, 98 James, Estelle, 153 Japan, 4 executive compensation and promotion in, 70, 7 1 , 217 savings rate in, 2 1 3 Jaws (film), 73, 194 Jencks, Christopher, 90 Jennings, Peter, 76, 200 Johnson, Ben, 134 Johnson, Larry, 8 1 Johnson, Lyndon, 1 96 Johnson, Ross, 68 Jonathan Livingston Seagull (Bach), 63 Jurassic Park (film), 6 1 Justice Department, 226, 227 Kahneman, Daniel, 105 Kakutani, Michiko, 189 Kand, Nancy, 204 Kaplan, Stanley H., 179 Karolyi, Bela, 132 Kaus, Mickey, 229-230 Keillor, Garrison, 105, 150 Kellogg Corporation, 1 4 1 Kellogg Graduate School of Management, Northwestern University, 129-130 Kennedy, Edward M., 200 Kennedy, John E, 58, 1 98, 199 Kerrigan, Nancy, 145 Labor, division and specialization of, 53-54 Labor unions, decline of, 5, 87 Laffer curve, 123 Lake Woebegon effect, 105, 150 Lane, Anthony, 1 8 Lang, Eugene, 223-224 Languages, 28, 52-53 Last Brother, The (McGinniss), 200 Law School Admissions Test, 3 1 Law schools, 222-223 Layard, Richard, 42 Le Carre, John, 18, 1 93 Legal profession, 3 , 1 1 , 1 6-17, 26, 88, 97-98, 1 1 1 , 1 19-120, 147, 2 1 9-220, 222-223 Leisure policy, 227-228 Leitch, Donovan, 204-205 Lendl, Ivan, 39 Letterman, David, 75 Leveraged buyouts, 70 Levy, Frank, 87, 94 Lewis, Lionel, 36, 1 49 Lewis, Michael, 92-94 Liar's Poker (Lewis), 92 Linkletter, Art, 140 Litigation, 97-98, 1 1 1 , 1 19-120, 178, 2 1 9-220 Index Lock-in through learning, 35, 36 Los Alamos National Laboratory, 166 Lotteries, 30, 32 Lottery game, 130-13 1 Lovers ( Krantz), 1 8 Ludlum, Robert, 65 Luxuries, prices of, 82-84 Luxury tax, 15, 183, 2 1 5 M&H Tire Company, 226 MacNeil!

The Centrist Manifesto
by Charles Wheelan
Published 18 Apr 2013

* In June of 2012, the Booth School of Business at the University of Chicago asked the same ideologically diverse group of expert economists mentioned earlier to agree or disagree with the following statement: “A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.” When the answers were weighted by the respondent’s confidence in his or her answer, 96 percent said “disagree” or “strongly disagree”; 4 percent said “uncertain.” Not a single expert answered “agree” or “strongly agree.” (“Laffer Curve,” Initiative on Global Markets, IGM Forum, Chicago Booth, June 26, 2012, http://www.igmchicago.org/igm-economic-experts-panel/poll-results? SurveyID=SV_2irlrss5UC27YXi) CHAPTER 4 The Centrist Party THE Centrist Party must be more than a collection of people who are not Republicans or Democrats.

Extreme Money: Masters of the Universe and the Cult of Risk
by Satyajit Das
Published 14 Oct 2011

Money for Sale Nature abhors a vacuum. Taking advantage of the financialization of business and everyday life, banks moved to fill the gap. In the film Ferris Bueller’s Day Off, an economics teacher, played by Ben Stein, launches into an improvised soliloquy, asking his apathetic students whether anyone has seen the “Laffer Curve.” He asks if anyone knows what Vice-President Bush Senior called this in 1980. No one knows. “Something-d-o-o economics. ‘Voodoo’ economics.” The 1930s Hollywood film White Zombie incorrectly associated voodoo, African beliefs syncretized with Christianity, with exotic superstitions and occult practices.

…

Christopher Fildes, an English journalist, restated Goodhart’s law: “It’s all very well when anthropologists observe the savages, but all bets are off when the savages start observing the anthropologists.”20 Reaganomics flirted with supply side theory, advocated by little known economist Arthur Laffer. Large tax cuts would stimulate economic growth, expanding the tax base and offsetting the lost revenue from lower tax rates. Armed with a flipchart and pointer, Reagan used a presidential TV address to introduce a bemused nation to the Laffer curve. Half a century earlier, Cornell University Professor George Warren had convinced Franklin Delano Roosevelt to raise prices for agricultural produce by boosting gold prices to try to end the Great Depression. Warren’s credentials included formulas for getting chickens to lay more eggs.21 Politics dictated that governments were unable to rein in spending to match the tax cuts to balance the budget.

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Kennedy Profiles in Courage Award, 301 Johnson, Lyndon, 30, 129 Johnson, Samuel, 352 Johnson, Simon, 96, 294 Joint Economic Committee, 203 Jonas, Adam, 259 Jones, Alfred Winslow, 240 Jones, Norah, 157 Jones, Paul Tudor, 256 Jong, Erica, 73 Jorgenson, Andrew, 64 Joseph, Fred, 146 JP Morgan, 191, 272, 280, 283, 337, 360 jumbo loans, 182 Jünger, Ernst, 233 junk bonds, 143 leveraged buyouts (LBOs), 145-146 JWM Partners LLC, 257 K Kadlec, Charles W., 97 Kahn, Herman, 35 Kahneman, Daniel, 126 Kaltwasser, Pablo Rovira, 126 Kapur, Ajay, 41 Karinthy, Frigyes, 269 Kasouf, Sheen, 121 Katainen, Jyrki, 356 Kaufman, Henry, 292 Kaupthing Bank, 275, 288, 345 Kazakhstan, 72 keiretsu, 139 Kell, Kevin, 99 Keller, Marianne, 64 Kelly, Don, 141 Kennedy, Robert, 359 Kennedy, John F., 81, 364 Kerkorian, Kirk, 137 Kerviel, Jerome, 226-230 Kessler, Andy, 316 ketchup economics, 116 Keynes, John Maynard, 25-29, 33, 77, 100, 303, 347, 362-364 China’s use of philosophy, 87 diversification, 123 Great Depression, 103 risk, 127 uncertainty, 366 warnings about speculation, 88 Kierkegaard, Søren, 130, 179 Kim, Dow, 315 Kimberly-Clark, 92 kimono traders, 40 King Kullen, 208 King’s College, 29, 123 King, Mervyn, 195, 342 KISS, 327 kiwis (New Zealand dollars), 21 KKR (Kohlberg, Kravis, and Roberts), 135, 137 Klein, Naomi, 342 Klempere, Otto, 157 Kluge, John, 149 Knebworth House, 262 Knight, Frank, 128 knock-ins, 211, 217 knock-outs, 211, 217-219 Kogan, Valery, purchases of, 322 Kohn, Donald, 270, 301 Koppel, Ted, 90 Kotov, Alexander, 252 Kravis, Henry, 162 Krawcheck, Salli, 316 kronas (Iceland), 275 Krug Grande Cuvée champagne, 304 Kübler-Ross, Elizabeth, 329 Kubrick, Stanley, 35 Kuhn, Thomas, 273 Kuwati dinars, 21 Kwak, James, 294 kwatcha, 21 Kynikos Associates, 161 L L’engrenage, Mémoires d’un trader, 229 La Défense, 227 LA Galaxy, 339 LaBelle, Patti, 164 Ladies’ Home Journal, 97 Laffer Curve, 65, 110 Lahde, Andrew, 256, 330 Lamont, Thomas, 337 Last Chronicle of Barset, 173 Laurence J. Peter, 144 Law of Attraction, 186 Law, John, 28 laws, Sarbane-Oxley (SOX), 81 Lay, Kenneth, 55 Leach, Jim, 67 leadership styles, Jack Welch, 62-63 Lee, Thomas H., 156 Leeson, Nick, 227 Legal Tender Act of 1862, 28 Legg Mason Value Trust Fund, 245 Lehman Brothers, 154, 162, 292, 312, 316 bankruptcy of, 221, 329, 333, 339 bonuses, 319 collapse of, 288, 346 contracts, 270 Milken’s mobsters, 146 Lehman Risk Committee, 292 lending practices, 70.

Arguing With Zombies: Economics, Politics, and the Fight for a Better Future
by Paul Krugman
Published 28 Jan 2020

To this day, one often hears pundits and establishment types in general talking as if we had a clear distinction between the elite, who know How Things Work, and the great unwashed who need to be led to elite wisdom. The reality, however, is nothing like this. It’s true that there are crank doctrines—goldbuggery, the Laffer curve, etc.—that play a substantial role in popular opinion but have no traction with the elite. But the elite itself has spent much of the past five years committed to economic doctrines—the prevalence of structural unemployment, the urgency of deficit reduction and entitlement reform, the destructive effects of “uncertainty”—that may not be quite as contrary to the evidence as fears of hyperinflation just around the corner, but are pretty bad.

