Progress and the Price System | Podcast Highlights

Marian Tupy interviews Brian Albrecht about how prices coordinate markets, discipline firms, and drive human progress.

Brian Albrecht — Jul 31, 2026

Listen to the podcast or read the full transcript here.

Today, I’m joined by Dr. Brian C. Albrecht, chief economist at the International Center for Law & Economics and author of the Economic Forces newsletter. Brian writes about competition, regulation, how markets work, why prices matter, and why good intentions often produce bad policy. His work matters because human progress depends not only on innovation, but also on the institutions and incentives that let useful ideas spread, compete, and improve ordinary lives.

Brian, we’re trying to alert our listeners to the economic underpinnings of modernity: why the last 200 years are so fundamentally different from the previous 300,000 years that Homo sapiens has been on the planet. Online, you’re described as one of the chief defenders of price theory. Why does this amorphous idea matter for the great enrichment and for human progress?

One thing that makes the modern world unique is that markets are a huge part of our lives. Markets let us coordinate across time and place in a way we couldn’t have imagined 300 years ago. And price theory is about studying prices: what causes them to move, how they coordinate behavior, when policies affect them productively or destructively.

Can you talk about prices as a signaling mechanism, and draw out the distinction between prices emerging spontaneously under free markets versus politicians trying to set prices?

I take a line from Alex Tabarrok that a price is a signal wrapped in an incentive. Hayek used the example of tin. Users of tin don’t need to know where a shortage came from or whether there’s a new usage; they see the price go up. That allows coordination across time and place. I can decide whether to hold off on tin production or do something else with my factory because tin is more expensive—all that coordination comes from a simple signal.

Thinkers try to distinguish free market prices from others. What does the price of my electricity bill convey? It’s not set by the same forces as the grocery store, where Krogers, Albertsons, Walmart, and Costco bid for chicken from the wholesaler. There’s gradation, and at the other extreme is not allowing prices at all: a government edict, a ration.

The other aspect of prices is incentives. If you own a grocery store and set the price of bananas too low, you sell out and leave money on the table. That’s a signal to raise prices tomorrow. But when the government sets prices, the Politburo chief isn’t making that money. What incentive do they have to set prices in a way that conveys information?

So it’s not just free market prices that give a signal; a government-regulated price like electricity, with taxes and green levies on top, still allows people to adjust. But at some point you get a situation like we did in Eastern Europe, where I grew up, where prices are so divorced from reality that the system collapses.

That’s an extreme example. Less extreme is just shortages. Mayor Mamdani in New York is known for wanting subsidized government-led grocery stores, but those have been tried elsewhere. It’s not that the system collapsed; there are just shortages in these stores.

In public debates, politicians often ignore scarcity and tradeoffs. Why is it so difficult for people to accept that there are scarcities and tradeoffs?

People accept scarcity in situations where they face the feedback themselves.

Any time you go to the grocery store, you’re confronted with scarcity. In other parts of life, that feedback isn’t as tight. In a large organization, you make budgeting decisions that don’t affect you. If you spend extra on the company card, how tight is that feedback?

The government has more insulation because it doesn’t have shareholders. Local governments might have tighter feedback because they’re more responsive to voters. Totalitarian regimes don’t have any feedback.

Right now, we are in the middle of the conflict in Iran. The price of gas has gone way up, and some people have suggested that we should cap the prices of gasoline. But we’ve been here before in the 1970s. What does the 1970s episode have to teach us about what to do when gas prices are going up because of geopolitical conflict?

Every few generations, you need to relearn the lessons of price controls.

The stories from the 1970s are generally known. There were gas lines and energy caps on different things across the economy. It all circles back to the core idea that when you cap prices, people aren’t able to adjust to reality. There’s less supply than there was before the conflict, and price controls don’t change that; they just hide it. In the 1970s, scarcity showed up as gas lines. At other points in time, it showed up as different types of shortages.

Tyler Cowen has written that we’ve forgotten the lessons people learned in the 1970s about price, wage, and rent controls and are now beginning to relearn them. As an economist, do you think that economic understanding is so counterintuitive that, unless taught, the default position is some sort of diktat socialism? If every generation needs to be retaught, then human nature must be the opposite. Have you thought about that?

I’ve thought about it in the context of Hayek’s idea about the micro and macrocosm. His point is that our brain evolved to think about our day-to-day lives and families rather than larger systems. Modernity, especially through markets, but also through things like the internet and social media, brings those larger systems into contact with our brains, which developed in the microcosm, and that’s a fundamental tension we have to keep dealing with.

