Saturday, November 23, 2013

Thursday, November 21, 2013

Naomi Klein v Joseph Stigliz

One of my colleagues (an historian) was given a copy of Naomi Klein's, Shock Doctrine, as a read to critique neo classical economic reasoning, by an economics faculty in my department.

Below is the e mail I sent to that colleague.

Glad to work with you on the scholarship for our department.

I apologize for this intrusion - I am delighted you are reading a critique of neo classical economic analysis - although I would have recommended Joseph Stigliz, nobel winner, rather than the Canadian journalist. Stigliz is more critical than Klein and Globalization and its Discontents, one of his excellent books, is as accessible as her work and grounded in real economic science. Stigliz has the advantage of restraint and a great deal of economic knowledge in his critique of capitalism and neo classical economic reasoning and of Milton Friedman. There is a substantial cost in reading a text by a seasoned and talented journalist who possesses a limited knowledge of the the topic that is under attack.

On the opposite side of the debate, a great book by William Baumol is much more nuanced and, in the end, effective in the critique of market theory and neo classical economic reasoning. To steal from Churchill, neo classical economic analysis is incomplete and poor social science, it is just much better than the alternative.• •Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity, co-authored with Robert Litan and Carl J. Schramm, 2007.

This blog post is also a swell way to balance the rather vitriolic prose of Klein.

Wednesday, November 20, 2013

Wassily Leontief and Larry Summers on technological unemployment

Wassily Leontief and Larry Summers on technological unemployment

Here is a very interesting piece from 1983 (jstor), Population and Development Review, it is called “Technological Advance, Economic Growth, and the Distribution of Income,” here is one excerpt:

In populous, poor, less developed countries, technological unemployment has existed for a long time under the name of “disguised agricultural unemployment”; in Bangladesh, for instance, there are more people on the land than are needed to cultivate it on the basis of any available technology. Industrialization is counted upon by the governments of most of these countries to relieve the situation by providing — as it did in the past — much additional employment. If I may put this into my own terminology, Leontief is suggesting that at some margins fixed proportions mean many agricultural laborers, or would-be laborers, are ZMP or zero marginal product.

Haven’t you ever wondered how some traditional economies can have unemployment rates which are so high? Those are “structural” problems, yes, but of what kind?

By the way, Brad DeLong cites Larry Summers on ZMP workers:

My friend and coauthor Larry Summers touched on this a year and a bit ago when he was here giving the Wildavski lecture. He was talking about the extraordinary decline in American labor force participation even among prime-aged males–that a surprisingly large chunk of our male population is now in the position where there is nothing that people can think of for them to do that is useful enough to cover the costs of making sure that they actually do it correctly, and don’t break the stuff and subtract value when they are supposed to be adding to it.

Monday, November 11, 2013

Global Gender Gap 2013 Report . . . the country that is most favorable to females . . . .

Iceland tops the list of 136 countries ranked in terms of gender equality for the fifth year in a row — followed by fellow Nordic countries Finland, Norway, and Sweden — and a big part of the reason is the attainable work-life balance that exists there.

The US ranks 23rd.

Nice reporting, although would you move to Iceland to be more equal?!mD9Ef

In related news, Saudi Arabia ranks 127 out of 137, in part due to . . .

Every year, nearly four dozen Saudi women get together for a reunion. Eighteen years ago, on Nov. 6, 1990, they staged a public protest against their country's ban on women driving. For half an hour, they drove their cars in a convoy around the capital city of Riyadh until they were stopped by police.

The women paid heavily for their actions — all the drivers, and their husbands, were barred from foreign travel for a year. Those women who had government jobs were fired. And from hundreds of mosque pulpits, they were denounced by name as immoral women out to destroy Saudi society. Almost two decades later, the ban is still in place, making Saudi Arabia the only country in the world where women cannot drive.

From NPR -

Saturday, November 9, 2013

Most people completing degrees in economics won't have read these books, but they should, suggests the British economist.

I am not a John Kay fan, but these 5 books do seem well worth a read, and I have already read 3 of the 5 and recommended David Landes in a previous post.

You have described economics and business as the last bastions of modernism. What do you mean by that?

Kay responds

I think they are the last bastions of the idea that you can redesign the world in accordance with a rationally designed blueprint. Modernism in the twentieth century went through areas such as art, architecture and the humanities with the idea that we could rethink everything from the ground up and that we understood enough about the world to do that. I’ve come to believe that we don’t. But people still think they can analyse and structure economies as if they were a mechanical system and that they can do the same in business. So in the same way that Le Corbusier said – wrongly - that a house is a machine for living in, it exemplifies the idea that a business or an economy can be structured from first principles in the same way.

Friday, November 8, 2013

Underappreciated Aspects of the Ratchet Effect

Underappreciated Aspects of the Ratchet Effect

Over the years, as I have defended my hypothesis about the ratchet effect of national emergencies in U.S. history since the Progressive Era (when the ideological conditions for the full operation of this effect were established), I have encountered many doubters and critics. My fellow economists have been especially disposed to reject my hypothesis.

