Richard A. Posner: Economics

“The importance to economics of the study of institutions is no longer a controversial proposition, thanks in part to the scholarly literature generated by the new institutional economics movement. Institutions are more than organizations – property is an institution, but not an organization – but organizations are an important form of institution and will be the focus of my paper, as it is, to a considerable extent, of the new institutional economics.”

Richard A. Posner

"From the new institutional economics to organization economics: with applications to corporate governance, government agencies, and legal institutions" (2010).

Literature , Study , Parting

“This book is written in the conviction that economics is a powerful tool for analyzing a vast range of legal questions but that most lawyers and law students-even very bright ones-have difficulty connecting economic principles to concrete legal problems.”

Richard A. Posner

Source: Economic Analysis of Law (7th ed., 2007), Ch. 1: The Nature of Economic Reasoning

Books , Law , Question , Problem

“Although there are other heresies in The General Theory, along with puzzles, opacities, loose ends, confusions, errors, exaggerations, and anachronisms galore, they do not detract from the book's relevance to our present troubles. Economists may have forgotten The General Theory and moved on, but economics has not outgrown it, or the informal mode of argument that it exemplifies, which can illuminate nooks and crannies that are closed to mathematics. Keynes's masterpiece is many things, but "outdated" it is not.”

Richard A. Posner

How I Became a Keynesian (2009)

Books , Error , Mathematics

“Central to this book is the further assumption that man is a rational utility maximizer in all areas of life, not just in his “economic” affairs, that is, not only when engaged in buying and selling in explicit markets. This idea goes back to jeremy Bentahm in the eighteenth and early nineteenth century, but received little attention from economists until the work of Gary Becker in th 1950s and 1960s.
The concept of man as a rational maximizer implies that people respond to incentives.(…) From this proposition derive the three fundamental principles of economics.”

Richard A. Posner

Source: Economic Analysis of Law (7th ed., 2007), Ch. 1: The Nature of Economic Reasoning

Life , People , Books , Idea

“One thing we’ve learned from the economic events of the past two years is that macroeconomics, or at least the part of macroeconomics that studies the business cycle, is a weak field. With only a few exceptions, macroeconomists, including the most illustrious, did not anticipate the current depression.”

Richard A. Posner

The Crisis of Capitalist Democracy (2010) Ch. 10 The Crisis of Macroeconomics.

Business , Study , Learning , Past

“As conceived in this book, economics is the science of rational choice in a world─our world─in which resources are limited in relation to human wants. The task of economics, so defined, is to explore the implications of assuming that man is a rational maximizer of his ends in life, his satisfactions─what we shall call his “self-interest.” Rational maximization should not be confused with conscious calculation. Economics is not a thoery about consciousness. Behavior is rational when it conforms to the model of rational choice, whatever the state of mind of the chooser.(…) Nor is perfect rationality assumed; rational-choice thoery allows us to assume that rationality is “bounded” because of human cognitive limitations, although another way to think of those limitations is as costs of absorbing and using information.”

Richard A. Posner

Source: Economic Analysis of Law (7th ed., 2007), Ch. 1: The Nature of Economic Reasoning

Life , Books , World , Way

“My reaction to “creative capitalism” as lauded by Bill Gates, Warren Buffett, Michael Kinsley, and (somewhat to my surprise), Professor Glaeser of the Harvard Economics Department is a skeptical one. The embrace of massive corporate charity, the criticism of capitalism by its greatest beneficiaries, and the frequent resort by the advocates of “creative capitalism” to platitudes (such as: “the world is getting better, but not fast enough and not for everyone”; “today’s miracles of technology only benefit those who can afford them”; “economic demand is not the same as economic need”), along with the vagueness of the term itself, leave me with an uncomfortable feeling.”

Richard A. Posner

" Against Creative Capitalism https://web.archive.org/web/20080813084622/http://creativecapitalism.typepad.com:80/creative_capitalism/2008/06/against-creativ.html" (2008), published in Creative Capitalism: A Conversation with Bill Gates, Warren Buffett, and Other Economic Leaders.

World , Feeling