Archive for February, 2007

Economic Imperialism

| Peter Klein |

This item in Tuesday’s W$J, “Is an Economist Qualified To Solve Puzzle of Autism?”, is required reading for those interested in the scope and methods of modern empirical economics. The piece focuses on Michael Waldman’s paper (with Sean Nicholson Nodir Adilov) linking autism to television, a link vehemently denied by other autism researchers and advocacy groups. More generally,

Prof. Waldman’s willingness to hazard an opinion on a delicate matter of science reflects the growing ambition of economists — and also their growing hubris, in the view of critics. Academic economists are increasingly venturing beyond their traditional stomping ground, a wanderlust that has produced some powerful results but also has raised concerns about whether they’re sometimes going too far.

Ami Klin, director of the autism program at the Yale Child Study Center, says Prof. Waldman needlessly wounded families by advertising an unpublished paper that lacks support from clinical studies of actual children. “Whenever there is a fad in autism, what people unfortunately fail to see is how parents suffer,” says Dr. Klin. “The moment you start to use economics to study the cause of autism, I think you’ve crossed a boundary.”

Moreover — how unusual is this for a newspaper story — there’s also an extended discussion of instrumental-variables estimation. (more…)

28 February 2007 at 5:43 pm 3 comments

The Essential Rothbard

| Peter Klein |

My admiration for the great libertarian polymath Murray N. Rothbard is no secret. Indeed, I would name Rothbard and Oliver E. Williamson as the most important influences on my own intellectual development. So I was delighted to receive a copy of The Essential Rothbard, an overview of Rothbard’s intellectual contributions by former O&M guest blogger David Gordon. David makes use not only of Rothbard’s published works — a bibliography, included at the end of the book, fills 53 pages of small type! — but also a huge collection of unpublished correspondence, memos, and manuscripts. (Justin Raimondo’s biography An Enemy of the State is also worth a read, but focuses more on Rothbard’s political activities than his core scholarly contributions.)

Particularly interesting is the 9th chapter, “The Unknown Rothbard: Unpublished Papers,” covering Rothbard’s thoughts on Leo Strauss, Willmoore Kendall, and Ernest Nagel (one of Rothbard’s teachers at Columbia) along with generally negative reviews of Hayek’s Constitution of Liberty, Anthony Downs’s Economic Theory of Democracy, and Douglass North’s Economic Growth of the United States, 1790-1860, among other books.

28 February 2007 at 5:36 pm Leave a comment

Temin on Landes

| Peter Klein |

We reported a while back on David Landes’s book Dynasties: Fortunes and Misfortunes of the World’s Great Family Businesses. Here is a review by the eminent economic historian Peter Temin of MIT. Excerpt:

[Landes] acknowledges the force of Chandler’s emphasis on managerial capitalism, but he argues that family firms have a prior role in economic development. In this claim, he associates himself on the one hand with Marc Bloch, who argued that Europe picked itself up from chaos in the tenth century by relying on the value of family connections. Landes associates himself on the other hand with modern economics and its concerns with asymmetric information and principal-agent problems. Landes argues that the failure of many development programs has been the neglect of the information and loyalty that are qualities of families — in his word, dynasties.

The stories illustrate these points, but Landes’s urge to tell a good story is at gentle odds with this justification for them. Most of the dynasties in this book have ruled over substantial enterprises. These enterprises employed many people other than family members. Normal business practice prevailed once these enterprises became major banks, auto firms, or mining companies. The importance of asymmetric information must have been concentrated in the early years.

28 February 2007 at 1:42 pm Leave a comment

Narcissism in Organizations

| Peter Klein |

How do you manage employees who care only about themselves? If you hire new college graduates you better think about it. An AP story reports that “[t]oday’s college students are more narcissistic and self-centered than their predecessors,” citing a study headed by Jean Twenge, author of Generation Me. “We need to stop endlessly repeating ‘You’re special’ and having children repeat that back,” says Twenge. “Kids are self-centered enough already.”

(One of my colleagues told me today that she was recently graded down on a student evaluation because, according to the student, “the teacher’s job is to make me feel good about myself” and my colleague hadn’t done that.)

Update: Here is an AMR paper on narcissism in organizations.

28 February 2007 at 12:30 am 2 comments

Nerd Alert, Part III

| Peter Klein |

I stopped at OfficeMax today to have new business cards printed and found myself drawn magnetically towards the pen section. I cannot resist trying new pens!