Another thing that makes economics tricky is that some parts are intuitive and some parts are not. When I tell my students there are tradeoffs, everyone nods. When I ask whether they’d buy more or fewer bananas if the price rises, everyone answers correctly. There’s an intuitive part we think we understand, and then we think we can make the jump ten steps down the road. Economics would almost be easier to teach if it were completely unintuitive. When you go into quantum physics, nothing’s intuitive, so you don’t even try to intuit it; you look at the experiments and the math.

There’s an idealistic vision of the future where AI and robots give us everything we need, eliminating scarcity. Is that kind of future possible, or are human desires infinite?

I was working this morning on a paper about how when we get more stuff, we discover desires we didn’t even realize we had. There was an LLM released that was only trained on text up to about 1930. You ask it what a computer is, and it says a computer is a person who computes because it’s predicting what a person in 1930 would think. They can’t imagine what we think of as a computer, so they don’t know that desire is possible.

That’s how human desires are infinite. Each time I don’t have to worry about where my water comes from, I can buy something fancier and worry about the next thing. Some of that may be resources, some social status. So far, as soon as we can take care of something without worrying about it, another desire appears. I can’t think of a good reason that would end.

The fundamental scarcity that isn’t settled is time. Even if AI does all the work, time with my kids is still scarce. And once there’s scarcity, there are tradeoffs. I’m excited for what AI will do, but the core principle of scarcity doesn’t go out the window.

Let’s talk about your work on monopolies and market concentration. A lot of people seem confused about the difference between firm size and monopoly power. They look at big companies like Apple, Walmart, or Amazon and say that they are monopolies. But those two terms aren’t identical, are they?

A monopoly, in the strictest sense, means one seller. The term grew out of times when you truly had one seller; the king said only one person could do something. In economics, it doesn’t need to be one seller, but rather one big player in a market. With one dominant player, you could imagine that company being a monopolist, or at least having market power. But what if you’re a small player in many markets? Amazon isn’t the biggest in retail or groceries, but add up enough, and it’s a very big company. Companies can be big because they’re diversified. “Monopoly” is a weird term for that.

Another distinction: the East India Company’s monopoly privileges came from politics, but companies often get big by winning a market. If you provide lower-cost or higher-quality goods, you’ll win the market and become a bigger company. That’s fundamentally different from the old-school idea of a player who’s there because they stole something and have power over you.

Right, so people often misunderstand what it means to be a monopoly. Still, people feel uncomfortable when JetBlue wants to take over Spirit. They feel concentration will result in high prices. How often do big companies raise prices rather than lower them?

In the broad sweep, the way to get rich is to lower prices.

The retailer everyone’s talking about is Costco. Costco has low prices. Combined with a membership fee that people happily pay, they get a lot of customers. No one says Costco’s profit comes from crazy high prices. They came in and lowered prices, maybe not on every item, but as a bundle. Before that, it was Walmart. Way back it was A&P. Even in tech, Microsoft and Apple lowered the price of computers and became big. That’s the default way most companies make money: find a cost saving, lower prices, attract more customers, and get profits over the long run.

And it protects you against competition, right?

Yeah, for sure. If I were born in 1920, maybe my job would be to open a corner shop selling lollipops as a retailer, but in today’s world, I can’t compete with the scale of Costco or Walmart. I could compete on a different margin, a gentler boutique experience, for instance, but it’s harder. The flip side is that I get to talk about economics all day instead of operating that corner store. These cost savings help consumers directly through lower prices and indirectly by freeing up resources for people to produce other stuff and move into services.

Now, when it comes to mergers, people are often concerned about collusion. What if all the sellers get together as one legal entity and collude to raise prices? We can separate winning the market by being more efficient versus winning by convincing everyone to stop competing, but mergers sit in between. Is the merger like Walmart, getting scale efficiencies and lowering prices, or like collusion? In most situations, it’s like Walmart, with real efficiencies and synergies. But in airlines or other situations, it can be more collusive, and that’s case-by-case.

To me, that’s why international competition is so important. Even if United takes over American, JetBlue, and Spirit and we end up with one company, so long as they’re exposed to international competition, it’s harder to collude and raise prices.

That’s a real benefit of international trade: if there are pockets of waste from implicit collusion or inefficient mergers, a constant force of external competition is a disciplining force. We want that pressure because it’s what lets us lower costs, improve quality, and generate progress in the longer run.

