Category: Books

Brigham and Epstein Have the Guts to Nudge the Overton Window

The Overton Window is the range of “officially acceptable” or “politically correct” policy views. The left has been successful at shifting the window in their direction, for instance, in cancelling those who question any aspect of the global warming ideology for being outside polite discourse. In the face of cancel culture it takes courage to challenge the current Overton Window. Brigham and Epstein (see below) have that courage. Their views should be considered.

(p. B12) Exxon Mobil, Occidental Petroleum and other oil giants are expected to receive billions of dollars of incentives to collect and bury carbon emissions. Texas oil billionaire Ben “Bud” Brigham and pro-fossil-fuels activist Alex Epstein want to turn off the tap.

Brigham, a serial entrepreneur and libertarian from Austin, is urging President Trump and the Republicans who are considering slashing a host of energy incentives to go further and nix tax credits for carbon capture.

. . .

Brigham says he doubts carbon capture can be profitable without public funding and that it is a distraction from firms’ core mission of finding oil and gas. He says that the subsidies distort markets and encourage cronyism.

A geophysicist by training, Brigham made his fortune building and selling two oil companies for a total of about $7 billion. He is an Ayn Rand fan who has produced two movies based on the philosopher’s work. He was also a major backer of what is now the Civitas Institute, a conservative center that launched in 2022 at the University of Texas at Austin.

Brigham first met Epstein, another Rand fan, about a decade ago. The two men bonded over a common belief in the importance of free markets and fossil fuels. Epstein is the author of “The Moral Case for Fossil Fuels,” a book saying that the imperative to fuel societies flourishing with oil and gas outweighs climate-change risks. It has given Republicans ammunition to counter the left’s climate push, oil lobbyists say.

For the full story, see:

Benoît Morenne. “Oil Tycoon, Philosopher Fight Carbon-Capture Goals.” The Wall Street Journal (Tues., July 1, 2025): B12.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 28, 2025, and has the title “The Oil Tycoon and the Philosopher Threatening Big Oil’s Bet on Carbon Capture.”)

Epstein’s book, mentioned above, is:

Epstein, Alex. The Moral Case for Fossil Fuels. New York: Portfolio, 2014.

artdiamondblog.com Is 20 Years Old Today and Will Now Switch to Weekly Entries (on Mondays)

On October 16, 2024 I announced some changes in my artdiamondblog.com web log. For instance, I was going to focus more entries on my next book project: Less Costs, More Cures: Unbinding Medical Entrepreneurs, and I was to include some brief entries on my memories of important economists such as George Stigler and Gary Becker. I implemented both changes, though more of the former than the latter.

One other change that I have made, especially in the last few months, is to precede almost all entries with (sometimes detailed) introductory commentary.

I believe that these changes have improved the average quality of my entries, but may have narrowed the audience who will find them of interest. My blog entries in the last several months may be of increased interest to those who are willing to follow me into the weeds of healthcare policy, but may be of decreased interest to those who care more about the broader set of issues that I dealt with in my Openness to Creative Destruction book.

Personally, I have mixed feelings about the changes to my blog. On the one hand I feel some pride and satisfaction on the higher quality of entries, and have some hope that many of the entries will end up being useful early notes toward my bigger project. On the other hand, the changes have not reduced the overall time I invest in the blog, as I had hoped they would.

The bottom line is that I have been spending too much time on the blog, and too little time on my writing and research projects. Or as an economist might say, the opportunity cost of marginal time spent on the blog is too high. So I have decided to implement another change. Starting on July 15, 2025, I will commit to running a new entry on Monday of each week, but will not post on the other days of the week unless something big comes up.

I want to see how this change works–it may be permanent, or after the end of the summer, I may switch back to daily posts.

I make this change with some twinge of sadness and regret, since I take some pride in having run a daily post on almost all days from July 15, 2005 through July 15, 2025.

On July 15 of every year Aaron Brown sends me happy blog birthday greetings. (I continue to be grateful to Aaron for his thoughtful comments on blog entries, and for letting me know when an entry is missing or when something in an entry is amiss.)

This year on July 15 my blog will be 20 years old.

Perseverance is sometimes praiseworthy; pivoting is sometimes praiseworthy too. I hope I am right to pivot.

Father Spends 20 Years Researching to Cure His Children’s Type 1 Diabetes

The development of a new drug to cure Type 1 diabetes is big news, a triumph of medicine. The process of developing the medicine and bringing it to market interests me for several reasons. One is that Doug Melton spent 20 years of effort on it. His passion was due to having skin in the game: he has two children with the disease. Another is that it took so many years “of painstaking, repetitive, frustrating work.” I emphasize the common importance of trial-and-error in many major medical discoveries. Another is that the trial-and-error was to develop a “chemical cocktail to turn stem cells into islet cells.” Several major medical advances have required nimble and persistent trial-and-error to adjust drug cocktails, in terms of components and doses. Examples include HIV, Hodgkin’s lymphoma, and childhood leukemia.

A final reason I am interested in the case is that Melton selected the Vertex company to bring the drug to market. Vertex is an interesting case of a large firm struggling to keep the innovative culture of its startup roots. I read a book about its struggles called The Antidote. I intend to read an earlier book about its early years called The Billion Dollar Molecule.

(p. 17) A single infusion of a stem cell-based treatment may have cured 10 out of 12 people with the most severe form of type 1 diabetes. One year later, these 10 patients no longer need insulin. The other two patients need much lower doses.

The experimental treatment, called zimislecel and made by Vertex Pharmaceuticals of Boston, involves stem cells that scientists prodded to turn into pancreatic islet cells, which regulate blood glucose levels. The new islet cells were infused and reached the liver, where they took up residence.

The study was presented Friday evening [June 20, 2025] at the annual meeting of the American Diabetes Association and published online by The New England Journal of Medicine.

“It’s trailblazing work,” said Dr. Mark Anderson, professor and director of the diabetes center at the University of California in San Francisco. “Being free of insulin is life changing,” added Dr. Anderson, who was not involved in the study.

. . .

The treatment is the culmination of work that began more than 25 years ago when a Harvard researcher, Doug Melton, vowed to find a cure for type 1 diabetes. His 6-month-old baby boy developed the disease and, then, so did his adolescent daughter. His passion was to find a way to help them and other patients.

He began, he said, with an “unwavering belief that science can solve the most difficult problems.”

It took 20 years of painstaking, repetitive, frustrating work by Dr. Melton and a team of about 15 people to find the right chemical cocktail to turn stem cells into islet cells. He estimated that Harvard and others spent $50 million on the research.

Dr. Peter Butler, a professor of medicine at the University of California, Los Angeles and a consultant to Vertex, said he was awed by the achievement of the Harvard team.

“The fact that it worked at all is just freaking amazing to me,” he said. “I can guarantee there were a thousand negative experiments for every positive one.”

When Dr. Melton finally succeeded, he needed a company to take the discovery into the clinic. He joined Vertex, which took up the challenge.

For the full story see:

Gina Kolata. “People With Severe Diabetes May Have Been Cured in a Small Trial of a New Drug.” The New York Times, First Section (Sun., June 22, 2025): 17.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the story was updated June 21, 2025, and has the title “People With Severe Diabetes Are Cured in Small Trial of New Drug.” The online version says that the article appeared on page 24 of the New York edition of the print version. But the article appeared on page 17 of my National edition.)

The NEJM academic article co-authored by Melton and mentioned above is:

Reichman, Trevor W., James F. Markmann, Jon Odorico, Piotr Witkowski, John J. Fung, Martin Wijkstrom, Fouad Kandeel, Eelco J.P. de Koning, Anne L. Peters, Chantal Mathieu, Leslie S. Kean, Bote G. Bruinsma, Chenkun Wang, Molly Mascia, Bastiano Sanna, Gautham Marigowda, Felicia Pagliuca, Doug Melton, Camillo Ricordi, and Michael R. Rickels. “Stem Cell–Derived, Fully Differentiated Islets for Type 1 Diabetes.” The New England Journal of Medicine (published online on June 20, 2025), DOI: 10.1056/NEJMoa2506549.

The books that I mentioned about Vertex are:

Werth, Barry. The Antidote: Inside the World of New Pharma. New York: Simon & Schuster, 2014.

