Posts filed under ‘– Klein –’
Big Think in Management Research
| Peter Klein |
Greg Clark’s A Farewell to Alms has received a lot of attention in the econo-blogosphere. I haven’t read the book and don’t have much to say about it but you can read as much as you like from Cowen, McCloskey, DeLong, Caplan, Kling, and others. One of the most interesting reviews, to me, is this one by Robert Margo of Boston University. Margo admires the book but dislikes this genre, what he calls “Big Think.”
“Big Think” refers to the genre of economic history that asks The Big Question. Why England and not China? Do institutions “matter” or is it something else, or many things? Why is the United States rich and Bolivia poor?
Reviewers should be upfront about their ex ante biases. Here is one of mine: I do not care for Big Think. The Big Question per se is not the problem — in economics, there is nothing more important. For me, the problem with Big Think is that it is inherently Too Big. One cannot hope to answer The Big Question by tackling it head on. One must break The Big Question into a great many very tiny precisely posed questions, and get the answers to them right. In economic history we are still _very_ far from completing this task even for a country whose economic history is as well-worn as the United States. Big Think is a Big Distraction from our true purpose in life. (more…)
Biblical Wisdom for Academics
| Peter Klein |
The gang at St. Maximos’ Hut has been running a series on the Proverbs and Psalms, highlighting verses that apply to faculty life. To wit:
On faculty recruiting: “He that walketh with wise men shall be wise: but a companion of fools shall be destroyed.” (Prov. 20:13)
On peer review: “Boast not thyself of to morrow; for thou knowest not what a day may bring forth. Let another man praise thee, and not thine own mouth; a stranger, and not thine own lips.” (Prov. 27:1-2)
On people who teach 8:00am classes: “He that blesseth his friend with a loud voice, rising early in the morning, it shall be counted a curse to him.” (Prov 27:14)
And perhaps you’ve seen this one before — a prayer before faculty meetings:
Keep me as the apple of your eye;
hide me in the shadow of your wings
from the wicked who assail me,
from my mortal enemies who surround me.
They close up their callous hearts,
and their mouths speak with arrogance.
They have tracked me down, they now surround me,
with eyes alert, to throw me to the ground.
They are like a lion hungry for prey,
like a great lion crouching in cover.
Rise up, O LORD, confront them, bring them down;
rescue me from the wicked by your sword. (Ps. 17:8-13)
The list also includes economic topics such as capital, financial planning, market institutions, information, etc.
Upcoming Events: A Busy June
| Peter Klein |
June is an exciting month for O&Mers looking for research conferences. First up is ACAC 2008, 12-14 June in Atlanta. ACAC, which has received high marks on this blog, is an annual workshop organized by Rich Makadok emphasizing the “big issues” in strategic management. Next is the DRUID 25th Anniversary Conference, 17-20 June in Copenhagen, with the theme of “Entrepreneurship and Innovation.” The distinguished participant list includes Rajshree Agarwal, Carliss Baldwin, Bo Carlsson, Kathy Eisenhardt, Maryann Feldman, Bronwyn Hall, Steve Klepper, Anita McGahan, Joanne Oxley, Olav Sorenson, Scott Stern, Sid Winter, and some Foss guy. Immediately afterward is ISNIE’s 12th annual meeting, 20-21 June, in Toronto. I am on the program committee, working with president-elect Scott Masten, and we got a bunch of great submissions this year. Barry Weingast and Robert Ellickson are keynoters. The preliminary program should be up on the ISNIE website soon.
Also, for graduate students in economics, history, philosophy, political science, business administration, and related disciplines there’s the Rothbard Graduate Seminar, 13-18 June in Auburn, Alabama. The RGS is an intensive workshop and research seminar on Austrian economics that uses Murray Rothbard’s Man, Economy, and State as its core text. I am one of the discussion leaders.
If I could teleport I’d attend all four!
Asset Specificity and International Trade
| Peter Klein |
The May 2007 issue of the Quarterly Journal of Economics featured a nice piece by Nathan Nunn, “Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade.” The paper constructs an aggregate, country-level measure of asset specificity and relates it to characteristics of a country’s contract-law regime and its patterns of international trade. When asset specificity is high, firms tend to rely on contracts or vertical integration, rather than spot markets, so countries with good legal protection for contracts are more likely to specialize in the production of goods requiring specific investments.