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Treasuries, 205 zero, 111–12, 111, 142–43, 153 Interior Department, U.S., 248 Internal Revenue Service (IRS), 350 international diplomacy, 244 International Monetary Fund, 97–98, 208 international trade, 243–45, 249–53 arbitration in, 252 backlash from, 244–45 conflicts of interest in, 246–47 and corporate assets, 249 and corruption, 246, 247, 254, 255–56 free trade, 249 literature on, 400 political realism in, 251–52 producer interests vs. consumer interests in, 250 protectionism, 247, 250, 252 reasons for agreements in, 246, 247, 249–50, 255 in recent history, 250–51, 251, 255–56 role of executive branch in, 250, 252–53, 255–56 as rules-based system, 244, 245, 247, 250–51, 252, 254–55, 256 tariffs, 244, 246–48, 252–53, 254–56 trade war, 353, 361, 371–72 and U.S. credibility, 256 investment: as accounting fiction, 228–29 debt-financed, 212 lure of personal wealth in, 93 Madoff’s Ponzi scheme in, 92–94 negative, 230–31, 231 overseas, 228 private, 204, 205, 208 progressive expenditure, 210–11 public “shovel-ready” projects, 116, 133, 205–6, 206 rate of return on, 205 uses of the term, 7 investment-savings, liquidity-money (IS-LM), 109–12, 111 invisible bond vigilante, 160–61 Iran-Contra, 300 Iraq war: based on false premises, 13, 26, 343, 381 failed reconstruction in, 299 support from Very Serious People, 157 unpopularity among voters, 27 Ireland: austerity-with-growth in (1980s), 161 banks in, 179 and Europe, 178 foreign investment in, 228 and recover, 183 irrational behavior, 132, 146 Irrational Exuberance (Shiller), 84 Irwin, Neil, 315, 316 “IS-LMentary” (Krugman), 103, 109–12, 111, 125 Israeli stabilization (1985), 127 Italy: economy of, 188 elections in, 188 Mussolini regime in, 346 “It Can’t Happen, It’s a Bad Idea, It Won’t Last” (Jonung and Drea), 184–85 “It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap” (Krugman), 9, 82 Japan: Bank of Japan, 104 financial crisis in, 81–82, 103, 116, 164 jargon, avoiding, 7 Jensen, Michael, 135 jobs: creation of, 120, 293 cuts in, 107, 120 employment benefits, 286, 317 full employment, 96, 114 health insurance covered in, 39 involuntary part-time employment, 60 in knowledge-intensive industries, 292 monopsony power in, 316–17 new geography of, 292 and real earnings, 316 taken by robots, 288–89 work opportunities for less-educated men, 286, 292 see also unemployment Johnson, Lyndon B., 53, 54, 55n Johnston, David Cay, 350 Jones, Alex, 356, 357 Journal of Money, Credit and Banking, 137 JPMorgan Chase, 163 Kaiser Family Foundation, 39, 58 kakistocracy, 350 Kamin, David, 239 Kansas: education in, 293 taxes in, 216, 229, 293 Kavanaugh, Brett, 345, 346, 352 Kentucky, health care in, 68 Kerry, John, 366, 380, 381, 382 Kerry, Teresa Heinz, 380, 381 “ketchup economists,” 136, 141 Keynes, John Maynard, 81, 123, 134, 135, 143, 394, 402 The General Theory of Employment, Interest and Money, 132–33 “The Great Slump of 1930,” 137 Keynesian economics: and business cycle, 276 and Capitol Hill Baby-Sitting Co-op, 137–38 and dysfunctional finance, 147 free-market, 124, 125, 133, 394 macroeconomics, 123, 407–8 as “moderately conservative,” 4, 123, 133, 408 New Keynesian views, 129, 139–40, 143, 145, 147 and the 1980s, 129 opponents of, 4, 95, 124, 133–34, 143 re-embracing, 147–48 “khaki election,” use of term, 13 Khashoggi, Jamal, 330 Kinsley, Michael, 126 Kiyotaki, Nobuhiro, 147 Kleiman, Mark, 48 Klein, Ezra, 51, 356 Klein, Joe, 29 Koch brothers, 60, 303, 331, 336, 355 Kocherlakota, Narayana, 384 Kristol, Irving, 299 “Krugman calculation,” 267–70, 268, 272, 273, 274, 276 K Street project, 283 Kudlow, Larry, 330 Kydland, Finn, 139 Laffer curve, 385 Lancaster, Kelvin, 398 Langone, Ken, 95, 96 language: avoiding jargon, 7 specialized, 393–94 writing in clear English, 6–7 Latvia, slumps in, 162 Lazear, Eddie, 384 Lehman Brothers, 123, 146, 157 Leonhardt, David, 5 Lerner, Abba, 152–54 liberalism, 324 death of, 13 liberal professional economists, 149, 150 libertarians, 5 life expectancy, 199 liquidity, 89, 90 IS-LM, 109–12 liquidity trap, 112 Logic of Collective Action, The (Olson), 354–55 London market, banks lending in, 89 “London Whale” venture, 163 Longman, Phillip, 42 Lucas, Robert, 128, 130, 131, 138–39, 143 Maastricht Treaty, 405 macroeconomics: business cycle vs. long-term growth in, 275–76 and Capitol Hill Baby-Sitting Co-op, 137–38 Dark Age of, 131, 408, 409 as divided field, 123–25, 136–37 false peace in (1985–2007), 142 Keynesian, 123, 407–8 rational-expectation, 128 “saltwater” vs.

Nomads: The Wanderers Who Shaped Our World
by Anthony Sattin
Published 25 May 2022

Economics is in there as well, for Ibn Khaldun made astute observations about the working of financial systems, the best-known being that ‘at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.’ This thought was picked up by the twentiethcentury economist John Maynard Keynes and turned into theory by Arthur Laffer; the Laffer Curve credits Ibn Khaldun with being the first to notice the inverse relation between tax revenues and power. And that explains why the late US President Ronald Reagan quipped that ‘I did not personally know Ibn Khaldun, although we may have had some friends in common!’ The achievement was all the greater because Ibn Khaldun was not writing in Aristotle’s Athens, in Alexandria’s ancient library or Baghdad’s House of Wisdom, but in a remote castle in turbulent, fourteenth-century North Africa, with darkness and difficulty spreading around him, governments fighting each other, and people left to fend for themselves.

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Karma 281–2 Circe 69 circularity 127, 149–50, 152, 165, 196, 197, 203 see also wheel of fortune, turning cities borders/walls 38, 39–40, 42, 81–2, 141, 150, 285–6 ill-effects of 139, 150, 152, 198, 231 Plato’s ideal 83–4 Clark, William 272 Clavijo, Ruy González de 212–13, 220 climate changes 17, 33, 37–8, 55, 58–9, 81, 107–8, 151 cobalt oxide 192–3 Coleridge, Samuel Taylor 188 ‘collective brain’ 302–3 Collinson, Peter 245, 246, 247 colonialism 25, 26, 238, 258–9, 267 Columbus, Christopher 239 comitatus 57, 97–8, 130, 138 compasses 240, 244, 258, 265 Constantine 109 Constantinople (Istanbul), Turkey 105–6, 116, 133, 231 Cook, Captain James 254–9 Cooper, Merian C. 287–8 Cooper-Schoedsack Productions 287–8 cost of progress 15–16, 84, 146, 148, 151, 254–9, 277–8, 290 Crazy Horse 280 Croesus 73, 87 crow symbol of wisdom 282 Crusades 168–9, 169–70, 170–1, 179, 186, 220 Ctesiphon, Iraq 132, 140 cultural exchange/transfer 54, 63–4, 73, 159, 192–5, 210 cuneiform 41–2 Cunliffe, Barry 47–8 Custer, Lieutenant Colonel George Armstrong 280–1 Cyrus the Great 73, 86–8, 117 Dadu (Beijing), China 158 Damascus, Syria 31–2, 134, 135, 138, 139, 186, 210, 214–21 Dance of Death, The (Wolgemut) 203 Darius I 74–5, 76, 88–92 Darwin, Charles 283 Daylam 151 de’ Mussi, Gabriele 199–200, 201 Decameron, The (Boccaccio) 201–2 Deleuze, Gilles 7, 46 Delhi, India 237 democracy 167, 194, 227 Descent of Man (Darwin) 283 Dharawal Aborigines 256–9 Dictionary of the English Language, A (Johnson) 249, 250–1 Diodorus Siculus 76 diversity 61, 73, 79, 83–4, 86, 102, 109, 128, 159, 303 dogs 24, 287 dopamine 29–30 DRD4-7R gene 28–31, 31, 304 Duby, Georges 194, 195 East India Company 241 Edeko 105–6, 112 Eden 15–16, 16–17, 138 Edfu, Egypt 60 education 59, 194, 247–8, 298 Edward I 179 Edward III 194 Egypt 26, 58–65, 61, 65, 138, 191, 193, 204–5, 214, 222, 306–7, 307–8 Einkorn wheat 33, 36 Eisenberg, Dan 29, 30, 31, 304 Elizabeth I 239 Elliot, Daniel Giraud 281 empires defining ‘empire’ 81–2 Macaulay’s speech on 265–6 ‘rise and fall’ cycle 130–1, 146–7, 151–2, 182, 197, 222–3, 228–9 see also specific empires Endeavour, HMS 255–9 Enkidu 43–6, 46 Enlightenment 239–44 Enoch, city of 35, 38 equine revolution see horses Eridu, Iraq 39 Esän Dawlat Begim 236 etymology of nomad 3–4 Euphrates river 15, 38–9, 140, 141, 148 extinctions 33–4 Faraj ibn Barquq, al-Nasir 214, 215 Ferdowsi 300–1 Fereydun 295–301, 304–10 Fergana Valley 101, 235–6 Fermor, Patrick Leigh 231–2 Fernández-Armesto, Felipe 24, 259 figurines and statues 18, 38, 54, 60–1, 133, 252–3 Flavius Orestes 105 Flecker, James Elroy 212 floral/vegetation ornaments/designs 17, 79, 149, 193, 221, 229, 233, 237, 238, 259, 309–10, 309 Florus 104 foxes/dogs 24, 287 Franklin, Benjamin 244–9, 267–8 Frankopan, Peter 103 freedom of conscience 109, 157–8, 169, 177–8, 187, 189, 193, 213, 221, 227, 298 freedom of movement 74, 86, 129, 141, 187, 189, 213–14, 221, 227, 297–8 Gabriel 134 Galileo Galilei 240, 243 Gama, Vasco da 239 Gan Ying 104 Ganges river 15 Gaozu 98–9 Garden of Eden 15–16, 16–17, 138 gardens of paradise 15–16 genetics 28–31, 304 Genghis Khan achievements 157 background and rise as Temujin 153–6 death 167 and Khwarazm 159–64 legal code 189 life on same level as people 166–7 religious beliefs 169 in Western memory 156–7, 161, 164 see also Mongol Empire genocide 277–8, 281 geography–history link 46–7, 58, 128 George II 278–9 Germany 286 Gibbon, Edward 110, 157–8, 208 Gila Monsters 284 Gilgamesh, Epic of 41–6, 285 Gindibu 129 goats 9 Göbekli Tepe, Turkey 17–24, 24, 25, 26, 32–4, 37 gods/goddesses Abrahamic faiths 32, 34–5, 132–3, 134–5 Aztec 152 Bedouin 133 Egyptian 59–61, 63 Greek 69, 71, 72, 84, 86 Hindu 55 Mesopotamian 39 Mongolian 156, 169 Nabataean 133 Persian 75 Scythian 80, 86 gold and silver articles 53, 66, 71, 87–8, 92, 103, 114, 116, 176, 177, 210 Golden Horde 189, 199 Goldsmith, Oliver 262 Goodwin, Jason 231 Goths 109–10 Grass (Cooper-Schoedsack Productions) 287–90 grave goods 7, 49, 54, 66–7, 71, 92, 103 Great Wall of China 96–7 Greece 65–71, 71–2, 82–3 greed 260 gunpowder 240, 258, 265 guns 268, 280 Gurganj, Turkmenistan 162–3 Guyuk Khan 169, 172 Hafez 211 Haider Khan 289 Han Empire, China envoy to Rome 104 Modu’s marriage proposal 99–100 trade 100–1, 101–2, 103–4 Xiongnu, conflict with 95–7, 98, 100 Xiongnu, peace with 98–9 Xiongnu, trade with 100–1 Zhang’s missions 101–2 Hangzhou, China 284 Hargreaves, James 261 Harrison, Marguerite 287–8 Harun al-Rashid 141–3, 147 Hatshepsut 63 Heracles 86 Heraclitus 151 Heraclius 133, 135 Herat, Afghanistan 221 Herder, Johann 46, 58 hero worship 69, 208 Herodotus background 72 customs 35, 301, 309 Egyptians 58 Mesopotamia’s agriculture 139 nomad–settler relationship 117 Olbia 92–3 Persian invasion of Scythia 86–8, 89–92 Persian Royal Road 74 Persians 73, 75, 78, 86–8, 89–92, 117 Scythians 85–8, 89–92, 93–4 Hisarlik, Turkey 67 Histories, The (Herodotus) 72, 94–5 see also Herodotus history–geography link 46–7, 58, 128 history, highway of 24–7, 116–17 History of the Art of Antiquity, The (Winckelmann) 252, 253 History of the Decline and Fall of the Roman Empire, The (Gibbon) 208 Homer 26, 55, 65, 66, 67–71, 285 Honoria 114–15 Hornaday, William 281 horses burials 49, 53, 91, 185 chariots, pulling 50, 62, 64 domestication 48 extending human mobility 49, 54 Fergana Valley 101–2, 236 humans riding 48–9 images of 50, 105, 170 Indus Valley, use in the 56 messenger systems, use in 74, 191 Mongols’ use of 153, 185, 207 Native Americans’ use of 272 redundancy during Industrial Revolution 283, 290 Scythians’ use of 80, 89, 97 trade in 54, 57, 93, 100, 101–2 Horus 60–1 House of Wisdom, Baghdad 144–5, 184 Hubal 133 Huitzilopochtli 152 Hulagu 178–9, 180–7, 187, 188 Hungary 49, 168, 171 Huns 106–7, 110–16, 116, 137–8 Hyacinth 114–15 Hyksos 62–4, 65, 65 Ibn Abd al-Wahhab, Muhammad 267 Ibn Abi al-Yusr 186 Ibn al-Ala, Abu Amr 149 Ibn al-Athir 164 Ibn Arabshah, Ahmad 210, 211, 215, 218, 219, 220 Ibn Barmak, Khalid 140–1 Ibn Battuta 32, 198–9, 200 Ibn Khaldun Arabs 128, 129, 135, 137, 145 asabiyya 130–1, 137 background 124 Barquq 205 Berbers, living among 124–5 Black Death 202–3 burial 229 change 119 in Damascus 215–18 Egypt, return to 219 Faraj 214–15 geographies 128 Harun 142 as historian 222 image of 132 as judge 222 Mongols 197 Muqaddimah, The 125–6, 126–7 nature–nomad relationship 129, 130 seer’s prophecy 203–4 settlement, ill-effects of 139, 145, 146–7, 151, 152 Timur 216–18, 219 wants of settlers/nomads 248 wheel of fortune of dynasties, turning 127, 146–7, 152, 197, 222–3, 228–9 Ibn Rushd (Averroes) 130 Ibn Salama castle, Algeria 123, 124, 126, 142, 203 Ibn Saud, Muhammad 267 Ibn Tumart 131 Idanthyrsus 89–91 identity 69, 137, 148, 155, 166, 232–3 idleness 245–6, 246–7 Iliad (Homer) 26, 66, 67–9 Imbrie, Major Robert 289 Inanna 39, 41 India 57, 102, 104, 237, 241, 267 Indian Notebooks (Thoreau) 271, 275 Indians see Native Americans Indo-European languages 3, 50–2, 54, 55–6, 80, 97, 262–3 Indo-European nomads, early 52–5, 56–8, 65, 66, 67, 72–3 Indra 55 Indus Valley 33, 54–8, 102 Industrial Revolution 259–65, 266, 285 Innocent IV, Pope 172 Iroquois 247–8, 249 Isfahan, Iran 234–5 Isis 60 Islam 134–5, 137, 193, 230, 299–300 see also Arab Empire Istanbul, Turkey 231 see also Constantinople (Istanbul), Turkey Italy 190, 198–9, 201–2, 214, 252 Iyrcae 93 Jackson, Andrew 273 Jani Beg 199 Jefferson, Thomas 272 Jehan, Shah 237–8 jewellery and ornaments 53, 66, 71, 80, 85, 105, 177, 212, 229, 253, 298 John Sigismund 232–3 Johnson, Dr Samuel 249–51, 251 Jones, William 50–1, 262–3 Jordanes 115 Josephus 15 journeys 2, 27–8, 69–70, 303–4 Juvaini, Ala-ad-Din Ata-Malik 180, 186 Kaaba, Mecca 133 Kabul, Afghanistan 237 al-Kafa (Feodosia), Crimea 198–200, 200–1 Kant, Immanuel 46 Karakorum, Mongolia 165–7, 167–8, 169–70, 174–7, 180 Karsakpay inscription, Kazakhstan 209 Kashan, Iran 178 Keynes, John Maynard 125 Khadija 134 Khalid ibn al-Walid 136, 138 Khanbaliq (Beijing), China 188, 192 Khosrow II 132–3, 135 Khwarazmid Empire 159–64 Kitab Na’t al-Hayawan 170 Kitchener, General Horatio Herbert 308 Kubilai Khan 178, 187, 188, 193, 195, 196, 282 Kubla Khan (Coleridge) 188 Kubra, Shaykh Najm al-Din 164 Kuh-e-Mehr (Mountain of Mercy/Mithra), Iran 75 Kurds 19, 232 kurgans 52–3, 91, 92 Laffer Curve 125 Lakota Sioux 273, 279–81 Laws (Plato) 83–4 Layard, Austen 300–1 Lewis, Meriwether 272 Li Ling, General 95–6 Lichfield, Staffordshire 249, 250 Life of Timur (Ibn Arabshah) 210 Linnaeus, Carl 245 Liu Cong 108 lotus flower 79 Louis IX 172 Lü 99–100 Lubana 144 Lucian 57, 72 Luri tree of life carpet, Iran 17 Lydians 73, 87 al-Ma’arri 146 Macaulay, Thomas 265–6 Mackintosh-Smith, Tim 123–4, 225 Madrassa al-Adili, Damascus 215–16, 218–19 Maikop mound, Russia 53–4, 54 Mamluks 169, 186, 187, 214–15, 222 al-Mamun 142, 144, 147 Manafi’ al-Hayawan (Ibn Bakhtishu) 158 Manetho 62 manifest destiny 267, 274, 279–80, 288 al-Mansur 139–40, 141, 143, 147 al-Maqrizi 204 Maragheh, Iran 181 Marco Polo 167, 187–8, 190, 191, 195–6, 198 Marlowe, Christopher 207, 208, 216, 218 Mashad, Iran 221 Massagetae 72, 80 al-Masudi 127 Maximinus 105–6, 111–12 May, Timothy 251 Meadows of Gold and Mines of Gems (al-Masudi) 127 Mecca, Saudi Arabia 133–4, 139 Medes 73, 85, 86, 88 memory, ambition to live in 56, 65, 69, 208–9, 236, 237 Mesopotamia 38–9 see also specific places messenger systems 74, 103, 191 Messiaen, Olivier 285 Mexica 152 Mexico 272, 274 Mighty Dead, The (Nicolson) 67–8 Mihal, Köse 230 Mirbad, Iraq 148 mobility see freedom of movement Modu 97–8, 98–100, 102–3 money, paper 194 Mongke Khan 173–6, 178–9, 187 Mongol Empire arts and sciences 165, 176, 177, 211–12, 221, 222, 222, 229 Black Death 199–201, 205 conquests and spread 158, 162–4, 165, 179, 180–7 cultural exchanges 192–5, 210 decline 197–8, 205–6, 214, 229 democracy 167, 194, 227 diversity 177, 189, 198–9 education 194 Europe, expansion into 168, 171 European embassies to 168–75, 212–13 extent 165, 188–9 freedom of conscience 157–8, 169, 177–8, 187, 189, 193, 199, 213, 221, 227 freedom of movement 187, 189, 213–14, 221, 227 freedom to trade 189–90, 221 gods 52, 169, 172, 178, 193 horses, importance of 158 identity 155 Karsakpay inscription 209 and Khwarazm 159–65 laws 189, 194 Marco Polo’s visit to 187–8 merchant navy 195–6 meritocracy 194 Neo-Mongols 235–8 paper 194 peace 190, 213–14 post-houses 191–2 quriltai of 1206 155 taxes 175–6, 190–1 tombs 211 trade 159–60, 189–92, 195–6, 199, 211–12, 213–14, 227 travel, ease of 191–2 Uighurs, alliance with the 159 viceroys 188–9 wealth 196, 221–2 in Western memory 156–7, 161, 164, 168, 180–1, 207–8 written records 161, 209–10 see also specific people; specific places Morteza Quli Khan 289 motor cars 283, 290 mountains as sacred places 74–5 Mughal Empire 237–8, 238 Muhammad II, Shah 159–60, 160–4 Muhammad, the Prophet 26, 132–3, 134–7, 137 Muqaddimah, The (Ibn Khaldun) 125–32, 202–3 see also Ibn Khaldun Muslim ibn Walid 142 al-Mustasim 181–3, 184–5 Mycenae, Greece 66–7, 71 Naissus (Niš), Serbia 106 Native Americans battles with European settlers 273, 277–8, 279–81 bison 271–2, 274 disappearance 281–2 Franklin’s views 246–8 George II, audience with 278–9 horses, use of 272 pre-colonial presence 241, 269, 271 pushed out by European settlers 268, 270–2, 273 symbols 249, 277, 282, 284 Thoreau’s views 270–1, 275–6 uniting against European settlers 269 nature–nomad relationship 3, 8, 15–16, 23, 129, 228, 258–9, 277, 282, 299 nature–settler relationship 42–6, 241–4, 253, 269–70, 272, 275–6, 281, 283, 285, 286 navies 195–6, 239, 240 Neo-Mongol Empire 235–8 Neolithic Evolution 32–5 Neolithic Revolution 23–4 Nevali Cori, Turkey 18 Newsom, Gavin 277–8 Nicolson, Adam 67–8 Nicolson, Harold 291–2, 293 Nile river 15, 58–65 Nineveh, Iraq 41–2, 81 nomad–nomad conflict 87–8, 89–91 nomad–settler conflict 225 Arabs 135–7 Beja 308 Goths 110 Huns 106, 111–12 Hyksos 62–4 Mongols 158, 160–5, 180–6, 214–20, 237, 251 Native Americans 268, 270–1, 273–4, 275–6, 279–81 Ottomans 231 Persians 145 Visigoths 111 Xiongnu 95, 96–7 nomad–settler cooperation 61, 65, 83–4, 107, 117, 123–4, 303–4 see also trade nomad–settler relationship stories Cain and Abel 32, 34–5, 61, 123, 243 Gilgamesh and Enkidu 42–6 Osiris and Seth 59–61 nomad, defining 3–4 nomad, exclusion/inclusion in dictionaries 250 Nomadic Alternative, The (Chatwin) 302 ‘nomadic gene’ (DRD4-7R) 28–31, 31, 304 Northwestern University, Illinois 28–31 Novgorod Chronicler 171 Novum Organum (Bacon) 239, 240 Nowruz festival 75, 294 oak leaves and acorns 309 octopus brooch 71 Odoacer 115–16 Odysseus 67–8, 69–71 Odyssey (Homer) 26, 67, 69–71 Og, son of Anak 127 Ogodei Khan 167–8, 169, 187 Olbia, Ukraine 92–3 Olympic Games, ancient 71–2 oral tradition 25–6, 27, 82, 86, 258, 282 Ordos culture 105 Origin of Human Races, The (Wallace) 283 Orkhon Valley, Mongolia 165–8 ornaments see jewellery and ornaments Osiris 59–60, 61 Osman 230–1 O’Sullivan, John 267, 268, 274 Otrar, Kazakhstan 160, 220–1 Ottomans 207–8, 220, 230–3, 233, 238, 266–7 overhunting 33–4, 281 ox figurine 54 Pan 84 paper 145, 194 paradise 15–17, 22 Parthians 101, 102, 104, 140 Pascal, Blaise 240–1 In Patagonia (Chatwin) 301 peacock motif 290 Pegolotti, Francesco Balducci 190 Persepolis, Iran 75–9, 79, 88–9 Persian Gulf 141, 148 Persians Abbasids see Abbasid Empire Achaemenids see Achaemenid Empire administration of Arab Empire 146, 148 Afshar goat image 9 Alexander the Great, conquest by 77 Arabs, conquest by 136–7 art 235 Bakhtiari see Bakhtiari Bisotun inscription 74–5, 88, 92 books 158, 170 Byzantines, conflict with 134, 136 cobalt oxide 192–3 Ctesiphon 132, 140 cultural exchanges 73, 210 Greece, relations with 71–2 Manafi’ al-Hayawan (Ibn Bakhtishu) 158 Mongols, conquests by 179–86, 206, 210 nomadic character 73–4, 117, 266, 291–4 nomadic tribes 72–3 paradise garden 16 Pars/Fars 73 Parthians 94, 101, 102, 104, 140 Persepolis 75–9, 79, 88–9 Persian plateau 72–3 Reza Shah 290–1 Royal Road 141 Sackville-West’s time in 291–4 sacredness of mountains 74–5 Safavids 233–5, 235 Sasanian 74, 132–3, 141 Scythians, inability to conquer the 86–92, 150–1 Shahnameh (Ferdowsi) 300–1 Simurgh (Phoenix) 158 trade 192–3 written records, paucity of 26, 71 Petrarch 202 Philip, Master 170 Pir Muhammad 229 Plato 82–5, 129–30 Pliny the Elder 103–4 Plymouth, Massachusetts, USA 241 Polk, James K. 274 Pontic–Caspian steppe 48, 49, 52–3, 109 population growth 17, 33, 59, 261–2, 263, 274, 284, 286, 294 Potbelly Hill, Turkey 17–24 pottery see ceramics prejudices, Western history’s 7–8, 8–9, 24–6, 110–11, 156–7, 161, 180–1, 207–8, 210, 252–4 Prester John 169, 171 printing 238, 240, 265 Priscus 106, 107, 111–14, 138 Proto-Indo-European (PIE) languages 52 Qara Qorum see Karakorum, Mongolia Qashqai 77–8 Qazvin, Iran 179–80 Quran 15, 26, 134–5 railways 274–5, 276–7 ram’s head and horns 11 Ramses III, Pharaoh 60–1 Rashid al-Din 196 Reagan, Ronald 125 religious tolerance see freedom of conscience Renaissance 253 Rendille 28 Report on King David 170 Reza Shah 290–1 Rig Veda 52, 55 Rimbaud, Arthur 303–4 Roerich, Nicholas 53 Roman Empire 102, 103–4, 105–7, 109–16, 136, 284 Roth, Joseph 286 Rousseau, Jean-Jacques 260, 278–9 Rukn al-Din Khurshah 180, 185 Rumi 164–5 Saadi 181, 294 Sacha the dog 287 Sackville-West, Vita 291–3 Safavid Empire 233–5, 235, 238 Safi ad Din, Sheikh 233–4 Sahlins, Marshall 16 Salisbury, Robert Gascoyne-Cecil, 3rd Marquess 283 Samarkand, Uzbekistan 108, 145, 162, 211, 212–13, 220–1, 237 Samburu 28 Sanskrit 50–1, 55–6 Sarmatians 72, 80, 104, 107 Sasanian Empire 132–3 Schliemann, Heinrich 66–7 Schmidt, Klaus 18, 19–22, 23, 25, 34 Schoedsack, Ernest B. 287–8, 289 science 127, 181, 222, 222, 243–4, 245, 254, 255, 283 scorpion symbol 126 Scythes 86 Scythians archery 80, 88, 89 art and ornaments 85, 92, 103, 105, 253 burials/tombs 91 customs 80–1 gods/goddesses 80, 86 Herodotus’ descriptions 85–8, 89–91, 93–4 horses, importance of 80, 89, 97 nomadic character 80, 89, 90, 97, 150–1 Persia’s inability to conquer 86–92, 150–1 rise of 79–80, 81 trade 105 Xiongnu, similarities to the 97, 98, 103 Secret History of the Mongols, The (Rachewiltz) 161 seed planters 260–1 Seljuqs 151–2 Serdica (Sofia), Bulgaria 105–6, 106–7 Seth 59–61, 61, 63 settlement beginnings of 22, 23–4, 32–3 benefits 35–6, 59, 309 detriments 30–1, 45–6, 139, 147, 152, 197, 285–6, 299 Franklin’s views 246, 247–9 and monumental architecture 25 see also cities settlers’ views of nomads Franklin’s 245, 246–8 nostalgia and romanticism 258–9, 287–90, 291–3 scorn and superiority 40, 84–5, 110–11, 265–6, 273–4, 275–6, 279–80, 282–3 Shahnameh (Ferdowsi) 300–1 Shalamzar Palace, Iran 289 Shamhat 43–4 Shami, Nizam al-Din 209–10 Shang-Tu, China 188 Shatt al-Arab 148 Shelley, Percy Bysshe 149–50 Shih Chi (Sima Qian) 94–5 ships 195–6, 200, 205, 206, 239, 240, 241, 254–7 Sidonius, Saint 117 silk 94, 101, 103, 191, 192, 234 Silk Roads 100–1, 103–4, 190–1, 192, 196, 200, 221 silver articles see gold and silver articles Sima Chi 108–9 Sima Qian 80, 92, 94–6, 98, 101 Sinauli, India 57 Sitting Bull 280 Siyavash and family, Iran 1, 2 Sky Father 39, 52, 71, 75, 92, 156, 169 slavery 172, 199, 210, 220, 267–8 Sloane, Sir Hans 254 Smith, George 41–2 Smyrna, Turkey 220 social hierarchies 40–1, 59 social order 40, 59, 63, 82, 83, 84 Socrates 83, 84 Sogdians 101 ‘Song of the Acorn’ (Bakhtiari tribe) 295 Songlines, The (Chatwin) 4, 302 Spain 22, 124, 125, 212, 272 Spargapises 87 specialisation, rise of 40, 59 spinning 259–61 Spinning Jenny 261 stag ornament 85 statues see figurines and statues Steppe, Great Eurasian cultural memories 57, 67, 69, 114, 138 customs/beliefs/rituals 80e–1 Herodotus’ descriptions 93–4 horses, importance of 46–50, 80, 98 Indo-European languages 50–4 kurgans 52–3, 91, 92 migration from 56–8, 67, 81, 108–9, 109–10, 151–2, 230 people of see specific tribes trade 53–4, 92, 105 Stewart, John 11 stories see oral tradition Suleiman the Magnificent 232–3, 235, 237 Susa, Iran 76, 77 al-Tabari 132 Tahiti 256, 259 Talas, Kyrgyzstan 145 Tamburlaine the Great (Marlowe) 207 Tatar Tonga 159 taxes 112, 123, 125, 134, 162, 175–6, 190–1, 232 technology 8, 241–2, 259–61, 274–5, 276–7, 285, 290 Tehran, Iran 289, 290–1, 294 Temujin 153–6 see also Genghis Khan Tengri see Sky Father Tepe Hesar ram’s head and horns, Iran 11 Theodosius II 106–7 Thesiger, Wilfred 130 Thoreau, Henry David 269–71, 274–7 Thousand and One Nights, The 51, 142 Tigris river 15, 38–9, 139–40, 141, 148, 183 Timaeus (Plato) 129–30 Timbuktu, Mali 123 Timur (Tamburlaine) ambitions 208–9 ancestor of Mughals 237–8 background 206–7 Damascus, conquest of 214–19 death 220–1, 222 eye-witness accounts 209–10, 212–13, 216–18 Ibn Khaldun’s meetings with 216–18 Karsakpay inscription 209 luxury 210, 212–13 Samarkand 210–12, 220–1 titles 206 trade 211–12, 213–14 in Western memory 207–8 Tiresias, prophet 69–70 Todd, H.

Debt: The First 5,000 Years
by David Graeber
Published 1 Jan 2010

Ghazali’s position here recalls and is no doubt influenced by Aristotle’s Nicomachean Ethics (1121b): that since money is a social convention meant to facilitate exchange, diverting it into usury defies its purpose; but its ultimate thrust is quite different, closer to Thomas Aquinas’ argument that money is basically a measure and that usury distorts it, and Henry of Ghent’s argument that “money is a medium in exchange and not a terminus”—unsurprisingly, since Aquinas was likely directly influenced by him (Ghazanfar 2000). 93. It’s hard to overstate this. Even the famous “Laffer Curve,” by which the Reagan Administration in the 1980s tried to argue that cutting taxes would increase government revenue by stimulating economic activity, is often called the Khaldun-Laffer curve because it was first proposed, as a general principle, in Ibn Khaldun’s 1377 Muqaddimah. 94. Goitein 1957 for the rise of the “Middle Eastern bourgeoisie.” 95. “Crying down” acted as a de facto tax increase, since one would now need to pay more ecus to make up a tax rate fixed in shillings.

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Just about anyone who runs anything important in America is expected to have some training in economic theory, or at least to be familiar with its basic tenets. As a result, those tenets have come to be treated as received wisdom, as basically beyond question (one knows one is in the presence of received wisdom when, if one challenges it, the first reaction is to treat one as simply ignorant—“You obviously have never heard of the Laffer Curve”; “Clearly you need a course in Economics 101”—the theory is seen as so obviously true that no one who understands it could possibly disagree.) What’s more, those branches of social theory that make the greatest claims to “scientific status”—“rational choice theory,” for instance—start from the same assumptions about human psychology that economists do: that human beings are best viewed as self-interested actors calculating how to get the best terms possible out of any situation, the most profit or pleasure or happiness for the least sacrifice or investment—curious, considering experimental psychologists have demonstrated over and over again that these assumptions simply aren’t true.2 From early on, there were those who wished to create a theory of social interaction grounded in a more generous view of human nature—insisting that moral life comes down to something more than mutual advantage, that it is motivated above all by a sense of justice.

