Posts filed under ‘– Klein –’
New Center for the History of Political Economy
| Peter Klein |
Bruce Caldwell is joining Duke University’s HOPE group as founding Director of a new Center for the History of Political Economy. Bruce explains:
The purpose of the Center is to promote and support both research in and the teaching of the history of political economy, broadly defined. Though operating on a somewhat reduced scale next year (AY 2008-2009), we anticipate that once it is up and running it will include an active visitors program for post-docs and more senior fellows, both short and long term; a regular seminar series; and programming, possibly in the summer, aimed at promoting teaching in the field.
The Center’s web page is not yet up but you can contact Bruce for more information.
There’s Still Hope for Foss and Klein
| Peter Klein |
Psychologists have not considered wisdom and creativity to be closely associated. This reflects their failure to recognize that creativity is not exclusively the result of bold discoveries by young conceptual innovators. Important advances can equally be made by older, experimental innovators.
That’s from the newest paper in David Galenson’s art history series, “Wisdom and Creativity in Old Age: Lessons from the Impressionists.” I notice the SSRN page has the title misspelled as “Wisom,” suggesting an old person typed it in.
Turning to entrepreneurship, there’s a common myth that entrepreneurial creativity declines sharply after age 30 but little systematic evidence for this. Given a suitably broad concept of entrepreneurship (i.e., not simply the establishment of new companies), we might expect entrepreneurial ability to increase with age and experience. Indeed, looking even at the conventional definitions, we find that the likelihood of self-employment and the probability of new-venture success are positively correlated with age and business experience (see Parker 2004 for details).
Remixed Movie Trailers
| Peter Klein |
As I noted in my review of Yochai Benkler’s The Wealth of Networks, I think that Web 2.0 enthusiasts tend to overstate the novelty of “user-generated content.” It’s true that the costs of creating and disseminating movies, music, and even the written word have, in many settings, fallen dramatically (look at blogging, for goodness’ sake). On the other hand, as Paul Cantor, Tyler Cowen, and others have pointed out, commercial culture has always been, in an important sense, consumer culture. Benkler tends to portray twentieth-century consumers as passive recipients of culture, easily manipulated by Hollywood and Madison Avenue. Yet individuals have always played an active role in shaping the plays, books, songs, and shows made available to them, in their decisions to buy or not to buy, to patronize or not to patronize, to support or reject particular artistic producers and particular products.
Having said this, I do enjoy clever bits of user-generated content. For instance, check out this trailer for Sleepless in Seattle — number 5 on this list of The 20 Worst Chick Flicks of All Time — remixed as a horror movie. It reminds me of the brilliant Brokeback to the Future trailer from a couple of years back.
Of course, the greatest of all such parody shorts is Kevin Rubio’s Troops, now more than a decade old. And don’t miss George Lucas in Love.
Do What Consultants Say, Not What Other Firms Do
| Peter Klein |
McKinsey suggests this strategy: when other firms ignore strategy consultants, earn rents by listening to strategy consultants.
- Companies don’t react to competitive threats in the way management theory says they should, according to a McKinsey Global Survey.
- Instead of undertaking extensive, sophisticated analyses when faced with a competitive threat, most companies assess just a few responses, and they often choose the most obvious one.
- These practices give companies an opportunity to seize a competitive advantage by understanding how their competitors are likely to react to their moves.
The pointer is from the ever-valuable Luke Froeb. Most economists are puzzled management consulting, believing that consultants add little real economic value. I am sympathetic to a signaling explanation with a separating equilibrium in which high-quality firms can afford to signal quality by hiring expensive consultants and low-quality firms cannot. But I haven’t studied this closely. Can anyone recommend literature on the economics of consulting?
Elgar Catalog Covers Getting Weird
I said before how much I liked the cover of Edward Elgar’s law catalog, which shows two stick figures holding megaphones and shouting at each other. The image on the business and management catalog (below, left) is pretty good too. But I don’t understand the economics catalog (below, middle), which pictures a family standing under an umbrella. Is it about saving for a rainy day? (What would Lord Keynes say?)
Today I get a pamphlet advertising Elgar’s “Economic Approaches to Law Series,” which has excellent edited contributions by Levitt, Posner, Epstein, Ben Klein, and others but an even weirder cover. This one shows the two guys with megaphones shouting at the family under the umbrella! What could they be saying to these poor people? “Consider the liability rule before opening that pointy umbrella in a crowd!” “Do you know your marginal damage cost of wetness?”
Economists as Public Intellectuals
| Peter Klein |
I haven’t read Judge Posner’s 2002 book Public Intellectuals: A Study in Decline but I hear it’s one of his more interesting efforts. (Actually I haven’t read most of Posner’s books, but you can’t blame me — he writes ’em faster than I can read ’em.) Posner’s thesis, as is obvious from the title, is that today’s public intellectuals are a far cry from those of yore, and he blames this (in part) on the increasing professionalism of the Academy and its inward-looking, highly technical but ultimately ephemeral research. (I remember an economist colleague a few years back being chided, by his senior peers, for having published an op-ed in the Wall Street Journal, thus indicating his lack of commitment to “serious” scholarship.)
The current issue of Foreign Policy contains a list of today’s top 100 public intellectuals. Shockingly, none of your esteemed O&M bloggers made the list. Economics, however, is its most represented academic discipline. The list includes ten academic economists, if I counted correctly: Paul Collier (Oxford), Esther Duflo (MIT), William Easterly (NYU), Paul Krugman (Princeton), Steve Levitt (Chicago), Nouriel Roubini (NYU), Jeff Sachs (Columbia), Amartya Sen (Harvard), Michael Spence (Harvard), and Larry Summers (unemployed). Daniel Kahneman, a psychologist whose work has been extremely influential in economics, is also there, along with several think-tank economists or journalist-economists. A few observations:
- No one from management or busisness administration makes the list, though some of these gurus are plausible candidates. Perhaps “influential business thinker” and “public intellectual” are disjoint sets in the minds of people who edit magazines like Foreign Policy.
- Six of the ten are development economists. Only one, Larry Summers, is a macroeconomist. Remember when Keynes, Hayek, Friedman, and Samuelson were household names? Today development is the hot field.
- The list includes one academic sociologist, Slavoj Zizek. Oh, and one pop sociologist, Malcolm Gladwell (don’t blame me, that’s what FP calls him). Robert Putnam, a political scientist often mistaken for a sociologist, gets his props too. More fodder for the orgtheory crew.
See also: The Role of Economic Analysis in Public Policy and Econo-Bloggers and the Public Good.
Update: Michael Spence isn’t a development economist but has been working in that area, serving most recently as Chair of the World Bank’s Commission on Growth and Development. Bill Easterly characterizes the Commissions newly released report thusly: “After two years of work by the commission of 21 world leaders and experts, an 11-member working group, 300 academic experts, 12 workshops, 13 consultations, and a budget of $4m, the experts’ answer to the question of how to attain high growth was roughly: we do not know, but trust experts to figure it out.”
Disengaged Students
| Peter Klein |
To my colleagues who teach: how do you handle disengaged students? Paul Trout describes them thusly:
They do not read the assigned books, they avoid participating in class discussions, they expect high grades for mediocre work, they ask for fewer assignments, they resent attendance requirements, they complain about course workloads, they do not like “tough” or demanding professors, they do not adequately prepare for class and tests, they are impatient with deliberative analysis, they regard intellectual pursuits as boring, they resent the intrusion of course requirements on their time, they are apathetic or defeatist in the face of challenge, and they are largely indifferent to anything resembling an intellectual life.
