by Brandt Weathers on May 19, 2011
My favorite tool provides today’s sign of the times:
Separation of church and state (Google hits: 9,870,000)
versus
Separation of business and state (Google hits: 39,900,000)
Though economists posture about what effects the 2008 financial crisis had upon the dismal science, there is little doubt that public opinion is turning.
PS should Public Economics be a more radical field?
PPS final exams are finally done. Rejoice with me in the comments section…
Posted 1 year ago at 11:58. Add a comment
by Benjamin on May 16, 2011
Some things should be easy to call. Either spend no money on server space and just register a domain or pay a company to maintain a computer just to host your website. Well, like any other blog that’s the choice which has been following us around for the last week or so. Our domain registration expires in a few hours, and we’ve made the decision to spend 160 odd dollars to maintain the server and pay for a private space… Why? Well, I guess security, knowing that the server will be running whatever else happens, and some form of guaranteed replies to tech problems (indeed, its a 24/7 service). It feels a little old fashioned perhaps – and I may move my personal site onto the cloud – but for something where you are responsible not just for your own jottings but other people’s ideas, papers and writings I guess there is a willingness to pay. Huh – turns out my utility curve is convex and my preferences somewhat transitive after all – at least here.
Posted 1 year ago at 15:34. Add a comment
by Brandt Weathers on May 6, 2011
In light of the NSER’s next edition, I will be hosting a regular Friday column searching for answers to the same question: what is economics?
Spell It Out: The SRPiESiMoAN
More questions about our discipline bring me to the Nobel Prize in Economics, otherwise known as “The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” or, um, the “SRPiESiMoAN.”
For those who don’t know, Sveriges Riksbank is Sweden’s central bank (and purportedly the oldest in the world.) Every year, alongside the other Nobel prizes, an economist is granted the award (a gold medal) as well as a diploma and 10 million Swedish Kronor (about $1.6 million).
After just the slightest amount of research, there seems to be at least enough controversy surrounding the prize to ask what it means for the field itself. To list a few idiosyncrasies:
- Only 1 woman has won the prize (Eleanor Ostrom, in 2009)
- 60% of prize winners were American citizens and only 4 have been from outside the US and Western Europe
- By institution, the top winning-est schools include: 1. U of Chicago (10 awards) 2. UC Berkeley (5) 3. Columbia U, Harvard, MIT, Princeton (all with 4)
- Since 1969, the Prize has changed its name no less than 11 times
- Today, Sveriges Riksbank awards the Nobel Foundation about $1 million per year for name rights and “administrative fees”
- The Sveriges Riksbank also donated approximately $315 thousand to have the prize listed with the traditional Nobel prizes on the Nobel Foundation’s website
- Critics of the award are diverse and well-known (including several laureates and descendants of Alfred Nobel)
Conclusions? Clearly, we have an identity conflict as well as a selection bias. An association with the original Nobel prizes, which was created by Alfred Nobel in his last will for those who confer “the greatest benefit onto mankind”, is obviously desired.
Ultimately, this prize is highly lucrative and relatively prestigious. What role does it play as an institution, among people, using behavioral reinforcement within economics?
Posted 1 year ago at 21:22. 4 comments
by Benjamin on April 29, 2011
I just got turned on to the daily poetry of Dr. Goose (of AEA 2011 conference fame) who comes out with a short limerick of the day’s economic news, theories or his observations. This one, called ‘fighting words‘ from a few days ago I thought was too good not to share:
A woman who loved a good fight
Would demand, as she argued all night,
Philosophical heft
From those on the left
And empirical proof from the right.
Inspired by the good doctors observation that:
A recent walk through the economic blogosphere left the impression that liberals (of the progressive variety, as in this randomly selected post by Paul Krugman) like to base their arguments on data, history and “whatever works;” while conservatives (particularly of the supply side or libertarian variety) seem to prefer philosophy, game theory, analogies or even the US constitution – anything but empirical studies.
And yes, I now need to check out Economists do it with models .com which I just found … It’s nice to procrastinate around midnight on Friday when I should be writing an abstract.
