Saturday, March 30, 2013
Friday, March 29, 2013
Thursday, March 28, 2013
*Worldly Philosopher* - Biography of AO Hirschman
Mr Hirschman raised some problems with the cult of exit. Sometimes, it entrenches the status quo. Dictators may rule longer if their bravest critics flee abroad (indeed, Cuba uses emigration as a safety valve). Monopolies may have an easier life if their stroppiest customers find an alternative. Mr Hirschman got the idea for his book during a ghastly train journey in Nigeria: he concluded that the country’s railways were getting worse because the most vocal customers were shifting to the roads.Mr Hirschman’s most famous book, “Exit, Voice and Loyalty: Responses to Decline in Firms, Organisations and States”, remains as suggestive today as it was when it first appeared in 1970, for managers and policymakers as well as intellectuals. Mr Hirschman argued that people have two different ways of responding to disappointment. They can vote with their feet (exit) or stay put and complain (voice). Exit has always been the default position in the United States: Americans are known as being quick to up sticks and move. It is also the default position in the economics profession. Indeed, when his book appeared, Milton Friedman and his colleagues in the Chicago School were busy extending the empire of exit to new areas. If public schools or public housing were rotten, they argued, people should be encouraged to escape them.
Monday, March 25, 2013
Sunday, March 24, 2013
Triumph of the City - April ASET bookclub
A nice review of the book in the New York Times - http://libertyandresponsibility.blogspot.com/2013/03/ny-times-book-review-of-triumph-of-city.html prompts the following possible discussion questions:
1. Which of the cities discussed exempifies the wealth enhancing potential of emergent and evolutionary processes? (Which city would Hayek point to as an example of the positive effects of spontaneous orders?
2. Which city reflects the wealth enhancing role that is possible from state or government shaped development?
3. What is your reaction to the "Three Simple Rules" proposed in the book?
4. How useful to you find Glaeser's categories of: The Imperial City, The Well-Managed City, The Smart City, The Consumer City, and The Growing City? Are these mutually exclusive categories?
Table of Contents
Introduction: Our Urban Species 1
Chapter 1 What Do They Make in Bangalore? 17
Ports of Intellectual Entry: Athens 19
Baghdad's House of Wisdom 21
Learning in Nagasaki 23
How Bangalore Became a Boom Town 24
Education and Urban Success 27
The Rise of Silicon Valley 29
The Cities of Tomorrow 34
Chapter 2 Why Do Cities Decline? 41
How the Rust Belt Rose 43
Detroit Before Cars 46
Henry Ford and Industrial Detroit 49
Why Riot? 52
Urban Reinvention: New York Since 1970 56
The Righteous Rage of Coleman Young 58
The Curley Effect 60
The Edifice Complex 61
Remaining in the Rust Belt 63
Shrinking to Greatness 64
Chapter 3 What's Good About Slums? 69
Rio's Favelas 72
Moving On Up 76
Richard Wright's Urban Exodus 79
Rise and Fall of the American Ghetto 81
The Inner City 85
How Policy Magnifies Poverty 86
Chapter 4 How Were the Tenements Tamed? 93
The Plight of Kinshasa 95
Healing Sick Cities 97
Street Cleaning and Corruption 101
More Roads, Less Traffic? 104
Making Cities Safer 106
Health Benefits 114
Chapter 5 Is London a Luxury Resort? 117
Scale Economies and the Globe Theatre 119
The Division of Labor and Lamb Vindaloo 122
Shoes and the City 126
London as Marriage Market 127
When Are High Wages Bad? 129
Chapter 6 What's So Great About Skyscrapers? 135
Inventing the Skyscraper 136
The Soaring Ambition of A. E. Lefcourt 140
Regulating New York 142
Fear of Heights 144
The Perils of Preservation 148
Rethinking Paris 152
Mismanagement in Mumbai 157
Three Simple Rules 161
Chapter 7 Why Has Sprawl Spread? 165
Sprawl Before Cars 167
William Levitt and Mass-Produced Housing 174
Rebuilding America Around the Car 177
Welcome to The Woodlands 180
Accounting for Tastes: Why a Million People Moved to Houston 183
Why Is Housing So Cheap in the Sunbelt? 188