I have known a few in my time. The pointer is from George Leef, who also provides this excerpt from Generation X Goes to College:
[B]y and large, students view themselves primarily as consumers who intend to study just a handful of hours a week for all their classes, and who expect, at a minimum, solid Bs for their efforts. . . . In short, they view themselves as consumers who pay their teachers to provide “knowledge,” regardless of how superficial that knowledge might be. After all, how hard should a consumer have to work to buy something?
See also: “In the Basement of the Ivory Tower” from the new Atlantic Monthly.
New Kauffman Entrepreneurship Blog
| Peter Klein |
The Kauffman Foundation’s Tim Kane and Bob Litan have a new blog, Growthology, focusing on the links between entrepreneurship and economic growth. Early posts focus on Schumpeter and Jane Jacobs, a good sign.
Reflecting on blogs’ advantages over traditional media, Kane notes the critical role of disaggregation. “A better way to think of this is personalized aggregation, something that can be done digitally with ease. . . . What is under siege is the business of mass-market aggregated news. I do not know if it can survive, but I do know that -– as a blogger -– I have its ink on my hands.” Amen to that.
Best Seminar Title You’ll Read Today
| Peter Klein |
It’s “Manure Entrepreneurs: Turning Brown to Green,” the theme for today’s Breimyer Seminar here at the University of Missouri. I promise, it won’t be just the same old . . . you know.
Incidentally, the seminar series is named for Harold F. Breimyer, a prominent agricultural economist of the last century. A friend described him to me this way:
He was an original New Deal agricultural economist who was absolutely and positively convinced of the inability of farmers and ranchers to compete without government because of their “obvious” lack of market power. His main issue was who will “control” agriculture. This conviction was so deep-seated that he could not appreciate or comprehend other perspectives. We corresponded in the late 1970s and it was as if we were from different planets. Promoting free-market agriculture, I was to him either a fool or a tool, or both.
Great Moments in Laziness
| Peter Klein |
Some people are calculator nerds. For the lazy nerd, however, the real action is in remote controls. Did you know the first commercially available TV remote came out in 1950? Check out this history of the remote, and don’t miss the slideshow.
But, really, how much fun is channel surfing with only four channels?
The Klein Doctrine
| Peter Klein |
That’s the title of Johan Norberg’s new report ripping Cousin Naomi’s The Shock Doctrine: The Rise of Disaster Capitalism. Great subtitle: “The Rise of Disaster Polemics.” Here’s Norberg: “Klein’s analysis is hopelessly flawed at virtually every level. . . . Klein’s historical examples also fall apart under scrutiny. . . . Klein’s broader empirical claims fare no better.” Indeed, an embarrassment for Kleins everywhere. (HT: Steve Horwitz)
Update from Per Bylund: “This guy will publish a whole book on Naomi Klein later this year, published by Timbro (in Swedish only), called Naomi Klein’s Nudity Shock: Exclusive Exposure: Everything on the Empress’ New Clothes (my [quick] translation).”
Bonus libertarian material: Former guest blogger David Gordon has a nice takedown of Thaler and Sunstein’s Nudge, their defense of “libertarian paternalism.” See also this exchange between Thaler and Mario Rizzo.
Tom Ulen is Blogging
| Peter Klein |
Tom Ulen, Swanlund Chair and Director of the Illinois Program in Law and Economics at the University of Illinois College of Law, is online at the Law & Econ Prof Blog. Tom’s textbook (with Robert Cooter), Law and Economics, is now in its fifth edition and continues to be a fine introduction to the L&E literature.
I was going to write “Welcome to the blogosphere!” until I discovered that he’s been doing this longer than we have.
Me on Benkler
| Peter Klein |
Here is my review of Yochai Benkler’s The Wealth of Networks: How Social Production Transforms Markets and Freedom (Yale University Press, 2006). It will appear in the Fall 2008 issue of The Independent Review. Benkler has written a fine book, though I have some reservations, as explained in the review.
Interdisciplinary Degree Programs
| Peter Klein |
ANAKIN: How do you know the ways of the Force?
PALPATINE: My mentor taught me everything about the Force . . . even the nature of the dark side.
One of the great things about being Oliver Williamson’s PhD student is that he encouraged us to read widely outside our core discipline. His “Economics of Institutions” course included materials from political science, business history, cognitive science, and even . . . sociology! So while my primary training was in economics, I was exposed to some of the best thinkers in the “contiguous disciplines.” I even know about the dark side.
Nonetheless, I was enrolled in a traditional degree program and was credentialed in an established discipline (economics). Recently I’ve been talking to colleagues in several departments about the possibility of creating a truly interdisciplinary social-science degree program, one that would train students in two or more disciplines organized around core subject areas like organizational studies, entrepreneurship, regional development, and the like. This sort of curriculum has obvious potential advantages in fostering intellectual breadth, developing critical thinking skills, and encouraging relevance and accessibility beyond a handful of specialists. On the other hand, there are many potential hazards. The training may be broad but not deep; opportunities for narrow, technical advances may be missed; students may struggle to find academic placements; and so on.
I’d like to hear from readers who have experience with, or informed opinions on, such interdisciplinary programs. The best-known is probably Chicago’s Committee on Social Thought, which included T. S. Eliot, F. A. Hayek, Allan Bloom, Saul Bellow, Hannah Arendt, and Leo Strauss on its faculty and produced outstanding graduates such as Ralph Raico and Ronald Hamowy. Arizona State’s School of Global Studies is a more recent example. Vanderbilt recently started a PhD program in law and economics. What are some other programs I should be studying?
Edinburgh Business School to Buy Adam Smith’s House
| Peter Klein |
How would you like to take economics classes in Adam Smith’s house? Edinburgh Business School students will have the pleasure after the school completes its purchase of Panmure House, Adam Smith’s home from 1788 to 1790. Smith was born in nearby Kirkaldy and spent much of his academic career in Glasgow, but lived in Edinburgh on several occasions and was a prominent member of Edinburgh society.
Some commentators find it ironic that the house’s current owner, Edinburgh’s City Council, is selling to the university rather than accept a higher, competing bid from a private citizen. So much for the free market! But, as a careful reading of Smith reveals, Smith was hardly an advocate for unrestricted laissez-faire, supporting substantial public expenditures on infrastructure and education as well as the legal system and national defense (see David Gordon and Gavin Kennedy).
Remember Books?
| Peter Klein |
Before multimedia, blog entries, and PowerPoint, people expressed their ideas in books. Appreciating books requires a longer-than-average attention span, a love of the tactile (no Kindles, please!), and a comfy chair. Anyway, if you’re into that whole Retro thing, there’s an official conference series on the Book. The sixth annual meeting is coming up this fall. From the conference blurb:
In the context of today’s rapid developments in information technologies, the book is indeed an old medium of expression. Do the new media (the internet, multimedia texts and new delivery formats) represent a threat or an opportunity? What is the book’s future as a creature of and conduit for human creativity?
This Conference will address the provocative suggestion that, rather than being eclipsed by the new media, the book will thrive as a cultural and commercial artifact. More than this, the information architecture of the book, embodying as it does thousands of years’ experience with recorded knowledge, may well prove critical to the success of the new media.
These crazy bibliophiles even have their own journal!
A Coasian Approach to Beating Google
| Peter Klein |
The always-interesting and provocative Mark Cuban (yes, him) suggests a “Coasian” strategy, based on side payments, for beating Google in the search-engine wars. If I understand correctly, the strategy works like this. Websites have the option (through robots.txt protocols) to prevent their inclusion in search engine databases. At some price, popular websites would presumably be willing to block Google’s spiders. Once word gets around that Google’s database no longer includes these sites, consumers would start to use alternative search engines. Doing this wouldn’t be cheap, but Cuban points out that that upstart search provider wouldn’t need the whole internet to play along, just the top sites, the ones at the left side of Chris Anderson’s long tail. It might cost, say, $1 billion, but the upstart would recover that $1 billion pretty quickly.
