Archive for April, 2007
Classic Books in Business and Economic History
| Peter Klein |
EH.Net’s Project 2000/2001 features new reviews of classic works in business and economic history. Here are some that may be of particular interest to O&M readers:
- David Landes on Chandler’s The Visible Hand: The Managerial Revolution in American Business
- Thomas McCraw on Schumpeter’s Capitalism, Socialism and Democracy
- Stanley Engerman on Weber’s Protestant Ethic and the Spirit of Capitalism
- Cynthia Taft Morris on Davis and North’s Institutional Change and American Economic Growth
- Paul Hohenberg on Landes’s The Unbound Prometheus: Technological Change and Industrial Development in Western Europe from 1750 to the Present
- Winifred Rothenberg on Horwitz’s The Transformation of American Law
- Albert Fishlow on Gerschenkron’s Economic Backwardness in Historical Perspective
- Philip Coelho on North and Thomas’s The Rise of the Western World: A New Economic History
Citation Metrics Using Google Scholar
| Nicolai Foss |
Are you in the process of preparing for tenure, promotion or for applying for a new job? Do you, as is increasingly the norm, wish to include your citatation data? Are you concerned that some or perhaps many of the journals in which your work is cited are not ISI listed?
Then you may benefit from checking out Anne-Wil Harzing’s new software for analyzing Google Scholar citation data, Publish or Perish.
It produces a number of useful statistics, such as, obviously, total number of papers and citations, average citations, etc., but also, and less trivially, the important metrics for measuring an academic’s impact, such as Hirsch’s h-index (and its updated version that gives more weight to more recent papers).
Lionel Robbins at 75
| Peter Klein |
This year’s Austrian Scholars Conference featured a panel on the 75th anniversary of Lionel Robbins’s influential Essay on the Nature and Significance of Economic Science. (Both the first and second editions of the book are available online at mises.org.) Robbins’s definition of economics as “the science which studies human behavior as a relationship between scarce means which have alternative uses” is sometimes considered so pedestrian, so completely subsumed into the mainstream of economic theory, that the book itself gets little attention today. However, as explained by the panelists at the Robbins session mentioned above, the book’s argument is sophisticated and nuanced, and definitely still worth reading.
The LSE, Robbins’s professional home, is hosting a conference on the book in December 2007, sponsored by the LSE and the journal Economica. “The purpose of this conference is both to renew the considerations of Robbins’s theme and reflect on the current nature and significance of economic science as well as examine Robbins’s own position from a historical perspective.” Details below the fold (courtesy of SSRN).
NB: Israel Kirzner’s first book, The Economic Point of View (1960), about the history of the definition of economics, is also now available online. (more…)
The New Nordic Cuisine
| Peter Klein |
Because we have an above-average number of Nordic readers I’ll mention that the current issue of Food and Wine magazine profiles Danish super chef Claus Meyer, described as “Scandinavia’s answer to James Beard and Alice Waters.” Recommended Copenhagen restaurants include Meyer’s Noma along with MR Restaurant, The Paul, and Restaurant Paustian. Stop by on your next trip to Copenhagen and tell ’em O&M sent you.
Method versus Methodology
| Peter Klein |
Speaking of pet peeves, here’s another of mine: the regular misuse of the word “methodology” in academic papers. Methodology is the study of scientific methods, a branch of epistemology. Econometric techniques, strategies for gathering data, means of testing hypotheses, etc. are methods, not methodologies. Yet how many empirical papers include a section titled “Methodology” or “Data and Methodology”? It makes me cringe. “We use an instrumental-variables methodology,” or “our methodology employs case studies and structured interviews.” No, those are your methods. Unless you’re citing Popper or Kuhn or Lakatos or Feyerabend or Blaug or Mäki you probably don’t have a methodology section.
This passage from the American Heritage Dictionary (1992 edition) makes the point well:
In recent years . . . “methodology” has been increasingly used as a pretentious substitute for “method” in scientific and technical contexts, as in “The oil company has not yet decided on a methodology for restoring the beaches.” This usage may have been fostered in part by the tendency to use the adjective “methodological” to mean “pertaining to methods,” inasmuch as the regularly formed adjective “methodical” has been preempted to mean “orderly, systematic.” But the misuse of methodology obscures an important conceptual distinction between the tools of scientific investigation (properly “methods”) and the principles that determine how such tools are deployed and interpreted — a distinction that the scientific and scholarly communities, if not the wider public, should be expected to maintain.
Vertical Agriculture
| Peter Klein |
I’ve done some work on vertical integration in agriculture (e.g., this paper). But I learned only recently about vertical agriculture — growing crops inside a skyscraper. (HT: Creativity Exchange.)
At first I thought vertical farming couldn’t possibly be the highest-valued use of land in densely populated urban centers like New York or Hong Kong. Then again, if government ethanol subsdidies continue driving up the price of corn (poor people beware!), you never know.