What's Wrong with Sprawl? 193
Chapter 8 Is There Anything Greener Than Blacktop? 199
The Dream of Garden Living 202
Dirty Footprints: Comparing Carbon Emissions 206
The Unintended Consequences of Environmentalism 210
Two Green Visions: The Prince and the Mayor 213
The Biggest Battle: Greening India and China 217
Seeking Smarter Environmentalism 220
Chapter 9 How Do Cities Succeed? 223
The Imperial City: Tokyo 224
The Well-Managed City: Singapore and Gaborone 227
The Smart City: Boston, Minneapolis, and Milan 231
The Consumer City: Vancouver 238
The Growing City: Chicago and Atlanta 241
Too Much of a Good Thing in Dubai 244
CONCLUSION: Flat World, Tall City 247
Give Cities a Level Playing Field 249
Urbanization Through Globalization 251
Lend a Hand to Human Capital 253
Help Poor People, Not Poor Places 255
The Challenge of Urban Poverty 257
The Rise of the Consumer City 259
The Curse of NIMBYism 260
The Bias Toward Sprawl 264
Green Cities 276
Gifts of the City 268
Saturday, March 23, 2013
NY Times book review of The Triumph of the City
Edward Glaeser, a Harvard professor of economics, has spent several decades investigating the role cities play in fostering human achievement. In “Triumph of the City,” he has embedded his findings in a book that is at once polymathic and vibrant.
Clearly, Glaeser loves an argument, and he’s a wonderful guide into one. “Triumph of the City” is bursting with insights and policy proposals to debate. Sometimes that’s a bit of a problem: there’s a lot of policy in this book, but not a lot of politics. It’s about ideas, not implementation. Some of those ideas may strike you as problematic: the increasing density he credits Atlanta with has been accompanied by an explosion of suburban sprawl. Others, like tilting the benefits of the tax system away from suburbanites and toward city residents, may sound absolutely unrealizable. And still others, like his advice to cities in decline to “shrink to greatness,” seem a little tone deaf, especially since those cities are steadily losing the skills and talent to find that greatness.
Friday, March 22, 2013
Economics versus Politics: Pitfalls of Policy Advice
Daron Acemogluy James A. Robinsonz
February 2013.
Abstract
The standard approach to policy-making and advice in economics implicitly or explicitly ignores politics and political economy, and maintains that if possible, any market failure should be rapidly removed. This essay explains why this conclusion may be incorrect; because it ignores politics, this approach is oblivious to the impact of the removal of market failures on future political equilibria and economic e¢ ciency, which can be deleterious. We Örst outline a simple framework for the study of the impact of current economic policies on future political equilibriaó and indirectly on future economic outcomes. We then illustrate the mechanisms through which such impacts might operate using a series of examples. The main message is that sound economic policy should be based on a careful analysis of political economy and should factor in its ináuence on future political equilibria.
Macroeconomics After the Crisis: Time to deal with the Pretense-of-Knowledge Syndrome,
Wednesday, March 20, 2013
Economics and Environmentalism: Belief Systems at Odds: The Independent Review: The Independent Institute
Economics and Environmentalism: Belief Systems at Odds: The Independent Review: The Independent Institute
Tuesday, March 19, 2013
Book reviews - possible ASET book club selections
Every economist should read A Capitalism for the People and ask their students to read it also. Since there is zero appeal to our consciences in most standard economics textbooks these days, Zingales’s book is a great complement.
Understanding how our emotions, beliefs, and limited understanding of complexity can influence whether capitalism flourishes or fails is just beginning. Few economists have tried to reinvent how to govern for the people in the context of the behavioral realities of the people. This great book by one of the people, Luigi Zingales, may be an important leap in the right direction.
