Posts in “Economics”
Gary Becker, University Professor of Economics and Sociology at the University of Chicago, has died at the age of eighty three. I am certainly not going to attempt an obituary or assessment. But something Tim Carmody said on Twitter caught my eye: “People sometimes talk about ‘neoliberalism’ as a kind of intellectual bogeyman. Gary Becker was the actual guy.” In a somewhat similar way, people sometimes talked about ‘poststructuralism’ as a kind of intellectual bogeyman, and Michel Foucault was the actual guy.
Pope Francis’s new Apostolic Exhortation, Evangelii Gaudium, has been getting some attention today, mostly thanks to its reiteration of some long-standing Catholic doctrine on social justice and the market. So, here is a quiz to see whether you can distinguish statements by Pope Francis from statements by Karl Marx. I figured someone was likely to do this anyway, so why not be first to the market? It’s fair to say that the Pope and Karl Marx differ significantly on numerous points of theory as well as on what people asking questions at job talks refer to as the policy implications of their views.
You can see this point made in somewhat more detail here.
While we’re running our Crowdsourced Sociology Rankings, people have been looking a little more closely at the U.S. News and World Report rankings. Over at Scatterplot, Neal Caren points out that U.S. News’s methods page has some details on the survey sample size and response rates. They’re bad: Surveys were conducted in fall 2012 by Ipsos Public Affairs … Questionnaires were sent to department heads and directors of graduate studies (or, alternatively, a senior faculty member who teaches graduate students) at schools that had granted a total of five or more doctorates in each discipline during the five-year period from 2005 through 2009, as indicated by the 2010 “Survey of Earned Doctorates.” … The surveys asked about Ph.D.
Prompted in part by some conversations at the ASA meetings, in part by Gabriel’s discussion of the Social Structures author-meets-critics session, and in part by some gentle prodding from Cosma Shalizi, here’s a current draft of a paper of mine, The Performativity of Networks, that I’ve been sitting on for rather too long. Here’s the abstract: The “performativity thesis” is the claim that parts of contemporary economics and finance, when carried out into the world by professionals and popularizers, reformat and reorganize the phenomena they purport to describe, in ways that bring the world into line with theory.
Via Chris, on Twitter (I hope I’m not preempting him here), an Open Letter from a Keynesian to a Marxist by Joan Robinson, and “Zombie Marx”, an essay by Mike Beggs. Here is Robinson, writing in 1953: I was a student at a time when vulgar economics was in a particularly vulgar state. … There was Great Britain with never less than a million workers unemployed, and there was I with my supervisor teaching me that it is logically impossible to have unemployment because of Say’s Law.
I saw this report go by on the Twitter saying that, in the wake of the latest budget deal, the Census Bureau is planning on eliminating the Statistical Abstract of the United States, pretty much the single most useful informational document the Government produces. The report says, When readying the FY2011 budget, the Census Bureau tapped teams to do thorough, systematic program reviews looking for efficiencies and cost savings. Priorities for programs were set according to mission criticality, and some cuts were made to the economic statistics program.
I’ve written a few times before about how to choose the software you work with, and what you should and should not care about when making those choices. I maintain a page with various resources related to this, if you’re interested, most notably the Emacs Starter Kit for the Social Sciences. A revised version of an article of mine on this topic called “Choosing Your Workflow Applications”, which I’ve had online for a while, has now been published in The Political Methodologist, the newsletter of the Society for Political Methodology.
Via John Gruber, Philip Greenspun asks how on earth the New York Times spent $40 million on its new paywall: … my biggest question right now is how the NY Times spent a reported $40-50 million writing the code (Bloomberg; other sources are consistent). Google was financed with $25 million. The New York Times already had a credit card processing system for selling home delivery. It already had a database management system for keeping track of Web site registrants.
While looking again at the proposed changes to the ASA’s dues, I noticed that, under the new scheme, a few lucky duckies will pay nothing at all. How is this possible, you ask? Consider the table: As you can see, for those sociologists lucky enough to earn between $125,000 and $125,998 per annum, the new system requires them to pay no dues at all. What a great deal! Speaking of good deals, it’s worth comparing the generous terms of the new ASA dues structure to what’s currently on offer from the American Economic Association.
