WSJ reviews “Inside the Box”: ““In the abstract,” Mr. [David] Epstein writes, “we often overvalue limitless freedom and choice.” One survey he cites found that most people believe that “total freedom” spurs creativity. But from art to entrepreneurship, he argues, constraints can unleash rather than stifle great work: “In seeking more freedom we frequently hamper our best efforts, because what we really need are helpful boundaries.”” More: “There’s a better way to make decisions. To understand it, you should know about Herbert Simon, a pioneer of artificial intelligence and cognitive psychology, as well as a Nobel laureate in economics. Mr. Simon demonstrated that for most decisions, humans can’t really evaluate the options available — there are too many, our information about them is incomplete and our minds aren’t built to weigh them all — and so we rely on mental shortcuts. He coined the term “satisficing” — a portmanteau of satisfy and suffice — to describe how we consider a limited set of options, then choose one that is good enough and move on to live our lives. When Mr. Simon faced a decision, he considered a few alternatives, sometimes asked for advice, chose and moved on. He didn’t agonize, and he didn’t second-guess. “The best is enemy of the good” was the mantra he lived by.”
FT: “We are living in the age of asymmetry. Power flows less from size or wealth than from the ability to convert imbalance into leverage.”
WSJ: “The capitalist makeover has allowed Sweden to do what few industrialized countries have managed in recent years: shrink the size of the state. That has enabled the government to sharply lower taxes and, economists say, sparked a surge in entrepreneurship and economic growth. Its total public social spending bill—which includes healthcare, education and all welfare payments—has fallen to 24% of gross domestic product, similar to the U.S. and well below the over 30% for nations like France and Italy.”
Menzie Chinn’s and Douglas Irwin: “Imports are the benefit of trade, and exports are its cost. Imports directly increase consumers’ utility by making higher utility combinations of goods available than under autarky. Exports, however, do not directly benefit anyone inside the country; they are goods that are produced but given up to other countries. However, the revenue earned from the exports is what pays for the imports that enable consumption to be higher. In other words, the gains from trade arise from imports, and exports are the cost of acquiring imports.” [via CafeHayek]
