In the current world, with the skills needed, dropouts [like no secondary education] are condemned to being members of the underclass. In my view, this is a fault of the American school system, which is a government monopoly.

Higher taxes never reduce the deficit. Governments spend whatever they take in and then whatever they can get away with.

The only relevant test of the validity of a hypothesis is comparison of prediction with experience.

The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.

George Stigler was a delightful correspondent. In a letter from London in 1948, after remarking on the inconvertibility of the pound and the inedible, still-rationed food, he concluded, "So here I am losing weight and gaining pounds.

The big issue is whether the United States will succeed in its venture of reshaping the Middle East. It is not clear to me that using military force is the way to do it. We should not have gone into Iraq. But we have.

China's productive system draws upon the other East Asian countries to a great extent. The volume of trade is much larger than the net amount being exported from China. China needs substantial reserves to finance all that.