I have always insisted that modern government has many facets and that, at minimum, a study of its growth must consider not only government spending (or taxing or employing), but also the government’s scope and power. Changes in these latter aspects of government do not leave the same kind of easily retrieved record, or numerical data set, that economists typically work with—and without which they are more or less at sea, or in denial. Over the many years that I have pursued my research into the growth of government, I have repeatedly met with evidence of essential elements of the ratchet effect that lie completely beyond the purview of conventional economic research on this subject.

Higgs expands at this post as well as in his book Crisis and Leviathan.

Thursday, November 7, 2013

Government Spending and Regime Uncertainty—a Clarification

Government Spending and Regime Uncertainty—a Clarification
Bob Higgs on regime uncertainty.He writes:  "I consider regime uncertainty as a form of uncertainty related to the public’s—especially the private investors’—confidence in the future security of private property rights, which can be impaired by future regulatory changes (e.g., Dodd-Frank and Obamacare regulations), court decisions, administrative twists and turns, tax increases in various forms (e.g., Obamacare penalties enforced through the income-tax system), monetary-policy changes that threaten the dollar’s purchasing power and distort the allocation of credit, and personnel changes in the government’s corps of executives, judges, and assorted capos."
I recommend the full post as well as a read of his excellent book - Crisis and Leviathan.

Wednesday, November 6, 2013

A Review of Enrico Moretti's The New Geography of Jobs

I previously blogged on this book which is reviewed by Glaeser, whose Triumph of the City our book club read and discussed.

A Review of Enrico Moretti's The New Geography of Jobs

Edward Glaeser

Why is prosperity distributed so unevenly across America's metropolitan areas? While population growth has gone disproportionately towards the Sunbelt, high-skill areas have experienced the strongest income growth since 1970. Gaps between more and less educated areas were modest forty years ago, but they have become quite large, and far larger than would be predicted solely by the general rise in the returns to skill. Unemployment rates during the recent recession were also strongly correlated with area level education. This essay reviews Enrico Moretti's The New Geography of Jobs, which both describes and explains these significant regional trends.

The review concludes and I agree:

Enrico Moretti is a first-rate empirical researcher who has taught us much about the geographic impact of human capital and a variety of public investments. His book, The New Geography of Jobs, is well-written and filled with important facts and wise policy advice. It is an excellent addition to the literature on the economics of place.

Tuesday, November 5, 2013

Even Richard Hofstadter Would Be Amazed

Back in the 1950s and 1960s, when new forms of right-wing extremism began to make an impact in American life, historian Richard Hofstadter published essays that drew attention to the “symbolic aspect of politics.” Hofstadter acted in the fashion of an amateur psychologist, attempting to make sense of “non-rational” factors. His judgments about the mentality of leaders and followers on the right, based on emerging social science research of the time, were highly speculative. Nevertheless, some of his observations still excite interest. Historians and pundits often refer to Hofstadter’s ideas about the “paranoid style.” Much-overlooked, however, is a sub-theme in Hofstadter’s writing. That discussion focused on the emergence of “fundamentalism” in American politics. Individuals who seek a broader understanding of the present political standoff in Washington may find Hofstadter’s judgments thought-provoking. Richard Hofstadter recognized that evangelical leaders were playing a significant role in right-wing movements of his time, but he noticed that a “fundamentalist” style of mind was not confined to matters of religious doctrine.

Saturday, November 2, 2013

2013 ASET Conference a Huge Success

The 2013 ASET Conference, held with the annual conference by the Arizona Council for the Social Studies was a rousing success. Over 200 teachers attended the Saturday conference and the Friday workshops were amazing.

ASET Conference 2013 - award winners. MCC Center for Economic Education Teacher of the Year Sylvia Martynowicz Paradise Valley Community College and 2013 ASET Teacher of the Year Marv Sorensen, Benson HS.

The slide show to the left shows the festivities.

Should America’s favorite sport really be one whose economic structure is based on inequality and greed?

Should America’s favorite sport really be one whose economic structure is based on inequality and greed?

Friday, November 1, 2013

November 13, 2013 at MCC

Dr. Tomas Cvrcek, Assistant Professor, John E. Walker Department of Economics, Clemson University

"The Marriage Market: How Rules of the Game Affect the Outcomes"

Tomas Cvrcek was born in 1977 in what was then Czechoslovakia. After graduating with a B.A. in Economics and International Relations at Charles University in Prague, he spent a year at Yale University as a Fulbright Scholar, earning a master’s degree in International and Development Economics. Dr. Cvrcek then continued his education at Vanderbilt University where he received a Ph.D. in Economics in 2007.

Currently, he is an Assistant Professor of Economics at Clemson University, South Carolina. His research lies at the intersection of economic history, demography, and labor economics which is to say that Dr. Cvrcek studies long-term trends in living standards, labor force participation, fertility, and marriage behavior.

Wednesday, November 13, 2013

7:00 - 8:00 pm

Mesa Community College

Lawn Tent