Let’s stick with airlines. Here’s something that freaks me out. The internet has a lot of information on my income and yours. At some point, between companies knowing our spending patterns and how much we can afford, they’ll discriminate the prices of plane tickets. If Brian is twice as rich as I am and he logs onto American Airlines, his price will be twice as high as mine because the company knows he can pay twice as much. How do you feel about that future?

Let me talk through the economics.

We can work out that the only way that price discrimination works is that you’re able to lower prices for the marginal consumer. Why do you not lower prices in general? Because you’re worried you’ll have to lower prices for the people you were making profit from. If someone says they won’t pay $100 but will pay $50, why not do that? Because the next person will say the same, and soon everyone will beg for $50.

Price discrimination lets you set different prices for different people and lower prices for consumers who wouldn’t otherwise buy the good. If willingness to pay is a proxy for income, you lower prices for poorer people and raise them for richer people. How you think about those tradeoffs depends on the situation, but there’s no disputing that the only way price discrimination works is if you lower prices for some and possibly raise prices for others.

If poorer people would get a price cut, and the rich pay more, why does the left oppose price discrimination so much?

I’ve tried to push that line, though it’s a little bit tongue-in-cheek. The only way price discrimination is profitable for firms is if it gets new people in the door, which means lowering prices for some people, who tend to be poorer. We should take that seriously as one of its benefits.

Also, who knows where technology ends up. There may be ways for people to hide their identity, or third-party sellers where you call and say, “Hey Brian, buy this ticket for me.”

That is in some sense wasteful. People respond to the threat of theft by installing locks, which reduce theft but are themselves a waste of resources. So there could be a role for policy there. Maryland just passed a law trying to ban this sort of price discrimination for grocery retailers. It had stuff like you cannot use tracking information to lower prices in the store, which isn’t something anyone does, but they’re imagining a future where that happens. In the meantime, it’s not a first-order priority.

Free-market economists emphasize competition over regulation. You just talked about a policy response, a regulation. Should an ordinary person rely on competition as a better way of handling these important issues?

People say the reason they feel safe at the grocery store is food regulation. But it’s not really true. It’s mostly because of competition. The Walmarts of the world try very hard to keep their products safe because they have to in order to keep customers coming back. Competition is a facet of the world that we rely on every day.

If you go to a different country, or even a different US city, you often ask whether the tap water is safe to drink. But people never ask that when opening a Coca-Cola. I remember traveling through Zimbabwe during the hyperinflation in 2008. You couldn’t buy anything, but we found a shack in the middle of nowhere selling ice-cold Coca-Cola. I drank it without thinking twice.

That’s a great example, and I’m ashamed I hadn’t thought of that connection because I’ve written on the importance of brands. Brands have to fight to protect against knockoffs. I can go into a McDonald’s anywhere in the world and expect some level of quality. The power of these big brands is that they keep their quality good enough that you trust what you’ll get and reach a price point that lets them be anywhere in the world.

To circle back to price theory, I try to understand how this is possible: the incentives, rule of law, institutions, and competition that make it possible. That’s what I try to do in my research.

Blog Post | Economic Growth

Growth vs. Redistribution in the Fight Against Poverty | Podcast Highlights

Chelsea Follett interviews Kevin Corinth about the causes of America’s long-term progress against poverty.

Kevin Corinth — Sep 11, 2026

Listen to the podcast or read the full transcript here.

Joining me on the podcast today is Kevin Corinth, a senior fellow at the American Enterprise Institute, where he researches economic mobility, poverty, safety net programs, homelessness, social capital, and other issues. He is a co-author, along with Richard Burkhauser, of a recent paper titled “Poverty and Dependency in the United States, 1939 to 2023.”

What motivated you to revisit nearly a century of American poverty trends?

We have a lot of evidence about the extent of economic progress over the past 50 years or so. My co-author, Richard Burkhauser, and I did a paper a few years ago showing that, since President Johnson declared his war on poverty, we’ve seen a dramatic decline in poverty in the US from a 20 percent baseline to less than 2 percent today. In this paper, we wanted to ask, “What happened before that? Were we seeing declines in poverty before we had a large and expanding safety net?”

I also think that the idea that living standards have not improved over time is motivating a lot of today’s political turn toward socialism. And if we lose our understanding of what we’ve gained through our imperfect capitalist system, that could have very deleterious effects on policy today.