Lucien Karpik’s Valuing the Unique: The Economics of Singularities came out with Princeton University Press recently. From the book jacket: Singularities are goods and services that cannot be studied by standard methods because they are multidimensional, incommensurable, and of uncertain quality. Examples include movies, novels, music, artwork, fine wine, lawyers, and doctors. Valuing the Unique provides a theoretical framework to explain this important class of products and markets that for so long have eluded neoclassical economics.
A useful bit of interactive data visualization for Emmanuel Saez’s time-series on historical trends in income growth and distribution in the United States. As you can see, between 1970 and 2008 people in the bottom 90 percent of the income distribution typically chose not to partake of annual increases in total income, presumably because of a tendency to prefer and thus self-select into lower-paying jobs, or possibly because of an innate dislike for the more complex mathematics (surrounding tax calculations, car payments, and budgeting generally) that is associated with earning more money.
Via Tyler Cowen comes a Michael Lewis thumbsucker about Ireland. Lewis is a great writer, but I do wonder whether he should have listened to his driver a bit less: When I went looking for some Irish person to drive me around, the result was a fellow I will call Ian McRory (he asked me not to use his real name in this article), who is Irish, and a driver, but pretty clearly a lot of other things, too.
Via John Gruber, Horace Dediu looks at how poorly analysts fared when it came to predicting the size of the market for the iPad. Apple sold just shy of fifteen million iPads in 2010. (starting in April, when it launched.) Every pundit with any kind of audience underestimated how successful it would be, usually by a long ways. Moreover, Philip Elmer-DeWitt notes that professional analysts (employed by investment firms and so on) did much worse than “unaffiliated” analysts with blogs, even when it came to just the previous quarter: In our ranking of the best and worst Apple (AAPL) analysts for Q1 2011, which lists them based on how accurately they predicted seven key numbers—revenue, earnings, gross margins and unit sales—the unaffiliated analysts … took 9 out of the 10 top spots.
Here’s a very nice Op-Ed from Viviana Zelizer on what (if I remember rightly) Michel Callon once described as the central question that animates her thinking in economic sociology: can one give money as a gift? The key to the problem, early 20th-century gift-givers found, was to camouflage money inside a traditional gift. This took effort and it had nothing to do with efficiency, but it enabled people to elevate the gift of cash.
Brad DeLong: DragonDictate for iPhone had better learn not to write “Martian” when I say “Marshallian”. Just saying. It’s not often you see a case where the jokes literally write themselves.
Via Cosma Shalizi, reports of a very interesting piece of work: Prejudice and truth about the effect of testosterone on human bargaining behaviour, C. Eisenegger, M. Naef, R. Snozzi, M. Heinrichs & E. Fehr, Nature 463, 356-359 (21 January 2010). The abstract: Both biosociological and psychological models, as well as animal research, suggest that testosterone has a key role in social interactions^1,^^2,^^3,^^4,^^5,^^6,^^7^. Evidence from animal studies in rodents shows that testosterone causes aggressive behaviour towards conspecifics^7^.
Some work of mine on presumed and informed consent for organ donation has been picked up by Catherine Rampell at the New York Times’ Economix blog. It’s a good summary of the paper. I’ve discussed this stuff before on CT, in the context of the possible introduction of a presumed consent rule in Britain.
A prompt from Dan Hirschman made me dig up this review essay on Donald MacKenzie’s An Engine, Not a Camera. A shorter version appeared ages ago on OrgTheory, and this version never quite got finished, but some people have found the discussion useful so here it is as a PDF.
I recall a short but striking conversation with the formidable Piero Sraffa at the Economics Faculty cocktail party after Dennis Robertson’s Marshall Lectures. I well knew that it was Sraffa whom Wittgenstein had described as his mentor during the gestation of the Philosophical Investigations, but I still ventured a rather simple-minded remark about the obvious importance of the fact-value distinction to the social sciences. He turned on me his charming smile and glittering eyes.
I guess Anthem is finally in public beta, under the guise of Microsoft SongSmith.
