Part of

The Road to Truth

Zuoshi Xie

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Table of Contents

  1. Let's All Learn Some Economics

    1. Learning and Propagating Economics Is a Deed of Merit
    2. Seeing Is Not Believing: Deceived by Facts
    3. One Test for a Good Theory
    4. Castle Built on Sand

  2. Self-Interest, Ethics, and Rationality

    1. Self-Interest: The Axiom of Maximization Under Constraints
    2. Always Self-Interested? Ask a Silly Question, Get a Silly Answer
    3. The Constraint Lens: Are the Chinese Really More Hardworking?
    4. The Actual Is Rational: Insight Reveals a Harmonious World
    5. The Actual Is Rational: Insight Reveals a Simple World
    6. Constraints Matter: The Line Between Economics and Management
    7. Altruism Must Be Reduced to Self-Interest
    8. Why a "Land of Saints" Cannot Exist

  3. Cost, Rent, and Constraints

    1. Cost Is the Value of the Best Alternative Forgone
    2. Historical Cost Is Not Cost: West Lake Got It Right
    3. Historical Cost Is Not Cost: The Absurdity of Sunk Cost
    4. History and Reality: Trend Is King
    5. Price and Cost: A Complicated Relationship
    6. Historical Cost Is Sometimes Useful
    7. Income, Cost, Rent: A Matter of Perspective
    8. Cost, Benefit, and Constraints

  4. Scarcity and Competition: Market and Non-Market

    1. Only Price Rationing Avoids Rent Dissipation
    2. Private Property Rights: The Precondition for Markets and Market Prices
    3. Private Property Rights: The Precondition for Much Else Besides
    4. Wind and Rain May Enter, But Not the King---the Inverse Coase Theorem Is Wrong
    5. Property Rights Protection, Liability Rules, and Necessity
    6. The Troublesome Public Domain: Collective Choice Is Both a Right and a Power
    7. More on the Public Domain: Is 'Never Forced Demolition' Really Right?
    8. Why Humans Accumulate More Than Animals---and High Growth Only Began With the Industrial Revolution
    9. No 'Low Human Rights Advantage': China's Economy Grew as Rights Improved
    10. Partial Property Rights, Reform: Rethinking the "China Economic Miracle"
    11. The "Well-Field System" Was Not What Textbooks Describe
    12. Slaves Were Happier Than You Think: Would You Mistreat Your Own Property?
    13. No Market Failure: Marketization Increases Morality and Reduces Corruption, Not Vice Versa
    14. No Market Failure: Markets Are Not Only Most Efficient But Also Most Fair

  5. Price, Transactions, and Markets

    1. Margin and Price: Why Diamonds Cost More Than Water
    2. The Demand Curve: Not a Real Existence
    3. Not the Same Curve: Why Does Academia Stop at the Surface?
    4. The Law of Supply and Demand: Does Demand Raise or Lower Price?
    5. Price, Shortage, and Surplus: What's Really in Short Supply Is Rigor
    6. What Price Determines Matters Far More Than How Price Is Determined
    7. Why Export Products Are Better Quality Than Domestic Ones
    8. No Such Thing as "Rigid Demand"
    9. Applications of Elasticity: Who Bears the Tax Burden
    10. Applications of Elasticity: Is Improved Trade Terms Always Good?
    11. Consumer and Producer Surplus: Does the "Exchange of Equivalents" Hold?
    12. Healthcare Access and Affordability: A Distorted Market Is to Blame
    13. Food Security Is an Income Problem, Not a Land or Grain Problem
    14. Can Quantity Controls and Low-Rent Housing Lower Housing Prices?
    15. How Could a Property Tax Possibly Lower Housing Prices?

