Saturday, March 30, 2013
Friday, March 29, 2013
Thursday, March 28, 2013
*Worldly Philosopher* - Biography of AO Hirschman
*Worldly Philosopher*
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.
ALBERT HIRSCHMAN knew what he was talking about when he called one of his books “Essays in Trespassing”. He was an extraordinarily peripatetic practitioner of the dismal science. Born in Berlin in 1915, he fled the Nazis in 1933, studied in Paris, London and Trieste, joined the anti-Mussolini resistance, fought on the Republican side in the Spanish civil war, served in the French army until France’s collapse in 1940, helped to organise an “underground railway” for refugees, emigrated to America, joined the army and was a translator at Nuremberg. He applied the cosmopolitan spirit that he had acquired in these years to everything he wrote.
He made his reputation as a development economist, focusing on Latin America, but he soon found himself trespassing obsessively—not only into other sub-disciplines such as the theory of the firm but also into other disciplines entirely such as political science and the history of thought. Mr Hirschman was never awarded the Nobel prize in economics he so richly deserved, perhaps because his writing was hard to classify. However, as if by way of recompense, Princeton University Press is about to publish a 768-page biography by Jeremy Adelman.
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.
Mr Hirschman wrote so much about so many different subjects that it is easy to see why his biography stretches to 768 pages. He challenged the conventional wisdom among his fellow development economists that poor countries need “balanced growth”; he argued instead that the “disequilibria” generated by unbalanced growth might do a better job of mobilising resources. He also challenged the conventional wisdom among sociologists and historians that the Protestant ethic prepared the way for capitalism. He suggested, rather, that the starring role should be given to a group of thinkers, such as Montesquieu, who argued that the best way to prevent social disorder was to channel people’s passions into moneymaking.
The Economist claims to engage in a “severe contest” with “an unworthy, timid ignorance obstructing our progress”. Mr Hirschman was an eloquent ally. In “The Rhetoric of Reaction” he wrote that purveyors of “timid ignorance” rely on three types of argument: jeopardy (reforms will cost a lot and endanger previous gains); perversity (reforms will harm the people they are intended to help); and futility (problems are so huge that nothing can be done about them). That certainly describes the current debates about global warming, illegal drugs and countless other topics. With luck, Mr Hirschman’s exit will not silence his voice.
Monday, March 25, 2013
Sunday, March 24, 2013
Triumph of the City - April ASET bookclub
Our April ASET book discussion will take place on April 4 from 5:45 to 7:45pm at the ACEE offices in Scottsale. Look forward to an animated discussion of The Triumph of the City
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
http://www.nytimes.com/2011/02/13/books/review/Silver-t.html
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
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.
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