Before we get into the findings, why should people care about how we measure poverty?

A lot of people would agree that you should judge a society based on how it treats its most vulnerable members. I subscribe to that. So measuring poverty matters a lot for people’s views about how society is doing, which matters a lot for determining which policies to adopt.

You measure poverty almost the same way that you measure incomes. The only difference is that you have to pick a poverty line because poverty is the number of people with an income below some threshold. A lot of the debate on poverty comes down to where to draw that line. Where you draw the poverty line is a value judgment. It’s scientifically arbitrary, but it’s not arbitrary in terms of our values. As an economist and social scientist, I don’t get to decide that. You tell me where you want me to draw that poverty line, and then I’ll update it with inflation each year to measure our progress.

The official poverty measure is not measuring poverty well. It tries to be an absolute measure in that it increases the poverty line with inflation, but it uses an inflation measure that overstates how much prices go up each year. It also doesn’t include in-kind transfers like the SNAP program, which is our largest non-medical transfer today. It doesn’t include Medicaid or refundable tax credits. It doesn’t adjust for taxes at all.

Based on the official poverty measure, we’ve seen essentially no decline in poverty over the past 50 years because of these problems. When Rich Burkhauser and I looked at it, we found 90 percent reductions. So how you adjust the threshold and which resources you include matters a lot. Fortunately, almost everyone recognizes that the official poverty measure doesn’t make sense.

Among those who do recognize that poverty has come down in the United States, many assume that it has fallen because of government redistribution. Your central finding is that poverty fell dramatically before the War on Poverty even began. Could you tell me more about that result?

We’re not looking at the causal effect of the War on Poverty. I think we’d argue that it’s not possible for someone to estimate the causal effect of such a massive change in society. However, a lot of people want to say, “Poverty has fallen a lot since 1963 or 1964. That must have been caused by the great expansion of the safety net.” We strongly push back against that assertion, because we found that poverty was actually falling in the 24-year period before the War on Poverty began.

In the paper, you distinguish between poverty reduction through government transfers and poverty reduction through rising earnings. Why should policymakers pay attention to dependency as well as poverty?

That’s the exact way that President Lyndon Johnson thought about it when he declared the War on Poverty in 1964. He wanted to reduce poverty, but he cared a lot about the way in which we did it.

You can reduce poverty by more redistribution, providing more resources to people at the bottom. But that comes with some adverse behavioral effects; maybe they work less, and there could be reductions in marriage, and that could counteract some of the benefits. The other way, which is the one that President Johnson wanted, was to reduce poverty by increasing people’s earnings. People are usually better off, materially and psychologically, when they are able to overcome poverty through their own efforts.

Today, with our spiraling federal debt, there’s also some point at which we cannot continue to expand these programs. If we want to see people flourish and rise up the economic ladder, it’s going to require more than just government transfers. Whenever you redistribute resources to people with lower incomes, these programs are all means-tested. That creates an implicit tax on increasing your own earnings, because if you increase your own earnings, you’re going to reduce the amount of transfers that you receive. Those penalties can stop people from moving up the economic ladder. So those are all reasons why it’s typically better, if possible, to reduce poverty through increases in market income as opposed to more redistribution.

In your view, how much of the post-1960s slowdown in market income growth among lower-income households may be connected to some of those changing incentives from welfare policy itself?

I don’t think it’s the whole story, but it is probably one reason that we’ve seen diminished growth.

There are a few ways that redistribution can slow growth. One of them is by reducing the incentives for people to work, invest in themselves, and get married. It also requires a lot of taxes, which is possibly even a bigger factor. We have high effective marginal tax rates that disincentivize working and investing, which can slow growth. We also borrow money to fund these programs, and the more we borrow, the more taxes we pay in the future. It also means higher interest payments on our existing debt, which slows growth by driving up interest rates and reducing investment.

Many people today are arguing that unconditional cash transfers are the future of social policy in the age of AI.

I worry a lot about the universal basic income debate. My former colleague at AEI, Charles Murray, has talked about it, although for him universal basic income was a replacement for the large safety net that we already have. His idea was to spend the same amount of money, but do it in a way that doesn’t have some of these perverse incentives. The debate has moved on from that idea. Now people are saying,

“Let’s keep the existing means-tested programs and also add a universal basic income for everybody, even middle-class people.”

In the short term, that’s completely unrealistic. We don’t have the budget for it. The cost would be astronomical, and you certainly could not do it just by taxing the rich. You would need vast expansions in taxes for middle-class people too.

