This is one of the largest groups in the ledger, and it is where the great arguments of political economy are filed side by side. Smith, Ricardo, Marx, Keynes, Hayek, Friedman and Piketty all appear, often in adjacent entries. Read together, most of their disagreements turn out to be about two things: who knows what, and who bears the cost.
Information
The most influential models of the last seventy years are about knowledge. Hayek's Knowledge Problem argues that the information needed to coordinate an economy is scattered, local and tacit, so no central planner can gather it; Mises's Calculation Problem adds that without market prices there is no way to compare uses of resources. Akerlof's Market for Lemons turns the same insight against markets: when sellers know more than buyers, good products are driven out. Adverse Selection, Moral Hazard, Signalling and the Principal-Agent Problem complete a toolkit for explaining why insurance, employment and lending behave as they do.
Incentives and who bears the cost
The second axis runs through market failure and government failure alike. The Free Rider Problem and the Tragedy of the Commons explain why people underprovide what they cannot be excluded from. Public choice turns the same logic on the state: Rent-Seeking, Rational Ignorance, Fiscal Illusion and Bastiat's Broken Window describe how politics rewards visible benefits and hides their costs. The Marxian entries, from the Reserve Army of Labour to Primitive Accumulation, put the cost on labour and the benefit with ownership.
Growth, crisis and inequality
A third cluster asks where prosperity comes from and why it breaks down. The Solow–Swan Model finds capital alone runs into diminishing returns; Endogenous Growth and Schumpeter's Creative Destruction put ideas and churn at the centre. Minsky's stability breeding instability, Keynes's Paradox of Thrift and the Soft Budget Constraint explain crises from different directions. Piketty's r > g and the Kuznets Curve offer opposite forecasts about inequality in a growing economy.
Where it applies
Most public argument about money is an argument between these models, usually conducted without naming them. A proposal to cap prices invokes supply and demand and meets the knowledge problem. A proposal to regulate a market invokes information asymmetry and meets rent-seeking. A proposal to cut taxes invokes the Laffer curve and meets Ricardian equivalence. The information models also apply far from politics: every insurance policy, job interview, used-car purchase and hiring contract is shaped by adverse selection, signalling and agency problems. The Poverty Trap and the Sam Vimes Boots Theory show the same logic from the household's side.
Where it is argued over
This is one of the most politically contested groups in the ledger, and the contest runs in every direction. Many entries carry the contested flag, from the Laffer Curve and Starve the Beast to the Tendency of the Rate of Profit to Fall and Galbraith's Dependence Effect. The Efficient Market Hypothesis and Ricardian equivalence are argued over on evidence rather than ideology. The ledger files each school's models with their supporters' case and their critics' case, and a reader moving through the group will find that no school's models are all well supported, and none are all refuted.
Why it is worth knowing
Economics is the vocabulary in which public choices are argued, and a person who knows only one school's models hears only half the argument. The value of this group is that it holds the schools together. When someone argues from one model, the ledger usually holds another that predicts the opposite, and the useful question becomes which one fits the case at hand.
The entries behind this essay: Model in Economics & Incentives. Every subject has its essays on the essays page.