Is a country’s ability to enforce contracts an important determinant of comparative advantage? To answer this question, I construct a variable that measures, for each good, the proportion of its intermediate inputs that require relationship-specific investments. Combining this measure with data on trade flows and judicial quality, I find that countries with good contract enforcement specialize in the production of goods for which relationship-specific investments are most important. According to my estimates contract enforcement explains more of the pattern of trade than physical capital and skilled labor combined.
One can quibble about the data and variables, such as the proxy for asset specificity (the absence of organized exchange or a publicly listed price for an input) and use of national input-output tables to construct measures of vertical integration, but overall this strikes me as an impressive piece of work, a clever combination of transaction cost economics and international trade theory. Check it out.
Big Brother Is Watching You
| Peter Klein |
Yahoo has changed the look of its home page, including the placement and format of RSS feeds. David Gerard sends along this scary image of what greeted him when he logged onto his computer this morning.
Steven Cheung Has a Blog
| Peter Klein |
Unfortunately it’s in Chinese. Perhaps one of our Chinese-speaking readers could summarize its contents?
Here is an English-language blog dedicated to Cheung’s ideas. Here is his wikipedia entry, which includes some information on the Late Unpleasantness. And of course the economic analysis of property rights, to which Cheung is a major contributor, is a popular topic on this blog.
Pre-Internet Blogging
| Peter Klein |
From the great Wiley Miller. The number of listeners seems about right.
MDE Special Issue, “Frontiers of Strategic Management Research”
| Peter Klein |
The March-April 2008 issue of Managerial and Decision Economics features a special issue on “Frontiers of Strategic Management Research,” edited by Catherine Maritan and Margaret Peteraf. Contributors include Mary Tripsas, Bill Hesterly, Jeff Dyer, Kyle Mayer, Janet Bercovitz, Ranjay Gulati, Bob Hoskisson, Jay Barney, Kathy Eisenhardt, Michael Jacobides, and many others. From the introduction:
Scholars working in the field of strategic management are fundamentally concerned with developing an understanding of how firms compete and how they can create competitive advantage. In addressing this overarching issue we ask questions about such diverse topics as the relationship between firms and industry conditions, the origins and consequences of heterogeneity among firms, how the scope of a firm’s activities affects how it competes, and factors that affect inter-organizational relationships. (more…)
Lesser-Known Counterparts of Common Words
| Peter Klein |
This week Anu Garg’s A.Word.A.Day is featuring lesser-known counterparts of common words, e.g.:
-
prepone (v. tr.): to reschedule an event to an earlier time
-
nocebo (n.): a substance producing harmful effects in someone because it is believed to be harmful, but which in reality is harmless
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dystopia (n.): an imaginary place where everything is very bad, as from oppression, disease, deprivation, etc.
- inhume (v. tr.): to bury
- prequel (n.): a book, movie, drama, etc. set in a time preceding that of an existing work
Can you think of more?
Wages and Currency: Visualizing Wage Payments
| Peter Klein |
That’s the title of a virtual exhibition hosted by the International Institute of Social History in the Netherlands. Jan Lucassen has collected data and images showing the connection between coin circulation and wage payments throughout history, particularly for societies about which we know little of labor patterns and wage rates. “As far as wages are paid in currency, in particular in coin, specific patterns of denominations produced and used in space and time may provide insights into the importance of wage labour in those societies.”
Numismatists may also wish to pre-order George Selgin’s forthcoming Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775-1821, a chapter of which you can read here. Two other Selgin papers on private coinage are here and here. As you can see, Selgin’s work has improved considerably since he quit doing stuff like this.
The Grad Student’s New Best Friend
| Peter Klein |
Forget coffee, Red Bull, and Krispy Kreme. Try Snickers Charged, which combines the decadence of a regular Snickers bar with 60mg caffeine. Delicious, nutritious, and sure to see you through that next dissertation chapter!
One taster’s report: “Shortly after downing the Snickers . . . my heartbeat began to accelerate. Within minutes, my hands were trembling and my stomach was a bit upset, but I was typing about twice as fast as I usually do.” Perfect!
