Two readings of every volume
312 collected plates and 312 expanded essays. The editions sometimes take different paths through the same subject; each keeps its own titles and order below.
26 volumes
IThe Wage12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Bargainthe wage as unequal exchange; Smith's asymmetry
- iiThe Marginthe marginal-productivity orthodoxy
- iiiThe Subsistencethe classical and Marxian alternatives
- ivThe Skillhuman capital and the return to schooling
- vThe Differencecompensating differentials, and why they hide
- viThe Discriminationtaste-based versus statistical
- viiThe Floorthe minimum wage in the competitive model
- viiiThe Monopsonyemployer power, and the inversion
- ixThe Unioncollective bargaining and countervailing power
- xThe Insurancesearch, the reservation wage, the safety net
- xiThe Machineautomation and the future of the wage
- xiiThe Sharelabor's share, and the great divergence
The expanded essays
Read the argument and original contents →- iThe Bargainthe wage as an unequal exchange; the asymmetry Adam Smith placed at the origin of the subject.
- iiThe Marginthe marginal-productivity orthodoxy; the wage as the value of the last hour worked, determinate and, it was said, just.
- iiiThe Subsistencethe classical and Marxian alternatives
- ivThe Skillhuman capital and the return to schooling; the wage as the yield on an investment lodged in the person.
- vThe Differencecompensating differentials; the wage and the conditions of the job
- viThe Discriminationtaste-based and statistical discrimination; the price of exclusion
- viiThe Floorthe minimum wage; the competitive benchmark and the room employer power leaves
- viiiThe Monopsonyemployer power and the inversion; why a single buyer of labor pays below the worker's worth, and the gap is the measure of its power.
- ixThe Unioncollective bargaining and countervailing power; the workers' combination as the answer to the employers', and the case where it costs no jobs.
- xThe Insurancesearch, the reservation wage, the safety net; the lowest wage a worker will accept, and what raises the floor beneath it.
- xiThe Machineautomation and the future of the wage
- xiiThe Sharelabor's share and the great divergence
IIThe Rent12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe DifferentialRicardo's rent at the margin; price-determined, not price-determining
- iiThe Scarcityeconomic rent generalized; the return to inelastic supply
- iiiThe UnearnedHenry George, the unearned increment, and the single tax
- ivThe HorizonMarshall's quasi-rent; what counts as rent depends on the clock
- vThe Privilegemonopoly rent; scarcity manufactured by power and law
- viThe Seekingrent-seeking; the waste of chasing the prize
- viiThe Rentierthe political economy of rent; Keynes's euthanasia
- viiiThe Endowmentresource rents; Hotelling, and the curse of plenty
- ixThe Groundland and location; von Thünen, Rognlie, and the housing question
- xThe Talentrent to scarce ability; the superstar and the inimitable
- xiThe Boundarydistinguishing rent from return; the earned and the unearned
- xiiThe Tributethe price that is pure surplus; toward The Rate, The Tax, The Stock
The expanded essays
Read the argument and original contents →- iThe CornRicardo's differential rent: the surplus of the better land over the no-rent margin, and the inversion that rent is price-determined, not price-determining.
- iiThe Ordervon Thünen and the location of rent; the isolated state, and rent as the saving in carriage that the better-placed land commands.
- iiiThe Excesseconomic rent generalized: the payment to any factor above the least that would keep it in its use — the surplus that does no work.
- ivThe QuasiMarshall's quasi-rent; the return to what is fixed for a while but not forever, and the rent that time alone creates and erases.
- vThe SingleHenry George and the unearned increment: the land-value tax, and the one levy that, because land cannot flee, takes without distorting.
- viThe Capturerent-seeking: the resources spent to win a rent rather than to make a thing, and the discovery that the chase can waste the whole of it.
- viiThe Scarcitythe sources of rent; natural fixity set against contrived restriction, and the monopolist's rent compared with the landlord's.
- viiiThe Positionthe return to a chokepoint — land, network, patent, brand, license — and how much of modern income is a toll on position rather than a reward for product.
- ixThe RentierKeynes and the euthanasia of the rentier; the functionless owner, and the politics of those who live by what they hold.
- xThe Groundland's return to the center; housing, the price of place, and the share of modern wealth that is simply ground.
- xiThe Licensethe modern proliferation of permission; occupational licenses and certificates, and the small artificial scarcities that ring-fence a wage.
- xiiThe Tollrents and the distribution of income; the part of profit, and of inequality, that is not reward but a sum collected.
IIIThe Rate12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Exchangeinterest as the price of time; the present for the future
- iiThe Balancesaving and investment; the loanable-funds market
- iiiThe TangentFisher; impatience and opportunity; the rate determined
- ivThe Rewardthe nature of interest; waiting, productivity, or rent?
- vThe LiquidityKeynes; interest as the price of parting with money
- viThe AnchorWicksell's natural rate; the rate the economy wants; r-star
- viiThe Veilreal versus nominal; the Fisher equation; inflation
- viiiThe Curvethe term structure; the yield curve; the market's forecast
- ixThe Ebbthe secular decline of the real rate; secular stagnation
- xThe Discountdiscounting the future; investment, assets, and climate
- xiThe Leverthe central bank; monetary policy; the rate as a policy variable
- xiiThe Futurethe price of the future; toward The Money, The Cycle, The Stock
The expanded essays
Read the argument and original contents →- iThe Usurythe oldest question: is interest legitimate, earned or extracted — from Aristotle's barren money to the slow rehabilitation of the lender's claim.
- iiThe AbstinenceSenior's reward for waiting; interest as the price of abstaining from present consumption.
- iiiThe Agiotime preference: Böhm-Bawerk and Fisher, and interest as the premium on present over future goods — impatience meeting the productivity of waiting.
- ivThe Productivityinterest as the marginal product of capital, and the capital controversy that finds the quantity of capital cannot be measured without the rate it is meant to set.
- vThe LiquidityKeynes's liquidity preference: interest as the reward for parting with money — a monetary phenomenon set in the money market, not the price of thrift.
- viThe NaturalWicksell's natural rate against the market rate; the cumulative process, and r-star, the rate that cannot be seen.
- viiThe Realreal against nominal; Fisher's equation, and the part of every rate that is only the expectation of inflation.
- viiiThe Policythe rate as an administered price: a committee sets the anchor of all rates, and the price of time becomes a decision steered toward chosen goals.
- ixThe Zerothe zero lower bound, secular stagnation, and negative rates — the price of time at and below nothing.
- xThe Discountpresent value and the valuation of the future; the ethics of the discount rate, from Ramsey to the price of the climate.
- xiThe Impatiencehyperbolic discounting and present bias; the rate as a psychology that contradicts itself across time.
- xiiThe Curvethe term structure; the many rates that are not one, and what the slope between them is thought to foretell.
VThe Spread12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Gapthe bid and the ask; the spread as the price of immediacy
- iiThe Searchwhy intermediaries exist; search, matching, and the bridging of gaps
- iiiThe Immediacyliquidity and the limit order book; who supplies immediacy and who demands it
- ivThe Inventorythe dealer's inventory risk; quote-shading and the price of bearing what waits
- vThe Informedadverse selection in the market; the spread that information alone creates — Glosten-Milgrom
- viThe Cutthe spread decomposed; order-processing, inventory, and adverse selection
- viiThe Quotehow competition sets the spread; rivalry, market power, and order flow
- viiiThe Haircutthe price of illiquidity; the liquidity premium and the patient hand — Amihud-Mendelson
- ixThe Bankintermediation's grandest form; maturity transformation, the net interest margin, and the run
- xThe Speedthe electronic market; high-frequency trading, latency, and the speed race
- xiThe Middlemanthe oldest contest; whether the intermediary serves or merely extracts
- xiiThe Crossingthe price of intermediation made whole — completing The Prices, toward The Margin, The Money, The Asymmetry
The expanded essays
Read the argument and original contents →- iThe Middlemanthe ancient charge that the middleman produces nothing and skims, and the first answer to it — that to move, to store, to vouch, and to bear risk is itself a service the spread pays for.
