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May 22, 2013

John Thorne: They launched the 'Arab Spring' but now yearn for the good old days of a strongman

John Rosemond: 'Disciplinary math' adds up to parental successl

Warren Richey: Are prayers before public meetings OK? Supreme Court to decide
Rick Montgomery: Use of ADHD drugs as study aid raises concern on campuses

Brierley Wright, M.S., R.D.: 6 convincing reasons you should keep carbs in your diet

Eoin O'Carroll: Scientists examine nothing, find something

The Kosher Gourmet by Carole Kotkin: This soup is made from one of the great pleasures of spring: A wonderful pairing of rosy color and earthy tang

May 20, 2013

Richard A. Serrano: Is Meir Kahane's assassin now a changed man?

Hannan Adely: Town raises Palestinian flag at City Hall

Melissa Healy: Genetic copies of living people from embryos no longer science fiction
Morgan Housel: When smart investors do stupid things

Sharon Saloman, M.S., R.D.: Hunger games: Eat more, weigh less, without starving

Jewz in the Newz by Nate Bloom : Jews Inducted into Rock Hall of Fame; Anton Yelchin co-stars in New "Trek" film; Kutcher (but not Kunis) visits Israel; Jewish TV Star Praises Jewish Rap Star

The Kosher Gourmet by Cathy Pollak: WARNING: This WALNUT CAKE WITH PRALINE FROSTING, perfect for afternoon coffee, is addicting

May 13, 2013

Rabbi Nathan Lopes Cardozo: Why the giving of the document that would permanently change the world could only be done in desolation

David G. Savage: Church-state, literally? Supreme Court weighing public school graduation in a church

Emily Alpert: Recession dragged down birth rates for less-educated women
Morgan Housel: The deep downside of home ownership

Peter Teffer: Will Dutch police soon be stalking cybercriminals on your computer?

Heidi McIndoo, M.S., R.D.: Meatless 'meat' can have its own set of problems

The Kosher Gourmet by Diane Rossen Worthington: Celebrate! This must-try appetizer is delicate yet has depth of flavor: Corn-Leek Cakes with Caviar, Smoked Salmon and Creme Fraiche

May 10, 2013

Rabbi Berel Wein: Be all that you should be

Caroline B. Glick: The dirty little secret about Israel's Arabs

Mona Charen: Hawking's Moral Calculus: The man and the movement he embraces
Morgan Housel: The biggest retirement myth ever told

Sandi Doughton: Eyes may provide new insight into brain problems

Jewz in the Newz by Nate Bloom : The Great Gatsby's Jewish Ties; Jews in the "Time 100 list" List; People's Most Beautiful Women

The Kosher Gourmet by Linda Gassenheimer: A sweet-hot meal: Pear salsa spices up salmon

May 8, 2013

Peter Ford: Why China is welcoming both Israel's Netanyahu and Palestinians' Abbas

Warren Richey: Obama administration quietly backs out of appeal over new contraceptive mandate

Fred Weir: At Kerry-Putin meeting, US-Russia relations thaw --- a tad
Amanda Paulson: Study reveals sad truths about community colleges

Harvard Health Letters: Evidence weak that zinc, echinacea are beneficial

The Kosher Gourmet by Leela Cyd Ross : Almost too pretty to eat, this colorful salad with Sicilian inspiration will tickle the taste buds and delight your visual sensibility

May 6, 2013

Edmund Sanders and Patrick J. McDonnell: Think Israel's objective in Syria is to weaken Assad or embolden the rebels? Think again

Brian Bennett: Israeli airstrikes may show weakness in Syrian defense

Michael Ollove: Millions of ex-felons, parolees and those on probation are about to be entitled to tax-payer paid health coverage
Karen Kaplan: Most men can skip PSA test for prostate cancer, urologists say

Kimberly Lankford: How to track down a lost life insurance policy

Dream of Mars exploration achievable, experts say

The Kosher Gourmet by Susan M. Selasky: EGGPLANT WRAPS are an easy, sumptuous and scrumptious meal

May 3, 2013

Rabbi Nathan Lopes Cardozo: Human Courage and the Unavoidable, Disturbing Text

Steven Emerson: Attorney General Fights CAIR in Court, Lauds it in Public

Mediterranean diet helps beat dementia: study
Harvard Health Letters: When to be screened for a hearing problem

Jewz in the Newz by Nate Bloom : Iron Man's Jewish Connections; Marc Maron's New TV Show; Martin Landau Grows Up with Israel; Shalom, Allan Arbus

The Kosher Gourmet by Diane Rossen Worthington: A sweet surprise for Mother's Day dessert

May 1, 2013

Jonathan Rosenblum: An Improbable Journey to Orthodoxy

Jonathan Tobin: Blame Obama, Not Israel for Syria Push

Kids, kittens the Same? With employee perks at struggling Internet pioneer Yahoo! it's hard to tell
Halena M. Gazelka, M.D.: Mayo Clinic Medical Edge: What you need to know about implanted pain relief devices

Sandy Kleffman: Artificial kidney offers hope to patients tethered to a dialysis machine

Jessica Shugart: When it comes to math, MRIs may be better than IQs

The Kosher Gourmet by Mario Batali: The celebrated chef on how high-maintenance ASPARAGUS RISOTTO need not be

April 29, 2013

Roy Gutman: Poland's new Jewish museum celebrates life, doesn't revisit Holocaust

Mark Clayton: Terrorism in America: Is US missing a chance to learn from failed plots?

