Archive for February, 2007
Agreeing With Omar
| Nicolai Foss |
Geoff Hodgson is in many ways an extremely interesting scholar. His work is penetrating, he is extremely widely read, his critique of mainstream economics is often well taken, and he is a lucid writer. However, he (like all of us) entertains at least one heavy idiosyncracy, namely a chronic penchant for picking on the notion of methodological individualism. Some of us think methodological individualism is almost trivially true, but Hodgson certainly wouldn’t agree. Many of his writings contain attacks on MI. A recent issue of Organization Studies contains a major diatribe against MI penned by Hodgson. (more…)
Breaking Up (Used to Be) Hard to Do
| Peter Klein |
“Breaking up is hard to do,” sang 1970s crooner Neil Sedaka. But he didn’t have a mobile phone. According to a Virgin Mobile USA survey (reported in today’s WSJ), one in ten 18-to-34 year olds has dumped a romantic partner via text message. “Yes, the lack of face-to-face contact can avoid prickly encounters and get the deed done without bloodshed,” writes the Journal reporter. “But as we contemplate Valentine’s Day 2007, it also is an indication that interpersonal relationships today are often less personal and more cowardly than they used to be.”
Fodder for the Bowling Alone crowd. And helps put Radio Shack’s decision last year to fire 400 employees via email in context.
Religion and the Market
| Cliff Grammich |
The Intercollegiate Studies Institute has announced its 2006 Templeton Enterprise Award winners. The awards are “presented annually to scholars under forty who have produced the very best books and articles in the field of humane economics and culture over the past two years.” Many of the honored works, e.g., Thomas Woods’ The Church and the Market, provide an interesting reconciliation of (Catholic) Church teaching with free market economics, drawing inferences one won’t typically see in staff work of the bishops’ conferences.
Geography Is Destiny
| Peter Klein |
When it comes to innovation, that is, writes Greg Zachary in Sunday’s New York Times. “[T]he inescapable lesson of the iPod, Google, eBay, Netflix and Silicon Valley in general is that where you live often trumps who you are.” Increasing returns and first-mover advantages — “debated in head-scratching terms by professional economists” — explain the geographic concentration of technology firms. (HT: Richard Florida)
No time for head scratching today, but I’ll throw this out for your consideration: I think the literature tends to overemphasize localization economies as a source of increasing returns, downplaying the gains from urbanization stressed by Jane Jacobs. Could this be because economists generally underappreciate the importance of uncertainty, experimentation, and serendipitous discovery, preferring to stick with equilibrium models of endogenous growth?
Here’s more on Jacobs from Richard Florida and from Lynne Kiesling.
Update: The Rockefeller Foundation has created a Jane Jacobs Medal.
Which Economies do Economists Study?
| Peter Klein |
Michael Robinson, James Hartley, and Patricia Higino Schneider have an interesting paper, “Which Countries Are Studied Most By Economists? An Examination of the Regional Distribution of Economic Research,” in the February 2007 issue of Kyklos (volume 5, number 1). Not surprisingly, bigger and wealthier countries, countries that are more open to outsiders, and countries that make economic data available get the most attention. Other significant predictors of the amount of economic research on a country are tourism receipts, whether English is an official language, and the number of domestic economic research institutions. Parts of Africa get less attention even controlling for these observables.
The University of Phoenix and the Economic Organization of Higher Education
| Peter Klein |
The Sunday New York Times features a lengthy, and mostly unflattering, look at the University of Phoenix, the world’s largest for-profit university. The tenor of the Times piece is set by the headline, “Troubles Grow for a University Built on Profits” — the p-word clearly chosen to shock the Times’s modal reader. (Where were the stories on the Times’s Judith Miller scandal titled “Troubles Grow for a Newspaper Built on Profits”?)