Posted 1 year ago at 19:06. Add a comment
by wkenton on April 27, 2011
Nobel laureate economist Robert W. Fogel is about to publish a book entitled “The Changing Body: Health, Nutrition, and Human Development in the Western World Since 1700″ (Cambridge UP, 2011) in which he and his co-authors Roderick Floud, Bernard Harris, and Sok Chul Hong argue that human evolution has developed more rapidly in the last three centuries than at any previous time in the existence of Homo Sapiens Sapiens.
This “technophysio evolution,” powered by advances in food production and public health, has so outpaced traditional evolution, the authors argue, that people today stand apart not just from every other species, but from all previous generations of Homo sapiens as well.
The march of Progress and Science has made us taller, stronger, smarter, and more well dressed than our rickety cousins from the pre-eighteenth century world; though Mr. Fogel does worry that “overnutrition” might derail our gene-train to Utopia. Obesity, hyper-tension, diabetes, stroke, and cancer have been observed to somewhat shorten the average life expectancy of our species.
But Mr. Fogel remains an “optimist at heart,” opining that “the trend of larger bodies and longer lives will continue into the future.” If these trends hold, what might we expect from the future of human-biological super-evolution? 1) Average hight will reach three meters by 2050; average lifespans will converge with those of the Patriarchs (e.g. Methuselah); and Olympic athletes will develop gills to help them outperform in aquatic competitions.
Posted 1 year ago at 09:07. Add a comment
by Brandt Weathers on April 22, 2011
In light of the NSER’s next edition, I will be hosting a regular Friday column searching for answers to the same question: what is economics?
The Invisible Hand
I recently watched a talk online which pointed out an interesting fact:
In Adam Smith’s defense, it should be added that he recognized what would happen if Britain followed the rules of sound economics — now called “neoliberalism.” He warned that if British manufacturers, merchants, and investors turned abroad, they might profit but England would suffer. But he felt that they would be guided by a home bias, so as if by an invisible hand England would be spared the ravages of economic rationality. The passage is hard to miss. It is the one occurrence of the famous phrase “invisible hand” in Wealth of Nations.
–Noam Chomsky, 3.13.2011
Being that I had to read The Wealth of Nations in the (in)famous Anwar Shaikh’s introductory course, I was curious in what I may have missed.
Looking up the passage Chomsky refers to, I found this:
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.
The passage does seem to measure up. One might claim that (the origin of) the term “invisible hand” speaks to the merits of nationalism. Something that large economic institutions (the IMF for example) would hardly agree with.
If this is true, then what does it say about the Economics discipline versus the Economics profession?
[For another example, an American comparison is made within the same talk]
Posted 1 year ago at 22:56. 3 comments
by wkenton on April 20, 2011
It seems like the only markets these days are irrational markets. Gold has reached record highs along with many other commodities, and London real estate is
more secure than a Swiss bank account:
London property is the ‘Swiss bank account’ of the 21st century,” Robin Hardy, an analyst at London investment firm Peel Hunt. … It’s seen as a relatively safe place to put your money if your objective is capital preservation,” he said. They think money is “safer invested in an apartment in Sloane Street than in a bank account in Damascus.
The London newspaper The Guardian reported that Ukrainian oligarch Rinat Akhmetov paid a record £136.4m ($222.8 million) for apartment at One Hyde Park. For that much money his view of Hyde Park should be orgasm inducing.
But according to the article quoted above, the rental yields on these properties are historically low, and in some cases negligible — meaning the buildings’ “fundamentals” do not support their high valuations. And you know what happens to a house built on sand.
You might think the world’s elites would have learned from one of their own — no less an authority than G. W. Bush — when he said “fool me once, shame on you; fool me twice … well, the point is you can’t fool me twice.” It’s not even three years since the US housing bubble popped and nearly brought on a global depression so bad it could have been predicted by the Mayan calendar.
Taken from a different perspective, this market furor makes perfect, rational sense. In the first place, England is second only to the United States in its militant support of personal property rights. In the second place (related to the first), London has very restrictive rules on new development: once you buy a property, you can be sure that the look of the neighborhood won’t change around it. (In New York, on the other hand, if you think about buying an historic brownstone in Fort Greene you can guarantee that your quality of life will be changed when the the new sports stadium opens on Atlantic avenue.) In the third place, (as noted above) many of the properties selling for record sums are being bought by global elites from places where the disparity of wealth and power have made their holdings precarious.