Kim Murphy: Boston Bomber's 'Svengali' Revealed
Morgan Housel: He's rich, smart and old: Listen to him

Thomas Salinas, D.D.S.: Mayo Clinic Medical Edge: The safety of amalgam fillings

Harvard Health Letters: Tomatoes and stroke protection

Pete Spotts: Tiny satellites + cellphones = cheaper 'eyes in the sky' for NASA

The Kosher Gourmet by Diane Rossen Worthington: Swing into spring with lemon cream pie

April 26, 2013

Rabbi Abraham J. Twerski: The world is a mirror

Caroline B. Glick: Time to confront Obama

Clifford D. May: Defense in the Age of Jihadist Terrorism
Kimberly Lankford: New strategies ease pain of paying for long-term care insurance

Howard LeWine, M.D.: Ask the Harvard Experts: Too much ibuprofen?

Sharon Palmer, R.D.: How to feel your best -- with plenty of energy, a healthy weight and optimal mental and physical function -- without driving yourself batty

Jewz in the Newz by Nate Bloom: Jewish Major Leaguers, 2013; New Movies and Comedy Show; Shalom, 'Lumpy' (Leave it to Beaver)

The Kosher Gourmet by Emily Ho : A bright and cheerful salad to herald the warmer months ahead

April 24, 2013

Steven Emerson: Boston Bomber Exposes Islamist Secret

Morgan Housel Admit it: No one has any idea what's going on
Harvard Health Letters: Can you get headaches from headache medication?

Kerri-Ann Jennings, M.S., R.D.: How to easily get more Omega-3s in your diet

Melissa Healy: Pot in a pill: All the pain relief without the smoke

The Kosher Gourmet by Susan Russo: Chipotle Chili Butternut Squash Soup is bold, zesty, hot

April 22, 2013

Ken Dilanian: Counterterrorism's future is unclear

US man departing country arrested on terror charges
Barbara Williams: An unorthodox but growing treatment in a 9-year-old's battle against cancer

P.J. Skerrett, M.D.: How to recognize a good whole grain product

Jewz in the Newz by Nate Bloom: Teen actor Jonah Bobo in New Flick: Hunky James Wolk on Mad Men; Erich Segal's Daughter Writes Prize-Winning Jewish Novel


Jewish World Review March 1, 2005 / 20 Adar I, 5765

Economics for the citizen

By Walter Williams


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Part Eight of a Ten-Part Series


http://www.JewishWorldReview.com | Economic theory is broadly applicable. However, a society's property-rights structure influences how the theory will manifest itself. It's the same with the theory of gravity. While it, too, is broadly applicable, attaching a parachute to a falling object affects how the law of gravity manifests itself. The parachute doesn't nullify the law of gravity. Likewise, the property-rights structure doesn't nullify the laws of demand and supply.

Property rights refer to who has exclusive authority to determine how a resource is used. Property rights are said to be communal when government owns and determines the use of a resource. Property rights are private when it's an individual who owns and has the exclusive right to determine the non-prohibited uses of a resource and receive the benefit there from. Additionally, private-property rights confer upon the owner the right to keep, acquire and sell the property to others on mutually agreeable terms.

Property rights might be well defined or ill defined. They might be cheaply enforceable or costly to enforce. These and other factors play a significant role in the outcomes we observe. Let's look at a few of them.

A homeowner has a greater stake in the house's future value than a renter. Even though he won't be around 50 or 100 years from now, the house's future housing services figure into its current selling price. Thus, homeowners tend to have a greater concern for the care and maintenance of a house than a renter. One of the ways homeowners get renters to share some of the interests of owners is to require security deposits.

Here's a property-rights test question. Which economic entity is more likely to pay greater attention to wishes of its clientele and seek the most efficient methods of production? Is it an entity whose decision makers are allowed to keep for themselves the monetary gain from pleasing clientele and seeking efficient production methods, or is it entities whose decision makers have no claim on those monetary rewards? If you said it is the former, a for-profit entity, go to the head of the class.

While there are systemic differences between for-profit and non-profit entities, decision makers in both try to maximize returns. A decision maker for a non-profit will more likely seek in-kind gains such as plush carpets, leisurely work hours, long vacations and clientele favoritism. Why? Unlike his for-profit counterpart, he doesn't have property rights to take his gains. Also, since he can't capture for himself the gains and doesn't suffer the losses himself, there's reduced pressure to please clientele and seek least-cost production methods.

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You say, "Professor Williams, for-profit entities sometimes have plush carpets, have juicy expense accounts and behave in ways not unlike non-profits." You're right, and again, it's a property-rights issue. Taxes change the property-rights structure of earnings. If there's a tax on profits, then taking profits in a money form becomes more costly. It becomes relatively less costly to take some of the gains in non-money forms.

It's not just businessmen who behave this way. Say you're on a business trip. Under which scenario would you more likely stay at a $50-a-night hotel and eat at Burger King? The first is where your employer gives you $1,000 and tells you to keep what's left over. The second is where he tells you to turn in an itemized list of your expenses and he'll reimburse you. In the first case, you capture for yourself the gains from finding the cheapest way of conducting the trip, and in the second, you don't.

These examples are merely the tip of the effect that property-rights structure has on resource allocation. It's one of the most important topics in the relatively new discipline of law and economics.

Every weekday JewishWorldReview.com publishes what many in uplifting articles. Sign up for the daily JWR update. It's free. Just click here.

Walter Williams Weekly Column Archives

Economics for the citizen, Part Seven
Economics for the citizen, Part Six
Economics for the citizen, Part Five
Economics for the citizen, Part Four
Economics for the citizen, Part Three
Economics for the citizen, Part Two
Economics for the citizen, Part One


© 2005, Creators Syndicate