What’s remarkable about the article is not the conclusion, which is largely predictable, but the form of the argument. There is no attempt to evaluate the University of Phoenix’s efficiency or profitability, the quality of its product, or the value added of its degree. (Just a few quotes from disgruntled students, taken at face value; obviously no one at the Times reads RateMyProfessors.com.) Rather, the focus is on the production function. Because Phoenix uses an unusual production technology, the Times implies, its product is suspect. (more…)
Most Interesting Syllabus I Saw Today
| Peter Klein |
Steven Pinker, who is very smart, and Alan Dershowitz, who is, um, well, on TV a lot, are teaching a Harvard course cross listed as Psychology 1002, “Morality and Taboo,” and Harvard Law School 47212A, “Thinking About Taboo Subjects.”
Among the general issues we will cover are the following: Psychological and legal aspects of morality, the moral sense, dangerous ideas, offensive ideas, and related topics. Can it ever be immoral to consider, research or evaluate taboo ideas, such as ones about torture; revenge; innate group differences; the environment; colonialism; debunking religious, cultural, scientific and other “truths;” infanticide; misuses of the Holocaust and other disasters; overuses of charges of anti-Semitism, racism, sexism; or the legalization of distasteful but victimless practices? When is it rational, or moral, to choose to be ignorant?
Check out the complete reading list. My old favorite Defending the Undefendable by Walter Block makes the cut!
HT to an anonymous Harvard student.
Wikiversity
| Peter Klein |
Looking for a low-cost alternative to law school or business school? Try Wikiversity, “a multidimensional social organization dedicated to learning, teaching, research and service.” Yep, it’s a wiki — we’re talking 100% user-generated content. Unfortunately there isn’t much content yet, just mostly a shell. But there are spaces for law and business as well as academic disciplines including economics, sociology, psychology, political science, history, and philosophy.
Related resources: WikiSummaries and the Open Text Project.
I Do “Simplistic” and “Comical” Work
| Nicolai Foss |
Of course, all of you knew already — but I confess that it came as a bit of a surprise to myself to have my work (rather than my blog posts) with Christian Bjoernskov, “Economic Freedom and Entrepreneurship: Some Cross-country Evidence” (here is an early version and here is a revised Danish version), characterized as “simplistic” and “comical” by the Danish deputy prime minister and the chief economist of the Danish labour unions, respectively. Here is the context. (more…)
What if Alfie Kohn Ran a Cafe?
| Peter Klein |
What if Alfie Kohn, Bob Sutton, Jeff Pfeffer, Fabrizio Ferraro, Sumantra Ghoshal, and other sociologically minded critics of economics ran their own cafe? Prices and wages would be out, because those constitute incentives for managers, employees, suppliers, and customers, and we all know incentives are bad. Everything would be done in a free, open, collaborative manner in an atmosphere of mutual trust and group love. It might look a lot like the Terra Bite Cafe.
Posner versus Hayek
| Peter Klein |
Todd Zywicki — what an unfortunate name in a profession where author order is usually alphabetical! — has a new paper with Anthony Sanders, “Posner, Hayek, and the Economic Analysis of Law.”
This Essay examines Richard Posner’s critique of F.A. Hayek’s legal theory and contrasts the two thinkers’ very different views of the nature of law, knowledge, and the rule of law. Posner conceives of law as a series of disparate rules and as purposive. He believes that a judge should examine an individual rule and come to a conclusion about whether the rule is the most efficient available. Hayek, on the other hand, conceives of law as a purpose-independent set of legal rules bound within a larger social order. Further, Posner, as a legal positivist, views law as an order consciously made through the efforts of judges and legislators. Hayek, however, views law as a spontaneous order that arises out of human action but not from human design. . . . This limits the success of judges in consciously creating legal rules because a judge will be limited in the forethought necessary to connect a rule to other legal and non-legal rules and what Hayek termed “the knowledge of particular circumstances of time and place.”
Paul Krugman once described Robert Barro as “esteemed but not revered” among professional economists (borrowing the phrase from a description of Stephen Hawking). Surely the same applies to Posner. Or perhaps it should be “admired but not esteemed.” One of my great pleasures in recent months was sharing a meal with a couple of University of Chicago law professors and listening to them swap Posner stories. Wow.
