The Fall 2012 issue of the Cato Journal is dedicated to the late William A. Niskanen, distinguished senior economist and chairman emeritus of the Cato Institute, who passed away on October 26, 2011. As Nobel laureate Vernon L. Smith once wrote, Niskanen was "a great American scholar, admirably independent, whose role I cannot imagine being adequately filled by anyone else." The issue opens with a revised lecture Niskanen planned to give in Madrid in 2011, in which he assesses the major political and economic futures for Europe, as well as the considerations that come to bear on these alternatives. Perhaps the best general guidance, he notes, was offered by Václav Klaus. "No costly, freedom-constraining uniformity, harmonization, and centralization should be part of it," Niskanen writes, echoing the Czech president's words, "nor any obligatory 'European' ideology."
Dwight R. Lee looks at the serious problems undermining Keynesian hopes for moderating the decline, duration, and frequency of economic downturns. Because Keynesian remedies are filtered through a political process and almost entirely focused on short-term demand-side concerns, he argues, they end up being "a prescription for fiscal irresponsibility." They are, in the end, just another example of "bad economics making for good politics."
Elsewhere in the issue, Deepak Lal finds that the new development economics is "just the old 'development economics' refurbished with mathematical bells and whistles," while James A. Dorn considers first principles in order to delineate the legitimate functions of government in a free society.
Other notable contributors include David Cronin on "The New Monetary Economics," Masoud Moghaddam on "Starving the Beast Revisited," and Bruce K. Gouldey and Clifford F. Thies on "Asset Bubbles and Supply Failures: Where Are the Qualified Sellers?"
The Fall 2012 issue concludes with reviews of books on the grip of global finance, the argument for nuclear-weapons abolition, China's response to the recent economic downturn, and the contribution of America's "warfare state" to big government, among others.