Archive for June, 2008

Tips for Presenting Your Research

| Peter Klein |

One of the most important skill young scholars must develop is the ability to give a technical presentation to a non-specialist audience.  Everyone likes to strut his stuff but dissertation committee members, prospective academic employers, seminar audiences in various contexts, and others to whom you expose your work don’t necessarily want the gory details. Background, context, motivation, results, and implications are usually the most important parts of a presentation, but often the most neglected.

Two cartoons in my local paper today, this from Dilbert and this from Pickles, highlight that theme. Also, check out this article from Web Worker Daily, “10 Tips for Working with the Not-So-Tech-Savvy,” illustrated beautifully with an abacus. It’s written for techies working with regular folk, but many of the principles — avoid jargon, use analogies, include visuals, reference case studies, link to current events, be patient — apply to scholarly communication.

See also: Fabio’s Grad Skool Rulz.

7 June 2008 at 12:30 am 2 comments

Mike Jensen Explains SSRN

| Peter Klein |

Mike Jensen, the distinguished financial economist and co-founder of SSRN, is interviewed here by Growthology’s Tim Kane. Everyone knows that electronic distribution of working papers has been extremely important for academic research in business and the social sciences. By the time most papers are published, they’ve already been read by many, if not most, of the target readers, from working-paper circulation, conference presentations, informal discussions, and the like. Jensen points out that electronic distribution has also had an important democratization effect. The elites always had access to cutting-edge research in advance of publication through informal networks, NBER workshops, and the like. “In my own field, I was part of a very small group doing cutting-edge work in the early days of modern finance, and I noticed that elites in all fields were 2-3 years ahead of other scholars just because they knew about research that took so much time to get distributed widely. The Internet allowed everyone to see the frontier.”

Note also Jensen’s comments about behavioral finance:

In the 1970s, I began to receive [as editor of the Journal of Financial Economics] quite a few papers challenging the efficient market hypothesis. The referees rejected them and I rejected them. Any one of these articles standing alone could be rejected, but I began to feel that as a package they cannot be ignored.  The authors were onto something, even if we didn’t see it. Sometime around 1975, over the objection of my referees — many of them close friends — we published a special issue with a collection of those papers.  That was controversial but proved to have great value. Subsequent to that, behavioral financial economics evolved. 

In creating SSRN, I envisioned an alternative distribution vehicle.

Jensen has also been an important friend of and advisor to CORI, delivering the annual CORI Distinguished Lecture in 2005.

6 June 2008 at 12:20 pm 5 comments

Economics and Sociology at Microsoft

| Peter Klein |

A couple of nuggets from today’s WSJ front-pager on the complicated relationship between Microsoft founder Bill Gates and current CEO Steve Ballmer:

Their relationship started at Harvard University in the mid-1970s, where the two played poker and thrived by pushing their intellectual limits. Once they skipped a graduate economics class for the entire semester, then teamed up a few days before the final exam to try to learn the material all at once. Mr. Ballmer recalls he got a 97; Mr. Gates a 99.

Who knew Harvard’s graduate economics program was so easy? And this:

One concern for Mr. Ballmer was how to preserve Mr. Gates’s role of technology visionary inside the company. Looking for guidance, Mr. Ballmer says he cracked open a book from his college years by Max Weber, the German sociologist, on how organizations handle the disappearance of “charismatic leaders.”

On March 28, 2006, Mr. Ballmer described the book to Microsoft’s board at a retreat in the San Juan Islands near Seattle, Microsoft executives say. One way for a firm to retain the charisma of a departing leader, Mr. Weber wrote some 100 years ago, is for the leader to name his own replacement.

Mr. Gates did just that.

Who says sociology isn’t useful?

5 June 2008 at 2:51 pm 3 comments

The New Comparative Economic History

| Peter Klein |

That’s the title and subject of a Festschrift for Jeffrey G. Williamson, edited by Timothy Hatton, Kevin O’Rourke, and Alan Taylor and published last year by MIT Press. Reviewer Dan Bogart describes the field thusly: “In a nutshell, this line of research analyzes the sources of economic growth, the importance of institutions, and the impact of globalization by making comparisons between actual economies. An illuminating contrast is made with early cliometrics, which addressed questions by constructing counterfactuals with the help of theory and calibration. ” As such, the new comparative economic history is a closely related to, though not identical with, the new institutional economic history associated with Douglass North, Barry Weingast, Avner Greif, and others mentioned frequently on these pages. The NCEH takes institutions seriously but does not give them quite as much weight as NIE historians in explaining economic performance.