Donated Kidney is Center of Divorce Dispute: A Long Island doctor is demanding that his estranged wife give him back the kidney he donated to her seven years ago. Dr. Richard Batista’s lawyer Dominic Barbara says his client would also be satisfied with the value of the kidney: $1.5 million. Newsday reports that Batista married wife Dawnell in 1990 and that he donated the kidney in 2001. According to Batista, their marriage was on the rocks then, but “My first priority was to save her life.
I’m so far behind on this one. Here’s a figure based on a table Eric sent me. There is a PDF version. There is also a 4-category version (with a PDF too), that breaks out farm workers from the main category.
This morning I was out for a walk and I found a twenty dollar bill lying in the street.
There’s been a bit of chat about “Cultural Sociology and its Others”, the Culture Section one-day conference held before the ASA meetings this year. This has broadened out into a discussion of the place of cultural analysis within sociology, and the relative position of the subfield. Some people worried about the allegedly marginal status of culture within sociology. Other people pointedly said that they were rather central figures in the discipline, thank you very much.
Consider the following piece in the Daily Telegraph, which may begin making the rounds: Scientists find ‘law of war’ that predicts attacks: Scientists believe they may have glimpsed a “law of war” that can be used to predict the likelihood of attacks in modern conflicts, from conventional battles to global terrorism. … The European Consortium For Mathematics in Industry was told today that an international team has developed a physics-based theory describing the dynamics of insurgent group formation and attacks, which neatly explains the universal patterns observed in all modern wars and terrorism.
There’s a long-standing urban legend about where you meet an attractive person in a bar, they buy you a drink, and the next thing you know you wake up in a bath of ice with a pain in your lower back and a note telling you to get to a hospital. One of the reasons this story is just a story is that in order to usefully extract someone’s kidney for transplant, a whole lot of stuff has to be organized beforehand, and you need to have a lot of skilled people working together against a hard time constraint—too many, really, to quietly and reliably pull something like this off.
A rich post over at Scatterplot. I spent a lot of those years exhausted and angry. We continued to have only part-time child care. Some nights I put the children to bed crying because I knew they were better off crying alone in bed than interacting with an angry sleep-deprived mother. I was furious that I had to make constrained choices and could not have the life I wanted. When he was home, my spouse was “superdad,” who did a lot of the work and played a lot with the children, so there was a big hole when he was gone.
Via John Gruber, here is a striking series of photographs of workers in toy factories in China. I wish I had seen them yesterday, because this morning I did a midterm review in my social theory course and, in quick succession, students asked me about Smith’s idea of the invisible hand and about Marx’s concept of commodity fetishism. Smith argued that the specialization encouraged by a market system liberated people from material want, but also freed them from having to spend all their time being “butcher, baker and brewer” for themselves.
Dani Rodrik argues that much disagreement in economics is between “first-best” economists and “second-best” economists. The former take Mark 1:14-15 as their text, and believe the Kingdom of God is at Hand: repent ye, and believe the gospel. The second believe, with Proverbs 16:18 that pride goeth before destruction, and a haughty spirit before a fall.
Tyler Cowen has a “secret” blog and he made a deal with his readers: pre-order my book and I’ll send you the URL. Don’t link to it, and don’t tell anyone. Inevitably, now, we have this request from this guy: DO YOU KNOW THE URL OF TYLER COWEN’S SECRET BLOG?? IF YES, PLEASE, SEND ITS URL TO CHRIS MASSE. ANONYMITY GUARANTEED. AND I PROMISE I WON’T PUBLISH IT. YES I KNOW HE’S SHOUTING.
Fabio says By emphasizing social dysfunction, we become associated with dysfunction. A basic finding in the study of the professions is that the prestige of your clients is a big predictor of your prestige. Also, if that’s what the average college student takes away from sociology – that it’s the field of social problems – then that’s the image they’ll have about us for the rest of our lives. Quick, which is the dismal science?
