EconTalk David Henderson on the Essential UCLA School of Economics
Sep 20, 2021
David Henderson, an esteemed economist and author, dives into the significant contributions of Armen Alchian and Harold Demsetz from the UCLA School of Economics. He highlights how they framed economics as a tool for understanding human behavior. The discussion reveals the importance of property rights, team production dynamics, and challenges misconceptions about exploitation. Henderson also critiques the Nirvana fallacy in economic debate, emphasizing balanced evaluations between government and market solutions. His insights link historical events to current economic resilience and behavioral economics.
AI Snips
Chapters
Books
Transcript
Episode notes
Incentives Drive Behavior
- Alchian believed that understanding incentives is key to understanding behavior.
- Given the rules, you can predict the outcomes.
Bookstore Lines
- David Henderson recalls Alchian's first class at UCLA, where he used the bookstore lines to illustrate economic principles.
- Long lines resulted from employees lacking ownership and strong incentives, demonstrating how economics explains behavior.
Barrow's Smoking Policy
- Barrow allowed Lucas to smoke in his office despite a no-smoking policy, demonstrating nuanced property rights.
- He valued conversation with Lucas more than avoiding smoke, illustrating trade-offs.