5 June 2008 at 9:52 am Leave a comment

Against Government-Subsidized VC

| Peter Klein |

Government-subsidized venture capital underperforms private venture capital, according to a new analysis of Canadian data. Firms backed by subsidized VC are less profitable, less innovative, and less attractive to later-stage investors than firms backed by private VC. Poor governance and a negative signalling effect, and not adverse selection, appear to be the drivers. This is from a new NBER paper by James Brander, Edward Egan, and Thomas Hellman, “Government Sponsored Versus Private Venture Capital: Canadian Evidence.” Abstract:

This paper investigates the relative performance of enterprises backed by government-sponsored venture capitalists and private venture capitalists. While previous studies focus mainly on investor returns, this paper focuses on a broader set of public policy objectives, including value-creation, innovation, and competition. A number of novel data-collection methods, including web-crawlers, are used to assemble a near-comprehensive data set of Canadian venture-capital backed enterprises. The results indicate that enterprises financed by government-sponsored venture capitalists underperform on a variety of criteria, including value-creation, as measured by the likelihood and size of IPOs and M&As, and innovation, as measured by patents. It is important to understand whether such underperformance arises from a selection effect in which private venture capitalists have a higher quality threshold for investment than subsidized venture capitalists, or whether it arises from a treatment effect in which subsidized venture capitalists crowd out private investment and, in addition, provide less effective mentoring and other value-added skills. We find suggestive evidence that crowding out and less effective treatment are problems associated with government-backed venture capital. While the data does not allow for a definitive welfare analysis, the results cast some doubt on the desirability of certain government interventions in the venture capital market.

5 June 2008 at 9:52 am 1 comment

Sudha R. Shenoy (1943-2008)

| Peter Klein |

I’m saddened to report the death yesterday of Sudha Shenoy, the distinguished Australian economic historian and important contributor to the “Austrian revival” of the 1970s. Her father, the eminent Indian economist B. R. Shenoy, was a student at the London School of Economics in the 1930s when Hayek gave his famous “Prices and Production” lectures and both father and daughter were deeply influenced by Hayek. Sudha too studied at the LSE and eventually took a position at the University of Newcastle, where she taught until her retirement in 2004. Sudha was writing a book on Hayek and would have given a week-long lecture series on Hayek at the Mises Institute this fall. Here is a 2003 interview, here are some audios and videos, and here are some materials collected by Google Scholar. Some obituaries and personal remembrances are here, here, and here.

Suhda was a regular reader and occasional commentator here at O&M. You can get a sense of her erudition from this blog post, one of our most popular, which was basically a cut-and-paste job from one of her emails.

Suhda was a quiet, kind, and gentle person. This may be hard for our younger American readers to comprehend but she didn’t know how to drive. I once had the pleasure of chauffeuring her around Auburn, Alabama at an Austrian Scholars Conference. Spending time with her was a real treat.

4 June 2008 at 10:28 am 4 comments

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.

4 June 2008 at 10:08 am 1 comment

Allen Nevins Dissertation Award

| Peter Klein |

I received an email the other day from the Economic History Association soliciting nominations for its dissertation prizes, the Allan Nevins Prize for best dissertation in U.S. or Canadian economic history and the Alexander Gerschenkron Prize for the best dissertation in the economic history of, you know, what our textbooks call ROW (the Rest of the World). This brought to mind a couple of personal connections:

1. Last year’s Nevins prize went to a University of Missouri student, Mark Geiger, who wrote on grassroots financing of the US Civil War.

2. My dad got his PhD in history at Columbia in the 1950s and, while teaching there as a lecturer, worked in Nevins’ office. Dad told an interviewer:

Allan Nevins had retired, but I was allowed by him to use a desk in his office. He had an office twice the size as this, which was filled with books from ceiling to floor and piled high. And if you were at Columbia you were immediately well known, you know. A newspaper or journal would call me up or a publisher, “Would you review this book for us?” And I wouldn’t know anything about it, “Yes Sir,” and I’d look on Nevins’ shelf and find three books on the subject. (Laughter)

Being at Columbia and around Nevins at that time was a great launching pad for an academic career. Dad, holding the rank of lecturer (lower than assistant professor), was invited to interview for the department head position at Long Island University, which he was offered and accepted. The job came with tenure and the rank of full professor. Dad’s the only person I’ve known to be a tenured full professor without ever having been an assistant or associate prof.!

3 June 2008 at 2:36 pm 1 comment

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…)

2 June 2008 at 10:17 pm Leave a comment

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 June 2008 at 2:09 pm 2 comments

This Month in Business History

| Peter Klein |

Business history highlights for June, courtesy of Friends of Business History News:

June 1, 1495 — Friar John Cor records the first known batch of Scotch whiskey in the Exchequer Rolls of Scotland.
June 4, 1896 — Henry Ford drives his first automobile through Detroit streets.
June 9, 1790The Philadelphia Spelling Book becomes the first work registered under the federal copyright act (U.S. District Court of Pennsylvania).
June 15, 1851 — Jacob Fussell of Baltimore, Maryland sets up first ice cream factory.
June 26, 1848 — The first U.S. pure food law is enacted, banning the importation of adulterated drugs.
June 30, 1893 — The blue-white Excelsior diamond (995 metric carats) is discovered at the De Beers mine in Jagersfontein, South Africa. Until the discovery of the Cullinan in 1905, it was the world’s largest known uncut diamond.

2 June 2008 at 8:00 am 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).
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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).
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