However, I worry a lot about universal basic income in the longer term. I don’t know what’s going to happen with AI, but I think in the back of people’s minds there’s this belief, and maybe they’re right, that with AI and all of the benefits it brings, we could see much stronger economic growth in the future. I think that people see that as an opportunity for a universal basic income, and think that once we can afford it, we should implement it. But universal basic income payments could discourage people from working, and especially from entering the labor market. Younger workers may decide, “I may not need to enter into the labor market.” And if you have less labor, you also have less of the augmentation effect of AI, which is where most of the value from AI might be created. So we could see a much smaller economic boom if the labor supply shrinks as a result of universal basic income.

Even if we don’t need human workers and we could actually get by with the machines doing everything, I still think universal basic income would be a terrible idea. People don’t just need work to fuel their own material well-being, but also for the sense of purpose that comes with contributing to society. And there will be ways to contribute to society, no matter what happens with AI.

What policies can we pursue to increase earnings opportunities for Americans without expanding dependency?

We can’t wave a magic wand and get the economic growth rate that we had during the 1940s and 1950s. And we already have a large social safety net. But we can want to design it in a way that reduces poverty and reduces dependence.

Starting in the 1960s, if you measure poverty based only on people’s market income, you see a flatlining of the poverty rate, maybe even a small increase. And at the same time, you see a greater dependence on government transfers. That pattern breaks starting in the early 1990s. Between 1990 and 2000, you see a continued reduction in poverty based on market income and a reduction in dependency.

What happened was welfare reform.

In the late ’80s, there was a lot of frustration about our cash welfare program. It was called AFDC, Aid to Families with Dependent Children. There was concern that it was breeding dependency and reducing marriage rates. In the late ’80s and early ’90s, states started experimenting with other ways of providing assistance, like having time limits on cash welfare, work requirements, and more investment into training programs and education. Then, in 1996, or early 1997, we passed welfare reform legislation that rolled those kinds of policies out nationally: time limits on assistance, work requirements, and, at the same time, expanded refundable tax credits that target families with children, including the child tax credit, which didn’t exist before 1997, and the earned income tax credit, which did exist but was much smaller until the 1990s.

In short, didn’t get any of the benefits unless you worked. And then benefits phased in as you worked more. Eventually there is a phase-out, and that has major problems, but these programs all encouraged people to enter the labor force and work. And after these reforms went into effect, we saw a growth in work efforts. Single moms had something like a 10 percentage point increase in their labor force participation. We saw many measures of child outcomes improving, including test scores and long-term outcomes. And even though we were still seeing a reduction in poverty, we were also seeing a reduction in dependency.

The 1990s example shows that, even with a large social safety net, if we design it correctly and address some of these perverse incentives, we can see reductions in poverty and reductions in dependency at the same time.

The Human Progress Podcast | Ep. 84

Kevin Corinth: Growth vs. Redistribution in the Fight Against Poverty

Kevin Corinth joins Chelsea Follett to discuss the causes of America’s long-term progress against poverty.

Chelsea Follett — Sep 11, 2026

Go To Episode

Our World in Data | Economic Growth

9 African Countries’ Incomes Doubled Since 1990

Sep 11, 2026

“Economic growth is most important for the world's poorest people, and most of the world’s poorest live on the African continent. Are Africa’s economies growing?

The picture is mixed. In some countries, incomes have unfortunately declined in the last decades. This includes Madagascar, Zimbabwe, and Burundi. I have written about this in my brief explainer on extreme poverty.

In today’s Data Insight, I want to focus on the other side: I want to highlight the African countries that are achieving economic growth. Nine of them are shown in the chart above.

In all nine countries, people’s average incomes have more than doubled since 1990.

This made substantial improvements in living standards possible: the share of people in extreme poverty and the rate of child mortality declined in all nine countries.”

From Our World in Data.

Market Forecast | Air Transport

Africa’s Airliner Fleet May More Than Double by 2045

Sep 10, 2026

“Africa’s young, increasingly urban population, growing middle class and improving infrastructure will drive passenger traffic to grow nearly 6% annually through 2045, one of the fastest rates globally, Boeing [NYSE: BA] said today. The region’s commercial airplane fleet will more than double from 755 to 1,625 over the next 20 years to support this demand, as projected in Boeing’s 2026 Commercial Market Outlook (CMO) for Africa.”

From Market Forecast.