- iiThe Searchsearch and matching: why a buyer and a seller who both want the trade may still need a third to find each other.
- iiiThe ImmediacyDemsetz and the price of immediacy: that the spread buys the right to trade now, without waiting to find a counterparty, and that liquidity is a service like any other.
- ivThe Inventorythe dealer who must hold what he buys before he sells it, and bear its price in the meantime; the part of the spread that is a premium for risk borne in inventory.
- vThe Informedadverse selection in the spread: that the maker always loses to those who know more, and widens his quote to recoup from the rest — the part of the spread that prices his own ignorance.
- viThe Arbitragethe arbitrageur who buys low and sells high across space and time; the law of one price, and the competition that shrinks the spread toward its cost.
- viiThe Bankthe bank as intermediary; maturity transformation, the net interest margin, and the spread between what savers are paid and borrowers are charged.
- viiiThe Makerthe market-maker who quotes two prices where we imagined one, and the discovery that there is no single price — only a bid, an ask, and a gap that is the cost of trade itself, earned and levied in proportions no one can cleanly divide.
- ixThe Platformtwo-sided markets and the platform's take rate; network effects, and the spread that the owner of the meeting-place can command.
- xThe Disintermediationthe perennial prophecy that technology will abolish the middleman, and the perennial rise of a new one in his place.
- xiThe Commissionthe broker and the agent; the commission as the spread of agency, and the conflict in being paid from the very gap one is trusted to narrow.
- xiiThe Frictionthe spread as the measure of friction; transaction costs, the frictionless market of theory, and the trading cost that the price itself assumes away.
VIThe Margin12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Incrementthe marginal idea — value lies not in the total but in the one more; the diamond-water paradox resolved — Smith
- iiThe Revolutionthe marginal revolution of the 1870s — subjective value overturns the labor theory — Jevons, Menger, Walras
- iiiThe Diminishingdiminishing marginal utility — why each additional unit is worth less, and why demand slopes down — Gossen
- ivThe Allotmentthe equimarginal principle — the consumer's optimum, where marginal utility per dollar is equal across all goods
- vThe Climbmarginal cost — the cost of one more, rising with diminishing returns, and the supply curve it traces
- viThe Meetingthe firm's optimum — produce where marginal revenue meets marginal cost, the rule beneath all supply
- viiThe Productmarginal product — the demand for a factor, hired until its marginal value equals its price — Clark
- viiiThe Bygonesunk costs — why only marginal costs matter, and bygones are forever bygones — Jevons
- ixThe Averagemarginal versus average — the distinction that decides, and how the margin pulls the mean
- xThe Efficientefficiency — the right quantity for society, where marginal benefit meets marginal cost
- xiThe Substitutionthe ordinal turn — indifference curves, the marginal rate of substitution, and marginalism without measured utility — Hicks, Pareto
- xiiThe Principlethe margin made whole — the single idea beneath demand, supply, and choice, toward The Surplus, The Utility, The Stock
The expanded essays
Read the argument and original contents →- iThe WaterJevons; the diamond-water paradox dissolved — price answers not to a thing's total usefulness but to the usefulness of its last unit, the final degree of utility.
- iiThe Laborthe classical theory the margin overthrew; value sought in the labor and cost a thing embodied, and the usefulness it could never quite explain.
- iiiThe IncrementGossen; the two laws beneath it all — that each added unit yields less satisfaction than the last, and that means are spent best by equalizing the satisfaction of the last unit of each.
- ivThe SubjectiveMenger; value grounded in ranked needs, not measured pleasure, and the inversion that follows — that the worth of the means is imputed backward from the worth of the ends.
- vThe AlternativeWieser; opportunity cost — the cost of any use of a resource is the value of the best alternative use forgone, the marginal idea carried into the reckoning of cost.
- viThe Scissorssupply meets demand; if marginal utility governs what buyers will pay, marginal cost governs what sellers will take, and the price is settled where the blades cross.
- viiThe Methodthe marginal rule generalized; do a little more of a thing while its marginal benefit exceeds its marginal cost, and stop just where the two meet.
- viiiThe EquilibriumWalras; the whole economy as one system of interlocking markets, all prices settled together at the margin — general equilibrium, and the numéraire that gives this series its name.
- ixThe Calculusthe marginal quantity is a derivative; how the margin turned a verbal subject into a mathematical one, for good and for ill.
- xThe Efficiencythe welfare theorems; in what exact sense an economy that reckons at the margin wastes nothing, and the demanding conditions under which the claim holds.
- xiThe Revolutionwhy three men, in three countries, lit on the margin within a few years of one another, and what it means that an idea has its moment.
- xiiThe Returndiminishing returns in production; why each added hand or acre yields a little less than the last, and how the margin governs what is made as well as what is wanted.
VIIThe Surplus12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Triangleconsumer surplus is born — Dupuit's bridge, Marshall's measure
- iiThe Crossthe gain from trade, and how it divides into two surpluses
- iiiThe Measurecan the triangle be trusted? — income effects and Hicks's true surpluses
- ivThe Residuethe older, social surplus — the Physiocrats, Ricardo, Sraffa
- vThe UnpaidMarx, and the surplus wrung from the unpaid hour
- viThe Lossthe deadweight loss — the surplus that goes to no one
- viiThe Wedgetaxation, incidence, and the state's claim on the surplus
- viiiThe Captureprice discrimination — the seller who takes it all
- ixThe Divisionbargaining and the indeterminate price — Edgeworth, Nash, Rubinstein
- xThe Standardthe compensation principle, and the unweighted dollar
- xiThe Theoremthe two welfare theorems — what efficiency does and does not buy
- xiiThe Keepingthe contest restored to a question — toward The Share, The Power, The Rent
The expanded essays
Read the argument and original contents →- iThe TriangleHotelling; consumer and producer surplus, the value an exchange creates beyond its price, and the welfare optimum where price equals the cost of one more.
- iiThe BridgeDupuit; the engineer who first measured the worth of a public work beyond the tolls its users pay.
- iiiThe UnseenBastiat; the gains from voluntary exchange, real but unseen, and the broken-window fallacy that destruction creates no wealth.
- ivThe TermsMill; reciprocal demand and the terms of trade, the division of the gains turning against whichever side wants the exchange more.
- vThe BrandChamberlin; monopolistic competition, product differentiation buying a sliver of market power, the surplus captured then competed away into excess capacity.
- viThe Sortingprice discrimination, the seller sorting buyers by willingness to pay to capture more of the surplus, the whole of it under perfect discrimination.
- viiThe Lossdeadweight loss, the surplus that simply vanishes when trade is held below its efficient level, captured by no one.
- viiiThe ControlLerner; the economics of control, the index of monopoly power, marginal-cost pricing, and the contested rule for how the surplus should be divided.
- ixThe Advantagecomparative advantage, the gains from specialization even when one party is better at everything.
- xThe Biddingauctions, mechanisms that assign the surplus by their rules, the winner keeping the gap to the runner-up.
- xiThe Scramblerent-seeking, the surplus consumed by the resources spent fighting to capture it.
- xiiThe Capprice controls, a ceiling or floor holding a price off its level, destroying some surplus and reshuffling the rest.
VIIIThe Utility12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Wantutility — the economist's name for the satisfaction behind value; Bentham's calculus of pleasure and pain
- iiThe Scalecardinal utility — the ambition to put satisfaction on a scale, and diminishing marginal utility — Jevons, Marshall
- iiiThe Rankingthe ordinal turn — utility as the mere ranking of bundles, and the indifference map — Pareto
- ivThe Axiomsrational preference — completeness and transitivity, and the theorem that a utility function represents them
- vThe Revealedrevealed preference — utility inferred from choice alone, with the psychology purged — Samuelson
- viThe Wagerthe St. Petersburg wager — why expected value fails, and the birth of expected utility — Bernoulli
- viiThe Expectedexpected utility — choice under risk, and risk aversion as the concavity of the utility curve — von Neumann, Morgenstern
- viiiThe Anomalythe violations — Allais and Ellsberg, ambiguity, and the descriptive failure of expected utility
- ixThe Incomparableinterpersonal comparison — whether one person's satisfaction can be weighed against another's — Robbins
- xThe Impossibilitysocial choice — aggregating preferences into a social judgment, and Arrow's impossibility theorem — Arrow
- xiThe Experienceddecision versus experienced utility — what we choose against what we feel; the remembering self — Kahneman
- xiiThe Goodutility made whole — value as felt, chosen, and inferred, toward The Surplus, The Stock, The Share
The expanded essays
Read the argument and original contents →- iThe SubstanceBentham's calculus; want as a real, countable quantity of pleasure, named before it could be measured.