An Empire of Wealth: Rise of American Economy Power 1607-2000
by John Steele Gordon
Published 12 Oct 2009

And investing in new technological possibilities is always very risky, for far more such ventures fail than succeed. It is an inescapable law of economics that if the rewards of success do not match the risks of failure, new ideas will not be tried. It had also lowered total receipts from capital gains taxes, evidence that excessively high tax rates cause tax receipts to fall, not rise—the so-called Laffer Curve after its developer, the economist Arthur Laffer. In 1968, when capital gains taxes had been no higher than 25 percent, receipts from the tax amounted to $33 billion. By 1977 receipts in inflation-adjusted terms were down to $24 billion. And while there had been three hundred start-up technology companies in 1968, there were none at all in 1976.

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M., 248 Jonson, Ben, 27 junk bonds, 397 Kaiser, Henry J., 354 Kay, John, 88 Keats, John, 366 Kellogg-Briand Pact, 311 Kemp, Jack, 390–91 Kemp-Roth tax proposal, 390–91, 395 Kennan, George, 282 Kennedy, John F., vii, 294, 327, 380–81, 382, 391 Kennedy, Joseph P., 340–41 Keynes, John Maynard, 173, 325, 378–80 Kilby, Jack, 408 King, Martin Luther, Jr., 374 King William’s War, 46, 54 Kipling, Rudyard, 350 Kitchener, Lord, 290 Knickerbocker aristocracy, 260 Knickerbocker Trust, 278, 279 Knights of Labor, 250, 252 Knox, Philander, 263 Korean War, 380, 403 labor relations, 249–54 factory system and, 250 pension programs and, 369–70 in postwar era, 371–73 reform of, 344–45 violent clashes in, 252–54 Laffer Curve, 394 La Guardia, Fiorello, 326 Lamont, Thomas, 320–23 Lansing, Robert, 291 League of Nations, 311 Lee, Robert E., vii, 201 Lend-Lease, 352 Levitt, William, 365–66 Levittown, 366 Lewis, John L., 345 liberty ships, 354 Lincoln, Abraham, 3, 137, 192, 196, 198 Lincoln, Benjamin, 65 Lippmann, Walter, 395 Liverpool and Manchester Railway, 147–49 Livingston, Robert, 135–38, 140 Locke, John, 24 London Stock Exchange, 287 Long, Russell, 273 Lothian, Lord, 352 Louis XIV, King of France, 52 Louis XVI, King of France, 75, 77 Louisiana, 86, 122 Louisiana Purchase, 78, 137 Louisville Courier, 185 Lowell, Francis Cabot, 93–97, 247 lumber industry, 30–31, 171–72, 177–78 Lynch, Edmund, 368 McAdam, John, 100 McAllister, Ward, 251 MacArthur, Douglas, 327 Macaulay, Lord, 220 McClure’s, 256 McCormick, Cyrus, 174–75 McKinley, William, 239, 270–71, 275 Madison, James, 64, 73, 74–75, 77–78, 105, 106, 116, 121 War of 1812 and, 117–19, 120 Man and Nature (Marsh), 172 Mansfield, Lord, 52 mark, German, 401 Marsh, George Perkins, 172 Marshall, Alfred, 378–79, 380 Marshall, George C., 351, 377 Marshall, James, 179–80, 187 Marshall, John, 144, 229 Marshall Plan, 377 Marx, Karl, 40, 57, 66–67, 206 Maryland, 87 Maryland colony, 21–22, 45 emigration to, 27–28 Massachusetts: canal program of, 102–3 Shays’s Rebellion in, 64–65 Massachusetts colony, 34–35, 46, 47 coin minting in, 44 Mass Transit Act, 382 Mauchly, John, 407 Maybach, Wilhelm, 296 Medbery, James K., 158, 200, 216 medical insurance, 360–61 Medicare and Medicaid, 382 Men and Mysteries of Wall Street (Medbery), 200, 216 mercantile system, 40–41, 66 Merrill, Charles, 368–69 Mexican War, 160, 179, 191 Mexico, 8, 179, 183, 291 Michigan, 141, 330 microprocessor, 408–9 Microsoft, 256, 410, 417 middle class, 28, 51, 161, 163, 244, 251, 275, 292, 308 credit and, 366–67 Miller, Joaquin, 218 Miller, Phineas, 84–85 Mills, Ogden, 182 Mineworkers Union, 345 Mining Exchange, 199 Mississippi, 86, 224 Missouri, 122 Mitterrand, François, 405 “Modest Enquiry in the Nature and Necessity of Paper Currency, A” (Franklin), 46 Moley, Raymond, 329, 333 money, 44–45, 68–70, 113 in American Revolution, 60–61 banknotes as, 113 in Civil War, 195–97 as commodity, 42–43, 45 deficit spending and, 380–81 “fiat,” 46–47, 195 gold collateralization and, 114–15 paper, 46, 47, 76–77, 121, 126, 128, 195, 196, 197, 202 see also banking industry; coins and currency monopolies, 256–57 Monroe, James, 126, 144 Moore, Gordon, 408 Moore, Henry, 50 Morgan, J.

My Start-Up Life: What A
by Ben Casnocha and Marc Benioff
Published 7 May 2007

Could he tolerate my stories about school and me his stories about his kids? He had to get comfortable with the longterm prospects of the business. Is there a viable business model for a company selling a $10K-a-year software application? We answered that last question in the affirmative after some scribbles on a napkin. I kid you not—along with the Laffer Curve and countless other historically pivotal doodles, Comcate’s business model was initially verified as “filled with potential” thanks to a cocktail napkin. We had to get comfortable with our personalities and our thought processes. For me, a difficult but important consideration when judging the potential of a relationship is whether there’s intellectual common ground.

Economic Gangsters: Corruption, Violence, and the Poverty of Nations
by Raymond Fisman and Edward Miguel
Published 14 Apr 2008

By 2004, the gap had narrowed to only 0.3 percent, as China brought down its overall tariff level to gain entry into the World Trade Organization. 5. Raymond Fisman and Shang-Jin Wei (2004). “Tax Rates and Tax Evasion: Evidence from ‘Missing Imports’ in China,” Journal of Political Economy 112(2). 6. This is conceptually similar to what some economists call the Laffer Curve, where increasing tax rates above some point actually lead to less government revenue. 7. With the help of his government connections, Lai escaped to Canada where he has lived under house arrest since 2002. He continues to fight extradition to China where he would almost certainly receive a death sentence, the punishment meted out to the fourteen senior government officials implicated in his smuggling operation.

How to Speak Money: What the Money People Say--And What It Really Means
by John Lanchester
Published 5 Oct 2014

There’s no real proof of the existence of these waves, and most economists don’t believe in them, but they have their fans. The theory cost Kondratiev his life: his idea implied that capitalism would go through these cycles but continue, whereas official communist ideology was that capitalism would inevitably destroy itself. He was sent to the Gulag and executed by firing squad in 1938. Laffer curve The most influential idea ever to have first arrived in the world on a cocktail napkin. Arthur Laffer (1940–) is an American economist who explained this idea to two officials in the Nixon and Ford administration in 1974. The idea was in essence that government would raise more money in tax by cutting tax rates.

Nine Crises: Fifty Years of Covering the British Economy From Devaluation to Brexit
by William Keegan
Published 24 Jan 2019

When Sir Geoffrey Howe, the new Chancellor, arrived at No. 11 and the Treasury, he and Mrs Thatcher were determined to make a big thing of reducing the top rate of income tax, which was then at the absurd level, even for lefties such as myself, of 83 per cent, or 98 per cent on investment income. The latter rate was, I suspect, one of the few cases where the notorious Laffer Curve really applies. Arthur Laffer, the American extreme right-wing economist, once drew on a Washington restaurant napkin a curve purporting to demonstrate that lower taxes would rake in more revenue for the Reagan administration. What they actually did was contribute to the vast increase in defence spending that swelled the budget deficit, but Ronald Reagan had a Teflon quality and a broad smile, and he got away with things a Democrat would have found difficult.

The Origins of Political Order: From Prehuman Times to the French Revolution
by Francis Fukuyama
Published 11 Apr 2011

The Persian ruler Chosroes I (531–579) was quoted as saying, “With justice and moderation the people will produce more, tax revenues will increase, and the state will grow rich and powerful. Justice is the foundation of a powerful state.”14 “Justice” in this context means moderation in rates of taxation.15 We might recognize this as an early Middle Eastern version of the Laffer curve popularized during the Reagan administration, which held that lower tax rates would produce higher total tax revenues by giving individuals greater incentives to produce. This sentiment was echoed by a number of early Turkish writers16 and inscribed into the so-called circle of equity, which was built around eight propositions: 1.