The British cultural inclination to protect the individual at the expense of the state is the very reason why middle class Britons are being priced out of the capital:
more and more properties in central London [are] simply unused most of the year. [You] look up at the windows as you walked down the street, and very few [are] lit up.
For the international capitalist class, this is an exploitable advantage that makes good market sense.
Posted 1 year ago at 09:50. 1 comment
by Brandt Weathers on April 15, 2011
In light of the NSER’s next edition, I will be hosting a regular Friday column searching for answers to the same question: what is economics?
Academic Field Trips: A Comparison
Economics has often been called the “queen of the social sciences“, but what does that mean? Does this express dominance over the other social sciences (8 of which housed here at The New School)?
If Economics were the queen, let’s assume her methods are imposed upon other fields, more than others’ methods are imposed upon economics.
Here’s my idea on how to test this possibility: Google Scholar search other social sciences with “Economic” as a condition (Economic Sociology, Economic Anthropology, etc), compare to the opposite (Sociological Economics, Anthropological Economics, etc), and see which has the most sources.
For the sake of self-interest, I’ll compare only the departments that are within my graduate school: The New School for Social Research. These departments include: Anthropology, Economics, Historical Studies, Liberal Arts, Political Science, Philosophy, Psychology, and Sociology. Here’s what we find (larger numbers in bold):
Anthropological Economics (247) Economic Anthropology (13,000)
Historical Economics (3,230) Economic History (654,000)
Liberal Arts of Economics (0) Economics of Liberal Arts (4)
Political Science of Economics (25) Economics of Political Science (30)
Philosophical Economics (229) Economic Philosophy (15,600)
Psychological Economics (229) Economic Psychology (25,000)
Sociological Economics (457) Economic Sociology (25,900)
Wow. That’s an outstanding result.
Now, I have numerous reservations** (many regarding proper terminology– “Economic History” for starters) in calling this a rigorous examination (and yet, somehow, this is a blog), but to dismiss these numbers would be callous.
If Economics is, in fact, the queen of the social sciences, then she appears to be greatly interested in affairs beyond her domain… and appears to have little tolerance for interest, reciprocated.
[**If anyone wants to know these in detail, I can provide them in the comments section.]
Posted 1 year, 1 month ago at 23:24. 1 comment
by wkenton on April 14, 2011
In the spirit of our project to define Economics, I thought I would look at the concept of “efficiency.” At first glance it seems like a no-brainer. Efficiency is the most return for the least work.
The original meaning, from the Latin ex facio, is to cause or bring about. According to the OED, itwas imported into English through philosophical and theological discourse. For example, Thomas Spencer says in his Art of Logic (1623) “God is sayd to be the Efficient Cause of man: the office of this efficiency, is placed in ioyning the forme vnto the matter.” At this early date efficiency clearly means the proper, proportional ordering of materials and forces, and the optimal outcome (Man) of this divine efficiency is a moral outcome.
Alfred Marshall in his Principals of economics: an introductory volume (7th ed., 1916) at the close of the 19th century is still thinking of efficiency in moral terms: “We have next to consider the conditions on which depend health and strength, physical, mental and moral. They are the basis of industrial efficiency, on which the production of material wealth depends; while conversely the chief importance of material wealth lies in the fact that, when wisely used, it increases the health and strength, physical, mental and moral of the human race” (Book IV, chapter v, parag. 1).
One outcome of the marginal revolution was to limit the definition of “efficiency” to a more technical and less moral valence. Keynes says in the General Theory (1936): “The relation between the prospective yield of a capital-asset and its supply price or replacement cost, i.e. the relation between the prospective yield of one more unit of that type of capital and the cost of producing that unit, furnishes us with the marginal efficiency of capital of that type.” This pronouncement was made during the period of “high modernism” discussed by McCloskey and Nelson, though the older, moral sense appears to creep in again by the 60s when Alan Gilpin is creating his Dictionary of Economic Terms (1966): “Economic efficiency, the efficiency with which scarce resources are used and organised to achieve stipulated economic ends. In competitive conditions, the lower the cost per unit of output, without sacrifice of quality, in relation to the value or price of the finished article, the greater the economic efficiency of the productive organisation.” Implied in “without sacrifice of quality” is the idea that stipulated economic ends are not ends in themselves.