- iiThe Marginthe marginalists; diminishing marginal utility, and want made at last to govern a price.
- iiiThe Orderthe ordinalist revolution; cardinal magnitude declared meaningless and only the ranking left standing, and what was lost when the size of a want was thrown away.
- ivThe Revelationrevealed preference; want emptied of feeling and rebuilt from consistent choice alone, and whether the preference so recovered is any less a ghost than the want it replaced.
- vThe Wagerexpected utility; cardinality returns, but only as a shadow cast by choice among risks.
- viThe ParadoxAllais and Ellsberg; the self-evident axioms failing exactly where they seemed surest.
- viiThe Frameprospect theory; the same outcome worth more, or less, by the way it is described.
- viiiThe Comparisonthe interpersonal problem; why the sum of two people's utility may be a sentence with no meaning.
- ixThe ImpossibilityArrow's theorem; the refusal to compare, with a few innocent conditions, making the common good incoherent.
- xThe HedonimeterEdgeworth's dreamed-of instrument, and the modern attempt to read pleasure off the brain itself.
- xiThe CapabilitySen's exit; advantage measured not by satisfaction but by what a person is able to do and to be.
- xiiThe Choicethe tie-back; want as the silent assumption beneath every plate of the table.
IXThe Stock12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Snapshotstock against flow — a quantity at an instant versus a quantity through time, and why everything depends on the difference
- iiThe Reservoiraccumulation — the stock as the integral of past flows, rising when inflow exceeds outflow; the past made present
- iiiThe Capitalcapital — the accumulated stock of produced means of production, and the desired stock where its marginal product meets its cost
- ivThe Assetvaluation — the worth of any durable asset as the present value of the future flow it yields — Fisher
- vThe Sumthe measurement of capital — heterogeneity, aggregation, and the Cambridge capital controversy — Robinson, Sraffa
- viThe Acceleratorinvestment — the flow that builds the stock, its determinants, and why it swings with the change in output
- viiThe Decaydepreciation — the stock wears out, gross against net investment, and the steady state where they balance
- viiiThe Bufferinventories — why a stock is held against uncertainty, the optimal level, and the inventory cycle
- ixThe Wealthwealth as a stock — its distribution, and the divergence when returns outrun growth — Piketty
- xThe Hoardmoney as a stock — the demand to hold it, liquidity preference, and the opportunity cost of the interest rate — Keynes
- xiThe Accountingstock-flow consistency — the deficit is not the debt, and the discipline of never confusing them
- xiiThe Bequestthe stock made whole — the past accumulated and the future redeemed, and the close of the atlas
The expanded essays
Read the argument and original contents →- iThe BathtubBoulding; the stock-flow distinction itself — a stock is a level that exists at a moment, a flow a rate that runs through time — and the charge that economics, built on the income statement, neglected the balance sheet.
- iiThe Hoardthe oldest confusion, of money with wealth; the mercantilist faith that a nation's prosperity was the pile of gold in its vaults, and how slowly wealth came to mean more than a hoard.
- iiiThe ReckoningKuznets; the flow account — national income, the measure that became gross domestic product — and its author's warning that it gauges neither a nation's wealth nor its welfare.
- ivThe BalanceGoldsmith; the stock account — the national balance sheet — and the dense web of financial claims that, being mutual debts, net to nothing for the nation even as they make up the wealth of its citizens.
- vThe LifetimeModigliani; the life cycle — how a person turns a humped income into a stock of wealth, saving in the middle years and spending it down in retirement; wealth as a buffer, earned and meant to be spent.
- viThe CircuitCopeland; the flow of funds — how money moves as both stock and flow across the sectors of an economy, every payment a flow that changes some balance, every balance a stock some flow has built.
- viiThe Wearingdepreciation; a stock decays without the maintenance a flow supplies, so gross investment must first make good the wearing-out before any of it counts as growth in the stock.
- viiiThe HoldingTobin; the economy as a web of balance sheets, and the ratio q by which the market's valuation of a stock of capital governs the flow that builds it — and the answer to when a fortune becomes a position.
- ixThe Debtthe debt is a stock, the deficit a flow; a debt is the accumulation of past deficits, and to confuse the standing total owed with the yearly addition to it corrupts every argument about public finance.
- xThe Annuitythe conversion of stock into flow and back; a lump sum becomes a lifetime income, and an income capitalizes into a lump sum, the two joined and exchanged at the rate of interest.
- xiThe Concentrationthe stock is split far more unequally than the flow; wealth is concentrated where income is merely unequal, the gap widened by inheritance and by the returns that accrue to holding.
- xiiThe Inheritancewealth that outlives the one who made it; the stock passed down rather than earned afresh, the position that survives its maker, and the question of whose work a dynastic fortune rewards.
XThe Power12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Makerthe price-maker, and the diagram of monopoly
- iiThe Markupmeasuring power; the Lerner index and the inverse of elasticity
- iiiThe Barrierthe sources of power; entry, scale, networks, patents
- ivThe Spectrumbetween the poles; structure, concentration, and conduct
- vThe Gameoligopoly, the strategy of the few, and the temptation to collude
- viThe Leverageextending power; tying, bundling, and foreclosure
- viiThe Buyerthe mirror; monopsony and buyer power, The Wage made general
- viiiThe Costwhat power costs; the triangle, the rectangle, the slack
- ixThe Enginethe defense; Schumpeter, innovation, and the inverted-U
- xThe Trustthe remedy; antitrust and the consumer-welfare standard
- xiThe Platformthe modern frontier; networks, data, and two-sided markets
- xiiThe Sovereignthe structure beneath the price; toward The Rent, The Tax, The Rule
The expanded essays
Read the argument and original contents →- iThe Monopolistthe single seller who makes the price instead of taking it: how, facing the whole demand alone, he holds back his wares to lift the price above its cost — the trades thus strangled the deadweight loss of his power, and the same logic, mirrored, the buyer's who is too few.
- iiThe Markupthe measure of market power: how far the price stands above the cost of the last unit made, the gap that is nothing under competition and yawns under power — and the evidence that, of late, it has been widening.
- iiiThe Moatwhy the monopoly is not stormed: the barriers that keep rivals out — the vast scale that fits but one firm, the patent, the network that swells with each user, the brand and the cost of switching — and the natural monopoly no entrant can challenge.
- ivThe Cartelthe few who would act as one: oligopoly and the collusion that mimics monopoly, the cartel's standing temptation to fix the price and each member's standing temptation to cheat — a prisoner's dilemma the law and the cheater both undo.
- vThe Decreethe law against the trust: a century's swing from the breaking of the great monopolies, through the creed that only the consumer's welfare counts, to the new alarm at the bigness of the platforms — and the question of what, if anything, concentration costs beyond price.
- viThe Segmentprice discrimination: why the same seat, pill, or program is sold to each buyer at a different price, the three degrees of the practice, and the surprise that to charge each his utmost may waste less than to charge all alike.
- viiThe Gridthe natural monopoly and its leash: where one network serves all most cheaply and rivalry would only duplicate the pipes, the regulation — by price cap or rate of return — that lets the one firm stand but not gouge.
- viiiThe Exitthe deepest turn: that power is nothing but the other side's want of an alternative, so that monopoly and monopsony are one — and that a fair price is only ever what the freedom to walk away compels, dissolving the moment one side has nowhere else to go.
- ixThe GaleSchumpeter's creative destruction: the recurring storm of invention that topples each monopoly with the next, and the hard suggestion that the prize of a temporary monopoly is the very spur that drives the progress.
