F.A. Hayek

Reason.tv: Nobel Prize-Winning Economist Vernon Smith on Experimental Economics, Adam Smith, The Housing Bubble, and His Journey Towards Libertarianism

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Vernon Smith is a pioneer, discovering a whole new way to study economics and winning a Nobel Prize for doing so.

Smith sat down with Reason.tv's Nick Gillespie to discuss a variety of topics, including growing up in Kansas during the Great Depression, his ideological journey from socialist to libertarian, how and why some of Adam Smith's most important intellectual contributions are overlooked, and what experimental economics has to say about the collapse of the housing market. 

Interview by Nick Gillespie. Shot by Zach Weissmueller and Hawk Jensen. Edited by Weissmueller.

Approximately 24 minutes.

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  1. Interesting fellow. Wasn’t familiar with his work – appreciate the introduction.

  2. Another fringe libertarian economist out there polarizing the debate at the behest of his corporate paymasters. Who exactly decides this “Nobel Prize” anyways? The Koch brothers, probably.

    1. 4.5 out of 10

    2. Are you the Stephen Metcalf who writes for Slate or are you just another liberal douche-bag with the same moniker?

      1. Pretty sure this was a spoof of the Stephen Metcalf you just identified.

    3. Its even worse then the Koch brothers, its the Swedish Bankers and its was never created by Nobel and its actually called the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”.

      1. Shhhh!

        Gnomes of Zurich.

        Shhhh!

    4. Re: Stephen Metcalf,

      Another fringe libertarian economist out there polarizing the debate at the behest of his corporate paymasters.

      In stark contract with the “non-fringe” UNlibertarian economists out there, who polarize the debate at the behest of their Federal Reserve and Government paymasters.

      It’s the battle of the Century!

    5. Who exactly decides this “Nobel Prize” anyways?

      Swedish central bankers……why do you think Krugman won one?

      Next question.

    6. The same people who decide the regular Nobel Prizes: “The Royal Swedish Academy of Sciences is responsible for selecting the Laureates in Economic Sciences. The Academy has 350 Swedish and 164 foreign members. Membership in the Academy constitutes exclusive recognition of successful research achievements. Its working body is the Prize Committee, elected from among its membes for a three-year term.”

  3. GOOF: pic at the end was Hume NOT Smith

    1. Yeah, correct this so that when I share it with my liberal friends, I don’t have to constantly tell them that I know the pic of Smith at the end was Hume. Jesus, I can just hear it now.

  4. and what experimental economics has to say about the collapse of the housing market.

    There must be a good reason why I never heard of this.

    1. Vernon Smith is a methodological positivist who creates and dismantles theories ex post facto based on statistical information. Experimental economics is much more widely practiced among neoclassical economists than Vernon makes it out to be; I’d go so far as to gamble that every neoclassical practices experimental economics. The fact that Nick Gillespie views the popularity of empiricism with glee makes me fear for how other libertarians view economic issues, which is the area that libertarianism is strongest in.

      I also find it endlessly hilarious that both Vernor and Gillespie conflate the marginal revolution spearheaded by Menger as being due to the rise of empiricism; it’s empiricism that has brought us cardinal utility, indifference curves, and polynomial functions to explain human action, which are diametrically opposed to marginal analysis. Marginal utility is pure methodological individualism, through and through.

      It would be nice if Reason (drink!) brought on people like Robert Murphy or Thomas Woods, but alas, that is not to be. I’m beginning to see why the folks on Mises.org turn their nose down to this community when it comes to economics.

      1. Re: Tncm,

        Vernon Smith is a methodological positivist who creates and dismantles theories ex post facto based on statistical information[…] I [find] it endlessly hilarious that both Vernor and Gillespie conflate the marginal revolution spearheaded by Menger as being due to the rise of empiricism

        Ah, there’s the reason why I never heard that the economic downturn was predicted by empirical economics!

        1. That’s also the reason why economists regularly pole lower than Congress.

          1. Umm, ow?

            1. Yes, RC Dean, “ow” indeed.

      2. Woods drastically..Woods drastically exaggerates the effects of wealth especially inherited wealth…

      3. “I’m beginning to see why the folks on Mises.org turn their nose down to this community when it comes to economics.”

        That’s because all those sites do is economics. They can’t touch Nick and Matt when it comes to drug war/civil liberties issues.

  5. I went through the same experiment he describes between 22:00 and 23:00 when I was a freshman. It’s nice to know the results.

    I took the $10.

  6. I didn’t know that Gary Busey knew so much about economics.

    1. Re: jorgeborges

      I didn’t know that Gary Busey knew so much about economics.

      Gary Busey? I thought that was Eric Braeden!

  7. After viewing the video I’m not convinced….about his ideas or even that he’s an economist! I mean real economists pontificate and expound upon the majesty of the state and have columns in the New York Times.

    Oh “Jacket” you have been cruelly duped!

  8. I agree with noiselull’s comment. The photo of the eighteenth-century gentleman who appears at 23:38 in the video is David Hume, not Adam Smith.

  9. I feel like the editing cut out a lot of interesting discussion. It seemed like he was going to expand on his theory of property rights and the stock market, but maybe it got cut off? Gillespie was sort of annoying in this interview as well; he kept trying to steer the conversation towards answers he wanted to hear and it seemed to me when they didn’t come, that portion was edited out. I know it’s a libertarian site, but that doesn’t mean he should try to force feed libertarian answers down his throat. I would like to see the interview in it’s entirety and at least hear everything he had to say.

  10. Guy said he was five in 1930 – I hope I am that relevent and coherent at 86.

    1. He said he was 5 in 32, so he’s “only” 84. I watch these on my phone, so I thought he was about 50 until he busted out with this. I second your hope.

  11. Whaaa!!?? Property rights don’t come from the state? Tony’s head will no doubt explode.

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