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Hitler, Adolph Hobbes, Thomas Holland, see Netherlands Holstein Holy Roman Empire Homo erectus Homo ergaster Homo heidelbergensis Homo sapiens, evolution of Hopi Indians House of Commons, English Huan, Emperor of China Huguenots Hui, Victoria Hulagu Khan Humbert of Moyenmoutier, Cardinal Hume, David Humphrey, Nicolas Hundred, Court of the Hundred Schools of Thought period Hungary; accountability in; Diet of; Golden Bull in; maps of; military expenditures in; Ottoman conquest of Huns hunter-gatherers Huntington, Samuel Hunyadi, János Hunyadi, Mátyás Huo Xian Husain Hussein, Saddam Iceland I Jing (Book of Changes) Iliad (Homer) Ilkhanid dynasty Imperial Academy, Chinese Inden, Ronald India; accountability in; agnatic lineages in; agrarian society in; British rule in; comparison of China and; corruption in; democracy in; divergence from Chinese development of; economic growth of; film industry in; kinship structures in; Mongols in; Muslim nation building in; political consequences of ideas in; rationality of religion in; religion in (see also Brahmanism); rule of law in; transition to statehood in; tribalism in; victory of society over politics in Indians: American (see also Native Americans); Amazonian individualism; English; modern; primordial Indo-Aryans Indo-Europeans Indo-Gangetic Plain Indonesia Industrial Revolution; economic growth and productivity gains in; interaction of dimension of development during; kinship patterns and; Protestant work ethic and information technology Institutional Revolutionary Party (Partido Revolucionario Institucional; PRI), Mexican International Criminal Court International Monetary Fund (IMF) Internet Iran; Islamic Republic of Iraq; tribalism in; U.S. invasion of Iraq-Iran War Ireland Irnerius Iron Age Iroquois Indians Isabella, Queen of Castile Islam; conversion to; in India; religious law of; see also Muslims Islamic Revolutionary Guard Corps, Iranian Islamism; radical Israel, ancient István, King of Hungary Italy; Catholic church in; colonies of; Normans in; rise of capitalism in; serfdom abolished in; urban bourgeoisie in Ivan I, Prince of Moscow Ivan III, Tsar of Russia Ivan IV (the Terrible), Tsar of Russia Ivan the Terrible (film) Jainism James I, King of England James II, King of England Janissaries Japan Jefferson, Thomas Jena-Auerstadt, Battle of Jesus Jews; in England; in Hungary; in Ottoman Empire; see also Judaism Jim Crow laws Jin Dynasty Jing, Emperor of China Jin state Joanna, Queen of Spain John, King of England John II, King of France Johnson, Simon Jordan Judaism; see also Jews Junkers Justinian Code Jutes Kaikolar weaver caste Kalahari Desert, Bushmen of Kalenjin people Kalmar Union Karakhanids Karbala, Battle of Kashi Kashmir Kautilya Kaviraj, Sudipta Kazakhstan Keeley, Lawrence Kenya Khaldun, Ibn Kharijites Khilnani, Sunil Khitai Khitans Khomeini, Ruhollah Khorasanis Khwarazm empire Kikuyu people kinship; advent of state and exit from; agnatic, see agnation; in China ,; in Europe; fictive; in India; in Latin America; in Muslim state; property rights and; religion and Kipchak Turks Kipling, Rudyard Koguryo Kojève, Alexandre Köprülüs, vizirate of Koran Korea Korean War Kosala Kroeber, Alfred Kshatriyas Kublai Khan Kurds Kushana dynasty Kutadgu Bilig Kwakiutl Indians Kwangju massacre Labour Party, British Laffer curve Laon, Aldabéron de Laos Laslett, Peter latifundia Laud, Archbishop William Law, John Laws of Manu Lebanon LeBlanc, Steven LeDonne, John P. Lee Kuan Yew Left Legalism legitimacy; of aristocracy; ceremonial; charismatic; democratic; dynastic; economic; legal; loss of; under Mandate of Heaven; religious; rights-based; taxation and Leighton, Alexander León Lepanto, Battle of Lesser Catechism, Lutheran levée en masse Levellers Levenson, Joseph R.

Milton Friedman: A Biography
by Lanny Ebenstein
Published 23 Jan 2007

Friedman writes of the “disastrous effects on incentives”22 of high tax rates. He has always been a “supply-sider”—a term that came in vogue in the late 1970s to contrast with the Keynesian emphasis on demand—as he favors reduction in tax rates to increase productivity and advocates a stable monetary environment. He has never adopted the idea of the Laffer curve, however, whereby tax cuts pay for themselves. Nor is he a proponent of a gold standard, as many supply-siders are. Friedman says that “supply-side fiscal policy... consists of cutting high marginal tax rates in order to stimulate innovation and entrepreneurship.... Experience suggests that it is very effective in stimulating economic growth.

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America
by Jamie Bronstein
Published 29 Oct 2016

Richard McGahey, “The Political Economy of Austerity in the United States,” Social Research vol. 80 no. 3 (Fall 2013): 717–748, at 729; Monica Prasad, “The Popular Origins of Neoliberalism in the Reagan Tax Cut of 1981,” Journal of Policy History vol. 14 no. 3 (2012): 351–383, at 354; Jude Wanniski, “Taxes, Revenues and the Laffer Curve,” The Public Interest vol. 50 (1978): 3–16. 6. Chris J. Dolan, “In His Shadow: The Impact of the Reagan Economic Regime and Institutional Structure on the Bush Administrations,” White House Studies vol. 7 no. 3 (2007): 235–250. 7. Jill Quadagno, The Color of Welfare: How Racism Undermined the War on Poverty (Oxford, UK: Oxford University Press, 1996), 167. 8.

One Up on Wall Street
by Peter Lynch
Published 11 May 2012

As some perceptive person once said, if all the economists of the world were laid end to end, it wouldn’t be a bad thing. Well, maybe not all economists. Certainly not the ones who are reading this book, and especially not the ones like Ed Hyman at C. J. Lawrence who looks at scrap prices, inventories, and railroad car deliveries, totally ignoring Laffer curves and phases of the moon. Practical economists are economists after my own heart. There’s another theory that we have recessions every five years, but it hasn’t happened that way so far. I’ve looked in the Constitution, and nowhere is it written that every fifth year we have to have one. Of course, I’d love to be warned before we do go into a recession, so I could adjust my portfolio.

Austerity: The History of a Dangerous Idea
by Mark Blyth
Published 24 Apr 2013

That is, debts are lower three years out and growth is higher than the seventy-fifth percentile of the average of the set of the observations.144 This time around, as we saw in the section on the effects of expectations, the results of the econometrics again lack the caveats of their prior piece. Cuts lead to expansion and “have far superior effects on growth than those based on increases in tax revenues.”145 This time around Alesina and Ardanga even smuggle a quasi-Laffer curve into the piece, whereby cutting spending (rather than taxes) leads to more tax revenues, whereas “they [taxes] go down quite significantly in expansionary adjustments.”146 Most significantly, successful adjustments see welfare transfers fall, while unsuccessful adjustments see them rise. As such, the welfare state has to go because “it is very difficult if not impossible to fix public finances when in trouble without solving the question of automatic increases in entitlements.”147 And in complete contrast to what Keynesians believe, government spending lowers growth, since “a one percentage point higher increase in the current spending to GDP ratio is associated with a 0.75 percentage point lower growth.”148 Eleven years later and the ambiguity, nuance, and qualification that characterized “Tales” has disappeared.

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond
by Chris Burniske and Jack Tatar
Published 19 Oct 2017

SRINIVASAN, CEO of 21.co and board partner at Andreessen Horowitz Burniske and Tatar have delivered a seminal guide to what may be the biggest investment opportunity since the Internet. Informative and actionable, Cryptoassets is a must-read for crypto-enthusiasts and capital market investors alike. —ARTHUR B. LAFFER, chairman of Laffer Associates, member of President Reagan’s Economic Policy Advisory Board, and creator of the Laffer Curve As we hurtle into a new, decentralized economy, Burniske and Tatar have laid down something of immense importance: a coherent logic, a new science even, for investing in the assets that will define that coming world. —MICHAEL J. CASEY, senior advisor to the Digital Currency Initiative at MIT Media Lab and coauthor of The Age of Cryptocurrency In this sweeping and lucid work, Burniske and Tatar make a compelling case that cryptoassets are foundational to the second generation of the Internet and represent a once-in-a-generation opportunity for the innovative investor.