- xThe Tributerent-seeking: the real resources — the lobbying, the lawyering, the courting of power — spent to win and keep a monopoly, a waste beyond the deadweight loss, for the prize of privilege is fought over with treasure that vanishes in the fighting.
- xiThe Gatekeeperthe platform's new dominion: the network that gives itself away and grows mightier the more it is used, the winner that takes all, and the data moat the old antitrust was not built to breach.
- xiiThe Markdownthe mirror of monopoly: not the giant that sells too dear but the one that buys too cheap, the single buyer who marks down the wage or the price he pays — monopsony, met first in the wage, now seen entire.
XIThe Externality12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Spilloverthe cost or benefit that falls on a bystander; the wedge; the missing market
- iiThe Smokethe negative externality; private versus social cost; the market makes too much
- iiiThe Orchardthe positive externality; the vaccine and the bees; the market makes too little
- ivThe CorrectionPigou's corrective tax; price the harm and the market mends
- vThe SettlementCoase, reciprocity, and the bargain that reaches efficiency from any right
- viThe Transactiontransaction costs; when bargaining fails and the assignment of rights matters
- viiThe Permittradable permits and cap-and-trade; a market in the right to pollute
- viiiThe Instrumentprices versus quantities; tax or cap under uncertainty — Weitzman
- ixThe Networknetwork externalities; tipping, lock-in, and the standard that wins
- xThe Miragewhat is not an externality; the pecuniary effect that only looks like failure
- xiThe Climatethe greatest market failure; the social cost of carbon and the discount rate
- xiiThe Reckoningthe failure of the missing market made whole — toward The Tax and The Commons
The expanded essays
Read the argument and original contents →- iThe Smokethe factory whose smoke dirties a stranger's wash: the cost that falls outside the bargain, the gap between private and social cost, and the too-much of every harm the price ignores.
- iiThe Vaccinepositive externalities and the good the market makes too little of; herd immunity, the subsidy, and the spillovers of knowledge and health.
- iiiThe LevyPigou's remedy: a tax set equal to the harm, a subsidy equal to the good, so that the price at last tells the whole cost and the market, corrected, wants the right amount.
- ivThe NeighborCoase's reply: that the harm is reciprocal and has no villain, and that neighbors with clear rights and a way to bargain will reach the same efficient end whoever the law first favors.
- vThe Permitthe missing market made: property in the right to pollute, a cap, and a price found by trading it — the externality internalized not by the state's tax but by a market in the harm itself.
- viThe Holdoutthe limits of the bargain; transaction costs, holdouts, and the free rider, and why the multitude that a harm touches can rarely negotiate at all.
- viiThe Highwaycongestion as an externality; the road, the bridge, the crowded network, and the toll that Vickrey would set to price the delay each adds to all.
- viiiThe Boundarythe deepest turn: that what counts as 'external' is set by where the law draws property, a line that moves as it becomes worth moving — so the price omits not what cannot be priced, but only what no one yet owns.
- ixThe Patentthe spillover of ideas, and the patent that fences them; the appropriability problem, and the trade between the spur to invent and the freedom to use.
- xThe NetworkArthur; increasing returns to adoption, the paths history selects, and the alternatives a network can close off.
- xiThe Contagionsystemic externalities; the risk one firm's gamble visits on the whole, financial contagion, and the case for taxing fragility.
- xiiThe Atmospherethe great externality: a harm spread across every border and every generation, the global commons, and the boundary no single nation can draw.
XIIThe Asymmetry12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Secretasymmetric information; hidden type and hidden action; the failure of knowing
- iiThe Lemonadverse selection; the market for lemons; how hidden quality unravels trade
- iiiThe Pooladverse selection in insurance; the death spiral; the mandate and the risk class
- ivThe Hazardmoral hazard; the hidden action; the deductible, the co-pay, the monitor
- vThe Incentivethe principal and the agent; pay for performance; insurance traded for effort
- viThe SignalSpence and the signal; education as proof; the costly sign that separates
- viiThe ScreenStiglitz and the screen; the menu that sorts; self-selection and its distortion
- viiiThe Rationingcredit rationing; why raising the rate backfires; the market that will not clear
- ixThe Witnessreputation, certification, the warranty; the devices the market breeds to cope
- xThe Disclosurethe state's hand; mandated disclosure; statistical discrimination and its harm
- xiThe Paradoxinformation as a peculiar good; Arrow's paradox; the knowledge a market cannot price
- xiiThe Knowledgewhat the failure teaches; markets run on knowledge, unequally held
The expanded essays
Read the argument and original contents →- iThe LemonAkerlof's market for lemons: how hidden quality lets the bad drive out the good, until the honest seller withdraws and the market thins toward ruin.
- iiThe Applicantadverse selection in insurance and credit; the applicant who knows his own risk, and the borrower who knows his own intent.
- iiiThe DiplomaSpence and the signal: why a costly credential can be worth its price even when it teaches nothing, and what it means that we burn years to prove what we already are.
- ivThe ScreenStiglitz and the screen: how the uninformed side can design a menu — the deductible, the cheaper version, the test — that makes the informed sort themselves.
- vThe Hazardmoral hazard, the hidden action: how a contract changes the conduct it insures, and why every policy against loss is also a temptation toward it.
- viThe Agentthe principal and the agent; incentive pay, the informativeness principle, and the price of being unable to watch.
- viiThe Warrantywarranties, brands, and reputation; the costly hostage a seller posts against his own cheating.
- viiiThe Signalthe price as a broken signal: how asymmetry turns a market into a game of inference, and how it survives — when it survives — only by paying, in real resources, to reveal what the price no longer can.
- ixThe Mechanismmechanism design and the revelation principle; rules built so that honesty is the best policy, and the rent the honest still collect.
- xThe Stereotypestatistical discrimination; the group taken as a proxy for the person, and the prophecy that fulfills itself.
- xiThe ParadoxGrossman and Stiglitz; the impossibility of a price that has already learned everything there is to know.
- xiiThe Secretinformation as a good; the paradox of the thing you cannot value until you have it, and cannot be sold once you do.
XIIIThe Commons12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Pasturerival yet open to all; the four goods; the tragedy in miniature
- iiThe TragedyHardin's pasture formalized; private incentive, collective ruin; the dissipated rent
- iiiThe Fisherythe open-access fishery; Gordon and Schaefer; rent fished away to nothing
- ivThe Manythe tragedy as an n-person dilemma; Olson, free-riding, and the trap of the many
- vThe Fenceprivatize the commons; Demsetz, enclosure, and the tradable quota
- viThe Leviathanthe state's coercion; Hardin's Leviathan, regulation, and its capture
- viiThe GovernedOstrom's third way; the community that governs itself
- viiiThe Charterthe design principles; the anatomy of a commons that endures
- ixThe Strangerwhen self-governance fails; the stranger, the multitude, the global commons
- xThe Clubclub goods and congestion; the crowded road and the optimal club — Buchanan
- xiThe Mirrorthe comedy, the knowledge commons, and the anticommons — Rose, Heller
- xiiThe Inheritancethe failure of the unowned made whole — toward The Game, The Norm, The Rule
The expanded essays
Read the argument and original contents →- iThe PastureHardin's tragedy: how a pasture open to all is grazed to ruin, each herdsman gaining the whole of his beast and bearing only a sliver of the cost, till the field that feeds all feeds none.
- iiThe ClubBuchanan's club goods, the fourth kind: the swimming pool, the toll road, the members' library — excludable yet shared, and the right size for a thing whose crowding all its holders feel.
- iiiThe Lighthousethe public good and its free rider: how a light that shines for every ship, and can be withheld from none, is one the market will not build — the mirror of the commons, a shared benefit too little supplied.
- ivThe Free RiderOlson and the logic of collective action: why the larger the group that shares a goal, the less any member will lift to reach it, and why the common interest so often goes undefended.
- vThe FisheryGordon's model and the cure: how open water dissipates the wealth of the sea, and how the two orthodox remedies — the state's quota and the private quota-holder — each try, by command or by ownership, to undo it.