How do we apply our everyday thinking to questions of efficiency? I offer two examples. The first is from the OECD, which released a report yesterday that delineates the number of hours of paid and unpaid work in the OECD countries, as well as China, India, Brazil and a few others. Mexicans work the most overall, and Belgians work the least. (More time for mussels and frites?) More interesting is the breakdown between unpaid and paid work. Again, Mexicans do the most unpaid work, but Koreans do the least. (Husband: “Honey, can you pick the kids up from school?” Wife: “Sure. That will be twenty-two thousand won. You can just credit it to my PayPal account.”)
Americans spend the least amount of time eating and preparing food, but they are the most obese. The common sense explanation is that the food industry, from farming to tables in homes and restaurants, is very efficient at producing calories, but something about those calories has produced a socially inefficient result. A modernist explanation sees this as evidence of an efficient, amoral market (the kind we want) distributing calories, and a population of consumers who will, when they realize they are (un)fit contestants for The Biggest Loser, drive down the price of gym memberships until everyone is fit again. (Would Marshall interpret this data as an erosion of the efficiency of industry, which is based on the health, mental and physical, of the people?)
I want to ask, is there more than one field of efficiency (industrial, technological, national, personal, human, or local), and if there are, can they be mutually exclusive? If there is only one field of human efficiency — one right answer to the question “how much should we produce” — and how many equations would you have to stuff into your model to make it work?
Posted 1 year, 1 month ago at 08:50. 3 comments
by Brandt Weathers on April 8, 2011
In light of the NSER’s next edition, I will be hosting a regular Friday column searching for answers to the same question: what is economics?
A Definition
What is economics? What are its boundaries as a discipline and a word? For the sake of approaching this topic, I felt it would be useful to search out a simple definition… easy, right?
Merriam-Webster says:
“a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services.”
It also states that the first use of the word is in 1792. That’s surprising… The Wealth of Nations came out in 1776.
Wikipedia has almost the exact same definition, but it gives a better idea of its origin:
“The term economics comes from the Ancient Greek οἰκονομία (oikonomia, ‘management of a household, administration’) from οἶκος (oikos, ‘house’) + νόμος (nomos, ‘custom’ or ‘law’), hence ‘rules of the house(hold)’”
Oikos, interestingly, is also rooted in words like “ecology” and “ecosystem.” So, the difference between “economics” and “ecology” is the difference between their suffixes: -ology is the “study of” and -nomics is the “laws of.” Also, “nomos” comes from a verb, which means “to distribute.”
The Free Dictionary adds this:
“economic matters, especially relevant financial considerations.”
It also suggests two other similar words: “money, finance.”
Since finance seems relevant, let’s see what an online financial glossary has to say:
“The study of how the forces of supply and demand allocate scarce resources.”
It adds a comment or two on micro- and macroeconomics as well.
Wait a second, just below this definition, there’s another from a website called progressiveliving.org… this should be interesting. They quote two definitions and form a conclusion from the two.
From Lionel Robbins: “the science which describes human behaviour as a relationship between (given) ends and scarce means which have alternative uses”
From Alfred Marshall: “examines that part of individual and social action which is most closely associated with the attainment and with the use of the material requisites of wellbeing”
And their conclusion: “Once we restore the normative dimension of economics, the deficiency of [both definitions] becomes apparent. This is because economics isn’t merely ‘associated’ with the attainment and use of the material requisites of wellbeing — rather, the primary task of economics is to tell us how to go about maximizing these requisites”
That’s a mouthful.
A final offering is from a page called henrygeorge.org. Their definition is not all that different but it does demand the use of the term “political economy” instead of “economics.” Their justification?
“Although the classical political economists recognized the problem of scarcity, they were preoccupied with the economic life of the entire community – with the ‘wealth of nations.’ They sought to identify the principles that underlie the production and distribution of wealth. As it is most often taught today, economics pays little attention to the distribution of wealth.”
So in our journey to “Google away” a definition of economics it seems like we have an idea (or two) of what the definition might be. But there seems to be little consensus as to what that definition means.
All this from the first page of a Google search…
Posted 1 year, 1 month ago at 17:08. Add a comment