Werth, Barry. The Billion-Dollar Molecule: One Company’s Quest for the Perfect Drug. New York: Simon & Schuster, 1994.

Increasing the Illumination “of Everyday Hardship”

History records much more on the lives of the rich, powerful, and articulate, than on the lives of ordinary citizens. But if we want to deeply understand what happened in the past, and how far we have come, we need to tease out evidence of the lives of ordinary citizens. Gabriel Zucktriegel makes the case that the ruins of Pompeii provide us some evidence. The volcano did not care if you were rich, powerful, articulate or ordinary–it buried everyone who did not escape in time. And more importantly, it buried the artifacts and settings of everyone.

(p. C11) After lying inert beneath volcanic ash for nearly 17 centuries, the Roman city of Pompeii, near Naples, is today a site of continuous change. New discoveries emerge constantly, even as conservators struggle to protect what’s been found from damage by weather, looters and crowds. Articles and books about these findings have steadily appeared as excavations expand into parts of the town that remain buried.

In 2021 Gabriel Zuchtriegel, a German classicist then in his late 30s, was given the enormous task of directing this dynamic site.

. . .

“Pompeii is like a rip in the screen, through which we have the opportunity to take a peek behind the official version of history,” writes Mr. Zuchtriegel. He describes in vivid detail his 2021 discovery of a small room containing the remains of three beds and other quotidian objects. Perhaps it was the dwelling, as well as the workspace, of slaves. A newspaper described the discovery as “the rarity of the everyday,” and Mr. Zuchtriegel takes the phrase as a rallying cry. “The ‘rarity of the everyday’ could also be the title for my personal access to archaeology and Pompeii,” he writes.

“What we found here was different, precisely because it wasn’t a temple, grave or palace,” says Mr. Zuchtriegel, just some 50 square feet “of everyday hardship.” He recounts how he noticed a nail on the wall for hanging an oil lamp and, beneath it, a white painted rectangle designed to reflect the lamplight and increase illumination. Moved by this simple effort to lighten a dark existence, he ponders how the room’s occupants, who no doubt lacked paint and brushes, got that rectangle made. It’s one of many instances where he reimagines the lives of Rome’s downtrodden.

. . .

“The Buried City,” translated from the German by Jamie Bulloch, offers many such glimpses of common Pompeians, some of whom stand before us today in the form of plaster casts made from cavities in the ash where their bodies decayed. Mr. Zuchtriegel is deeply moved by these casts, the phantoms of those who were trying to hide or flee when a searingly hot blast of dust and ash swept in. As he contemplates them, he tells us, “the academic in me switches off.”

For the full review see:

James Romm. “An Ordinary Day in Pompeii.” The Wall Street Journal (Sunday, June 28, 2025): C11.

(Note: ellipses added.)

(Note: the online version of the review has the date June 27, 2025, and has the title “‘The Buried City’: Pompeii on Display.”)

The book under review is:

Zuchtriegel, Gabriel. The Buried City: Unearthing the Real Pompeii. Translated by Jamie Bulloch. Chicago: University of Chicago Press, 2025.

Gram and Boudreaux Present Data to Refute Myths About the History of Capitalism

Donald Boudreaux makes the case for economic freedom more clearly, effectively, and persistently than almost anyone. I have not yet read his book with former senator Phil Gram, but I look forward to doing so.

(p. A13) . . . if you control the historical narrative surrounding economic questions, you are more than halfway toward winning the policy battles. This is the insight Phil Gramm and Donald J. Boudreaux bring to “The Triumph of Economic Freedom.”

. . .

In eight chapters, Messrs. Gramm and Boudreaux tackle seven longstanding historical myths about American capitalism that still influence economic discussion today. In each case, they are careful not to caricature the conventional wisdom they challenge.

But having given their opponents’ positions more than a fair shake, Messrs. Gramm and Boudreaux turn to extensive rebuttals. These are supported by detailed attention to data sets. The authors also outline alternative explanations for the path taken by American manufacturing since the 1970s, and for the state of poverty in America today.