Bloggers versus Newspaper Columnists
| Peter Klein |
Arnold Kling, we recently noted, finds bloggers more valuable than journal editors. Richard Florida says bloggers are more interesting than newspaper columnists:
I not only prefer reading bloggers to columnists, I very much prefer blogging to writing a column. For several reasons. Columnists have to cover a wide range of turf, are forced to write in a formulaic 850 word framework, can’t hyper-link to source material and other content, and often are writing in areas and on subjects where they are not really experts. Plus they have “artificial” deadlines and can’t engage their audience. It seems to me that the on-line future favors bloggers over columnists in a big way.
Who are we to disagree?
Is Law School a Waste of Time?
| Peter Klein |
We frequently criticize management education on these pages. To show that we’re equal-opportunity critics, we point you to this essay by George Leef, “Is Law School a Waste of Time?” Leef summarizes a recent Carnegie Foundation report taking law schools to task for “giv[ing] only casual attention to teaching students how to use legal thinking in the complexity of actual law practice” and “fail[ing] to complement the focus on skill in legal analyses with effective support for developing ethical and social skills.” Sounds a lot like business schools!
Writes Leef:
To anyone who thinks that merely because someone has graduated from law school, he “knows the law” and is capable of providing a client capable assistance, the Carnegie Foundation report is like a cold shower. It’s telling us that law students spend three or more years of their lives and huge amounts of money just to become qualified to start learning what they really need to know. While it’s true that law schools are good at instructing students in some basic things — how to do legal research and to “think like a lawyer” — the question is whether it needs to take so long and cost so much to accomplish that.
As we’ve noted before, graduate and professional degrees may function primarily as signals, but as such, they are very expensive signals. There must be more efficient ways to provide certification and social networking. (Look soon for Organizations and Markets University — for a modest fee we’ll give you a written test plus access to our private Facebook pages!)
Don’t Believe the E-Hype
| Peter Klein |
Tom Hazlett, writing in Monday’s Financial Times, brings the wiki crowd back to earth. Noting the excitement over user-generated content, club goods, and the electronic commons, Tom warns:
Overhype about the emerging markets is good clean fun when confined to mindless text-messaging. There is an undeniable “wow” factor. But there is also a madness to the e-crowd. Whenever a trend is spotted that captures the fancy of the zeitgeist, it is formulated as a linear trajectory, and shot into orbit. All cross traffic is banned. Call it “asymmetric triumphalism.”
This fits nicely with some of our own recurring themes: little is new under the sun (1, 2), “open” doesn’t always beat “closed” (1, 2), etc. Indeed, as Tom points out:
“Open” networks have evolved, and Time dutifully touts the success of Linux -– the open-source operating system mocked by Microsoft critics during the company’s US antitrust trial but now heralded as a bona fide competitive rival.
But iPod/iTunes is a proprietary platform that has magically restored order to the music download business while creating the iconic consumer electronics product of the 21st Century. Similarly, electronic games are driving explosive growth in entertainment software and broadband markets, riding on the backs of three consoles that are “open” only to the software licensed by their makers — Sony, Microsoft, or Nintendo.
The point is not that “closed” beats “open,” but that capitalism accommodates both.
My former colleague George Selgin, known for his dry sense of humor, used to say that a lot of thinking and writing on e-commerce, e-learning, e-etc. could be summarized in one word: “e-gnorance.”
Twilight of Sociology?
| Peter Klein |
I haven’t seen anything from our sociologist friends at orgtheory.net about Wilfred McClay’s piece in last Friday’s WSJ, “Twilight of Sociology,” so I’ll take a stab. (The gated version is here; this public link should work for a few days.) Ruminating on Seymour Martin Lipset’s death in December, McClay wonders “whether the discipline of sociology itself may now be ebbing away, as so many of its leading practitioners depart the scene without, it seems, anyone standing ready to replace them.”