- viThe Enclosurethe privatizing cure and its violence: how the fencing of the common field can end the tragedy and end a way of life at once, the right to the land bought at the price of the right to its use.
- viiThe Leviathanthe state as keeper of the commons: regulation, the public trust, and the provision of what markets will not — and the distant guardian's twin failings, ignorance of the local and capture by the strong.
- viiiThe Covenantthe third way: Ostrom's discovery that communities can govern a commons themselves, by rules of their own making — neither the state nor the fence, but the binding faith of those who share it.
- ixThe Knowledgethe purest public good: an idea that all may hold at once and none use up, the science and the song and the open code — and the puzzle of paying to make what costs nothing to share.
- xThe Trustthe social capital beneath the rules: the reciprocity, reputation, and trust that let neighbors keep faith where no contract binds, and the slow making and quick breaking of it.
- xiThe Sanctionhow a self-ruled commons enforces itself: the watchful neighbor, the graduated penalty, the punisher who pays to punish — and the repeated game in which cooperation can, at last, be made to hold.
- xiiThe Planetthe commons with no sovereign: the climate, the oceans, the web of life, shared by every nation and ruled by none, and the question whether a globe can be governed as a village is.
XIVThe Firm12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Islandwhy firms exist; planning within the sea of prices
- iiThe Frictiontransaction costs; the price of using the market
- iiiThe Edgethe boundary of the firm; make or buy; the Coasean margin
- ivThe Holdupasset specificity; lock-in; why integration follows
- vThe Agentthe nexus of contracts; the principal-agent problem; agency costs
- viThe Unwrittenincomplete contracts; ownership as residual control
- viiThe Hierarchythe managerial corporation; ownership divorced from control
- viiiThe Authoritythe employment relation; the wage as submission to direction
- ixThe Fiefthe firm as private government; power over the working life
- xThe Stewardcorporate governance; shareholder value and its rivals; for whom
- xiThe Fissureoutsourcing, franchising, the gig platform; the dissolving boundary
- xiiThe Visible Handthe firm as conscious coordination; planning and the market
The expanded essays
Read the argument and original contents →- iThe IslandCoase's puzzle and answer: why firms exist at all when the market could do the work — because using the price is not free, and where its costs run high, command is cheaper than exchange.
- iiThe EntrepreneurKnight; the firm as the bearer of uncertainty, the entrepreneur who guarantees the wage and claims the residual, and profit as the reward for shouldering the risk no one could price.
- iiiThe HoldupWilliamson; asset specificity and the hold-up it invites, and the make-or-buy line — the firm swallowing the transactions that the market, by exposing them to a partner's mercy, would govern badly.
- ivThe Nexusthe firm as a web of contracts rather than a thing with an inside — with workers, lenders, suppliers, owners — and the agency cost that each such bond, joining parties whose interests diverge, must carry.
- vThe OwnerGrossman and Hart; ownership as the residual right to decide all that the contract did not, and make-or-buy as the question of who should hold that right over which assets.
- viThe EmployeeSimon; the employment relation, and the wage that buys not a single named task but the open-ended agreement to be directed within a zone the worker does not negotiate.
- viiThe ShareholderBerle and Means; the separation of ownership from control in the great corporation, the owners who do not manage and the managers who do not own, and the apparatus that would align them.
- viiiThe Planthe deepest turn: the firm as planning inside the market, the visible hand where the invisible fails — and the discovery that market against plan was always a false choice, the firm a moving frontier between them set by the cost of coordinating.
- ixThe Charterthe corporation as a legal person — limited liability, transferable shares, and a life beyond its founders' — the legal invention that made the great firm possible to build and to finance.
- xThe Divisionthe multidivisional firm; how an organization too large for one mind to hold is split into divisions and made to act as one, and the internal market that allots its capital.
- xiThe Cooperativethe worker-owned firm, the partnership, the mutual; the alternatives to capital's ownership, and the puzzle of why capital so usually hires labor and so seldom the reverse.
- xiiThe Dissolutionthe firm in the age of cheap markets; how outsourcing, the franchise, and the gig platform dissolve the firm as the cost of using the market falls — the moving frontier, caught in motion.
XVThe Contract12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Wordthe contract as enforceable promise; the bond of the word
- iiThe Mastcommitment; binding the future, and the freedom in being bound
- iiiThe Sealwhat makes a promise binding; consideration and the bargain
- ivThe Remedybreach and its remedies; expectation damages; the efficient breach
- vThe Unforeseenincompleteness; the impossibility of the complete contract
- viThe Defaultthe law's gap-fillers; default rules, implied terms, good faith
- viiThe Handshakerelational contracts; trust, reputation, the shadow of the future
- viiiThe Adhesionthe standard form; the fine print; the fiction of agreement
- ixThe Limitwhat cannot be contracted; the coerced, the inalienable, the void
- xThe Warrantycontracting under asymmetry; the warranty, the signal, the guarantee
- xiThe Compactthe social contract; the polity as agreement, and the fiction of consent
- xiiThe Bondthe tie that binds; promise, trust, and cooperation across time
The expanded essays
Read the argument and original contents →- iThe SwordHobbes; the enforcement that turns a promise into a binding one, and lets exchange reach across time.
- iiThe Hostagethe bond, the collateral, the hostage staked and forfeited on breach; how a promisor binds himself by what he puts at risk.
- iiiThe GapAyres and Gertner; the incomplete contract, and the default rules by which the law fills the silence the parties left.
- ivThe TenantHolmström; the incentive contract, and the spur of reward bought always at the cost of risk, when effort cannot be watched.
- vThe HandshakeMacaulay; the promise kept for the relationship, not the court — the self-enforcing bond in the shadow of the future.
- viThe BreachHolmes; efficient breach, and the contract as an option to perform or to pay, the duty to keep it only a duty to compensate.
- viiThe StatusMaine; the movement from the status one is born to, to the contract one chooses — the rise of the contract as the rise of the chooser.
- viiiThe Promisethe deepest turn: what fills the gaps no clause can close — trust, reputation, discretion — and the discovery that the contract, emblem of the explicit, rests on the implicit it seemed to replace.
- ixThe Boilerplatethe standard form, the contract of adhesion, the fine print no one reads and no one can bargain; consent in the age of the mass contract.
- xThe Limitthe limits of freedom of contract; unconscionability, duress, and the bargains the law will not enforce though both parties freely struck them.
- xiThe Contingencythe contract as a state-contingent claim, and the dream of complete markets in which every future could be insured against, were it only nameable.
- xiiThe Codethe smart contract; the self-executing agreement enforced by the machine, not the court, and what is gained and lost when the sword becomes software.
XVIThe Money12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Promisewhat money is; the three offices; money as a social relation
- iiThe Ledgermetal, state, and credit; the three theories of money's value
- iiiThe Pyramidhow money is created; banks, reserves, and the hierarchy of money
- ivThe Quantitythe quantity theory; money and the price level; Friedman
- vThe Fetterscommodity money and the gold standard; discipline and its disasters
- viThe Faithfiat money; value by decree and convention; the shared fiction
- viiThe Collapseinflation and hyperinflation; the death of money
- viiiThe Mintseigniorage and the inflation tax; the revenue of issue
- ixThe Runbank runs and panics; maturity mismatch; the lender of last resort
- xThe Wheelis money neutral? the veil, the engine, and the great wheel
- xiThe Cipherthe frontier of money; crypto, stablecoins, and the digital state
- xiiThe Numérairethe measure of all value; money as the keystone of the table
The expanded essays
Read the argument and original contents →- iThe BarterMenger; the double coincidence of wants, and how money emerges as the one good everyone will take.
- iiThe SovereignKnapp; money as the creature of the state, given its worth by the taxes that must be paid in it.
- iiiThe YardstickFisher; money as the measure of all value, and the quantity that sets the measure's own worth — and its inflation.
- ivThe LoanWicksell; how money is created by the act of lending, conjured as a deposit, so that money and debt are one.
- vThe RunDiamond and Dybvig; the promise to pay on demand, and the panic that proves it empty when confidence fails.
- viThe Veilthe classical dichotomy; whether money moves the real economy or only the prices that name it.
