The 1648 Treaty of Westphalia established the principle that nation states could run their internal affairs as they pleased – it was no longer acceptable for Catholic states to invade Protestant states because they didn’t like their religion (or vice versa). Westphalianism proved a vital organizing principle for the next 300 years, allowing significant periods […]

At the Federal Open Market Committee meeting last week, policy remained unchanged, and the accompanying statement made the extraordinary claim that “measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate.” The following day, the March Producer Price […]

For non-British readers, I should explain that the British TV advertisements for Hovis bread revolved around an intense misty-eyed nostalgia for the way things were, the supposedly simpler lives of a half-century ago. (In the United States the term “Hovis banking,” coined in the FT this week, might be replaced by “Jimmy Stewart banking,” referring […]

The awarding of a $36 billion tanker contract to Boeing illustrated the well-known difficulties caused by crony capitalism in the awarding of government contracts. However what is less well appreciated is the damaging effect that crony capitalism has in a number of other ways, making the economy less efficient and providing rent-seeking opportunities that are […]

The series of revolutionary movements around the Middle East raises the possibility of a general collapse of current Middle East regimes and their replacement by populist governments. Judging by current rhetoric, those governments would be anti-western and anti-capitalist, making their economies inefficient hotbeds of waste and unrest. Given that the West gets a high percentage […]

The merger between the New York Stock Exchange and the Deutsche Boerse, together with the SEC’s proposal to prevent money market funds from maintaining a stable $1 asset price per share are symptomatic of a worrying recent trend in global finance: the tilting of the playing field against individual investors of moderate means. This de-democritization […]

Emerging market central banks in China, India, Brazil and elsewhere are now raising interest rates fairly aggressively, and even in the United States long-term Treasury bond rates have risen significantly in spite of Fed Chairman Ben Bernanke’s efforts to hold them down. Given the continued rise in commodity prices, it’s likely that these are just […]

Both the rioters in Cairo’s Tahrir Square and the Western commentators on those riots have missed a vitally important component of Egypt’s miseries: its excessive and rapidly rising population. With such population growth even the wisest Egyptian ruler, the great Ptah-hotep, could not have achieved a rapid rise in the living standards of Egypt’s people. […]

The Congressional Budget Office’s report Wednesday that the U.S. budget deficit was to run close to 10% of Gross Domestic Product for a third successive year, together with President Obama’s refusal to face the need for major public spending cuts in his State of the Union Tuesday night, finally opened the possibility of a lengthy […]

Venture capital fundraising in 2010 declined from $16.3 billion to $12.3 billion, according to Thomson Reuters data. That’s a far cry from the average of over $30 billion annually in 2005-07, let alone the peak of $106 billion raised in 2000. Contrast those figures with the datum that the value of hedge funds closed at […]