One problem Cuban doesn’t consider is that this kind of fragmentation in search-engine space would presumably reduce the value of search, cutting the revenue stream that Google is presently gobbling up. But the upstart might be better off with a larger slice of a smaller pie.
A more fundamental problem is that Google would presumably bid to get the top sites back. Do the search engines bid away all the rents, such that the returns from search accrue entirely to the top sites (as in the old Demsetz-Posner franchise-bidding model)? Or is the process more like a common-values auction with uncertainty and hence subject to the winner’s curse?
Manne on Ideology and the Law-and-Economics Movement
| Peter Klein |
Josh Wright has written a thoughtful and informative series on the future of law and economics (1, 2, 3, 4). Key issues include the increasing formalism of L&E scholarship, the place of L&E within law schools (as opposed to economics departments), and the influence of L&E on legal practice and public policy.
The latest entry focuses on a response to Josh by Henry Manne, the founder of the modern law-and-economics movement (and, I might add, a regular reader of O&M). Manne argues that ideology, more than genuine scientific disagreement, explains the often-hostile reaction to L&E within the legal establishment, a theme we’ve explored in several posts (1, 2, 3, 4, 5).
I think that the major issues are now, as they were fifty years ago, mainly ideological, and I believe that the causes forcing L&E out of the law schools today are the very same ones that operated to prevent my getting better jobs in the 1960s and for most senior law professors to think that what I was advocating was sheer nonsense, “to the right of Genghis Kahn,” as they used to be so stupidly amused at repeating ad nauseum. They were protecting their intellectual investment in skills and ideology against the threat of a new paradigm in which they could not share the rents, and I do believe that that is exactly what is still happening. While you and I see enormous social benefits from a legal system based on the idea of property rights and their protection, all they see is less role for the government and themselves. Perhaps this acts at an unconscious level, but it unmistakably is at work whatever the source of the peculiar leftist ideology of most academics.
What I am saying is that it is impossible to separate completely a discussion of the role of L&E in legal education from the ideological aspects of the subject. I honestly believe that at some level the turn of L&E to econometrics and empirical work is a flight from the implications of a thoroughgoing Alchianesque kind of economics. Perhaps that is even more clear with the current popularity of Behavioral Economics, and of late I even notice in the literature a somewhat open attack on the very idea of freedom of contract. I do not think these developments are accidental or random; I believe that they are inherent in the very structure of modern universities and law schools.
I Almost Didn’t Write this Blog Entry
| Peter Klein |
I mean, what’s the rush? But here it is, a pointer to Slate’s special issue on procrastination. Don’t put off reading it. Or do, if you want.
Take (Over) My Firm, Please!
| Peter Klein |
To paraphrase Groucho Marx, would you want to take over a firm that wants you to take it over? Most corporate bidders don’t. From Derek Oler and Kevin Smith:
We investigate 401 firms that publicly advertise a desire to be acquired (“take-me-over” or TMO firms) from 1990 to 2006. Over this period the TMO “wave” lags about one year behind the acquisition wave. Most TMO firms show evidence of high debt levels as well as fundamental underperformance relative to industry peers. Although most TMO firms enjoy positive announcement period returns, they significantly underperform in the year following their TMO announcement, and most do not receive a takeover offer. Greater proportionate ownership of the firm by dedicated institutional investors is associated with greater likelihood of the firm avoiding bankruptcy, but not with greater likelihood of the firm being acquired. These results suggest that the TMO announcement is a significant signal of bad news that is not fully anticipated by the market. However, the TMO announcement does increase the odds of the firm actually receiving a takeover offer.
The paper is titled “The Characteristics and Fate of ‘Take Me Over’ Firms.”
I tell you, I’ve been looking for an opportunity to reference Henny Youngman and Groucho Marx in the same post for years!
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