- viiThe Debasementinflation, hyperinflation, and Gresham's law; how the measure of all value is itself destroyed.
- viiiThe Ledgerthe deepest turn: money as a promise made universal, a debt that circulates — trust we can spend — resting in the end on the state.
- ixThe Goldcommodity money and the gold standard; whether money must be anchored to a thing of worth or may float on confidence.
- xThe Governorthe central bank and monetary policy; the management of money, and the interest rate as its price.
- xiThe Cointhe cryptocurrency and the digital ledger; the attempt to make money without a state, or any issuer at all.
- xiiThe Liquidliquidity, and the spectrum of moneyness; what makes one promise spend like cash and another sit like a debt.
XVIIThe Tax12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Levywhat a tax is; the price of civilization; the foundation of the state
- iiThe Burdenincidence; who really bears a tax; statutory versus economic
- iiiThe Distortiondeadweight loss; the excess burden; the cost beyond the revenue
- ivThe Painlessthe land tax and the Pigouvian tax; the levies without excess burden
- vThe Basewhat to tax; income, consumption, and wealth
- viThe Scheduleprogressivity; average and marginal rates; who bears the system
- viiThe Peakthe Laffer curve; the revenue-maximizing rate; the optimal top rate
- viiiThe Optimumoptimal taxation; the equity-efficiency tradeoff; Ramsey and Mirrlees
- ixThe Escapeavoidance, evasion, and havens; the race to the bottom
- xThe Endswhat taxation is for; revenue, redistribution, repricing, representation
- xiThe Consenttaxation and the state; representation, legitimacy, the fiscal contract
- xiiThe Commonwealththe price of public life; the tax as the substance of the common realm
The expanded essays
Read the argument and original contents →- iThe WedgeDupuit; the wedge a tax drives between buyer and seller, and the trades it destroys — the deadweight loss no one collects.
- iiThe TariffMetzler; the tariff, the terms of trade, and the conditions under which a duty can undo its own protection.
- iiiThe ShiftJenkin; how the burden divides — not as the law dictates but by elasticity, settling on whoever cannot escape the taxed trade.
- ivThe OptimumMirrlees; the conflict of efficiency and equity, and the optimal tax that redistributes without killing the effort it taxes.
- vThe CorrectivePigou; the tax that mends rather than wounds — taxing a harm to make its author reckon the whole of what it costs.
- viThe LandHenry George; the land value tax, borne wholly by the owner and distorting nothing, because land cannot move.
- viiThe Bracketprogressive taxation and the income tax; the larger share, and what the larger share costs in effort foregone.
- viiiThe Burdenthe deepest turn: the law names who pays, but the market decides who bears — the state can tax, but it cannot choose whom to burden.
- ixThe Restraintpublic choice; the state as a revenue-maximizer, and the constitutional limits on the power to tax.
- xThe Consentconsent and the social contract; by what right the state takes, and what makes the taking just rather than theft.
- xiThe Loopholeavoidance and evasion; the shadow economy, and the gap between the statutory rate and the rate that is paid.
- xiiThe Deficitthe deficit; spending beyond taxes, the budget constraint, and the deferred taxation of borrowing.
XVIIIThe Rule12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Artificemarkets are built, not found; the market as a made thing
- iiThe Scaffoldthe rules a market needs; property, contract, money, enforcement
- iiiThe Enclosureproperty as the foundational rule; its creation and assignment; Coase
- ivThe Refereeantitrust and regulation; the rules that keep markets working
- vThe Captiveregulatory capture; who writes the rules, in whose interest
- viThe Engineermarket design as a science; building markets that work
- viiThe Auctionauction design; the winner's curse; the design that makes the market
- viiiThe Matchmatching markets; allocation without prices; stable matching
- ixThe Repugnantthe moral limits of markets; what should not be bought and sold
- xThe Protocolstandards, protocols, and benchmarks; the hidden rules; network lock-in
- xiThe Authorwho writes the rules; the deepest economic power; in whose interest
- xiiThe Designthe market as a designed institution; the rules as the deepest verdict
The expanded essays
Read the argument and original contents →- iThe RulebookAlvin Roth; that a market is built, not found — every exchange runs on rules that are chosen, and the choosing shapes all that follows.
- iiThe Engineermechanism design; designing the rules of the game so that self-interest is led to serve the chosen end.
- iiiThe AuctionMyerson; how the design of the rules, not the competition alone, decides the outcome — the same bidders yielding different ends under different rules.
- ivThe MatchShapley; the market without prices, where money cannot clear and the design must do everything — the matching of students, doctors, organs.
- vThe InterestPeltzman; who writes the rules, and in whose interest — regulation as a thing competing interests contend for, and the design that serves its designers.
- viThe Standardstandards and network effects; who sets the one standard that all must follow, and how the choice is made or captured.
- viiThe Forumthe private marketplace; the platform that owns the market it hosts, and writes the rules for those who trade within it.
- viiiThe Architectthe capstone: the market is built, by whom and for whom — and the design, extractive or inclusive, is the deepest determinant of a nation's wealth.
- ixThe Spoilscapture and corruption; the rules written for the rule-makers, and the cost borne by the rest.
- xThe Compactthe social contract; by what right the rules bind those who never agreed to them, and what binds the rule-makers.
- xiThe Treatythe international order; rules among states with no sovereign above them, and how they hold.
- xiiThe Cipherthe rule written in software; algorithmic governance, unread and unaccountable.
XIXThe Cycle12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Wavethe recurring fluctuation of the whole — expansion, peak, recession, trough
- iiThe Wholethe cycle as a systemic thing — comovement, the fallacy of composition, the paradox of thrift
- iiiThe Boomthe self-reinforcing expansion — the multiplier, the accelerator, optimism feeding itself
- ivThe Shockwhat starts a cycle — impulse and propagation, and the kinds of shock — Frisch, Slutsky
- vThe Neutralis money a veil? sticky prices, the short-run real effects of money, and the long-run return
- viThe Creditthe financial cycle — pro-cyclical credit, leverage, and the Minsky moment
- viiThe Turnwhy booms end — the reversal of belief, the panic, the run, and debt-deflation — Fisher
- viiiThe Slumpthe demand-deficient recession — coordination failure, involuntary unemployment, the output gap — Keynes
- ixThe Curecan the cycle be tamed? fiscal and monetary stabilization, and the automatic stabilizers
- xThe Lagthe limits of policy — long and variable lags, rational expectations, time inconsistency — Friedman, Lucas
- xiThe Spiritsthe cycle as a creature of belief — self-fulfilling expectations, multiple equilibria, animal spirits
- xiiThe Returnthe cycle made whole — opening The Aggregates, toward The Growth, The Level, The Money
The expanded essays
Read the argument and original contents →- iThe LawSay; supply creates its own demand, so a general glut cannot occur and the willing worker need never be idle for long.
- iiThe Glutthe general-glut debate; Malthus against Ricardo, and the question whether demand can fail for the economy as a whole.
- iiiThe MultiplierKahn; a change in spending ripples and multiplies through the economy — and the paradox of thrift, where the prudence of each is the ruin of all.
- ivThe ManiaMinsky; stability breeds the fragility that ends it, as debt mounts in the boom until the tower of leverage topples.
- vThe ContractionFriedman and Schwartz; the Great Depression as a collapse of money the central bank could have prevented — the monetary rival to Keynes.
- viThe Spiritsanimal spirits; the volatility of investment under irreducible uncertainty, and what governs it when the future cannot be known.
- viiThe Stickinesswage and price rigidity; why wages do not fall to clear the labor market, and why the classical self-correction fails.
- viiiThe Idlethe capstone: output is set by effective demand, which can fall short, so the economy can rest at an equilibrium of involuntary unemployment.
- ixThe SpiralFisher; debt-deflation, where falling prices raise the real burden of debt and force the selling that drives prices lower still.
- xThe Shockreal business cycles; the new-classical claim that booms and slumps are the economy's efficient response to real shocks, and idleness a choice.
- xiThe Stabilizerstabilization policy; the state spending against the tide to fill the gap in demand, and the debate of activism against rules.
