Send us a text We trace how Adam Smith solves a historical puzzle: why Europe’s path to prosperity inverted the “natural order,” and how commerce quietly dissolved feudal power to make room for liberty. The story follows incentives, from primogeniture and entail to charters, free towns, and the market’s “silent and insensible” revolution. institutions as congealed preferences and elite incentiveswhy Smith’s natural order inverts in Europethe physiocrats’ growth model and Smith’s critiqueSol...
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Send us a text We trace how Adam Smith solves a historical puzzle: why Europe’s path to prosperity inverted the “natural order,” and how commerce quietly dissolved feudal power to make room for liberty. The story follows incentives, from primogeniture and entail to charters, free towns, and the market’s “silent and insensible” revolution. institutions as congealed preferences and elite incentiveswhy Smith’s natural order inverts in Europethe physiocrats’ growth model and Smith’s critiqueSol...
Send us a text Mike Munger explores insurance economics through the lens of transaction costs and risk management, culminating in an amusing case study about "bat-in-mouth disease." Insurance transfers risk from individuals to larger pools, reducing the expected variance of outcomesThe fair price of insurance equals expected value (probability × potential loss) plus transaction costsInformation asymmetry, subjective risk valuation, and strategic behavior complicate insurance marketsInsuranc...
The Answer Is Transaction Costs
Send us a text We trace how Adam Smith solves a historical puzzle: why Europe’s path to prosperity inverted the “natural order,” and how commerce quietly dissolved feudal power to make room for liberty. The story follows incentives, from primogeniture and entail to charters, free towns, and the market’s “silent and insensible” revolution. institutions as congealed preferences and elite incentiveswhy Smith’s natural order inverts in Europethe physiocrats’ growth model and Smith’s critiqueSol...