Today I bought a two-pack of Pentel EnerGel 0.7mm ballpoint retractable gel pens with purple ink. Oooooo, they write so smoothly . . . with such violet-purpleness . . . ahhhhh. . . .

That’s Anne Zelenka asking “Do You Have An Office Supply Fetish?” at Web Worker Daily. I’m sure some of you have one. What office supplies do you covet?

(I think we are ready now to add Nerd Alert as a general category.)

27 February 2007 at 3:21 pm 3 comments

Those Arrogant String Theorists

| Peter Klein |

What do mathematical economists and string theorists have in common? Consider this characterization of the latter from Lee Smolin’s The Trouble With Physics, as summarized by reviewer Kenneth Silber in Reason (March 2007, not yet online):

Smolin portrays string theorists as tending toward arrogance, insularity, and groupthink; they value technical ability over original thought, follow faddishly the ideas of a few top physicists, and look down on adherents of other theories. This culture, in Smolin’s telling, eschews the philosophical bent of Einstein and quantum theory’s founders, preferring the “shut up and calculate” attitude of later particle physicists.

OK, the comparison to mathematical economists is a cheap shot, but I’m following Nicolai’s lead here. Anyway, Smolin suggests a useful taxonomy for scientists, distinguishing “craftspeople” from “seers.”

[Craftspeople are] focused on technical problems, [seers] on deeper meanings and new ideas. [Smolin] makes a plausible argument that physics institutions have become too geared toward producing craftspeople rather than seers. The way for young physicists to get jobs, tenure, and grants, he notes, is to fill in the details of research lines established by their elders.

Wow, does that sound familiar! Substitute economics and economists for physics and physicists and the statement rings equally true. (By the way, “seer” is a much nicer term than “puzzler,” the label used by Hayek to distinguish himself from the systematic, methodical “master of his subject.”)

27 February 2007 at 10:16 am 1 comment

Author Order

| Peter Klein |

Nicolai’s post on paper order got me thinking about author order, and how authorship ordering practices vary systematically across academic disciplines. In some scientific fields the lead author (or principal investigator) is listed first, while in others the lead author’s name comes last. In economics and business administration there isn’t a strong notion of “lead authorship,” and author names are usually listed alphabetically. There are, of course, prominent exceptions, such as Klein, Crawford, and Alchian (1978), Masten and Crocker (1985), and Hoskisson and Hitt (1994), to name just a few in organizational economics and strategy.

I’m curious to know how these practices evolved, and why they evolved differently in different disciplines. Surely some sociologists have written on this. (Academics tend to be narcissists, after all, and have shined the research spotlight on virtually every other aspect of their own profession!)

The social-science convention of usually-but-not-always-alphabetical ordering poses particular problems. How, for instance, do you communicate priority if the main author is first in the alphabet? Suppose my friends Mike Aarstol and Todd Zywicki get together. They can signal equal effort with “Aarstol and Zywicki” or give Todd the lead with “Zywicki and Aarstol.” But how do they give priority to Mike? “By Michael Aarstol, with special assistance from Todd Zywicki”?

26 February 2007 at 10:16 pm Leave a comment

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Nicolai J. Foss and Peter G. Klein, Organizing Entrepreneurial Judgment: A New Approach to the Firm (Cambridge University Press, 2012).
Peter G. Klein and Micheal E. Sykuta, eds., The Elgar Companion to Transaction Cost Economics (Edward Elgar, 2010).
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).
Nicolai J. Foss, Strategy, Economic Organization, and the Knowledge Economy: The Coordination of Firms and Resources (Oxford University Press, 2005).
Raghu Garud, Arun Kumaraswamy, and Richard N. Langlois, eds., Managing in the Modular Age: Architectures, Networks and Organizations (Blackwell, 2003).
Nicolai J. Foss and Peter G. Klein, eds., Entrepreneurship and the Firm: Austrian Perspectives on Economic Organization (Elgar, 2002).
Nicolai J. Foss and Volker Mahnke, eds., Competence, Governance, and Entrepreneurship: Advances in Economic Strategy Research (Oxford, 2000).
Nicolai J. Foss and Paul L. Robertson, eds., Resources, Technology, and Strategy: Explorations in the Resource-based Perspective (Routledge, 2000).