For the full review see:

Samuel Gregg. “Bookshelf; A Few Lessons From History.” The Wall Street Journal (Tuesday, June 17, 2025): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date June 16, 2025, and has the title “Bookshelf; ‘The Triumph of Economic Freedom’: A Few Lessons From History.”)

The book under review is:

Gramm, Phil, and Donald J. Boudreaux. The Triumph of Economic Freedom: Debunking the Seven Great Myths of American Capitalism. Lanham, Maryland: Rowman & Littlefield Publishers, 2025.

During Covid-19 “Bureaucratic Authorities Erred in Pretending . . . Certainty”

(p. A13) Adam Kucharski, a professor of epidemiology at the London School of Hygiene & Tropical Medicine, takes the reader on a fascinating tour of the history of what has counted as proof.

. . .

What should we do, . . ., when a mathematical proof of truth is unavailable, but we must nonetheless act?

This leads us to a discussion of probability and statistics, and of pioneers such as William Gosset, a brewer at Guinness who figured out how to quantify random errors in experiments, and Janet Lane-Claypon, an English scientist who first thought to investigate confounding factors while analyzing children’s health. Some innovations, though, have hardened into unhelpful dogma. The scientific notion of “statistical significance” relies, Mr. Kucharski explains, on a wholly arbitrary cutoff, which incentivizes researchers to massage their data. Such issues, he says, can be hard for scientists, let alone the laity, to understand.

Mr. Kucharski speaks from experience, since he was one of the experts first called upon by the British government for advice on the Covid-19 pandemic. He explains brilliantly the fragmentary and confusing nature of the data then available, and the provisional conclusions they led to. As a public face of this effort, Mr. Kucharski was bombarded daily with abusive and threatening messages from angry citizens who simply didn’t believe what they were being told.

The lesson Mr. Kucharski draws isn’t that he and his colleagues were right (though they largely were), but that bureaucratic authorities erred in pretending there was certainty when all that was possible at the time was messy and provisional. Notoriously, in March 2020 the World Health Organization tweeted “FACT: #COVID19 is NOT airbone.” (As it turns out, it was, and it is.) The author regrets, too, that politicians claimed to be “following the science,” because science can never tell you what you should do.

For the full review see:

Steven Poole. “Bookshelf; Finding Truth In Numbers.” The Wall Street Journal (Friday, June 6, 2025): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date June 5, 2025, and has the title “Bookshelf; ‘Proof’: Finding Truth in Numbers.”)

The book under review is:

Kucharski, Adam. Proof: The Art and Science of Certainty. New York: Basic Books, 2025.

How Did Ed Smylie and His Team Create the Kludge That Saved the Crew of Apollo 13?

Gary Klein in Seeing What Others Don’t analyzed cases of innovation, and sought their sources. One source he came up with was necessity. His compelling example was the firefighter Wag Dodge who, with maybe 60 seconds until he would be engulfed in flame, lit a match to the grass around him, and then laid down in the still-hot embers. The roaring fire bypassed the patch he pre-burned, and his life was saved. The story is well-told in Norman Maclean’s Young Men and Fire.

Pondering more cases of necessity might be useful to help us understand, and encourage, future innovation. One candidate might be the kludge that Ed Smylie and his engineers put together to save the Apollo 13 crew from suffocating after an explosion blew up their command capsule oxygen tank.

Necessity may be part of it, but cannot be the whole story. Humanity needed to fly for thousands of years, but it took Wilbur Wright to make it happen. (This point is made in Kevin Ashton’s fine and fun How to Fly a Horse.)

I have ordered the book co-authored by Lovell, and mentioned in a passage quoted below, in case it contains insight on how the Apollo 13 kludge was devised.

(p. B11) Ed Smylie, the NASA official who led a team of engineers that cobbled together an apparatus made of cardboard, plastic bags and duct tape that saved the Apollo 13 crew in 1970 after an explosion crippled the spacecraft as it sped toward the moon, died on April 21 [2025] in Crossville, Tenn. He was 95.

. . .

Soft-spoken, with an accent that revealed his Mississippi upbringing, Mr. Smylie was relaxing at home in Houston on the evening of April 13 when Mr. Lovell radioed mission control with his famous (and frequently misquoted) line: “Uh, Houston, we’ve had a problem.”

An oxygen tank had exploded, crippling the spacecraft’s command module.

Mr. Smylie, . . ., saw the news on television and called the crew systems office, according to the 1994 book “Lost Moon,” by Mr. Lovell and the journalist Jeffrey Kluger. The desk operator said the astronauts were retreating to the lunar excursion module, which was supposed to shuttle two crew members to the moon.

“I’m coming in,” Mr. Smylie said.

Mr. Smylie knew there was a problem with this plan: The lunar module was equipped to safely handle air flow for only two astronauts. Three humans would generate lethal levels of carbon dioxide.

To survive, the astronauts would somehow need to refresh the canisters of lithium hydroxide that would absorb the poisonous gases in the lunar excursion module. There were extra canisters in the command module, but they were square; the lunar module ones were round.

“You can’t put a square peg in a round hole, and that’s what we had,” Mr. Smylie said in the documentary “XIII” (2021).

He and about 60 other engineers had less than two days to invent a solution using materials already onboard the spacecraft.

. . .

In reality, the engineers printed a supply list of the equipment that was onboard. Their ingenious solution: an adapter made of two lithium hydroxide canisters from the command module, plastic bags used for garments, cardboard from the cover of the flight plan, a spacesuit hose and a roll of gray duct tape.

“If you’re a Southern boy, if it moves and it’s not supposed to, you use duct tape,” Mr. Smylie said in the documentary. “That’s where we were. We had duct tape, and we had to tape it in a way that we could hook the environmental control system hose to the command module canister.”

Mission control commanders provided step-by-step instructions to the astronauts for locating materials and building the adapter.

. . .

The adapter worked. The astronauts were able to breathe safely in the lunar module for two days as they awaited the appropriate trajectory to fly the hobbled command module home.

. . .

Mr. Smylie always played down his ingenuity and his role in saving the Apollo 13 crew.

“It was pretty straightforward, even though we got a lot of publicity for it and Nixon even mentioned our names,” he said in the oral history. “I said a mechanical engineering sophomore in college could have come up with it.”

For the full obituary, see:

Michael S. Rosenwald. “Ed Smylie Dies at 95; His Team of Engineers Saved Apollo 13 Crew.” The New York Times (Tuesday, May 20, 2025): B11.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary was updated May 18, 2025, and has the title “Ed Smylie, Who Saved the Apollo 13 Crew With Duct Tape, Dies at 95.”)

Klein’s book that I praise in my introductory comments is:

Klein, Gary A. Seeing What Others Don’t: The Remarkable Ways We Gain Insights. Philadelphia, PA: PublicAffairs, 2013.

Maclean’s book that I praise in my introductory comments is:

Maclean, Norman. Young Men and Fire. new ed., Chicago: University of Chicago Press, 2017.

Ashton’s book that I praise in my introductory comments is:

Ashton, Kevin. How to Fly a Horse: The Secret History of Creation, Invention, and Discovery. New York: Doubleday, 2015.

The book co-authored by Lovell and mentioned above is:

Lovell, Jim, and Jeffrey Kluger. Lost Moon: The Perilous Voyage of Apollo 13. Boston, MA: Houghton Mifflin, 1994.

Do Graeber’s “Bullshit Jobs” Thrive in Innovative Dynamism?

Last week I participated in a panel on “Freedom and Abundance” with Bri Wolf at an I.H.S. Symposium on “The Future of Liberalism.” As a small part of my presentation (and also in my Openness book), I claim that innovative dynamism creates more jobs than it destroys, and that the new jobs are generally better jobs than the old jobs.

After the panel Bri asked me how I respond to David Graeber’s book Bullshit Jobs. I vaguely remembered hearing of the book, and told her I would look into it. What follows is my brief, quick, edited response.

Graeber claimed that a large number of jobs in the for-profit sector are purposeless, demoralizing “bullshit” jobs. I do think that there are some bullshit jobs, but think that they are much more common in the government and non-profit sectors than in the for-profit sector. There are some in the for-profit sector, but I would argue that the number is diminishing, and many of them are due to labor unions and government regulations, that protect bullshit jobs from being eliminated.