By now you’ve probably all seen this ridiculous graphic from todays’ WSJ, which purports to show that the Laffer curve is somehow related to the data points on the figure. Brad DeLong, Kevin Drum, Matt Yglesias, Mark Thoma and Max Sawicky have all rightly had a good old laugh at it, because it’s spectacularly dishonest and stupid. I just want to make a point about so-called outlying cases, like Norway. In discussion threads about this kind of thing, you’ll find people saying stuff like, “I want to see a line showing x z or z”, or “I want to know what happens when you …”, and very often they’ll add “excluding outliers like Norway from the analysis.” Now, it’s true that in this plot Norway is very unlike the other countries.
So checking the post today I found a letter addressed to my son, inviting him to apply for a Citibank Platinum Select Mastercard. Up to 40,000 American Airlines airmiles included! I’ve had a chat with the little guy about it (I still call him the little guy—corny, I know, but other Dads will understand), and he won’t be signing up, partly because it’s a bad deal (18.24 percent variable rate, annual fee after the first year), but mostly because he is six and a half weeks old.
I was able to pick up an iPhone early through a local contact at Apple, and I have to say it’s really something. No of course I wasn’t able to do that—who do you think I am? Besides, I already have a phone on a relatively new contract. But I was in the Campus Bookstore here at the U of A and, while briefly down in the computer section, I heard store employees field two calls from people asking whether it would be possible to buy an iPhone there tomorrow, and whether there would be an educational discount on them.
Last weekend I read Prophet of Innovation, Thomas McGraw’s biography of Joseph Schumpeter. Maybe more on that later: I need to write something about it before I forget the content. Somewhere in there McGraw quotes Schumpeter’s line that “the budget is the skeleton of the state, stripped of all misleading ideologies.” With that in mind, here’s a kind of X-ray of California’s state budget, via Chris Uggen. This is from a SF Chronicle article on these trends, which look set to continue.
Following up on the ongoing discussion about Freakonomics, my review of the book just came out in Sociological Forum, and I think it overlaps a bit with some of the things Omar was saying in the comments to Fabio’s post. (A layout issue in headline makes it look as though I’m the author of the book and Levitt and Dubner are reviewing it. Sadly for my bank manager, this is not the case.) As it happens, this essay started out life as a blog post I wrote for Crooked Timber’s Seminar on the book.
Home sales are down a long ways. But why? Sales of existing homes plunged in March by the largest amount in nearly two decades, reflecting bad weather and increasing problems in the subprime mortgage market, a real estate trade group reported today. … David Lereah, chief economist at the Realtors, attributed the big drop in part to bad weather in February, which discouraged shoppers and meant that sales that closed in March would be lower.
On Bloggginheads.tv, Virginia Postrel and Dan Drezner discuss organ markets, Virginia’s recent spat with Amitai Etzioni, and the importance of making clear that Kieran Healy Is Not A Libertarian. In the discussion, Virginia wonders what I think of Etzioni’s view. In his letter to the New York Times, Etzioni decries the prospect of market incentives in organ exchange and proposes this alternative: Actually, what we need is more, not fewer, evocations of our moral responsibilities.
Continuing the trend of Libertarian economist types talking to sociologists, here is Viviana Zelizer being interviewed by Russ Roberts (of George Mason University) on Econ Talk, a podcast hosted by the Library of Economics and Liberty.
On the side of this box of McCann’s Oatmeal here it says: “Tip: Add liquid to oatmeal a few minutes before cooking. It will cook faster.” Now, I can see the benefits of doing this in terms of energy conservation. But the fact is, I’m not going to get my oatmeal any faster, am I? Sure, it’ll spend less time on the cooker, but the amount of time I spend preparing it will be the same, or maybe even longer.
I have been extremely irresponsible about my contribution to our OrgTheory book seminar on Donald MacKenzie’s An Engine, Not a Camera. But for once this is because my thoughts on the book metastisized into an article-length something-or-other. I’m still working on it so I won’t inflict it upon you (but stay tuned: eventually I will). Instead, here is a long excerpt. At the risk of sounding like Saul Kripke, some disclaimers: I’ve dropped some of the throat-clearing sign-posting introductory stuff and also left out supporting material in the middle; there’s another whole bit to the paper which I’m not putting in here; and I’m still not sure what I think on some points.
Via Jeremy Freese, a poster for a Mass General Hospital study. As Jeremy says, Do you have not one, but two separate problems that are associated with making bad decisions? If so, why don’t you choose to have a 50% chance of forgoing treatment for both for three months, in exchange for $600?… Don’t worry: you can rest assured you’ll be in the most capable, professional hands—just look at the quality of our graphic design!
Milton Friedman has died at the ripe old age of ninety four. Alex Tabarrok at Marginal Revolution writes a brief appreciation from the point of view of a fan. As Harry said around here only the other day, everyone should read Capitalism and Freedom at least once.
I came across The Cambridge Companion to Keynes in the bookshop yesterday and went to add it to my Amazon wishlist this morning. When I looked it up in the catalog I saw that it had a rating of only 2 stars and my first thought was: I bet that guy is responsible! And I was right. A while ago I was poking around in the literature on Keynes and Post-Keynesianism and anytime I checked a book on Amazon there would be a review from Michael E.
I think this is called a “market correction.” Looks like the last days of Long Term Capital Management. I finally finished MacKenzie’s book, and now I promise to write something about it.
I was browsing in the campus bookshop over lunch and saw the UK/Australia edition of Freakonomics for sale—this is the recently released revised and expanded version. Looking to see what had changed, I was surprised and gratified to see that the new version incorporates much of Steven Levitt’s response to our seminar on the first edition. The essay is prefaced by a generous comment from Steve to the effect that the CT seminar is the best available discussion of the book.
Say what you like about the free-marketeers, they certainly know how to ignore market forces, eschew profit and embrace subsidization when it suits them. I just got the 2006 Liberty Fund catalog in the post, and as usual I am having a hard time not buying a lot of their absurdly under-priced offerings. You can get the complete Sraffa/Dobb edition of Ricardo (eleven volumes!) for about a hundred bucks, or $12 for individual volumes.
Wait, is this Marginal Revolution or something? Anyway, consider the following story: Dutch fans are being handed orange shorts to watch the Argentina World Cup match if they wear trousers promoting a beer which is not the official sponsor. Up to 1,000 fans had to watch Friday’s game against Ivory Coast in underpants after being denied entry because they were wearing the orange lederhosen. Fifa said a bid at “ambush” marketing – free publicity at the expense of official sponsors – was not allowed.
Any society that can make both John Tyler Bonner’s The Ideas of Biology and The Evolution of Complexity available to me for two dollars each on sale has to have something going for it. On the other hand, Kevin Trudeau’s Natural Cures ‘They’ don’t want you to now about still cost eighteen bucks, and rather more copies of it were available.
I’ll leave it to John Q to comment on the upcoming Bernanke era at the Fed. But the New York Times article about his appointment is funny: White House Gamble Pays for a Princeton Professor Even before President Bush named Ben S. Bernanke as chairman of the Council of Economic Advisers this spring, Mr. Bernanke decided to gamble. He sold his home in New Jersey last year and told friends that, instead of returning to a tenured professorship at Princeton University, he was taking a chance that President Bush would elevate him from obscurity as a Federal Reserve governor to a top political appointment.
Review of Freakonomics, by Steven Levitt and Stephen Dubner. I’ll admit that I rolled my eyes a little at first. Behold the Freakonomist! “Politically incorrect in the best, most essential way,” said the blurb. A “rogue economist,” who goes out of his way in the first few pages to say he is “afraid of calculus” and doesn’t know how to do theory. Amazing! Incidentally, he trained at Harvard and MIT, was at the Harvard Society of Fellows, won the John Bates Clark medal and teaches at the University of Chicago.
My friend Pierre-Olivier Gourinchas has co-authored a very interesting paper with Hélène Rey called “International Financial Adjustment.” (Here’s the PDF version.) You might think that’s not a title to set the world on fire, but don’t be fooled. A more appealing—though perhaps less responsible—alternative would be something like “Dude! We can predict exchange rates!” Here’s the abstract: The paper proposes a unified framework to study the dynamics of net foreign assets and exchange rate movements.