Resources For Economics Teachers
| Peter Klein |
Old fogies like myself who teach economics to undergraduates need help to make the subject come alive to Generation Z (or whatever we’re up to now). Here are links to multimedia, popular song lyrics, in-class exercises, and other useful resources.
1. Common Sense Economics — accompanies the text by the same name by Jim Gwartney, Rick Stroup, and Dwight Lee. Look under “Really Cool Stuff” for some, well, really cool stuff.
2. AmosWeb — lots of of electronic resources for economics courses. Say the producers: “we take economics seriously, but with a touch of whimsy.” Much like our attitude here at O&M, but with more substance. (HT: Jan Dauve)
3. From ABBA to Zeppelin, Led: using music to teach economics — excerpts from popular song lyrics along with economic interpretations and classroom exercises. I’ve actually heard of some of the groups! (HT: Marginal Revolution)
4. Mises.org fun page — Austrian economics cartoons, crossword puzzles, and more. Be sure to scroll down for the Monty Python money song and Roderick Long’s Kant song.
Also, remember, lecturing is out, “learner-centered instruction” is in. You’re supposed to be the guide on the side, not the sage on the stage.
Words and Phrases to Avoid
| Peter Klein |
More on jargon: Here are some words and phrases to avoid. Also check out Eric Rasumssen’s “Aphorisms on Writing, Speaking, and Listening” and the Economist’s style guide for many useful tips. And whatever you do, flee from egregious PowerPoint mistakes.
Vaguely Defined Property Rights
| Peter Klein |
The shareholder model of the firm has come under increasing criticism from a variety of quarters. Stakeholder approaches argue that employees, suppliers, customers, community members, and others with relationships to the firm should have their preferences taken into account. Theories of worker empowerment, “flatter hierarchies,” and similar approaches advocate delegating decision rights to employees, not top management. Models of loose and open collaboration treat the firm as simply a node in a cluster or network of firms, with decision authority widely dispersed throughout the larger structure.
All these approaches, despite their differences, reject the standard shareholder model in which the firm’s owners, as residual claimants, possess unique rights of decision management and control. And yet, there is a substantial literature on the organizational costs of alternative models, particularly those in which residual claims are not alienable, separable from other agent roles in the organization, or marketable. These costs have not been widely appreciated in the literature on stakeholder management, worker-managed teams and firms, and the like.
My colleague Mike Cook, a specialist in cooperatives, describes these as costs of “vaguely defined property rights.” Mike argues that cooperatives, partnerships, and similar structures are plagued by two kinds of free-rider problems, a horizon problem, a portfolio problem, a control problem, and an influence costs problem, all because their equity shares are not alienable assets that trade in secondary markets. Consider each in turn. (more…)
My Redesigned Site
| Nicolai Foss |
Check it out. I have dropped the quasi-blog feature of the old version (I hadn’t maintained it for almost a year anyway), so now I can concentrate on O&M and this one. I will soon upload talks and work in progress.
More on Socialist Calculation
| Nicolai Foss |
In an excellent book review of GC Archibald’s Information, Incentives and the Economics of Control, Tyler Cowen raised a number of neglected points concerning the socialist calculation debate. (The review is published in the apparently now closed Journal of International and Comparative Economics 5: 243-249 (1995) and unfortunately isn’t online).
Cowen argued out that the victors in the socialist calculation debate “… have shied away from the hard questions,” and that it is necessary to “push the boundaries of the calculation argument.” For example, what if a dictator who has read Mises instructed his managers to compete as in a regular market economy (i.e., not as in an Oskar Lange-economy), with the dictator being the residual claimant monitor? Would that work? It might not — but that would primarily be because of excessive monitoring costs.
Cowen also indirectly questions the Misesian emphasis on calculating prices. Experience shows that socialist managers systematically set prices too low (because they can gain from creating excess demand, while they cannot gain from setting the right prices). But this would seem to presuppose that socialist “managers are in fact very good at calculating the proper price.” In other words, there is really no “calculational chaos,” as predicted by Mises.
Pomo Periscope XI: Clive James on Sartre
| Peter Klein |
Clive James on Jean-Paul Sartre, from Slate’s series of excerpts from James’s book Cultural Amnesia.
