Posts filed under ‘Food and Agriculture’
The Science of Design
| Peter Klein |
Rob King’s 2011 AAEA Presidential Address, “The Science of Design,” takes its cue from Herbert Simon.
[M]uch of what we do as economists is akin to what Simon calls natural science. We develop theories about how the economy works, and we conduct empirical studies that test these theories or estimate the parameters of key economic relationships that explain how general results derived from our theories manifest themselves in a particular context.We strive for results that explain what is or that predict what will be. . . .
Economists also design economic artifacts (e.g., markets, contracts, organizational structures, public policies) that reshape economic systems in order to better meet human needs. This work, which I will call economic design, is complementary with but differs fundamentally from economic analysis. While economic analysis is motivated by a question or a puzzle and focuses on explaining what is and predicting what will be, economic design is motivated by a problem or opportunity and focuses on what can be and ought to be or on what will yield a satisfactory outcome. . . .
While we are comfortable in recognizing “good science” in economic analysis, I believe we have devoted less attention to developing a shared understanding of “good science” in economic design.
It is certainly true that economists are increasingly involved in economic design (a trend that accelerated around WWII) though I am less sure this is a good idea. A lot of economic design — specifying “optimal” contracts, for example — might be considered the domain of entrepreneurs, not social scientists. But applied policy work is certainly of this character, so the essay may be read as a call for applied economists to pay closer attention to issues like decomposability, modularity, search, creativity, etc. (See Dick’s work for rich discussions of these issues.)
Kudos to Rob for a thoughtful and intelligent piece. A friend calls it “perhaps the most interesting President’s Address from AAEA in the last 20 years.”
Vive les French (Fries)!
| Peter Klein |
Most people don’t know that France is McDonald’s second-most popular market, despite the presumed French distaste for les choses américaine. Knowledge@Wharton has a nice piece suggesting that the firm’s willingness to cater to French tastes explains its success over local and multinational rivals:
In France, barely 10% of meals are eaten outside the home, compared to nearly 40% in the U.S. and the U.K. Unlike their Anglo-Saxon counterparts, French consumers rarely snack between breakfast, lunch and dinner. As a result, French meal times also last longer, and more food is consumed through multiple courses, creating unique opportunities and challenges for fast-food dining. McDonald’s decided to capitalize on the opportunity. Rather than run promotions that encourage snacking, the company freed up valuable labor by installing electronic ordering kiosks, which are used by one out of every three customers in more than 800 of its restaurants. McDonald’s has capitalized on the French cultural preference for longer meals by using surplus labor to provide table-side service, particularly in taking orders from lingering diners inclined to order an additional coffee or dessert item. Thanks to such initiatives, the average French consumer spends about US$15 per visit to McDonald’s — four times what their American counterparts spend.
Adding the McCafé — featuring macaroons baked by the same company that supplies Ladurée — was another savvy move.
Another Job Opening
| Peter Klein |
Following up Nicolai’s post, here’s another job listing for O&M readers interested in vertical integration and supply-chain issues in food, fiber, and natural resources (forwarded at the request of Karin Hakelius). Feel free to share similar listings with us and we’ll post them here. (We assume most of you already see the announcements posted at JOE, the BPS and ENT lists of AoM, etc.). (more…)
A Turkey of a Thanksgiving Post
| Peter Klein |
Many US bloggers try to post something clever on Thanksgiving about religious freedom, agricultural productivity, colonialism, property rights, immigration, etc. We’ve done it ourselves. But this year I thought I’d share something different: nerdy academic stuff about — what else? — the economic organization of the turkey industry. Tomislav Vukina’s 2001 paper on vertical integration in poultry is instructive. For example:
The pattern of vertical integration is less uniform in the turkey industry than in the broiler industry. A turkey company is less likely to own its own hatchery but is more likely to have company owned production farms (Martin et al. 1993). There is also more variation among production contracts in terms of division of risks and profits from growing turkeys than in the broiler industry. The processing plant is the center for control of placement.
A processor may contract directly with farmers or contract with a feed supplier who in turn contracts with farmers. In the turkey industry, there are still some independent producers with formal marketing contracts with processors. Such marketing contracts do not always provide any price or margin guarantees to producers. (more…)
CFP: ISNIE 2012
| Peter Klein |
The Call for Papers for the 2012 ISNIE conference, 14-16 June 2012 at the University of Southern California, is now posted. Proposals are due 30 January 2012, so start working on those abstracts!
