Before They Were Famous

2 June 2008 at 10:17 pm Randy Westgren Leave a comment

| 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.He was one of the most influential biologists of the 20th century and is known in management for two things: development of path analysis and elaboration of the adaptive, or fitness, landscape. In fact, the corn-hog paper was a precursor to his exposition of path analysis, which exposed the method for calculating supply and demand curves, as well as genetic paths for heredity and hog pice dynamics. Clever stuff.

Anyhow, I offer this for your (plausible) amusement. I enjoy off-the-wall writings by the giants upon whose shoulders we stand, particularly if they are about pigs. BTW, the rule about the ratio of hog prices ($/100 lb) to corn ($/bushel) is something like: if >20 there will be hog industry expansion and if <18 there will be contraction. The ratio now is about 5 — impending food price catastrophe.