The second is a review of a book previously discussed by ASET - Why Nations Fail and a review of Pillars of Prosperity and reads, in part
The two books covered in this review, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (Crown Business 2012) by Daron Acemoglu and James Robinson, and Pillars of Prosperity: The Political Economics of Development Clusters (Princeton University Press 2011) by Timothy Besley and Torsten Persson think big. They are written by distinguished academics concerned with the issue of national performance and how national institutions can explain why some nations perform much better than others. Pillars of Prosperity is written for graduate students, and uses a common formal model to explore the factors that they have identified as important for national performance.
Both reviews are in the current issue (March 2013) of the Journal of Economic Literature.
Monday, March 11, 2013
Cutting Size of the Public Sector
Budget sequestration is as modest a step toward cutting Leviathan as one can imagine. Further progress will be difficult as long as people believe that slashing the size of government conflicts with reviving the economy. Nothing could be further from the truth.
In his recent debate on Charlie Rose, Nobel Prize-winning economist and New York Times columnist Paul Krugman said that even wasteful government spending should not be cut, because it would undermine job creation and economic recovery. This view isn’t quite as popular as it once was, but it is still influential.
Full analysis is excellent.
Sunday, March 10, 2013
Professor Krugman and Crude Keynesianism
Very thoughtful analysis by Saches
Wednesday, March 6, 2013
Bhagwati on Bangladesh
The Bangladesh fires emphasize again a lax and lackadaisical attitude to the issue of workplace safety by the Bangladeshi authorities, possibly aided and abetted by domestic politics. This reflects a general attitude of neglect in protecting workers against unsafe conditions, like providing goggles and ensuring that they are worn when workers operate close to an open furnace.
But asking Wal-Mart, Gap and other brands to substitute for the somnolent government will only marginally address worker safety reform.
Monday, March 4, 2013
MRUniversity New Courses!
The new courses are The Euro Crisis, a 90 minute mini-course over 3 weeks.
The Economics of Media, 4 hours over 4 weeks.
The American Housing Finance System, 15 hours running to June taught by Arnold Kling.
Mexico’s Economy, a 4.5 hour course over 4 weeks taught by Robin Grier.
Sunday, March 3, 2013
Great book title recommendations
Saturday, March 2, 2013
Great AEA summary
by James W. Fox
jameswfox@cox.net
January 2013
Atmospherics
Meeting attendance was slightly below last year, with 11,400 participants. There was little on development at the meetings. It was all financial crises, risk and uncertainty, and why things aren’t as simple as we thought.
The blog post is well worth a read.
http://www.economicprincipals.com/what-he-saw-at-the-2013-aea-meetings
Friday, March 1, 2013
Book recommendation
I am currently reading Jonathan Haidt, “The Righteous Mind”. It is more psychology than economics, but provides a fascinating theory about why it is impossible to change someone’s moral philosophy with logical reasoning. So it is something at all political economists should seriously think about.
http://www.amazon.com/The-Righteous-Mind-Politics-Religion/dp/0307455777/ref=ntt_at_ep_dpt_1
Product Details
Paperback: 528 pages
Publisher: Vintage (February 12, 2013)
As America descends deeper into polarization and paralysis, social psychologist Jonathan Haidt has done the seemingly impossible—challenged conventional thinking about morality, politics, and religion in a way that speaks to everyone on the political spectrum. Drawing on his twenty five years of groundbreaking research on moral psychology, he shows how moral judgments arise not from reason but from gut feelings. He shows why liberals, conservatives, and libertarians have such different intuitions about right and wrong, and he shows why each side is actually right about many of its central concerns. In this subtle yet accessible book, Haidt gives you the key to understanding the miracle of human cooperation, as well as the curse of our eternal divisions and conflicts. If you’re ready to trade in anger for understanding, read The Righteous Mind.