I have been involved with ISNIE for many years and currently serve as the organization’s treasurer. The conferences are terrific, with a variety of papers, panels, and keynotes spanning the broad range of institutional and organizational social science research.
Trivia: I first met the good Professor Foss at the inaugural ISNIE conference in 1997 in St. Louis So if it weren’t for ISNIE, this blog might not exist. . . .
CFP: “Managing Wicked Problems: The Role of Multi-Stakeholder Engagements”
| Peter Klein |
O&M friend Brent Ross sends along this CFP for a track session of the 2012 Wageningen International Conference on Chain and Network Management. The session, “Managing Wicked Problems: The Role of Multi-Stakeholder Engagements for Resource and Value Creation,” is linked to a special issue of the International Food and Agribusiness Management Review. Info below the fold: (more…)
The Institutional Revolution
| Peter Klein |
I’m very excited about Doug Allen’s forthcoming book The Institutional Revolution (University of Chicago Press). Trained by Yoram Barzel (and hence part of the Tree of Zvi), Doug is a leading contemporary scholar on property rights, transaction costs, contracting, and economic history. His work on agricultural contracting with Dean Lueck, including their 2002 book The Nature of the Farm, is a classic contribution to the economics literature on economic organization. He also has a very good introductory textbook. More information is at Doug’s informative (and amusing) website.
Here’s the cover blurb for the new book:
Few events in the history of humanity rival the Industrial Revolution. Following its onset in eighteenth-century Britain, sweeping changes in agriculture, manufacturing, transportation, and technology began to gain unstoppable momentum throughout Europe, North America, and eventually much of the world—with profound effects on socioeconomic and cultural conditions.
In The Institutional Revolution, Douglas W. Allen offers a thought-provoking account of another, quieter revolution that took place at the end of the eighteenth century and allowed for the full exploitation of the many new technological innovations. Fundamental to this shift were dramatic changes in institutions, or the rules that govern society, which reflected significant improvements in the ability to measure performance—whether of government officials, laborers, or naval officers—thereby reducing the role of nature and the hazards of variance in daily affairs. Along the way, Allen provides readers with a fascinating explanation of the critical roles played by seemingly bizarre institutions, from dueling to the purchase of one’s rank in the British Army.
Engagingly written, The Institutional Revolution traces the dramatic shift from premodern institutions based on patronage, purchase, and personal ties toward modern institutions based on standardization, merit, and wage labor—a shift which was crucial to the explosive economic growth of the Industrial Revolution.
Bonus: Here’s the syllabus from Doug’s course on the economics of property rights.
Upcoming Conferences
| Peter Klein |
- ISNIE, 16-18 June in Palo Alto. Registrations are closed but latecomers could try lobbying the Treasurer to accept a late payment — never mind, that’s me, don’t bother.
- “Open Source, Innovation, and New Organizational Forms,” 1 August in Johannesburg. “This first IPEG conference intends to explore new theoretical and empirical advances in open source organization: the interest is not just on voluntary Open Source Software production and its potential innovation implications, but also on such related ‘open source’ phenomena as collective invention, online collaboration (e.g., Wikipedia), online social networking (e.g., Facebook), open innovation, open science, open source biology, and open standards.” The conference website is not live as of this posting, but organizer Giampaolo Garzarelli can provide details. O&M’s Dick Langlois is a keynote speaker. 500-word abstracts are due 24 June.
- “Achieving Coexistence of Biotech, Conventional & Organic Foods in the Marketplace,” 26-28 October in Vancouver. Speakers include FAO Deputy Director General Ann Tutweiler and Canadian Ag Minister Gerry Ritz. Coexistence conferences have been held every other year since 2003; the first 3 conferences came out of EU Commission efforts, the next was in Australia, and this one is the first to be held in North America. A co-organizer tells me “we hope to bring a more ‘practical’ view of coexistence than is commonly held in Europe.”
McQuinn Center for Entrepreneurial Leadership
| Peter Klein |
Earlier this academic year I assumed the Directorship of the McQuinn Center for Entrepreneurial Leadership here at the University of Missouri. My colleague (and former O&M guest blogger) Randy Westgren retains the position of McQuinn Chair. The McQuinn Chair was established in 2004 through a generous gift from Al and Mary Agnes McQuinn, and the Center was created soon afterwards by Bruce Bullock, the inaugural McQuinn Chair.
Look for a slate of exciting programs and activities about entrepreneurship, organization, innovation, strategy, and more in the coming months. To keep you up to date on the Center’s activities, as well as news and information from the wider world of entrepreneurship, we’re blogging as well at entrepreneurship@McQuinn.
University Restructuring, Agricultural Economics Edition
| Peter Klein |
The current issue of AAEA Exchange, the newsletter of the Agricultural and Applied Economics Association (formerly American Agricultural Economics Association), features three perspectives on the long-term viability of maintaining separate departments of economics and agricultural economics. (Much of the discussion would apply to business economics departments too.) Ron Mittelhammer of Washington State argues for consolidation, Ken Foster of Purdue for keeping separate departments, and Rob King of Minnesota for the transformation of agricultural economics departments to applied economics departments.
The issues are organizational and strategic and familiar to O&M readers. Mittelhammer emphasizes tangible resources and a shared intellectual heritage and downplays accumulated routines and capabilities, organizational culture, etc.:
Arguably above all other rationale, mergers are also warranted because, fundamentally, economics is economics. Agricultural economics is a field of economics, not some other paradigm of economics, and is no more distinct from its parent discipline than other fields such as labor economics, international economics, health economics. . . .
Too often of late, it appears that the last ditch attempt at justifying the separation of economic units degenerates to the issue of faculty personalities, the correlated issue of seemingly unbridgeable differences in “professional cultures,” and the fear of open faculty warfare that might be ignited by a merger, rather than the existence of truly distinct and defensible differences in the methodologies used to do economic analysis in agricultural and applied, versus the “other” economics disciplines. (more…)
History of Agricultural Research to 1945
| Peter Klein |
The importance of agricultural research in the intellectual history of science should be self-evident. Justus Liebig (1803-1873) was a key figure in both the development of laboratory methodology and agricultural science. Gregor Mendel’s (1822-1884) famous experiments were in plant breeding. Louis Pasteur’s (1822-1895) most celebrated work was on the cattle disease, anthrax. William Bateson (1861-1926), who coined the term genetics, was the first director of the John Innes Horticultural Institution in London, 1910-1926. Statistician, geneticist, and eugenics proponent R. A. Fisher (1890-1962) was employed by the Rothamsted Experimental Station, 1919 to 1933 (and temporarily relocated there from 1939 to 1943). Interwar and postwar virologists and molecular biologists did a great deal of work on the economically destructive tobacco mosaic virus.
From a very informative post at the history-of-science blog Ether Wave Propaganda (via Randy). In economics and management we’d have to add large swathes of production economics and risk-management research, the early papers in agency and contract theory dealing with sharecropping and land tenure, Grilliches’s work on hybrid corn, and much more. What else would you put on the list?
Interesting New Books
| Peter Klein |
In place of the “What I’ve Been Reading Lately” posts that show up regularly on certain blogs, I hereby offer something slightly less egocentric, the “What I’ve Been Receiving Lately” post. It contains a list of books I’ve recently received by mail, some by choice, others because publishers sent them (perhaps hoping I’d blog about them — Mission Accomplished!). Not the most scientific sample selection process, but there you go.
- Jesús Huerta de Soto, Socialism, Economic Calculation, and Entrepreneurship (Elgar, 2010). English translation of an important work first published in Spanish in 1992.
- Guinevere Liberty Nell, Rediscovering Fire: Basic Economic Lessons from the Soviet Experiment (Algora, 2010). What the failure of central planning teaches about markets and institutions.
- Koray Çaliskan, Market Threads: How Cotton Farmers and Traders Create a Global Commodity (Princeton, 2010). Economic sociology meets global commodity systems. Contains dust-jacket endorsements from Richard Swedberg and Donald MacKenzie, so expect a review from the orgtheory boys soon.
- Peter J. Boettke, ed., Handbook on Contemporary Austrian Economics (Elgar, 2010). Essays by young Austrian economists associated with George Mason University.
- Robert E. Wright, Fubarnomics: A Lighthearted, Serious Look at America’s Economic Ills (Prometheus, 2010). I think the title says it all.
- Ranjay Gulati, Reorganize for Resilience: Putting Customers at the Center of Your Business (Harvard Business School, 2010). Looks fluffy, but I have a teaching interest in change management so I’ll give it the benefit if the doubt.
- David Stark, The Sense of Dissonance: Accounts of Worth in Economic Life (Princeton, 2009). Also deals with organizational change, but in a more serious way. Ethnographic studies of three organizations dealing with large exogenous shocks. Looks interesting.
PENSA 20th Anniversary
| Peter Klein |
Congratulations to Decio Zylbersztajn and the rest of the group at PENSA on their 20th anniversary. PENSA, a research center within the University of São Paulo, is the home of New Institutional Economics research and teaching in Brazil (and Latin America more generally), producing papers, training graduate students, hosting international conferences, and other activities. The group celebrated its 20th year with a party this past weekend. You can see current and former PENSA personnel in the photo below, including Decio, my Missouri colleague Fabio Chaddad (to Decio’s right), Luciana Florencio de Almeida (just in front of Decio), Paulo Furquim de Azevedo (back row), Sergio Lazzarini (front row), Sylvia Saes (middle row, right side), and other well-known New Institutional Scholars.
The current issue of the Revista de Administração da Universidade de São Paulo has an article on financial constraints and agricultural contracting in Brazil by Decio, Luciana, and me.
Assorted Links
| Peter Klein |
- A new paper by Randall Morck and Bernard Yeung, “Agency Problems and the Fate of Capitalism.” A very good comparative-institutional analysis of shareholder democracy and its benefits and costs relative to “stakeholder” models.
- A Washington Post story on “moral licensing” (via Sheen Levine) — suggesting that some people view ethical behavior, like goods and services, in terms of trade-offs at the margin!
- A call for contributions to The Ethics and Economics of Agrifood Competition, a Springer volume in preparation by my colleague Harvey James.
- Videos and papers from the Coase centenary conference held last year at the University of Chicago Law School.
Fast Food and Obesity
| Peter Klein |
A new Australian public-service ad compares fast food to heroin: “You wouldn’t inject your children with junk. So why are you feeding it to them?” (See the ad, along with Katherine Mangu-Ward’s funny meditations on the theme.) But does fast food really contribute to health problems, particularly obesity?
Not much, according to Richard Dunn’s study, “The Effect of Fast-Food Availability on Obesity: An Analysis by Gender, Race, and Residential Location,” in the July 2010 issue of the American Journal of Agricultural Economics (it’s peer reviewed, and not funded by corporations!). Previous research finds links between the number and density of fast-food restaurants and health problems, but has difficulty identifying cause and effect (fast food could make people overweight, but fast food restaurants could be put in areas where people are overweight anyway). Dunn uses the number of interstate exits as an instrument for restaurant location to tease out the causal relations, and finds little overall effect of fast food on obesity — none at all in rural areas, a bit in medium-density areas, and only among women and minorities.
Incentives Matter, Soviet Edition
| Dick Langlois |
As economists like Benito Arruñada and Eric Hilt have shown, fishing and whaling have always used an incentive system in which crew members are paid a share of the profits of the voyage. Recall that Ishmael in Moby Dick contracted for a 300th lay, a 300th “part of the clear nett proceeds of the voyage, whatever that might eventually amount to.” This provides relatively high-powered incentives, in that it is a reward based on results, though it works only when team members can monitor each other easily and when the market for workers is competitive. (This contrasts with the reward system in, say, professional sports, where one is rewarded on the basis of one’s own performance rather than on that of the team. But that may be changing.)
I was surprised to discover that even Soviet factory ships used a similar system, as described in the Martin Cruz Smith novel Polar Star — a work of fiction but clearly well researched and probably accurate. “The Polar Star’s pay was shared on a coefficient from 2.55 shares for the captain to 0.8 share for a secondclass seaman. Then there was a polar coefficient of 1.5 for fishing in Arctic seas, a 10 percent bonus for one year’s service, a 10 percent bonus for meeting the ship’s quota, and a bonus as high as 40 percent for overfulfilling the plan. The quota was everything. It could be raised or lowered after the ship left dock, but was usually raised because the fleet manager drew his bonus from saving on seamen’s wages. Transit time to the fishing grounds was set at so many days, and the whole crew lost money when the captain ran into a storm, which was why Soviet ships sometimes went full steam ahead through fog and heavy seas.”
Presumably, however, the share was not of profit but of some fixed amount. The incentive came from the quota bonuses, which, as the novel details, were subject to political manipulation. Interesting nonetheless that the system used incentives of the broadly traditional kind, and that it explicitly rewarded workers differently for different skill level and status.
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Westhoff’s The Economics of Food
| Peter Klein |
Congratulations to my colleague Pat Westhoff for his new book, The Economics of Food: How Feeding and Fueling the Planet Affects Food Prices (Financial Times Press, 2010). A highly readable account of food markets and food and agricultural policy. Includes some wise words about forecasting:
One thing FAPRI has learned over the years is that people who make and use market projections need a good sense of perspective — and humor. In a rapidly changing world, even the best projections have a very short shelf life. The economic models used to develop the projections necessarily rely on a long series of assumptions, and at least some of these assumptions always prove to be incorrect when viewed with 20-20 hindsight. . . .
For all these reasons, this book uses market projections by FAPRI and other institutions simply to illustrate important points, rather than to predict what will actually happen. If there is one lesson readers should take away from this book, it is that analysts who say they know exactly who food prices will evolve in the future are misleading their audience or fooling themselves.
Update (20 April 2010): While stranded in Germany waiting for a flight home, Pat wrote an item for Freakonomics.
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Agribusiness Economics and Management
| Peter Klein |
Congratulations to my colleague Mike Cook for his review paper on “Agribusiness Economics and Management” (with Rob King, Mike Boehlje, and Steve Sonka) in the new issue of the American Journal of Agricultural Economics. It’s a special issue commemorating the centennial of the American Agricultural Economics Association. Lots of good stuff here on the history and development of management theory and pedagogy, the evolution of the food sector, and the effects of the institutional environment on firm structure. Here’s the abstract:
Agribusiness scholarship emphasizes an integrated view of the food system that extends from research and input supply through production, processing, and distribution to retail outlets and the consumer. This article traces development of agribusiness scholarship over the past century by describing nine significant areas of contribution by our profession: (1) economics of cooperative marketing and management, (2) design and development of credit market institutions, (3) organizational design, (4) market structure and performance analysis, (5) supply chain management and design, (6) optimization of operational efficiency, (7) development of data and analysis for financial management, (8) strategic management, and (9) agribusiness education.
Unquenchable
| Dick Langlois |
I attended an interesting lecture on Thursday, part of the University’s Edwin Way Teale lecture series on the environment. Normally these lectures do not tend, shall we say, to take perspectives that O&M readers would find congenial. But this lecture, by Robert Glennon of the University of Arizona Law School, was interesting along a number of dimensions. The talk was based on his book Unquenchable: America’s Water Crisis and What To Do About It. Here is the abstract:
From manufactured snow for tourists in Atlanta to trillions of gallons of water flushed down the toilet each year, Dr. Robert Glennon reveals the heady extravagances and everyday inefficiencies that are sucking the nation dry. The looming catastrophe remains hidden as the government diverts supplies from one area to another to keep water flowing from the tap. But sooner rather than later, the shell game has to end. And when it does, shortages will threaten not only the environment, but every aspect of American life. America must make hard choices — and Glennon’s answers are fittingly provocative. He proposes market-based solutions that value water as both a commodity and a fundamental human right.
The talk was interesting not only in that I learned a few things about the screwed-up water system in the U. S. (the broad contours of which I was vaguely familiar with) but also in that it presented an interesting case study in rhetoric. Glennon spent most of the talk revving up the environmentalist crowd, with lots of show and tell about the effects of bad water policy and a tour through various command-and-control policies that environmentalists might think of to fix the situation. (He even paused to make fun of Ann Coulter’s claim that the flush toilet is man’s greatest invention.) But Glennon’s bottom line, revealed at the very end, is that the only thing that will fix the problem is properly assigning property rights and trading those rights on markets. This was the conclusion I was expecting, not only because of the abstract but also because Glennon has an NBER Working Paper with Gary Libecap. Maybe this is the way to go in selling market-based solutions.
I, Taco
| Peter Klein |
Some California design students tracked the ingredients in their favorite local taco and came up with this cool image.
Of course, it’s supposed to show us the horror of all those food miles, but what I see is the miracle of the market.
Today’s Food and Ag Links
| Peter Klein |
- Via LRC, Jim Rogers and Marc Faber are bullish on commodities and agribusiness. “Rogers says that it will be farmers not bankers driving Ferraris in the coming decades. Faber likens investing in agriculture to investing in oil in 2001 or 2002.” Rogers is good on macro, BTW.
- The Illinois Department of Agriculture — bless its heart! — has swooped in to protect high-end Chicago restaurant diners from the evils of unregulated designer sausages. Notes Thom Lambert: “The charcuteries’ sophisticated patrons realize they’re dealing with unlicensed meat-preparing facilities, but they know the sausage makers, are aware of the high-quality products they use and the care they take in making their products, and are willing to purchase the products despite the absence of a commercial license.” No, no, reputation effects cannot, I repeat, cannot, substitute for one-size-fits-all, top-down, government regulation! People might start thinking for themselves, you know.
- Christine Harbin writes on libertarian food paternalism. “If America were serious about reducing the caloric intake of its citizens, then officials would eliminate the subsidies that it pays to corn producers rather than instituting sin taxes.”
- Here’s an updated food chain, with zombies.
The First Secretary of Agriculture
| Peter Klein |
Mises.org has posted Frank Chodorov’s 1952 classic, “Joseph, Secretary of Agriculture”:
The dream plan worked wonders — for Pharaoh and his secretary of agriculture. . . . On the other hand, it is told how a delegation of Egyptians came to Joseph and declared: “Thou hast saved our lives: let us find favor in the sight of my lord, and we will be Pharaoh’s servants.” Showing that the proletariat had come to terms with collectivism (since that was the only way to get by in this world) and were content with whatever security the secretary would provide.
Joseph, however, had to make some concession to private property, perhaps to encourage more taxable production; he restored to some of the Egyptians the land he had taken from them in their adversity, on a rental basis. The rent? One-fifth of all the annual output. By this well-timed act of policy, informs historian Flavius Josephus, “Joseph established his own authority in Egypt and increased the standing revenue of all its succeeding monarchs.”
Though the succeeding monarchs and the succeeding commissars did well under the plan introduced by Joseph, it seems (according to later historians) that it put upon the proletarians a moral blight, so that when conquerors from other lands came to Egypt they met with little resistance; those who had nothing to lose had nothing to fight for, so that even the monarchs had to beg the invaders for administrative jobs. And lots of dust fell on the civilization of Pharaoh.
Chodorov goes on to describe the obvious analogy to twentieth-century agriculture policy. Of course, without farm programs, how would we have food?
Not Even the Slightest Soupçon of Correlation
| Dick Langlois |
Another interesting article from the Journal of Wine Economics:
The lead article is again by Robert T. Hodgson, who analyzes the reliability of Gold medals awarded at 13 California Wine Fairs. “An analysis of over 4000 wines entered in 13 U.S. wine competitions shows little concordance among the venues in awarding Gold medals. Of the 2,440 wines entered in more than three competitions, 47 percent received Gold medals, but 84 percent of these same wines also received no award in another competition. Thus, many wines that are viewed as extraordinarily good at some competitions are viewed as below average at others. An analysis of the number of Gold medals received in multiple competitions indicates that the probability of winning a Gold medal at one competition is stochastically independent of the probability of receiving a Gold at another competition, indicating that winning a Gold medal is greatly influenced by chance alone.” The full article can be accessed free of charge at Abstract Full Text (PDF).
The Industrious Revolution
| Peter Klein |
Hans-Joachim Voth calls Jan de Vries’s new book on household behavior during the early modern period “staggeringly erudite, insightful, stimulating, and on all the main points, convincing.” The book, The Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present (Cambridge, 2008) builds on de Vries’s earlier concept of an Industrious Revolution, the two centuries before the Industrial Revolution in which consumers increased their production of marketable goods, largely at the expense of leisure time. “The industrious revolution was a household-level change with important demand-side features that preceded the Industrial Revolution, a supply-side phenomenon” (De Vries, 1994). Adds Voth:
The sheer amount of hard work that went into every aspect of these chapters is hard to convey. Surveying the rise of consumer items through the prism of probate inventories shows the author confidently mastering the abundant historical literature in four or five languages. De Vries’ reconstruction of Europeans’ increasing consumption of “colonial luxuries” — sugar, tea, and coffee — alone is going to be useful for all scholars working in the area.
This book may be of interest not only to economic and business historians, but also to management scholars in marketing and consumer behavior.
Plowing Under Rural Sociology
| Peter Klein |
From Randy Westgren:
The aggie world, and to a lesser extent, the sociology world, is reacting to a decision by Washington State University to dissolve its Department of Community and Rural Sociology. There is a great deal of rancor developing about this type of budget-cutting strategy, as opposed to making everyone suffer equally. If one looks closely at the budget documents made public by WSU, the ag school is getting a smaller cut (5% teaching + 8% research) than many colleges, including the B-school (13%, 12 vacant positions). The budget plan can be found here. It looks like the Dean’s decision, rather than the CEO’s (The Dean is an agricultural economist).
I was stunned to see a comment to a piece written in Inside Higher Education on this battle from an engineering prof — well, not actually stunned, more like chagrined.
“As for the rural sociology department, while I can sympathize with their plight in Pullman I do not see the loss as intellectually serious. As a member of an engineering faculty at a major university for more than 25 years, I’ve known quite a few sociologists. Most of them publish little stories that are not much sounder empirically, and usually less interesting substantively, that a good fiction writer. With very few exceptions, sociologists I know and have known are mathophobes! The few who have some ability in math use it on their omnibus snapshots of human populations taken at widely spaced intervals and then try to figure out from those “data” what happened and why. Ridiculous! Continuous observation is probably not possible, but you need closely spaced observations that focus on the specific processes that are the point of your investigation! If you have continuous-time observations, you need calculus in order to analyze your data. If you have closely spaced discrete-time observations, you need something more than shotgun regressions to analyze your data. Most of what sociologists publish is a waste of time and money.”
Obviously, this scholar has not followed the closely reasoned defense of fuzzy, ill-defined concepts at orgtheory.net.
Teppo and Brayden, if you are watching, ask Dave Whetten about his take on the Chancellor of SUNY Albany who undertook a similar department-cutting strategy during the New York State budget difficulties of the late 1970s.
There Isn’t Much Spam In It
| Dick Langlois |
A new working paper from the Association of Wine Economists is called “Can People Distinguish Pâté from Dog Food?” Here’s the abstract.
Considering the similarity of its ingredients, canned dog food could be a suitable and inexpensive substitute for pâté or processed blended meat products such as Spam or liverwurst. However, the social stigma associated with the human consumption of pet food makes an unbiased comparison challenging. To prevent bias, Newman’s Own dog food was prepared with a food processor to have the texture and appearance of a liver mousse. In a double-blind test, subjects were presented with five unlabeled blended meat products, one of which was the prepared dog food. After ranking the samples on the basis of taste, subjects were challenged to identify which of the five was dog food. Although 72% of subjects ranked the dog food as the worst of the five samples in terms of taste (Newell and MacFarlane multiple comparison, P<0.05), subjects were not better than random at correctly identifying the dog food.
Perhaps the group should broaden its name to the Association of Wine and Hors d’Oeuvre Economists.
Another Regulation Not Worth Its Salt
| Mike Sykuta |
Thanks to Randy Westgren for calling attention to an April 7 article in the New York Times concerning a new regulatory initiative in the Big Apple. It seems Mayor Bloomberg has decreed that salt consumption should be cut in half and has pledged the coercive power of New York City’s food industry regulatory system to launch a “nationwide initiative” to pressure the food industry to change its salty ways.
Apparently Mayor Bloomberg has identified salt consumption as a major public health crisis. Never mind that scientific research fails to demonstrate a causal relationship between salt consumption and actual health outcomes. Never mind that the human body requires some level of salt and there is no research demonstrating the potential health consequences of restricting persons’ salt intake to the level the Mayor prescribes. And don’t even think about the idea of personal responsibility and liberty in choosing what to eat and whether (and how much) salt to consume.
“if the salt has become tasteless, how can it be made salty again? It is no longer good for anything, except to be thrown out and trampled under foot by people.” Perhaps a better approach would be to throw out such ill-founded regulations and trample them under foot.
Cooking by the Numbers
| Peter Klein |
Management by the numbers is out; will cooking by the numbers be next? The WSJ reports:
[A]s people look for quicker and easier ways to make everyday meals, some are moving away from the rigidity of recipes and advocating improvisational cooking, where measurements are approximations and ingredients are interchangeable.
It’s common to distinguish between two personalities in the kitchen: the deliberate, systematic, careful personality, which tends to excel in baking, and the wilder, risk-taking, adjust-on-the-fly personality, which does better with other types of cooking. But the use of careful and precise measurements has been a staple of most kinds of home cooking for a hundred years:
The rise of recipes that use precise measurements is widely credited to Fannie Farmer, a student, and later, director of the Boston Cooking School, who published “The Boston Cooking-School Cookbook” in 1896. Until Ms. Farmer’s manual, cookbooks were written in prose, calling for a pinch of this or a handful of that.
“The Boston Cooking-School Cookbook,” which survives today as “The Fannie Farmer Cookbook,” featured nearly 2,000 recipes that gave detailed instructions using a standardized system of measurement (teaspoon, cup, etc.). Ms. Farmer also included scientific explanations with her recipes, and wrote essays on housekeeping and cleaning. The rising middle-class and subsequent growth in the number of women looking to homemaking as a profession turned Ms. Farmer’s book into a hit — it has sold more than 4 million copies to date. (more…)
The Farmer’s Cow
| Dick Langlois |
This morning I read a story in the Hartford Courant about the state legislature’s proposals to save the small local dairy farmer. The naïveté and economic illiteracy of the article filled me with a sudden (and, for me, unusual) urge to post a comment on the newspaper’s website. Here is what I wrote.
This article is awash in errors of commission and omission.
First: it is misleading to the point of mendacity to say that the federal government “tells farmers what prices to set.” The government effectively specifies the price floor — it mandates that farmers set a price no lower than the floor, but it permits farmers to raise the price if they like. What is forcing prices down to the floor is supply and demand.
Second: the plight of the farmers is entirely the fault of the byzantine federal farm-price system, which creates a myriad bad incentives. For a short description with further references, see: http://www.cato.org/pubs/tbb/tbb_0707_47.pdf
Third: it is wrong to imply that the beneficiaries of the current supply and demand situation are the supermarkets. Retailing milk is a highly competitive industry — milk is often a price loss-leader for convenience stores. The real point is that the milk price support system, and the proposals being considered by the State legislature, will raise the prices consumers pay for milk. This is what economists call a “regressive” transfer. Since poor people spend a larger fraction of their incomes on milk than do affluent people, raising milk prices to keep farmers afloat transfers income from the poorer people in Connecticut to a group whose income is above the state average.
Finally: if you have a Romantic desire to save small or local farmers, you are free to pay extra to buy their milk. Marketing associations like The Farmer’s Cow explicitly brand their milk as local. If it pleases you to do so, spend your own money on local farmers; don’t force poor Connecticut consumers and taxpayers to do it for you.
Tribal Ritual Among the Ag-Econ
| Peter Klein |
Henry Bahn and George McDowell’s spin-off of the Leijonhufvud classic. I wonder how many other sub- and sister disciplines have their own versions? Sample:
Almost all tribe members adhere to a fundamental belief system and set of basic tenets called Neoclassic Econ. However, different groups in the tribe, sometimes formalized into castes called “fields,” are more or less strict in their adherence to different parts of these tribal teachings. . . .
One group, the Quant-jocques, thinks the tribe should ascribe to a special language and method of communication and analysis. Others, known as Institoots, think the Quant-jocques are introverts, inclined to want to know more and more about less and less, and thus miss important issues along the way. The Quant-jocques reply that the Institoots have more than their fair share of the “mists” about their work as Agg-econ-ni-mists. One of the revered elders of a related tribe decided to resolve some of the philosophical issues among tribe members about who they were and what they believed by pronouncing that the belief system is simply “what the tribe does.”
Like other academic disciplines, agricultural economics has its share of adjuncts, consultants, and other semi-professorial types:
There are also landless tribe members — some of those perhaps more disposed to vagrancy — scattered throughout the land doing what Ag-econs do. Indeed, one group in the tribe has members who live apart from the Depts and are therefore obliged to do honest work for a living. This group is known by its hard work and industry and are called “industry types” or, in an apparent slight, “nonacademics.” Yet another view of this group is that many of them are akin to wandering minstrels who dash in and out of the protected communities, donning the protective robes of the Depts when it serves them well, and when more is to be gained from singing their minstrel song for more than the honor of the Depts, they sing for the highest bidder.
Also lots of insider references on journals and annual meetings. A related discipline, rural sociology, is described in the classic “Village Idiot” Python sketch.
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