Archive for September, 2008

Notes from the Economic History Association Meeting

| Dick Langlois |

I am only now (slowly and partially) emerging from a crush of administrative and teaching responsibilities at the beginning of the semester. But I did manage to drive down to New Haven last weekend for some of the Economic History Association meeting. It was an eventful meeting in many respects, including a fire at the hotel Thursday night that sent conference-goers into the street in their pajamas as well as an apparent outbreak of food poisoning from the Saturday night banquet. Happily, I was spared both of those experiences.

For at least two of the three sessions I managed to attend, there emerged a theme: that a lot of interesting work in economic history today is rediscovering and reinventing ideas that Nate Rosenberg, Paul David, and others were discussing in the 1970s and earlier: learning by doing and factor prices, technological and economic complementarities, and general-purpose technologies. (I have been known to talk about the Stanford School in this respect.)

In his keynote address on Saturday — evidently similar to his Clarendon Lectures last year and probably dating back at least to this paper — Daron Acemoglu talked about the issue of skill bias in technological change. In the 1970s, labor economists were arguing that Americans were investing too much in education, since rising wage rates should lead to labor-saving technical change, which would reduce the supply of skilled jobs. Of course, just the opposite happened: skilled jobs grew even faster than skilled workers, creating a skill premium in the U.S. Acemoglu presented a clever general-equilibrium model in which the bias of technological change is endogenous. Under certain assumptions, supply of a factor of production (like skilled labor) can create its own demand. The intuition is that a larger supply of a factor (like skilled labor) can increase the market for complementary innovations to an extent that offsets other effects. (For my own Rosenbergian take on why technical change should be biased toward higher skill levels, see here.) Interestingly, Joel Mokyr discussed Acemoglu’s presentation using a 1975 Paul David paper as a framework. (more…)

25 September 2008 at 12:55 pm 1 comment

Advice For Junior Faculty

| Peter Klein |

Last Friday the Chronicle of High Ed published the first in a series of articles giving strategic advice for pre-tenure faculty. In “A Call for Clarity” Cathy Trower and Anne Gallagher identify four common pitfalls facing early-career professors:

  • Vague and inconsistent tenure guidelines
  • Lack of constructive feedback
  • A culture of “don’t ask, don’t tell”
  • Divergence between policy and practice

In response they suggest that universities adopt formal written policies, offer tenure workshops, and provide clear interpretation of tenure rules. Good advice. (Thanks to Fabio Chaddad for the pointer.)

24 September 2008 at 9:47 pm 3 comments

A New Hope

| Peter Klein |

Finally, encouraging signs of resistance to the Paulson-Bernanke Corporate Welfare Act of 2008. Naturally, the commentators at our favorite sites at our favorite sites listed in the “Links” section below and to the right have been been against the bailouts from the beginning, but now mainstream scholars and analysts are getting into the act. I don’t mean complaints from members of Congress or The Candidates that the recent and proposed bailouts don’t go far enough (e.g., homeowners should get bailed out too) or that the Paulson-Bernanke proposal doesn’t include enough new regulations. Rather, I’m talking about sensible analysis by prominent, mainstream economists and other experts explaining that a market economy in which profits are private while losses are socialized is, well, not a market economy at all but a socialist or corporate-fascist state. See, for example, statements by Luigi Zingales, John Cochrane, and Richard Epstein, among others. Maybe the Empire can be defeated after all. (Apologies to Seth MacFarlane for modding his image.)

Update: Casey Mulligan is also quite good.

24 September 2008 at 4:59 pm 3 comments

More on Facebook

| Nicolai Foss |

We bloggers face strong competition from Facebook, as recognized in earlier O&M posts. FB integrates numerous functionalities, including blogging features, and allows narcissism to run amok in a more interactive fashion than blogging allows for. Irresistible. Therefore, smart bloggers embrace FB. As of today, O&M also has a category called “Facebook.”

Facebook is, of course, also an attractive hunting ground for all those ICT-obsesssed network sociologists or computer scientists-turned-sociologists (e.g., here and here) out there, as well as for personality psychologists. Concerning the latter, in the latest issue of Personality and Social Psychology Bulletin, Laura Buffardi and W. Keith Campbell report on “Narcissism and Social Networking Web Sites.” The authors conclude, among other things, that narcissists have more friends (rather, acquaintances), more personal info and more glamorous pics of themselves on FB than non-narcissists. (Now, check this profile).

Perhaps not a surprising finding, but still good to now (particularly for job applicants, given that employers now routinely check FB profiles). And surely it won’t take long before we see the first applications in network studies of the “narcissism index” as an antecedent of this or that (“Narcissism as an Antecedent of Knowledge Sharing in Networks”). Heck, they come up with a new measure every morning anyway. (more…)

24 September 2008 at 7:12 am 2 comments

Request for Urgent Confidential Business Relationship

| Peter Klein |

Perhaps you found this in your inbox today. But, really, is it any sillier than the real thing?

From: Minister of the Treasury Paulson

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

Of course, the word “deregulation” above should be “change in regulation.”

See also: All Your Banks Are Belong to US (via Anthony).

23 September 2008 at 3:20 pm 1 comment

Online Managerial Economics Seminar with Luke Froeb

| Peter Klein |

Luke Froeb, co-author (with Brian McCann) of the excellent MBA text Managerial Economics: A Problem-Solving Approach and co-blogger at Management R&D is conducting an online seminar this Wednesday, “Teaching MBA Students How to Solve Problems Using Economics.” (I can’t bring myself to use the word “webinar.”) All you need to participate is an internet connection and a phone. It’s free but you have to register.

22 September 2008 at 5:41 pm 2 comments

The Coleman Bathtub

| Nicolai Foss |

The so-called “Coleman Bathtub” (or “boat”) is one of the most useful expository vehicles for thinking about multi-level issues in social science research. The diagram portrays macro-micro-macro relations as a sort of rhombic figure with causal relations going down from macro (e.g., institutions) to the conditions of individual actions which then give rise to individual actions that in turn aggregate up to macro outcomes. (Check the 1st chapter in James Coleman’s tome, Foundations of Social Theory).

Although the diagram is exceedingly simple, there are substantial potential issues with it, e.g., are the relations depicted in the diagram really causal relations (can macro-entities cause individual actions? Also, I am tempted to adopt the position that ontologically there really aren’t levels, just interacting social actors). Nevertheless, different levels of analysis abound in social science science research, and the Coleman bathtub is often a great eye opener, particularly for students. And I have frequently used it myself in recent research.

I just had my paper with Peter Abell (Professor of Mathematical Sociology, LSE) and Teppo Felin (you know, the founder), “Building micro-foundations for the routines, capabilities, and performance links,” published in Managerial and Decision Economics. Another plug: with Dana Minbaeva, a HRM specialist in “my” research center, I have written “Governing Knowledge: The Strategic Human Resource Management Dimension.” You can find it here.

22 September 2008 at 4:45 am 3 comments

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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).