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated)
by Charles Wheelan
Published 18 Apr 2010

Many economists argue that cutting taxes and rolling back regulation unleashes productive forces in the economy. This is true. The most ardent “supply-siders” argue further that tax cuts can actually raise the amount of revenue collected by the government because we all will work harder, earn higher incomes, and end up paying more in taxes even though tax rates have fallen. This is the idea behind the Laffer curve, which provided the intellectual underpinnings for the large Reagan-era tax cuts. Economist Arthur Laffer theorized in 1974 that high tax rates discourage so much work and investment that cutting taxes will earn the government more revenue, not less. (He first sketched a graph of this idea on a restaurant napkin while having dinner with a group of journalists and politicians.

The Social Animal: The Hidden Sources of Love, Character, and Achievement
by David Brooks
Published 8 Mar 2011

It was like Ralph Lauren’s own personal heaven—a vast Anglophilic expanse with walnut paneling, various fireplaces with great stone hearths, English club chairs sprayed around alcoves, a large marble chess table in the corner, his-and-her showers in the bathroom suite in case you got the urge to shampoo in one and condition in the other. She wandered around the complex in a sort of wide-eyed disbelief, wondering things like “What? No trout stream?” The concierge was on the wrong side of the service Laffer curve. At certain top-end facilities, the waiters and concierge types are at such a heightened state of attending to your every need that the more they do for you, the less convenient your life becomes. They refill your coffee cup after every sip so you have to remix sugar and cream just to keep it even.

Evil Geniuses: The Unmaking of America: A Recent History
by Kurt Andersen
Published 14 Sep 2020

He met with the new White House chief of staff, Donald Rumsfeld, who in turn ordered his deputy to meet with Wanniski and Laffer. And so over drinks at a restaurant three blocks from the White House, Laffer explained himself to the deputy White House chief of staff, Dick Cheney, by sketching on a cocktail napkin what later became known as the Laffer Curve, as if it were some well-established principle of economics. In 1976 Wanniski introduced supply-side talking points to the Journal’s readers. By then Laffer was teaching at the USC business school in Los Angeles, which made it easy for him to throw a dinner party for Governor Reagan—and teach him the supply-side catechism—just before he announced he’d be running for president in 1980.

The omnivore's dilemma: a natural history of four meals
by Michael Pollan
Published 15 Dec 2006

George Naylor has studied this question, and he has come up with a convincing answer. He's often asked to speak at meetings on the farm crisis, and to testify at hearings about farm policy, where he often presents a graph he's drawn to explain the mystery He calls it the Naylor Curve. ("Remember the Laffer curve? Well, this one looks a little like that one, only it's true.") Basically it purports to show why falling farm prices force farmers to increase production in defiance of all rational economic behavior. "Farmers facing lower prices have only one option if they want to be able to maintain their standard of living, pay their bills, and service their debt, and that is to produce more."

Traffic: Why We Drive the Way We Do (And What It Says About Us)
by Tom Vanderbilt
Published 28 Jul 2008

As a result, he writes, “I drove with a modicum of caution.” From The Beckoning Silence (Seattle: Mountaineers Books, 2006), p. 105. for more “safety”: The Mount McKinley information comes from a fascinating study by R. Clark and Dwight R. Lee, “Too Safe to Be Safe: Some Implications of Short- and Long-Run Rescue Laffer Curves,” Eastern Economic Journal, vol. 23, no. 2 (Spring 1997), pp. 127–37. It is true that many more people were climbing the mountain by the century’s end, but it is also true that many more climbers were needing to be rescued. In 1976 alone, the study notes, there were thirty-three rescues, one out of every eighteen climbs—almost as many as the total number prior to 1970.

Rentier Capitalism: Who Owns the Economy, and Who Pays for It?
by Brett Christophers
Published 17 Nov 2020

In a forceful intervention in 2018, George Monbiot, drawing on Piketty’s concept of ‘patrimonial capital’, which refers to a rentier class generating its income from largely inherited assets, explained why: During the 1940s, when the left was arguably at the peak of its power in mainstream politics, the top rate of income tax in the US rose to 94%, and in the UK to 98%. Economists today look back on these rates and describe them as irrational. They argue that the Laffer Curve suggests that governments raise no further revenue above a rate of about 70%. But this is to miss the point. The point of these taxes was not just to raise revenue, but to break the power of patrimonial capital, and the vicious circle of wealth accumulation and inequality.29 Monbiot’s crucial point is that taxation is a vital tool – perhaps even the principal tool – that the state has at its disposal to address inequality, including the power relations propelling it and their reproduction over time.

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present
by Jeff Madrick
Published 11 Jun 2012

But Democratic economists argued that it wasn’t incentives due to lower tax rates but increased demand for goods and services that made the Kennedy-Johnson cuts effective. This was precisely the lesson of Keynesianism. Roberts went to work for the House Budget Committee, and Kemp recruited former Nixon economist Arthur Laffer to help his cause. He famously created something called the Laffer curve to illustrate how tax revenues could increase—or at least not fall very much—when taxes were cut, not for Keynesian but for supply side reasons. Kemp introduced a massive tax cut bill in the House and Delaware senator William Roth introduced the bill in the Senate. The Kemp-Roth bill proposed cutting personal income taxes by 30 percent over ten years.

Reaganland: America's Right Turn 1976-1980
by Rick Perlstein
Published 17 Aug 2020

In his newspaper column, Pat Buchanan called Kemp-Roth “the Republican response to Humphrey-Hawkins”: a full employment bill that didn’t create a single socialistic government job. And in the next issue of the Public Interest Wanniski published a head-spinningly ambitious defense of Kemp-Roth’s foundational theory: “The idea behind the ‘Laffer curve’ is no doubt as old as civilization,” he claimed, “but unfortunately politicians have always had trouble grasping it.” He described instances throughout history when tax cuts were supposedly followed by economic booms, and tax hikes that brought forth economic Armageddon. Though his definition of “tax hikes” was a little bit loose.

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legislation Jimmy Carter championed Eric Laursen, The People’s Pension: The Struggle to Defend Social Security Since Reagan (Chico, CA: AK Press, 2012), 44. Conference Board “The Economic Scene,” NYT, June 11, 1978. fall of 1977 Patrick Buchanan column, October 25, 1977; “The Tax Relief Act of 1977,” First Monday, August 1977. next issue of the Public Interest Jude Wanniski, “Taxes, Revenues, and the ‘Laffer Curve,’ ” Public Interest, Winter 1978. single phone call Stahl, Right Moves, 101; “typical review” is 103; Friedman, 104. Gardner Ackley Collins, More, 177. Franco Modigliani Collins, More, 177; Stein is 186. Alan Greenspan Seymour Zucker, “Massive Tax Cuts Won’t Work,” Newsday, August 9, 1978; also Stigler and Business Week.

Basic Economics
by Thomas Sowell
Published 1 Jan 2000

Government Printing Office, 2014), p. 389. {669} “Maryland’s Mobile Millionaires,” Wall Street Journal, March 12, 2010, p. A18. {670} “Ducking Higher Taxes,” Wall Street Journal, December 21, 2010, p. A18. {671} Arthur Laffer, “Real Relief: A Capital-Gains Tax Cut,” Wall Street Journal, May 14, 2001, p. A18. {672} “Iceland’s Laffer Curve,” Wall Street Journal, March 12, 2007, p. A14. {673} David Walker and Mike Foster, “New U.K. Tax Sends Hedge Funds Fleeing,” Wall Street Journal, August 25, 2009, p. C2. {674} Michael T. Darda, “The Inflation Threat to Capital Formation,” Wall Street Journal, April 10, 2008, p. A15. {675} Economic Report of the President, 2010 (Washington: U.S.

Crashed: How a Decade of Financial Crises Changed the World
by Adam Tooze
Published 31 Jul 2018

In its redistributive impact and the scale of the giveaway, 2017 stood in comparison with the huge Reagan tax cut of 1981 and those of Bush in 2001 and 2003.66 To ease the passage of their tax measures through Congress and to calm the nerves of fiscally conservative Republicans, the Treasury and fellow traveling Republican economists talked down the deficit implications.67 They resorted to the old Reagan-era arguments that lower tax rates would boost growth and thus raise government revenues. Even the notorious Laffer curve, purporting to show a positive relationship between lower tax rates and government revenue, made a comeback.68 But the vast majority of economists were scornful of these evasions. The tax cuts would clearly add to the deficit. Simpson and Bowles, who had headed Obama’s national commission on fiscal responsibility and reform, denounced the tax plan as a return to the era of “deficit denial.”69 In fact, it was not so much denial as hard-nosed political calculation.