Friday, 6 July 2012

Dr Arthur Laffer at the IEA

Last week I had a chance to see the Arthur Laffer lecture at the Institute of Economic Affairs in London, and I have to admit it was one of the best lectures I've been to while in London (these include Nobel prize laureates Christopher Pissarides and Elinor Ostrom, Olivier Blanchard, Niall Ferguson, Jesús Huerta de Soto, John Allison, Tom PalmerDetlev SchlichterDaniel Klein, Adair Turner, Martin Wolf, John Cochrane, Madsen Pirie, Tim Evans and many other great professors, economists, philosophers and politicians).  

So in a great competition this lecture strikes me as one of the very best. Dr Laffer underlined his theory of the conveniently called Laffer curve while going through the history of US taxation from 1917, judging all the administrations and all the effects their decisions had on tax revenues. His biggest praise went to the Reagan and Clinton administrations (not surprisingly, the ones where he served as an adviser to). He also coupled the lecture with a few vivid and amusing examples from his personal correspondence with Margaret Thatcher and Ronald Reagan. 

Enjoy the lecture!


Britain on the Laffer Curve by Dr Arthur Laffer. from Institute of Economic Affairs on Vimeo.

4 comments:

  1. What is amazing to me is that after forty years of The Laffer curve. After a half century of free market economics becoming ascendent.

    After seeing the hold of Keynesianism slipping in the area of academic economics.

    We nevertheless see Keynesian policies triumphant, and doing terrible damage, throughout the industrialized nations.

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    1. Austerity isn't a Keynesian policy. You should get your facts straight before you make such a claim.

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    2. Really? And just what sort of austerity is there going on in the world today? Because frankly I don't see much. A lot of talk, and the same old big spending. Maybe you ought to get your facts straight. In the USA we just had three years of the biggest Keynesian stimulus in history.

      Hollande just won in France by rejecting belt tightening in favor of more spending.

      And none of it will work. The so called austerity can not work because there is really not enough cutting going on, but it is usually accompanied by ruinous tax increases. And stimulus spending never works.

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    3. I agree with Kyle, a vast majority of immediate responses to the crisis in 2008/2009 was a Keynesian stimulus (in both the US and across Europe - the UK was leading the way). The current alleged austerity policies are trying to be implemented simply to offset the stimulus policies which led to an unsustainable debt situation and threats of defaults in Europe. However, somewhere along the line Europe forgot to reform its welfare state model which was why the recovery is taking so long. I'm afraid we haven't seen any sign of free market economics in a while.

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