Reuven Brenner

An Overlooked Explanation of the Declining Saving Rate

With a socioeconomic model of the determinants of savings that takes into account variables reflecting the abrupt changes in the divorce rate that occurred during the 1970s and the 1980s in the U.S., the increase in womens participation in the labour force, and their greater investrnent in education, we explain part of the measured decline in the saving rate. The uncertainty generated by the increased likelihood of divorces encourages households and women, in particular, to substitute human capital to financial or physical capital for precautionary savings.

Indexation in Israel

The spread of ‘two-digit inflation’ to many parts of the Western world has led in recent years to greatly increased interest in the possible use of indexation to deal with some of the problems which arise in connection with inflation that proceeds relatively at such a rapid rate. It is accordingly the purpose of this paper to indicate in broad lines what lessons we can learn about indexation from Israel’s thirty-five years of experience with it.1

Venture Capital in Canada: Lessons for Building (or Restoring) National Wealth

Canadian policymakers and regulators have been praised for avoiding many of the policy blunders that, when combined with excessive risk-taking by the banks, nearly brought down the U.S. financial sector. But, as the global economy begins to recover, policymakers everywhere need to find ways to stimulate the creation of new ventures. Copyright Copyright (c) 2010 Morgan Stanley.

Innovations and Antitrust

Antitrust laws do not penalize firms that have succeeded because of ‘superior skill, foresight and industry’, that is, because of either the entrepreneurial talents they used or the innovations they adopted, even if the use of such skills and the successful innovations led to dominance in some markets.1 Courts faced with defendants possessing market power must find that this power was obtained because of ‘anticompetitive’, or ‘exclusionary’ practices. When proposals for mergers are submitted to the respective regulatory agency, the government official must decide whether or not the merger will create or enhance substantial market power.

A World of Chance: Politics and Prohibitions; or, What's a Good Tax Anyway?

Which shows why prohibitions on gambling have been wrongheaded, often serving narrow political interests, their effect at all times in all countries having been the creation of extensive black markets rather than withdrawal from betting. By the twentieth century, old theories blaming poverty on poor peoples propensity to gamble and drink and on gambling violating the law of labor disappeared from both academic and political vocabularies. But it did not take long for new well-intentioned but inaccurate arguments against gambling to emerge. Some of these new vocabularies and models suggested what other jargons and models had suggested before: that gambling should either be prohibited or be a government monopoly both to prevent too much vice, fraud, corruption, and involvement of criminal elements and to control the populaces occasional irrational urges to gamble. Other models have condemned government monopolies of lotteries or casinos, though without drawing the arguments to the logical conclusion or providing any alternatives. They condemned lotteries and some forms of gambling not on the grounds that monopoly rents could be spent on bribes or that monopoly prevents the development of a wide variety of innovative financial instruments and innovative betting markets. Instead, they stated that lotteries are both a regressive tax and a nontransparent one.

A World of Chance: Betting on Futures and Creating Prices

Which shows how conventional wisdom about futures markets was often wrong, and the relationship between these markets and gambling and insurance. To gamble. To bet. To speculate. To invest. All these terms and other phrases (“to take a chance,” “to challenge luck,” or “to take risks”) have been used when people put money in stocks, futures markets, and derivatives, or have bought and sold land, houses, or other tangible assets. As we saw previously, both England and the United States passed at various times in their histories laws that made contracts to wager unenforceable. The problem that often came up both before the courts and in public policy debates was how to distinguish between contracts that allocated risks and rewards legitimately in productive sectors and gambling or wagering contracts. This chapter shows that the source of the confusion – still with us today, even in the United States and the United Kingdom, sophisticated financial markets notwithstanding – is the false idea that the “real” economy can be divorced from the financial, betting one, and still function well.

DEALING WITH CREATIVITY, BUT AVOIDING DISCIPLINARY METAPHORS: A RESPONSE TO RUBENSON AND RUNCO"

Creativity, be it in business, sciences, the arts or politics, means a deviation from customary behavior. Thus if one wants to explain why some people bet on a new idea and try to bring it to life-call it the “supply” of creativity, if you wish-and why others adopt them-call it the “demand” for creativity-one must be able to explain two things: -When are people more likely to deviate from customs and traditional ways of thinking and offer new ideas? -When is the rest of society more willing to abandon the beaten tracks, and be more open to accept such ideas, enabling them to come to life? Models of human behavior which do not address these two questions cannot say anything about creativity or innovations in any domain. For, the two words“creativity” and “innovations”+annot even be defined if the arguments make no reference both to a society’s customs and to its traditional ways of doing things, be they in technology, business or the arts, and to what is involved when people try to abandon them. If some people try to use essentially static models and vocabulary for discussing creativity, the results turn out to be nothing more than obscure linguistic exercises. It is not surprising that such articles about creativity make no reference to facts about creativity in any domain, and turn out to be mere play on words. Unfortunately, the article by Daniel Rubenson and Mark Runco belongs to this category.

Gambling and Speculation: A Theory, a History, and a Future of Some Human Decisions.

Preface and acknowledgments 1. The uneasy history of lotteries with Gabrielle A. Brenner 2. Why do people gamble? with Gabrielle A. Brenner 3. Why is gambling condemned? words, facts, and the discrepancy between them with Gabrielle A. Brenner 4. Gambling, speculation, insurance - why they were confused and condemned 5. Governments, taxation, and the impact of prohibitations 6. Happiness, luck, and the social good Appendixes Notes Bibliographies Index of names Subject index.

FROM ENVY AND DISTRUST TO TRUST AND AMBITION EASTERN EUROPE'S PROBLEM: HOW TO SOLVE IT AND WHY IT MAY TAKE LONG

The monetary and fiscal problems that the Soviet Union and other Eastern European countries face today are important, but not only are they marginal relative to others, but also their solution depends on making credible legal reforms enabling private property righrs to emerge, be defined and be enforced first, before trying to implement other reforms (1). Unless this is done, no monetary, no fiscal policy and no exchange rate policy in the world will put these societies back to the road leading toward a better life. Recall that idea of communism could be — and was — summed up (in its Manifesto) in one sentence: the abolition of private property. This is at the root of their problems, and this is were the treatment should start. All the rest of the communist regimes’ undeniably big problems are only symptoms. Treating them rather than the sickness will not cure the patients. But even if such steps are firmly taken — and meanwhile in most Eastern bloc countries they are not: the symptoms are being treated, rather than the sickness — prosperity will not be around the corner. It will take years until credibility in the new legal system is established.

Gambling: The shaping of an opinion

Examining historical and contemporary writings, the authors show that many of the negative arguments about gambling spring from selfish interests in the business and political sectors. The stigma associated with gambling turns out to be a method of preventing competition from gambling, and leads to misguided social policies.