Issues & Insights
Greek God Zeus. Image by Jeff Chabot from Pixabay (

Robert Mundell: The Zeus Of Free Market Economics

Excerpt provided by the Committee to Unleash Prosperity. Sign up to receive a free subscription to the full weekday Unleash Prosperity Hotline newsletter by clicking here:

This past weekend the world lost a great hero with the passing of supply-side icon Robert Mundell. 

Committee to Unleash Prosperity co-founder Arthur Laffer fondly remembers him:

Bob Mundell changed the world all for the better. I was blessed to spend lots of quality time with him as his sidekick trying to hold back the forces of evil and push truth to the fore. I loved him dearly and believe him to be the greatest economist of at least the past century.

Our friend Sean Rushton wrote this beautiful remembrance:

At the height of the 1970s stagflation — runaway inflation paired with high unemployment — Keynesian economics and monetarism blew up.

Robert Mundell and Art Laffer proposed a then-novel solution: supply side economics. This was the combination of stable monetary policy to fight inflation plus marginal tax rate cuts to spur growth and jobs. The idea got legs, promoted by Congressman Jack Kemp and then Ronald Reagan, and the supply-side economics revolution was underway. Inflation collapsed, the economy took off, and the U.S. embarked on what became a quarter-century boom that included the decisive triumph of capitalism over communism, a global tax revolution, the rise of Silicon Valley and the Internet, and the expansion of freer markets across the globe, resulting in a huge reduction in poverty and misery.

Based on Mundell’s advice, not only did the U.S. boom but Europe abandoned its multiple junk currencies to unite under the euro, and China smartly fixed its currency to the dollar while enacting pro-market reforms which spurred a 30-year run of rapid economic growth, for better and worse. In 1999, Mundell was awarded the Nobel prize for economics, and he continued to advocate for lower taxes, freer markets, and fixed exchange rates well into his 80s. One of his profoundest insights was that international capital flows discipline policymakers and punish them when they make bad decisions that lower the after-tax rate of return [i.e. raising marginal tax rates].

Biden has adopted a Keynesian, industrial policy model of government directing capital, which is the diametric opposite of the Mundell-Laffer model. Alas, it is destined to fail miserably.

Editor’s note: We also recommend the attached article from Laffer Associates by economic historian Brian Domitrovic.

Also, to know more about:

  • The Stimulus We DO Need
  • Biden Corporate Tax Rate: We’re #1! Woo Hoo!
  • MLB = Major League Blunder
  • And much more . . .

click here:

We Could Use Your Help

Issues & Insights was founded by seasoned journalists of the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day -- without fear or favor.

We’re doing this on a voluntary basis because we believe in a free press, and because we aren't afraid to tell the truth, even if it means being targeted by the left. Revenue from ads on the site help, but your support will truly make a difference in keeping our mission going. If you like what you see, feel free to visit our Donations Page by clicking here. And be sure to tell your friends!

You can also subscribe to I&I: It's free!

Just enter your email address below to get started.


The Committee to Unleash Prosperity

About Issues & Insights

Issues & Insights is run by the seasoned journalists behind the legendary IBD Editorials page. Our goal is to bring our decades of combined journalism experience to help readers understand the top issues of the day. We’re doing this on a voluntary basis, because we believe the nation needs the kind of cogent, rational, data-driven, fact-based commentary that we can provide. 

We Could Use Your Help

Help us fight for honesty in journalism and against the tyranny of the left. Issues & Insights is published by the editors of what once was Investor's Business Daily's award-winning opinion pages. If you like what you see, leave a donation by clicking on donate button above. You can also set up regular donations if you like. Ad revenue helps, but your support will truly make a difference. (Please note that we are not set up as a charitable organization, so donations aren't tax deductible.) Thank you!
%d bloggers like this: