Posts filed under 'Food and Agriculture'
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.
Add comment 28 May 2009
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.
3 comments 20 May 2009
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.
3 comments 1 May 2009
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.
Add comment 7 April 2009
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…)
3 comments 2 April 2009
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.
3 comments 12 March 2009
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.
1 comment 18 February 2009
Food Miles
| Peter Klein |
My favorite economic geographer, Pierre Desrochers, has written (along with his better half, Hiroko Shimizu), a critique of the “food-miles” approach to measuring environmental impact.
As modern food production and distribution becomes ever more complex and globalized, a “buy local” food movement has arisen. This movement argues that locally produced food is not only fresher and better tasting, but it is also better for the environment: Because locally produced food does not travel far to reach your table, the production and transport of the food expend less energy overall. The local food movement has even coined a term, “food miles,” to denote the distance food has traveled from production to consumption and uses the food miles concept as a major way to determine the environmental impact of a food.
This Policy Primer examines the origins and validity of the food miles concept. The evidence presented suggests that food miles are, at best, a marketing fad that frequently and severely distorts the environmental impacts of agricultural production. At worst, food miles constitute a dangerous distraction from the very real and serious issues that affect energy consumption and the environmental impact of modern food production and the affordability of food.
See also these comments from Peter Gordon.
1 comment 5 November 2008
Westgren to Missouri
| Peter Klein |
I’m delighted to announce that Randy Westgren, organizational scholar, academic entrepreneur, bon vivant, and all-around great guy — and, most important, former O&M guest blogger — has been named McQuinn Professor of Entrepreneurial Leadership at the University of Missouri. I’ve greatly enjoyed interacting with Randy over the years from his perch in Urbana-Champaign and am looking forward to having him just down the hallway.
As McQuinn Professor Randy will also direct the McQuinn Center, which was launched in 2004 under the leadership of Bruce Bullock. The Center is creating an innovative and unusual program to research and teach the “functional” aspects of entrepreneurship, with particular emphasis on firm organization and strategy and applications to food, agriculture, biotechnology, natural resources, and rural development.
Please join me in congratulating Randy on his new post!
1 comment 5 September 2008
“El Pulpo”
| Peter Klein |
A few years ago I read, and enjoyed, Stephen Schlesinger and Stephen Kinzer’s Bitter Fruit: The Story of the American Coup in Guatemala. (Kinzer also has a nice book on the CIA’s role in Iran.) So when I saw Peter Chapman’s Bananas!: How The United Fruit Company Shaped the World in a local bookstore — yes, the bright-yellow cover caught my eye — I snapped it up. United Fruit — “El Pulpo” (the Octopus) to its detractors — is a fascinating company, the history of which should be required reading for students of international business. Bananas is a disappointment, unfortunately. I wasn’t expecting a scholarly treatment but, even by journalistic standards, the book is weak, substituting breathy clichés for facts and analysis. And Chapman’s unfamiliarity with even the most basic concepts of economics doesn’t help. (Spend your money on Bananas instead — my favorite Woody Allen movie.)
Today I learned of at least one scholarly treatment of United Fruit, focusing on its Colombian operations: Bananas and Business: The United Fruit Company in Colombia, 1899-2000 by Marcelo Bucheli (New York University Press, 2005). Alan Dye makes some interesting points about knowledge transfer in his review for EH.Net:
One important contribution is the story the book tells of how United Fruit eventually decided to abandon its initial policy of creating barriers to competition and accept fair dealing with rivals to its core business. Although its early history was one of raising barriers to competition and exploiting the weakness of unstable governments to establish its monospony position, he argues that in the long run the presence of this, or another multinational, was necessary for the development of a commercial banana industry in Colombia. United Fruit had pioneered techniques for how to commercialize a fragile and highly perishable product. Regardless of unethical practices when dealing with locals in the producing countries, the importation of the marketing techniques that such pioneers in the industry developed were of substantial value to local industry. (more…)
4 comments 20 August 2008
IBES-AAEA
| Peter Klein |
As the next phase of my Plan for World Domination I’ve taken office as Chair-Elect of the Institutional and Behavioral Economics Section (IBES) of the Agricultural and Applied Economics Association. One of my duties is to organize the section’s sessions for next year’s AAEA annual meeting, 26-28 July 2009 in Milwaukee, Wisconsin. I welcome participation from the O&M crowd so please email me your suggestions for session topics, papers, special formats, themes, or other ideas. Milwaukee is a lovely and interesting town (just ask Alice), so make plans to join us!
1 comment 7 August 2008
Homogeneity and Cooperation
| Peter Klein |
Why are Scandinavians so cooperative? Nicolai and Lasse might suggest it’s their superior moral character. La Porta et al. (1997), Putnam et al. (1992), and others point to Protestantism: hierarchical religions like Catholicism and Islam, it is argued, tend to discourage trust and retard the development of social capital. The Protestants, who already have Max Weber in their corner, seem to be piling it on.
Not so fast, says Kevin O’Rourke in a recent paper, “Culture, Conflict, and Cooperation: Irish Dairying Before the Great War” (Economic Journal, October 2007). O’Rourke compares the Danish and Irish dairy industries before 1914 and argues that cultural and ethnic homogeneity, not religion, explains the success of Danish cooperatives. Unlike recent large-sample econometric work on trust, the paper uses deeper, more robust indicators of cooperation. Key findings:
At first sight, the contrast between Protestant Ulster and the Catholic South (as well as between Denmark and Ireland as a whole) seems a striking confirmation of the LLSV hypothesis that culture matters for the ability to cooperate, and that hierarchical religions such as Catholicism undermine both trust and cooperation. However, on closer examination it appears that politics, not culture, was responsible for the lower Irish propensity to cooperate. Suspicion between Catholics and Protestants, and tenants and landlords, spilled over into Nationalist suspicion of the cooperative movement and hindered its spread, despite the efforts of the [Irish Agricultural Organisation Society] to remain apolitical. To this extent, the results are more consistent with the stress on [ethnolinguistic fractionalisation] in Alesina and La Ferrara (2000) than with the cultural perspective of LLSV, Knack and Keefer (1997) and Zak and Knack (2001).
Denmark benefited from several relevant advantages that Ireland did not enjoy during this period. In particular, it was an extremely homogeneous country, ethnically, religiously and linguistically. There was no conflict over who should own the land, since land reform in Denmark had been underway since the late eighteenth century. . . . Nor was there any ethnic conflict, or disputes over where national boundaries should lie (all such controversies became redundant following the loss of Schleswig-Holstein in 1864). The results suggest that this homogeneity of Danish society is what explains the success of cooperation there.
11 comments 6 August 2008
Conference Announcement: The Practice and Theory of Entrepreneurship
| Peter Klein |
The University of Missouri’s McQuinn Center for Entrepreneurial Leadership announces its 2008 conference, “Entrepreneurship: Where Practice and Theory Meet,” 6-7 November in St. Louis:
A conference bringing together practitioners and researchers to discuss current research and share best practices for creating successful new ventures and vibrant economies (with a special focus on rural entrepreneurship). The conference will highlight the Appalachian Regional Commission’s 10-Year Entrepreneurship Initiative, the W.K. Kellogg Foundation’s Entrepreneurship Development Systems in Rural America Program, and recent community initiatives.
Speakers include Elaine Edgcomb (Aspen Institute), Deb Markley (Rural Policy Research Institute), and John Potter (OECD). The conference is sponsored by the McQuinn Center, ExCEED / University of Missouri Extension, the Rural Policy Research Institute, and the Federal Reserve Banks of St. Louis and Kansas City. Further details including registration information, accomodations, etc. are available at the McQuinn Center website. Contact Ken Schneeberger for more information.
Add comment 23 July 2008
NIE Guidebook
| Peter Klein |
The long-awaited New Institutional Economics: A Guidebook is due out this September from Cambridge University Press. Editors Eric Brousseau and Jean-Michel Glachant assembled an all-star team including Oliver Williamson, Paul Joskow, John Nye, Gary Libecap, Lee Alston, Pablo Spiller, Benito Arruñada, Stéphane Saussier, Jackson Nickerson, Brian Silverman, Joanne Oxley, Mike Sykuta, Mike Cook, and many others — even Foss and Klein. You can pre-order yours today — the hardback’s a whopping $140 but the paperback’s only $59.
Here’s the official CUP page and here’s an information page put together by Eric Brousseau. It should be a valuable reference for years to come.
2 comments 22 July 2008
More on Agricultural Adaptation: Johnny Appleseed
| Dick Langlois |
The abstract of a new paper called “Alertness, Local Knowledge, and Johnny Appleseed” recently crossed my computer screen. By a grad student at George Mason called David Skarbek, the paper applies a Kirznerian account of entrepreneurship to the case of Johnny Appleseed, aka John Chapman (1774-1845). The entrepreneurial part will no doubt be of interest to many readers, including my estimable co-bloggers. But I’m more interested in the historical and institutional angle.
Skarbek points out that, contrary to the Disney-fueled myth, Johnny Appleseed didn’t scatter apple seeds randomly throughout Appalachia and the midwestern frontier. He planted clearly defined apple groves, totaling some 1,200 acres by the time of his death. This turned out to be crucial for homesteading, since under American state law the planting of fruit trees was one way to create a property right (in Lockean fashion) out of unowned land. Chapman was thus an institutional entrepreneur.
What Skarbek doens’t say, however, is something I learned at the NBER conference I wrote about earlier. In addition to having what we would nowadays call mental health issues, Chapman was also an evangelical Swedenborgian who shared with Thoreau the view that apples should aways be grown from seeds. (For documentation, see for example here.) In fact, apple trees grown from seeds are good for only one thing — cider — and, indeed, the Johnny Appleseed legend got a boost in Appalachia during Prohibition as the fruits (as it were) of his efforts were used for hard cider. Apple cultivation normally requires grafting, a form of hybridization known for centuries and practiced in Appleseed’s lifetime by the likes of Thomas Jefferson. The point is that Chapman saw hybridization as unnatural and immoral, and his quest was animated as much or more by this religious view as by environmentalist zeal or entrepreneurial insight. As the mention of Thoreau suggests, however, distaste for “unnatural” breeding methods is not exclusive to religious fundamentalists, and indeed today it is followers of Thoreau not (generally) Christian evangelicals who object to genetically modified organisms.
1 comment 4 June 2008
Before They Were Famous
| Randy Westgren |
If we point to ”The Nature of the Firm” (1937) as the moment when Ronald Coase earned is place in the Pantheon, then we can go back two years (and 16 years before his doctorate was awarded) to a period when he was lecturing at LSE and working on public utilities to find the beginning of a series of papers in Economica (with R.F. Fowler) on the English pig industry (see here, here, here, and here for JSTOR links). The story line is about the effects of anticipated prices (based on lags) for hogs and corn on production decisions and the consequent cobweb model of dynamic prices. A classic in agricultural economics.
Another giant figure, Sewell Wright, examined the same phenomenon in the US in an obscure publication ten years earlier: Corn and Hog Correlations, USDA Department Bulletin # 1300, July 1925. Wright was an animal husbandman (and guinea pig breeder) at USDA after completing a doctorate in genetics at Harvard. (more…)
Add comment 2 June 2008
Climate (Change) and Agricultural Adaptation
| Dick Langlois |
Just for the fun of it, I drove up to Cambridge on Friday to take in one day of an interesting NBER conference on Climate Change: Past and Present. The conference was organized by Gary Libecap, whom I’ve known for years, and Richard Steckel, whose work I have always read with interest. Steckel is one of the people who have pioneered the use of archaeological techniques in economic history, notably measuring the heights of skeletons for evidence on nutrition in historical populations. This time he talked about using tree rings in historical research involving climate.
There were several excellent papers, which are available at the conference website. The two I liked the best have a flavor of evolutionary economics as well as evolutionary biology. Richard Sutch talked about the history of hybrid corn in the U. S. An important figure in the story is Henry Wallace, who founded one of the earliest hybrid-corn seed companies and, as Secretary of Agriculture, evangelized for hybrid corn and higher corn yields at the same time he was implementing pro-cyclical New Deal farm policies that restricted agricultural output in other commodities. But the main story is one of evolutionary learning. The major midwestern droughts of 1934 and 1936 accidentally revealed the (unintended) benefits of one kind of hybrid corn that was resistant to drought, thus changing the perceived payoffs to farmers of adopting the new technology, whose primary benefit was ultimately increasing yields. (more…)
2 comments 2 June 2008
Westgren at Missouri
| Peter Klein |
Those of you within driving distance of Columbia, Missouri should come over Monday (2 June) for a seminar by Randy Westgren, “The Entrepreneurial Niche,” at 2:00 2:30pm in 217 Mumford Hall. Abstract below the fold. The talk is sponsored by the McQuinn Center for Entrepreneurial Leadership. Email me for details. (more…)
2 comments 30 May 2008
Middle Managers in the Theory of the Firm
| Peter Klein |
The current issue of Knowledge@Wharton features a piece on the challenges facing middle managers. The middle-management role is typically high in responsibility and low in authority — middle managers are accountable for the performance of their subordinates but selective intervention from above makes it difficult for them to commit to particular incentive schemes. Moreover:
[T]op reasons for dissatisfaction among middle managers include micromanagement by senior managers and lack of respect, says [author David] Sirota. “And sometimes the senior leader is just really ineffective; middle managers don’t want to be in a company that is run by that type of person.” . . .
Navigating the various relationships upward, downward and horizontally can be an emotional management challenge, adds Wharton management professor Sigal Barsade. “This is particularly noticeable with organizational change. If you are a middle manager, there may be a change that you didn’t have much to do with, but you need to translate it to your people and make them feel protected and valued. However, you are also someone being impacted by the change. Because you didn’t design the change, you might be left feeling like you don’t know what to do yourself, but you still need to comfort, protect and inspire your people.”
A more colorful description is provided by Chef Shuna Fish Lydon who blogs on all things culinary at eggbeater. Here she is on the role of the sous chef: (more…)
Add comment 29 May 2008
InBev and Bud . . . In Bed?
| Randy Westgren |
Recent news about the impending bid by InBev for Anheuser-Busch was interesting subtext for my current study tour on EU agri-food supply chains. We normally schedule a stop at InBev when we spend our first week based in Leuven, Belgium, which is InBev’s HQ. This year, they told us a visit was impossible. I had assumed that it was due to shake-ups in the management following a weak first quarter, but I guess there was more in the air!
You will note that A-B shares rose on the news. The strategic fit is stunning. InBev is strong in its traditional markets (Belgium and Germany from the Interbrew parent; Brazil from the Ambev parent) as is A-B, who also has an equity strategic alliance with Tsingtao in China. Not much overlap geographically and lots of opportunities for building on existing distribution alliances. A merged firm gets serious presence in mature markets as well as the growing ones.
The other thing that the market will react to is the InBev style. They drive growth with a limited number of global brands; they pare local brands over time. And they are relentless cost-cutters. Look at the top management team for a “Belgian” brewer. It has only taken a few years for the “tradition-oriented” Belgians to be succeeded by aggressive Brazilians. (I know this smacks of ethnic profiling, but ask around. . . .) The corporate culture of InBev is palpable.
3 comments 24 May 2008
Pensées de l’Alsace
| Randy Westgren |
Sorry to carry no intellectual weight tonight. One day remains of a 14-day whirlwind tour of the EU with 24 students of business, international studies, and agriculture. No student has had as much as 4 hours of sleep any night this week and I am in awe of their willingness to throw themselves into long days of travel and company visits. I am beat. Much of my day was spent translating between English and French, between US weights and measures and EU metrics (including such oddballs as quintals and hectolitres), and between currencies. Luckily, there was beer.
In honor of Peter Klein’s francophilia, I note the following from our second day outside Strasbourg.
(1) Cousin Naomi’s book has been translated as La Stratégie de Choc and sells as a trade paperback for 25 euros. It is not flying off the shelves. Evidently, there aren’t enough intellectuals in Europe’s second capital to make a sale.
(2) Not that polemics aren’t big press here. I bought Le Monde Selon Monsanto by Marie-Monique Robin. Evidently (on first read) Monsanto is behind the dioxin poisoning in Belgium, agent orange use, hormones in beef, and lost biodiversity in Mexico. Complete crap, but worthy of two hours on national TV earlier this year. Something for Naomi Klein to aspire to.
(3) We dined at a restaurant in the beautiful village of Obernai tonight. The specialty of the house is choucroutte (sauerkraut) served in a 2 kilo pile topped with 4 kilos of sausages, meatballs, pork chops and belly slices. What sweet revenge on the sour, self-absorbed vegetarian in the group (add emoticon here)! Magnificent food!
Bonne nuit.
2 comments 22 May 2008
Best Seminar Title You’ll Read Today
| Peter Klein |
It’s “Manure Entrepreneurs: Turning Brown to Green,” the theme for today’s Breimyer Seminar here at the University of Missouri. I promise, it won’t be just the same old . . . you know.
Incidentally, the seminar series is named for Harold F. Breimyer, a prominent agricultural economist of the last century. A friend described him to me this way:
He was an original New Deal agricultural economist who was absolutely and positively convinced of the inability of farmers and ranchers to compete without government because of their “obvious” lack of market power. His main issue was who will “control” agriculture. This conviction was so deep-seated that he could not appreciate or comprehend other perspectives. We corresponded in the late 1970s and it was as if we were from different planets. Promoting free-market agriculture, I was to him either a fool or a tool, or both.
1 comment 22 May 2008
An Organization and a Market
| Randy Westgren |
Yesterday I visited a unique auction in the small town of Roeselare, in Western Flanders. A cooperative organization of vegetable and strawberry growers, REO Veiling, operates a 7 hectare receiving and shipping facility that serves their members and buyers (wholesale, supermarkets, export) from all over northern Europe. The trading floor has six electronic Dutch auction clocks that operate simultaneously, two for the Roeselare site, two for a sister site in Mechelen, and two for small lots/direct delivery. Mechelen has a matching facility and there are dozens of remote terminals for buyers. Prices are pooled across lots within a given crop and quality category; all growers receive an identical payout, even if their particular lot of a given quality drew a higher/lower bid. All transactions clear within the day. All product is turned and shipped within 18 hours of delivery. The combined exchange has a 95% market share for Belgium.
The grower/owners pay the exchange costs from their revenues. This includes third-party grading and sorting and third-party production monitoring.They own a brand name in common for the top quality shipped from the facility (which earns a significant premium) and individual growers may pack for a private label and accept the pool price from the day of delivery. The exchange will collect from the private label buyer upon shipment from the auction warehouse.
A very innovative hybrid organization. I’ll have to formalize a case study.
3 comments 20 May 2008
State-Enforced Cartels
| Peter Klein |
Theory and evidence suggest that firms cannot form effective cartels on the free market. So, when producers wish to cartelize, they naturally turn to the state for help. Pennsylvania’s recent decision to forbid dairies from advertising hormone-free milk provides a vivid example. ”It’s kind of like a nuclear arms race,” said State Agriculture Secretary Dennis C. Wolff in November. ”One dairy does it and the next tries to outdo them. It’s absolutely crazy.” Right, next thing you know firms will be lowering prices, increasing output, improving quality — who knows what else! If only they could agree not to compete. . . . (Andrew Samwick helpfully declared Wolff’s office a “Microeconomics Free Zone.”)
The classic example of state-enforced cartelization is, of course, the National Industrial Recovery Act of 1933. The Depression, argued President Roosevelt, was exacerbated by excessive competition among firms, so firms must be compelled to form cartels to keep nominal prices and wages high (exactly the opposite, unfortunately, of what was needed to reduce unemployment). Despite a massive propaganda campaign to enforce participation the NIRA cartels largely fell apart by early 1934. Jason Taylor and I have a new paper exploring the role of expectations and enforcement in the collapse of the NIRA. Abstract below the fold: (more…)
Add comment 27 February 2008
Was Whole Foods Choking On Their -5% Net?
| David Hoopes |
I’ve used a couple of Ben and Jerry’s cases over the years. One of the interesting things about B&J is that they seem to suffocate under their desire to “do good.” In general, it seems they would have been able to donate a good deal more to charity if they had run their business to be a good business. Then, Ben and Jerry could have taken their salaries or capital gains or dividends and given them to their favorite charities.
Whole Foods, like B&J had a concentrated ownership for quite a while. I don’t know what it’s like now. For a long time John Mackey and his Dad owned 51%. John did not take a large salary. So, giving away Whole Foods’ profits was like he was spending his own money anyway. And, anyone involved with WFM after John got rid of his co-founders knew WFM was John’s thing.
The point with WFM is that it’s an unusual example of corporate charity in part because of concentrated ownership, the marketing benefits of donating money, and the political inclinations of many if not most of its employees (far more left-wing than J. Mackey). Unlike B&J, WFM did not suffocate itself by not paying professional executives. Also, Mackey never felt guilty about turning a profit and is a tried and true capitalist (guilt free).
I worked for Whole Foods when they only had two stores in Austin (oh so long ago). I’m afraid John considered me a pest (I suppose I was).
Did they ever buy Wild Oats? That’s another story.
2 comments 29 November 2007
Reflections on the McQuinn Entrepreneurship Conference
| Peter Klein |
Last week’s McQuinn Center conference on entrepreneurship in Kansas City was a great success, with some 75 participants from places like Nepal, Norway, the UK, and Peru as well as the US and Canada. Keynoters Cornelia Flora, Pierre Desrochers, Sandy Kemper, and Randy Westgren challenged and inspired the group and the papers and discussions highlighted a variety of innovative entrepreneurship research topics, theories, and methods. Papers and presentations are now available on the conference website.
I had the pleasure of offering introductory and closing remarks, and I’ll share here some reflections about the state of the field and suggestions for moving forward. (more…)
1 comment 24 October 2007
Nye on Wine and Trade
| Peter Klein |
John Nye is a very interesting economic historian. I still remember his fiery (and controversial) talk at the inaugural ISNIE conference in 1997, in which he urged new institutional economists to separate themselves from their brothers and sisters in mainstream economics. (Other participants, such as Paul Joskow, thought this was a bad idea.)
John’s new book, War, Wine, and Taxes: The Political Economy of Anglo-French Trade, 1689-1900 (Princeton, 2007) argues that Britain was not, contrary to popular perception, devoted to free trade after the repeal of the Corn Laws in 1846. The British retained high tariffs on French wine, among other goods, leading to substantial welfare losses among Britons. (more…)
Add comment 16 October 2007
São Paulo Workshop on Institutions and Organizations
| Peter Klein |
Three Brazilian institutions — Fundação Getúlio Vargas São Paulo, IBMEC São Paulo, and the University of São Paulo – are jointly sponsoring a “Research Workshop on Institutions and Organizations” in São Paulo, 2-4 September 2007. Keynote speakers are Jackson Nickerson, Armando Castelar, and me. From the blurb:
Seminar participants will discuss recent developments in the analysis of institutions and organizations through the lenses of Economics, Management, Sociology, Law and other social sciences. Instead of focusing on the contributions of specific disciplines dealing with institutions and organizations, workshop participants will emphasize differences and commonalities among different approaches, leading to potential advances and refinements in the field.
Here is registration information and a preliminary schedule.
1 comment 14 August 2007
The “Age of Cobden”
| Peter Klein |
Leonard Liggio reviews a new collection of essays on Richard Cobden, the great English liberal and free trader who led the movement to eliminate the protectionist Corn Laws. Notes Liggio:
The contemporary world is focused on the issues Cobden raised. According to co-editor, Anthony Howe’s “Introduction”: “For the modern preoccupations with globalization, free markets, the retreat of the state, the importance of civil society are all ideas which took political shape in the ‘age of Cobden.’ While post-modernists may find in Cobden’s liberalism too many of the emblems of the ‘modernity’ project from which they are keen to distance themselves, historians and the public may still have much to learn from one of the first practical attempts to implant the ‘Enlightenment project’ within the fabric of the world order.” Cobden’s affinity with European Liberals reflected their shared heritage of the Enlightenment in the works of Vattel, Grotius, Voltaire, Rousseau, Franklin, Jefferson, Bentham and James Mill.
For more on Cobden and his contemporaries John Bright and Charles Dunoyer see these papers by Liggio and Ralph Raico and listen to Raico’s 2005 lecture “Classical Liberalism in War and Peace: The Case of Richard Cobden” (scroll down).
Add comment 27 July 2007
Interactive Maps
| Peter Klein |
Those of you into maps will enjoy Social Explorer, a neat tool that generates detailed maps using US census data from 1940 to 2000. (Thanks to Cliff for the pointer.)
My colleagues at the Center for Agricultural, Resource, and Environmental Systems (CARES), just down the hall from my office, also produce some amazing maps. (I keep waiting for them to take on a joint project with the World Health Organization, to be titled WHO-CARES.)
Add comment 17 May 2007