Where innovative dynamism is allowed to function unbound, the trend is toward more meaningful jobs. Two of the important technological innovations of the last several decades have been computers and the internet. Erik Brynjolfsson and co-authors wrote a few papers showing that an important effect has been to flatten the hierarchy at a great many firms. This eliminates much of the middle management that Graeber identifies as one main location of bullshit jobs.

I also looked the book up on Wikipedia and noticed that a couple of empirical papers have been written that raise doubts about some of the claims in the book.

The book seems to have gotten enough attention to justify a longer more serious critique than I am giving it in this blog entry. But I humor myself that I have bigger fish to fry, namely my mission to see if I can help nudge the healthcare mess more toward being a system of innovative dynamism.

Some of Erik Brynjolfsson’s relevant co-authored articles, alluded to above, are:

Bresnahan, Timothy F., Erik Brynjolfsson, and Lorin M. Hitt. “Information Technology, Workplace Organization and the Demand for Skilled Labor: Firm-Level Evidence.” Quarterly Journal of Economics 117, no. 1 (2002): 339-76.

Brynjolfsson, Erik, and Lorin M. Hitt. “Beyond Computation: Information Technology, Organizational Transformation and Business Performance.” Journal of Economic Perspectives 14, no. 4 (Fall 2000): 23-48.

Brynjolfsson, Erik, and Lorin M. Hitt. “Computing Productivity: Firm-Level Evidence.” Review of Economics and Statistics 85, no. 4 (Nov. 2003): 793-808.

David Graeber’s book is:

Graeber, David. Bullshit Jobs: A Theory. New York: Simon & Schuster, 2018.

My book is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

If Universities Disbanded Would Learning and Discovery Cease?

The university is a medieval institution that in many ways in recent decades has become less efficient and less supportive of diversity of ideas. some analysts are calling for fundamental change in universities, maybe even the defunding of universities and the creation of alternative institutions to carry out the legitimate functions of universities. See Richard Vedder’s recent book Let Colleges Fail.

What are those functions? The two most important are 1) educate and 2) create new knowledge. Some, e.g., Christensen and Eyring in The Innovative University, identify a third function as providing a memorable and enjoyable early-adulthood experience of peer-camaraderie.

If universities were disbanded, could these functions be well-done by other institutions? Philip Hamburger in a passage quoted below points out that a huge store of diverse knowledge is now available on through the internet. Some of it is especially designed to help teach a variety of subjects at a variety of levels. With a basic knowledge of reading and of how to access the internet, the dedicated autodidact is not limited in what he can learn.

If universities were disbanded, could the creation of new knowledge continue? Here there is even greater uncertainty, but we have some proofs of concept of how alternative institutions and activities might fill the gap. In the early days of the Royal Society many of the members were not associated with any university. Many members pursued science in their spare time, with their own funds.

New forms of peer review could be tried that might allow anyone the chance to participate as citizen scientists. The new Journal of the Academy of Public Health will publish peer review comments along with the original article. Many scholars and citizen scientists are finding Substack a fruitful platform for publishing their ideas. Substack calls itself “a new economic engine for culture.”

Much science has been done, and can still be done, in entrepreneurial ventures and in industry. Terence Kealey documented the history and made the case. More science would be done by those seeking practical applications, and less by those seeking useless, but pretty, theory. Milton Friedman condemned NSF funding of economics, because it made economics too mathematical.

Science would be more highly valued and would produce more value.

(p. A15) Academic institutions think they have a problem and that its name is Donald Trump. But he’s only the beginning of their problems. The difficulties are systemic, not only legal or political, and that means it’s time to reconsider what higher education should look like.

. . .

. . ., although today the immediate threat comes from the Trump administration, academic institutions are fragile because knowledge is now available through the internet and artificial intelligence. For balanced inquiry, even academics increasingly look outside their universities.

For the full commentary see:

Philip Hamburger. “Don’t Just Fix Higher Education, Reconstitute It.” The Wall Street Journal (Tues., June 3, 2025): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 2, 2025, and has the same title as the print version.)

The sources mentioned in my comments are:

Christensen, Clayton M., and Henry J. Eyring. The Innovative University: Changing the DNA of Higher Education from the inside Out. San Francisco, CA: Jossey-Bass, 2011.

