Archive for July, 2008

Call For an Annual Adam Smith Festival

| Peter Klein |

In 1990 I was privileged to attend a conference on “Adam Smith and his Legacy” commemorating the 200th anniversary of Smith’s death. The speakers included eight of the twenty Economics Nobel Laureates then living along with Smith scholars such as Andrew Skinner, general editor of the 1976 Glasgow edition of Smith’s Works and Correspondence. The papers were published in this book; you can read my conference report here. Listening to and visiting with the Laureates was fun, though I didn’t learn much about Adam Smith at the conference (most economists — Nobel Laureates included — know and care little about the history of economic thought). There was also an event at Smith’s grave in Canongate Kirk. (Somewhere I have a picture of myself at the site of Smith’s birthplace in Kirkcaldy; it’s basically me standing next to this).

From Gavin Kennedy I learn that Eamonn Butler has called for an annual Adam Smith Festival, to be held each summer in Edinburgh. The city already holds an internationally recognized and highly successful arts festival so it knows how to do this sort of thing. Butler proposes several activities that could be part of a Smith festival then adds, wryly:

[O]ther people will have their own ideas. After all, it would not do for an Adam Smith Festival to be too rigidly planned. How much more appropriate it would be if different people’s initiatives came together — as if led, indeed, by an invisible hand.

31 July 2008 at 9:47 am 1 comment

Research and Teaching: Friends or Foes?

| Peter Klein |

Administrators at every research university know the mantra, repeated endlessly to parents, funders, and overseers: cutting-edge research and top-notch (undergraduate) teaching go hand-in-hand. But there is surprisingly little work, theoretical or empirical, investigating the relationship. Here is an edited transcript of a discussion between economists Jim Gwartney (Florida State), Dirk Mateer (Penn State), Rich Vedder (Ohio U), and Russ Sobel (West Virginia) about the relationship between research and teaching. They were asked (1) is research needed for good teaching, and (2) can research activity harm teaching?

Higher education has two key missions: transferring existing knowledge to students, and discovering new knowledge. While the two functions are not mutually exclusive, there is a growing awareness that trade-offs exist between them. Does an emphasis on research detract from undergraduate education? Are too much time and money spent on research rather than teaching? Is career advancement (such as tenure) too dependent on research, a la “publish or perish?”

We asked four noted university-based economists to discuss those issues. . . .

Hat tip to Vedder, whose higher ed blog is on my regular reading list.

30 July 2008 at 11:19 am 4 comments

Neuroeconomics and the Firm

| Peter Klein |

I’m not a big fan of neuroeconomics — Gul and Pesendorfer’s critique seems about right to me — but if you like that field you may be interested in this call for book chapters:

Neuroeconomics and the Firm

Mellani Day
Angela Stanton
Isabell Welpe

How can we take advantage of neuroeconomics to inform organizations? Neuroscience can provide us with ways to understand causal relationships; it enables us to identify the biological drivers of beliefs, opportunity perception, opportunity analysis, risk-aversion or risk-seeking, motivation, incentives and reward mechanisms; in other words, we can map the pre-decisional dynamics of the human brain. Neuroeconomics has yielded important new insights and may provide powerful new ways of looking at the firm. (more…)

29 July 2008 at 10:29 am Leave a comment

São Paulo Workshop on Institutions and Organizations

| Peter Klein |

See below for information on the Third Research Workshop on Institutions and Organizations, 13-14 October 2008 at Fundação Getúlio Vargas in Brazil. Session topics include “Organizations, law and corruption,” “Institutions and development,” “Institutions and environment,” “Psychological issues and organization strategies,” and “Industrial and competition policy.”

I participated in last year’s conference and enjoyed it tremendously. There is a growing network of Brazilian researchers working on various topics in the New Institutional Economics. It is a good group to be involved with. (more…)

28 July 2008 at 10:47 am 1 comment

Moral Hazard, For Real

| Peter Klein |

I suppose I posted a whimsical item about moral hazard because I was too angry to write anything about the Financial Irresponsiblity Bailout and Reward Act of 2008, the moral-hazard story of the decade. Buy more house than you can afford? Sign a mortgage contract you can’t understand? Invest in risky mortgage-backed securities that lose money? Run your financial institution into the ground? Don’t worry, the hapless US taxpayer will pick up the tab!

I have nothing but contempt in my heart for all who asked for, drafted, and voted for this odious piece of legislation. If there were any doubt that the US is, in many ways, a socialist economy, this massive socialization of financial-market risk should put such doubts to rest. Capitalism, requiescat in pace.

26 July 2008 at 10:09 pm 4 comments

New Edition of Hayek’s Early Works

| Peter Klein |

The Mises Institute has just released a new edition of Hayek’s early works on economic theory, Prices and Production and Other Works: F. A. Hayek on Money, the Business Cycle, and the Gold Standard, edited and introduced by Joe Salerno. It collects the monographs Prices and Production, Monetary Theory and the Trade Cycle, and Monetary Nationalism and International Stability, along with the important essays “The Paradox of Saving,” “Reflections on the Pure Theory of Money of Mr. J.M. Keynes,” “The Mythology of Capital,” and “Investment That Raises the Demand for Capital.” These works, written between 1929 and 1937, established Hayek’s reputation as one of the great technical economists of his day, and the leading opponent of Keynes in monetary and business-cycle theory. Ironically, Hayek is mostly known today for his popular writings, particularly The Road to Serfdom, and for his later work on knowledge, evolution, and social theory. It is often forgotten that he was first and foremost an economic theorist.

Here is a detailed Hayek bibliography (through 1982) compiled by Leonard Liggio. Here’s a biographical essay written by yours truly. Here is the home page of the Collected Works of F. A. Hayek (and a pointer to my favorite volume). And it’s never too early to begin preparations for this important holiday.

Update: By coincidence, Collected Works editor Bruce Caldwell was interviewed in today’s Carolina Journal about his new edition of The Road to Serfdom.

25 July 2008 at 2:57 pm 3 comments

Moral Hazard

| Peter Klein |

Ten-year-old child wants a mobile phone. Parent buys a basic, inexpensive model with a pay-as-you-go plan. Child loses phone.

Parent: “You see, I thought that might happen, which is why I got you a cheap phone that’s easily replaceable and not one of those fancy, expensive ones you’re always asking for.”

Child: “But if I had a fancy one, I would have been more careful not to lose it.”

25 July 2008 at 10:01 am 2 comments

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
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Peter G. Klein, The Capitalist and the Entrepreneur: Essays on Organizations and Markets (Mises Institute, 2010).
Richard N. Langlois, The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy (Routledge, 2007).
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