McClay blames the decline of sociology on two factors: politics and scientism. (more…)
Open Innovation Site
| Peter Klein |
For something serious on “open” architecture and innovation, see Henry Chesbrough’s Open Innovation site (named for his 2003 book). There’s a nice bibliography, research page, and the official site for Chesbrough’s edited volume (with Wim Vanhaverbeke and Joel West) Open Innovation: Researching a New Paradigm (Oxford, 2006).
The Wikified Firm
| Peter Klein |
Openness is surely the prevailing fetish of our times. In the tell-all memoir, in the airiness and transparency of modern architecture, in the porousness of national borders and, lately, in the flashier theories of business, the overwhelming appeal of openness is nearly a closed question.
Thus opens Daniel Akst’s review of Don Tapscott and Anthony D. Williams’s Wikinomics: How Mass Collaboration Changes Everything from the Saturday W$J. It’s actually a pretty good review considering the book’s underlying flakiness. “Firms that cultivate nimble, trust-based relationships with external collaborators are positioned to form vibrant business ecosystems,” write Tapscott and Williams. “For individuals and small producers, this may be the birth of a new era, perhaps even a golden one, on par with the Italian renaissance or the rise of Athenian democracy.” Notes Akst: “Somehow it seems a little premature for Botticelli to roll over and tell Demosthenes the news.”
The basic problem with Wikinomics, and others in this genre, is the failure to take a balanced, comparative approach to the effect of technology on transaction costs. Of course, information technology has the potential to lower the costs of transacting between firms. But it can also lower the costs of organizing activities within firms (through improved communication, better monitoring, more effective coordination, and so on). The net effect on firm size and vertical integration is ambiguous. (See more discussion here.)
Does anyone else think that “wiki” and its derivatives should be added to the banished words list?
Update: Tapscott published an op-ed on Viacom’s tiff with YouTube in Monday’s WSJ.
Final Call for Papers for the 2007 DRUID Conference
| Nicolai Foss |
The annual conferences of the Danish Research Unit for Industrial Dynamics (of which this blogger is a founding member) are characterized by their hopeless names and their increasingly high quality level.
This year’s conference on “Appropriability, Proximity, Routines and Innovation” (no less) takes place at the Copenhagen Business School, Denmark, June 18 at 1 pm to June 20 at 5 pm, 2007. Among the confirmed participants are Allan Afuah, Gautam Ahuja, Keith Aoki, Ron Boschma, Thomas Brenner, Bo Carlsson, Kathleen M. Eisenhardt, David Hsu, William Ocasio, Joanne Oxley, Chris May, Orietta Marsili, Anita M. McGahan, Mariko Sakakibara, Olav Sorenson, Michael Storper, Joel West, and Sidney Winter.
To cite from the DRUID site: “In addition to the paper sessions the conference will include plenary panel debates where internationally merited scholars take stands on contemporary issues within the overall conference theme.” One such event is a debate between Peter Abell, Giovanni Dosi, Sidney Winter and yours truly over the issue of whether strategy research needs to become more methodologically individualist.
Deadline for full paper submission: February 28, 2007 (Twelve noon, Pacific time (GMT -8). See instructions for submission at the conference site.
Knowledge Governance Primer
| Nicolai Foss |
Along with Euro colleagues such as Prof. Anna Grandori (Bocconi University) and my colleagues at the Center for Strategic Management and Globalization here at the Copenhagen Business School I have championed the notion of “knowledge governance” as a distinct perspective on knowledge management that explicitly relies on “rational” organization theory (including organizational economics), is methodologically individualist, etc. (more…)
A Super Chicago Sunday
| Cliff Grammich |
Word on the street here in frigid northeastern Illinois is that there’s a football game being played in south Florida tonight of considerable local interest. (Just one bit of evidence: my choir director selected this as our postlude this morning, something I would not have done — and something, I confess, that I’m not sure I’ve ever sung with as little alcohol as transubstantiated wine provides.)
It’s hard to put a new spin on this game, but here’s some local ephemera that might interest O&M readers. (more…)
4 February 2007 at 5:45 pm Clifford Grammich Leave a comment
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