- xiiThe Scarhysteresis; how a deep enough slump can leave a permanent wound, so that the cycle alters the very trend it deviates from.
XXThe Growth12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Ascentthe sustained rise of output per person — the power of compounding and the hockey stick of history
- iiThe Snarethe Malthusian trap — why for most of history any gain was eaten by population
- iiiThe Takeoffthe great escape — the Industrial Revolution, modern growth, and the demographic transition
- ivThe Accumulationthe first theory — growth by saving and capital
- vThe Plateaudiminishing returns and the steady state — why accumulation alone runs out
- viThe Residualthe Solow residual — most growth is unexplained, and laid to technology
- viiThe Ideaendogenous growth — ideas as nonrival goods, increasing returns, the engine within
- viiiThe Humanhuman capital — the skill, knowledge, and health embodied in people
- ixThe Convergencedo the poor catch up? conditional convergence, the great divergence, and poverty traps
- xThe Rootsthe ultimate causes — institutions, geography, and culture
- xiThe Ceilingthe limits and discontents of growth — resources, the environment, sustainability, and happiness
- xiiThe Compoundinggrowth made whole — the trend the cycle rides, toward The Level, The Share, The Rule
The expanded essays
Read the argument and original contents →- iThe TrapMalthus; the trap in which, for all of history, every gain in production was eaten by more mouths — and growth is the escape no one foresaw.
- iiThe Takeoffthe Industrial Revolution; why sustained growth began around 1800, and why in Britain rather than anywhere else.
- iiiThe Steady StateSolow; accumulation and its limits — capital runs into diminishing returns, and the residual that remains is technology, not stuff.
- ivThe ChurnAghion; creative destruction — growth as the churning replacement of the old by the better, and the power that would block it.
- vThe Catch-UpGerschenkron; the advantages of backwardness — catching up by borrowing what the leader invented, if the conditions allow.
- viThe Talenthuman capital; the wealth that is in skilled and educated minds rather than in machines.
- viiThe Multitudepopulation and growth; the demographic transition, and whether more people mean more mouths or more minds.
- viiiThe Ideathe capstone: the source of growth is ideas, which are non-rival and do not run out — so the wealth of nations is the compounding of knowledge.
- ixThe Mapgeography against institutions; whether mountains and climate or rules and laws decide a nation's fate.
- xThe Measurethe national accounts; what it means to add up a nation's product, and what the great sum leaves out.
- xiThe Slowdownsecular stagnation; whether the age of rapid growth was a one-time windfall now nearly spent.
- xiiThe Ceilingthe limits to growth; whether a finite world of resources can sustain the endless compounding of ideas.
XXIThe Level12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Yardstickthe price level and its measure — a basket, an index, and inflation as its rate; the value of money inverted
- iiThe Maskthe classical dichotomy and the neutrality of money — doubling the money doubles all prices and changes nothing real — Hume
- iiiThe Equationthe quantity theory — MV = PY, and inflation as a monetary phenomenon — Fisher, Friedman
- ivThe Tollinflation as a tax — seigniorage, the inflation tax, and why governments print — Cagan
- vThe Spiralhyperinflation — the fiscal roots, the flight from money, and the death of a currency
- viThe Menuthe Phillips curve — the apparent menu of inflation and unemployment — Phillips, Samuelson, Solow
- viiThe Expectationthe natural rate — how expectations dissolve the tradeoff and turn the long-run curve vertical — Friedman, Phelps
- viiiThe Sacrificedisinflation — the sacrifice ratio, credibility, and the cost of bringing inflation down — Sargent
- ixThe Erosionthe costs of inflation — shoe-leather, menu, the inflation tax, and the noise in the price signal
- xThe Falldeflation — debt-deflation, the zero lower bound, and why falling prices are the graver danger — Fisher
- xiThe Mooringmonetary policy — the central bank, time-inconsistency, rules, and inflation targeting — Kydland, Prescott
- xiiThe Valuethe level made whole — the value of the unit that names this atlas, toward The Money, The Share, The Tax
The expanded essays
Read the argument and original contents →- iThe QuantityHume; the price level tracks the quantity of money, so money is a veil over real wealth and inflation is, at bottom, too much money.
- iiThe Neutralthe neutrality of money; whether money can move real things or, in the long run, only the prices at which they are quoted.
- iiiThe TradeoffPhelps; the Phillips curve and the natural rate — inflation buys lower unemployment only by surprise, and never for long.
- ivThe FlightCagan; hyperinflation, where the value of money flees toward zero in a self-feeding panic as people rush to be rid of it.
- vThe TemptationKydland and Prescott; the inflation bias of discretion, and why the power to inflate must be bound to a rule to be trusted.
- viThe Erosionthe costs of inflation; the silent tax on cash and savings, and the arbitrary redistribution between debtor and creditor.
- viiThe Descentdeflation; the silent trap of falling prices, the rising real burden of debt, and the floor beneath which interest cannot fall.
- viiiThe Anchorthe capstone: money is backed by nothing but belief, so its value rests on the credibility of the regime, and the power to set it must be insulated to be trusted.
- ixThe Speciethe gold standard; the metallic anchor that once gave money a worth beyond any government's word, and why the anchor was cut.
- xThe TargetSvensson; the inflation forecast as an intermediate target, and the public discipline of a conditional promise.
- xiThe Transmissionmonetary transmission; the levers, the interest rate and the open-market operation, by which a central bank actually moves the value of money.
- xiiThe Mandatecentral bank independence; the uneasy bargain by which a democracy places the power over money beyond the reach of its own voters.
XXIIIThe Choice12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Maximizerthe foundational assumption; rational as consistent, not cold; the agent behind it all
- iiThe Preferencethe axioms of choice; completeness and transitivity; the money pump
- iiiThe Indexutility as the ordinal representation of preference; the indifference curve
- ivThe Inferencerevealed preference; reading the wants from the choices; the operational turn
- vThe Gamblechoice under uncertainty; expected utility; the maximand under risk
- viThe Aversionrisk aversion from concave utility; the certainty equivalent and the premium
- viiThe Boundbounded rationality; the limits of computation; satisficing for good enough
- viiiThe Frameconstructed preference; framing and the reference point; the seam in the axioms
- ixThe Impatiencetime-inconsistent preference; present bias; the divided self over time
- xThe Manufactureendogenous preference; where wants come from; the tastes the theory takes as given
- xiThe Tautologythe circularity; the best as what is chosen, what is chosen as best; the empty claim
- xiiThe Bestwhat the model captures and where it breaks; choice, preference, and the good
The expanded essays
Read the argument and original contents →- iThe Axiomscompleteness and transitivity; the two conditions from which a number, and then the whole of demand, are made.
- iiThe Revelationrevealed preference; the attempt to reconstruct the ranking from nothing but the choices themselves.
- iiiThe Reversalpreference reversals; the same options ranked one way when chosen, the opposite way when priced.
- ivThe Cycleintransitivity and the money pump; whether a preference that runs in a circle is the mark of a disordered mind or the natural price of weighing several things at once.
- vThe Framedescription invariance; the same option chosen, or refused, by the words in which it is put.
- viThe BoundSimon's bounded rationality; the chooser who searches until good enough, not until best.
- viiThe Selfthe divided chooser; today's preference reversing tomorrow's, and the question of which self is served.
- viiiThe MenuSen's inversion; why the set a thing is chosen from is part of what is chosen, and consistency was never internal.
- ixThe Surfeitchoice overload and the paradox of choice; how more options, though any one of them may be ignored, reduce both welfare and the willingness to choose at all.
- xThe Libertythe impossibility of a Paretian liberal; choice as the exercise of freedom, not the satisfaction of want.
- xiThe Nudgelibertarian paternalism; if there is no neutral way to offer a choice, who arranges it, and toward what?
- xiiThe Wantthe tie-back; the choosing returned to the wanting it was meant to replace — see № 08.