Skeptics might say that a knack for making duplicity look profound was inherent in Sartre’s style of argument. Students who tackle his creative prose in the novel sequence The Road to Freedom or the play Kean (his most convincing illustration of existentialism as a living philosophy) will find clear moments of narrative, but all clarity evaporates when it comes to the discursive prose of his avowedly philosophical works. But it should be said in fairnesss that even English philosopher Roger Scruton, otherwise a severe critic of Sartre, finds Sartre’s keystone work Being and Nothingness a substantial work; and Jean-François Revel, who took Sartre’s political philosophy apart brick by brick, still admired him as a philosopher who earned his own credentials, without depending on the university system for his prestige. But those of us unfettered by being either professional philosophers or patriotic Frenchmen can surely suggest that even Sartre’s first and most famous treatise shows all the signs of his later mummery. Where Sartre got it from is a mystery begging to be explained. It could have had something to do with his prewar period in Berlin, and especially with the influence of his admired Heidegger. In Sartre’s style of argument, German metaphysics met French sophistry in a kind of European Coal and Steel Community producing nothing but rhetorical gas.
Sartre’s admiration for Communist regimes, even after their atrocities were laid bare, is also emphasized. And there’s this: “After Camus died prematurely in a car crash, Sartre’s gauchiste vision was the style setter of French political thought, founding an orthodoxy that still saturates French intellectual life today and, to a certain extent, continues to set a standard of engagement for intellectual life all over the world.” (HT: Right Reason)
Has Strategy Forgotten About Rivalry?
| Nicolai Foss |
Austrian economists and other “process economists” have often argued that what is (or at least was) called “competition” in mainstream/neoclassical/orthodox/etc. economics has rather little to do with the real phenomenon. Hayek made the point famously and forcefully in his 1946 essay, “The Meaning of Competition,” and several Austrians have echoed him since then. (The best study of the transformation of “competition” (particularly, “perfect competition”) into the opposite of competition is Frank Machovec’s 1995 book, Perfect Competition and the Transformation of Economics).
It seems that strategy scholars may also have forgotten about rivalry. (more…)
Super Top Secret Crazy Maps
| Peter Klein |
In the early days of World War II a map showing Hitler’s plans for dividing up South America after a German invasion began circulating in Washington. The map turned out to be a hoax created by British intelligence, part of a massive covert operation to persuade US officials to enter the war. (This is all documented in Thomas Mahl’s fascinating Desperate Deception: British Covert Operations in the United States, 1939-1944, one of the most interesting foreign-policy books no one has read.)
Now Strange Maps reveals a recently declassified Soviet memo from 1973 showing how the world would look without the North American continent, a result “which may happen as a result of correction of gravity field of the Earth by the A-241/BIS device.” A hoax, to be sure, but whose? I’m guessing the CIA or a US defense intelligence agency. Why waste time explaining bomber gaps and missile gaps to appropriations committee members when you can simply show them a map like this?
Update: The Brits are at it again, using a fake map showing a nonexistent Iran-Iraq maritime border to prove the HMS Cornwall was seized in Iraqi waters. Craig Murray reports here and here.
Breaking News
| Peter Klein |
Several important announcements for today, April 1:
Foss, Klein, Postrel Join Harvard Faculty
Nicolai, Steve, and I are pleased to announce that we have accepted chaired positions at Harvard University:
Cambridge, Mass., April 1, 2007 — World-renowned scholars Nicolai J. Foss, Peter G. Klein, and Steven R. Postrel will join the Harvard faculty as University Distinguished Professors and co-directors of the newly formed Long Tail Institute for the Global Economy. Says incoming President Drew Faust: “I am delighted that Professors Foss, Klein, and Postrel are joining our team. I have always admired Foss and Klein’s work on judgment-based entrepreneurship, and I enjoyed Postrel’s columns in the New York Times before he changed his name to ‘Steve.’ After reading their blog I knew they were the ones to lead Harvard into the global information age.”
Announcing Guest Bloggers Jeff Pfeffer and Bob Sutton
We’re delighted to welcome Stanford University professors Jeff Pfeffer and Bob Sutton as our newest guest bloggers. Sutton writes: “Jeff and I have recently come out of what we call our ‘Blue Period,’ characterized by moodiness and irritability toward toward economists. We now realize that economic analysis is vital to the proper understanding of organizations. What better way to flaunt our new perspective than by joining the outstanding bloggers at Organizations and Markets? We’ll also be working on our new book, Not Ready to Make Nice in the Workplace.” Welcome, Jeff and Bob!
Google Acquires O&M
This hit the news wires today:
Mountain View, April 1, 2007 — Google Corporation announced today it has acquired a majority stake in the weblog Organizations and Markets, a leading provider of news and information on organizations, strategy, entrepreneurship, and anti-postmodernism. Google CEO Larry Schmidt noted that Google is seeking to expand beyond the search-engine business. “Let’s face it, search is yesterday’s technology. There’s too much junk out there. Instead of using computers to sort our information with confusing page-ranking algorithms, the time has come to hire experts to tell us what the world is really like. The authors of Organizations and Markets are just the experts we’ve been looking for.” Google shares dropped 42% in heavy trading upon the announcement.
Here are some important April 1 stories from prior years.
Organizations and Markets 
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