Friedman, Milton. “An Open Letter on Grants” Newsweek, May 18, 1981, 99.

Kealey, Terence. The Economic Laws of Scientific Research. New York: St. Martin’s Press, 1996.

Vedder, Richard. Let Colleges Fail: The Power of Creative Destruction in Higher Education. Oakland, CA: Independent Institute, 2025.

The Chicago School of Economics Was Once Uniquely Focused on Real World Problems

The Chicago School of Economics, most associated with Milton Friedman and George Stigler, saw itself as different from all the other top graduate programs in economics. At Chicago, the priority was solving applied problems, and only as much mathematics and theory should be used as was necessary to solve them. The other schools prioritized mathematical puzzle-solving and mathematical rigor and sophistication.

For those who might suspect Chicago was full of itself, the non-Chicago economists Arjo Klamar and David Colander dispelled the suspicion in their The Making of an Economist. After thorough interviewing and surveying of graduate students at the five or six top graduate programs, they concluded that graduate students at all but Chicago were cynically discouraged to realize that they were being trained to solve mathematical puzzles, while only those at Chicago still felt that they were being trained to matter in the real world.

I noticed that a recent obituary for the economist Stanley Fischer quotes Fischer as stating some diplomatic confirmation of the Klamar and Colander conclusion:

After earning his Ph.D. at M.I.T. in 1969, Mr. Fischer moved to the University of Chicago as a postdoctoral researcher and assistant professor. “At M.I.T. you did the mathematical work,” he told The New York Times in 1998, “and at Chicago you asked the question of how this applies to the real world” (Hagerty 2025, p. A17).

Alas, I fear that what was once true, is true no longer. I fear that if Klamar and Colander were to repeat their study today, they would find that Chicago has joined the other top programs in prioritizing mathematical puzzle-solving and mathematical rigor and sophistication.

The obituary of Stanley Fischer, quoted above, is:

James R. Hagerty. “Stanley Fischer, 81, Economist Who Helped Defuse Crises, Dies.” The New York Times (Mon., June 2, 2025): A17.

(Note: the online version of the Steve Lohr article was updated June 10, 2025, and has the title “Stanley Fischer, Who Helped Defuse Financial Crises, Dies at 81.”)

The Klamar and Colander book mentioned above is:

Klamer, Arjo, and David Colander. The Making of an Economist. Boulder, CO: Westview Press, 1990.

Puzzling Studies Claim Economic Downturns Encourage Innovation

A recent paper co-authored by Talay joins several other studies (e.g., Anthony 2009 and Field 2011) in claiming that economic downturns encourage economic innovation.

I have always found these studies deeply puzzling. When I acquire infinite time, I plan to hunker down and try to figure out what is going on.

My initial hypothesis is that downturns do not actually help innovators, but that those entrepreneurs who persist in bringing new goods to market during a downturn either have higher levels of perseverance or else have better new goods.

In other words the puzzling results are due to a selection issue–other things are not equal, and downturns do not encourage innovation.

The WSJ article that summarizes the recent paper is:

Lisa Ward. “When a Recession Helps Product Launch.” The Wall Street Journal (Tues., June 17, 2025): B6.

(Note: the online version of the WSJ article has the date June 12, 2025, and has the title “Yes or No: It’s Smart to Launch a New Product in a Recession.”)

The recent academic published paper co-authored by Talay and summarized in The Wall Street Journal article mentioned and cited above is:

Talay, M. Berk, Koen Pauwels, and Steven H. Seggie. “Why and When to Launch New Products During a Recession: An Empirical Investigation of the U.K. FMCG Industry and the U.S. Automobile Industry.” Journal of the Academy of Marketing Science 52, no. 2 (March 2024): 576-98.

The two books cited above that support the claim that downturns encourage innovation are:

Anthony, Scott D. The Silver Lining: An Innovation Playbook for Uncertain Times. Boston, MA: Harvard Business School Press, 2009.

Field, Alexander J. A Great Leap Forward: 1930s Depression and U.S. Economic Growth, Yale Series in Economic and Financial History. New Haven, CT: Yale University Press, 2011.