XXIVThe Bias12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Departurewhat a bias is; systematic error, not random noise; the model meets the mind
- iiThe Intuitionthe two systems, fast and slow; heuristics as the engine of error
- iiiThe Availabilityjudging the likely by the easily recalled; the vivid risk and the quiet one
- ivThe Resemblancejudging by similarity to a type; the conjunction fallacy; the neglected base rate
- vThe Draganchoring and adjustment; the pull of an arbitrary number
- viThe Kinkprospect theory; loss aversion; the value function bent at the reference
- viiThe Weightthe weighting of probability; the overweighting of rare events; lottery and insurance together
- viiiThe Possessionthe endowment effect; status quo and sunk cost; money that is not fungible
- ixThe Conceitoverconfidence; the above-average self; the plan that always runs late
- xThe Arbitragewhether biases survive the market; the limits of arbitrage; behavioral finance
- xiThe Nudgechoice architecture and the nudge; libertarian paternalism and its quarrel
- xiiThe Mindwhat the catalogue amounts to; bias, welfare, and economics meeting the mind
The expanded essays
Read the argument and original contents →- iThe CertaintyAllais; the Allais paradox and the certainty effect, the systematic violation of expected utility's independence axiom, and the first replicable crack in the rational model.
- iiThe UrnEllsberg; ambiguity aversion, the preference for a known risk over an unknown one, and the line between measurable risk and Knightian uncertainty.
- iiiThe ReferenceKahneman and Tversky; prospect theory, choices weighed as gains and losses from a reference point, loss aversion, and the distortion of probability.
- ivThe ShortcutTversky and Kahneman; the heuristics of judgment — representativeness, availability, anchoring — and the systematic biases they breed.
- vThe PresentLaibson; hyperbolic discounting and present bias, the preference that reverses as the future becomes the present, and the divided intertemporal self.
- viThe EndowmentThaler; the endowment effect and mental accounting, a thing worth more once owned, money treated as non-fungible by the account it falls in.
- viiThe Sunkthe sunk-cost fallacy, good money thrown after bad, a past and unrecoverable outlay honored in a choice that should turn only on what lies ahead.
- viiiThe EcologyGigerenzer; ecological rationality and the great rationality debate, whether the biases are defects against logic or fast-and-frugal heuristics fitted to the world.
- ixThe Conceitoverconfidence and the better-than-average effect, the systematic overrating of one's own knowledge, control, and prospects.
- xThe HeatLoewenstein; projection bias and the hot-cold empathy gap, the feeling of the present moment projected onto a future self who will not share it.
- xiThe VividSlovic; the perception of risk ruled by dread and salience, the vivid hazard feared and the common one ignored.
- xiiThe Baselinethe tie-back; every bias is defined as a departure, and the rational model of choice is the baseline it departs from — see № 23.
XXVThe Game12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Interdependencewhat a game is; strategic interdependence; the hall of mirrors
- iiThe EquilibriumNash equilibrium; mutual best response; the self-enforcing configuration
- iiiThe Dilemmathe prisoner's dilemma; when rational choices yield collective ruin
- ivThe Shadowrepeated games; the shadow of the future; how cooperation emerges
- vThe Commitmentsequential games; backward induction; threats, promises, and credibility
- viThe Coordinationmany equilibria; focal points; the stag hunt and the problem of which
- viiThe Bluffmixed strategies; randomization; zero-sum games and the minimax
- viiiThe Bargainbargaining games; dividing the surplus; the threat point and the split
- ixThe Auctionauctions as games; the winner's curse; price as the outcome of bidding
- xThe Mechanismdesigning the game; incentive compatibility; rules that elicit the truth
- xiThe Competitionthe market as a game; Cournot, Bertrand, and the price as equilibrium
- xiiThe Contestthe price as the verdict of a contest; cooperation, tragedy, and the rules
The expanded essays
Read the argument and original contents →- iThe DilemmaNash; the prisoner's dilemma and the equilibrium of mutual betrayal, where each player, reasoning faultlessly, ends worse off than cooperation would have left him.
- iiThe Minimaxvon Neumann; the games of pure opposition, the saddle point, and the minimax theorem with which game theory was founded.
- iiiThe CommitmentSchelling; the strategy of conflict, and the paradox that binding one's own hands — burning the bridge, throwing away the choice — can be a source of power.
- ivThe CredibilitySelten; subgame perfection and backward induction, and why a threat the threatener would never carry out fails to bind at all.
- vThe PopulationMaynard Smith; the evolutionarily stable strategy, where equilibrium is reached not by reason but by survival, and conflict proves self-limiting.
- viThe Coordinationcoordination games and focal points; when several outcomes would suit everyone, how players settle, without a word, on the same one.
- viiThe Fogincomplete information; Harsanyi's games of types, and how one plays against an opponent whose very aims cannot be seen.
- viiiThe Reciprocitythe capstone: played again and again, the dilemma yields to cooperation — held among the self-interested by no altruism or authority, but by the long shadow of the future.
- ixThe Brinkbrinkmanship and deterrence; the threat that leaves the outcome partly to chance, and how one makes credible a threat one would never wish to carry out.
- xThe Designmechanism design and the revelation principle; whether the rules of a game can be built so that honesty becomes each player's best move.
- xiThe Coalitioncooperative game theory, the core and the Shapley value; which alliances hold together when cooperation pays, and how its gains are divided.
- xiiThe Huntthe stag hunt and the assurance game; the great prize that needs every hand, and the mutual trust required before anyone dares reach for it.
XXVIThe Norm12 plates · 12 essays
The collected volume
Read the argument and all twelve plates →- iThe Unspokenwhat a norm is; the unwritten rule; informal versus formal institutions
- iiThe Conventioncoordination norms; the self-enforcing rule; which side of the road
- iiiThe Reciprocitythe deepest norm; the gift and the return; tit for tat
- ivThe Conscienceinternalization; guilt and shame; the rule obeyed unobserved
- vThe Sanctionexternal enforcement; approval, reputation, and ostracism
- viThe Punisherthe cost of enforcing; altruistic punishment and the ultimatum game
- viiThe Originwhere norms come from; spontaneous emergence and evolution
- viiiThe Lubricanttrust as social capital; the economic value of the unwritten
- ixThe Communitygoverning the commons by norm; the third way between market and state
- xThe Crowdingmarkets and norms; when the price drives out the principle
- xiThe Trapthe dark side; bad norms, sticky norms, and the tyranny of conformity
- xiiThe Understoodthe unwritten foundation; the rules merely understood beneath all the rest
The expanded essays
Read the argument and original contents →- iThe ConventionLewis; a regularity that holds itself in place, where each conforms because the others do and prefers to conform so long as they do — the unwritten rule in its purest, self-enforcing form.
- iiThe Customhabit, tradition, and path dependence; how a practice, once useful, hardens into a rule that outlives the conditions that first gave rise to it.
- iiiThe FaithPutnam; trust as social capital, the silent precondition of exchange — a productive asset held in common, whose radius sets the very reach of the market.
- ivThe GiftMauss; the gift that binds where a price clears, and reciprocity, the most primal of the unwritten rules and the seed from which all trust grows.
- vThe GrammarBicchieri; the conditional structure of empirical and normative expectation that makes a norm bind — and, when the beliefs beneath it shift, that makes it break.
- viThe Censureinformal enforcement; shaming, ostracism, and the second-order problem of who will punish those who fail to punish the cheat.
- viiThe EmbeddedGranovetter; the embeddedness of economic action in social networks, and how far a market is a web of standing relationships rather than a crowd of strangers.
- viiiThe Reputationthe capstone: an eleventh-century coalition sustained long-distance trade with no court at all, on a single unwritten rule — cheat one of us, and you deal with none of us.
- ixThe Honorcodes of honor and the professions; what binds the members of a trade — the guild, the bar, the bench — beyond the law that governs them.
- xThe Cascadepreference falsification and the tipping of norms; how a rule obeyed for generations, but privately rejected, can collapse almost overnight.
- xiThe Conspicuousconspicuous consumption and emulation; how status and the watching eye of others govern what we buy, and how much is bought to be seen buying it.
- xiiThe Lubricanttrust at the scale of a society; whether a market can produce the generalized faith it runs on, or must draw it from a reservoir filled outside the market.