  6. Tragedy of the Commons, Price Controls, and Rent Dissipation

    1. Inevitable Tragedy of the Commons: Steven Cheung's Contribution
    2. Scalpers: Not to Blame, and Worth Thanking
    3. Who Does the Minimum Wage Law Hurt?
    4. Should Train Ticket Prices Rise During Peak Times?
    5. What Is the Root Cause of Going Through the Motions?
    6. More Choices More Welfare
    7. Rule of Law, Not Regulation: Defend Your Own Interests
    8. Bad Legislation Is Worse Than No Legislation
    9. Regulation Is Sometimes Needed: Easy to Impose, Hard to Repeal

  7. Production, Profit, and Entrepreneurship

    1. Diminishing and Increasing Marginal Returns Are the Same
    2. Do You Calculate Fixed Costs Right?
    3. It Should Be an Expected Cost Function: Explaining the Bowl-Shaped Cost Curve
    4. Why Capital Generally Hires Labor, Not the Other Way Around
    5. Entrepreneurship: No Private Property, No Entrepreneur
    6. Profit Is a Phantom Vagabond
    7. Expected Profit Maximization and the Supply Curve Revisited
    8. Real-World Price and Output Decisions: Inframarginal Decisions Lead, Marginal Decisions Follow
    9. More on Real-World Pricing: Prices Converge Toward Marginal Cost
    10. Ownership and Control: United, Not Separated

  8. Interest, Income, and Wealth

    1. How Interest Rates Are Determined
    2. Present and Future Value: The Power of Compound Interest
    3. Income, Capital, and Wealth
    4. Choices in Consumption, Investment, and Career
    5. Rate of Return on Assets: Bad Money Cannot Drive Out Good
    6. Asset Prices Are Determined by Expectations and Move in Advance

  9. Externalities, Efficiency, and Public Goods

    1. The Nature of the Externality
    2. The Analysis of Externality Have Gone in the Wrong Direction
    3. The Coase Theorem Revisited: Focusing on Constraints Is the Real Insight
    4. Coase's Luck: No Rights Definition, No Harm
    5. Efficiency Is Conditional: No Efficiency Without Constraints
    6. The General Equilibrium Nature of Efficiency: No Partial Equilibrium in Reality
    7. Pareto Optimality in a World of Positive Transaction Costs
    8. The Real Meaning of Efficiency: No Such Thing as Pareto Improvement
    9. The Real Meaning of Efficiency: Is Gradual Reform a Pareto Improvement?
    10. Public Goods: The Story of the Lighthouse
    11. The Coase Theorem, the Irrelevance Proposition, and the Baseline for Economic Analysis
    12. Efficiency Is the Greatest Morality, Science Should Have No Forbidden Zones

  10. Monopoly and Antitrust

    1. Monopoly and Competition: Chalk and Cheese
    2. No Artificial Entry Barriers: More Monopoly, More Efficiency
    3. Protecting Property Rights Requires Opposing Administrative Monopoly
    4. Tying and Pricing Products Is the Firm's Right
    5. Antitrust Is a Game With No Objective Standard
    6. Where Is the Harberger Triangle?
    7. The Fallacy of X-inefficiency
    8. The Tullock Quadrilateral and the Social Cost of Administrative Monopoly

  11. Asymmetric Information, Adverse Selection, and Moral Hazard

    1. Adverse Selection and Market Failure
    2. Signaling and Screening
    3. Principal-Agent Problems and Moral Hazard
    4. Incentives and Monitoring Are the Fundamental Issues of the Principal-Agent Problem
    5. A Miss Is As Good As a Mile: Can "Sunk Cost" Build Trust?
    6. Asymmetric Information Is Likewise Not a Justification for Government Intervention
    7. Shirking, Slacking, Extortion, and Free-Riding
    8. Still "Blackboard Economics": the Fault of Mathematization

  12. Learning Is Columbus's Egg, But You Must Walk in the Right Direction

    1. The Theory of Moral Sentiments and The Wealth of Nations Are Not on Equal Footing
    2. If Economics Had No Rationality Assumption, How Could It Have a Cost Concept?
    3. That "Classic Experiment" Refuting the Rationality Assumption Doesn't Hold Up
    4. The "Change-Making" Phenomenon Proves the "Endowment Effect" Doesn't Exist
    5. The Widespread Lending Proves There Is No "Hyperbolic Discounting"
    6. Mental Accounting, Convex Preferences, and the Law of Demand
    7. Where the "Prisoner's Dilemma" Goes Wrong
    8. Game Theory Is Mathematics, Not Economics
    9. The Fallacy of the "Fallacy of Composition"
    10. Rethinking Optimality, Second-Best, and Rationality
    11. Defining and Measuring the Concept of Transaction Costs
    12. Experience Can Only Select a Theory, Not Test One