Marshallian Industrial Economics
| Peter Klein |
Almost every recent paper on networks, clusters, agglomeration economies, and the like mentions Alfred Marshall’s concept of the “industrial district” and gives the obligatory cite to Book IV of Marshall’s Principles (Marshall’s term was the more colorful “thickly peopled industrial district”). But what exactly were Marshall’s views on industrial districts, and on industrial economics more generally? Attend this workshop to find out:
International Workshop: “Marshall and the Marshallians on Industrial
Economics”March 15-16th 2008, Mercury Tower, Hitotsubashi University, Tokyo (more…)
The Urban Toilet
| Peter Klein |
That’s the title of SCA 90.001, offered this semester at New York University’s Department of Social and Cultural Analysis. Professor Harvey Molotch’s syllabus, writes Ben McGrath in the New Yorker, “reads almost like a parody of Allan Bloom’s worst nightmare, bringing the jargon of gender and ethnic studies, city planning, and industrial design to bear on the most euphemized of subjects.” The reading list includes
- Jo-Anne Bichard, Julienne Hanson and Clara Greed, “Please Wash Your Hands.” The Senses and Society 2(3): 385-90.
- Barbara Penner, “A World of Unmentionable Suffering: Women’s Public Conveniences in Victorian London.” Journal of Design History 14 (2001): 35-52.
- Mitchell Duneier, “When You Gotta Go.” From Sidewalk.NY: Farrar Straus & Giroux, 1999.
- Lee Edelman, “Men’s Room,” in Joel Sanders, ed., Stud: Architectures of Masculinity. Princeton Papers on Architecture Series. New York: Princeton Architectural Press, 1996.
Apparently Clara Greed, of the World Toilet Organization, is a major player in the field. In class one day Molotch read aloud something by Greed about “the restroom revolution which is going on in the Far East.”
“Does she use the phrase ‘Far East’?” a young woman asked, sounding incredulous. “It’s really Western-centric, obviously.”
“O.K., so Clara stepped into that one, but she’s otherwise good on toilets,” Molotch said.
Thanks to Travis Kavulla for the pointer.
Religious Figures for Modern Times
| Peter Klein |
Remember Saint Hubbins, the patron saint of quality footwear? He has nothing on Lord Balaji, described in a recent WSJ story as the Hindu god of H-1B visas.
Local officials were on a tear to turn Hyderabad into the next Bangalore, the high-tech capital of the neighboring state of Karnataka. They started referring to Hyderabad as “Cyberabad.” They fixed roads and wooed Microsoft and General Electric Co. to set up offices there.
Hoping to capitalize on all the activity, technical colleges sprouted up in the city’s outskirts near Mr. Gopala Krishna’s temple. Students started trickling by on their way home from school; many complained about their failed attempts to secure U.S. visas. That gave the priest an idea to sell the students on the deity by giving him a new persona, “Visa God.” Mr. Gopala Krishna counseled the students in English, then told them to walk around the temple 11 times to get their wish. “I used to say, ‘Go, this time you’ll get it,'” he recalls.
Soon, Mr. Gopala Krishna started seeing dozens — then hundreds — of new visitors a day. In 2005, some local newspapers wrote about the Visa God, just as new U.S. visa restrictions were taking a toll. Mr. Gopala Krishna and his relatives also launched a Web site and a newsletter called Voice of Temples, with features like a primer of sample prayers for help in visa interviews.
The temple’s popularity surged. Last year, a public battle between Mr. Gopala Krishna’s family and the local government, which briefly wanted to take the temple over, only boosted its appeal among the young and subversive. Now devotees of the Visa God say they have to reach the temple by 6 a.m. to avoid the daytime rush.
Interview with Peter Bernstein
| Peter Klein |
Here is Peter Bernstein, author of the terrific books Capital Ideas and Against the Gods, interviewed by Tom Keene of Bloomberg’s On the Economy series.
Still More on Legal Origins
| Peter Klein |
John Armour, Simon Deakin, Prabirjit Sarkar, Mathias Siems, and Ajit Singh add to the debate with a new dataset and a new interpretation: common-law countries offer better shareholder protection not because of the characteristics of common law per se, but because the emergence of a global common-law standard gave common-law countries a head start, a sort of network effect. Here is the paper. Abstract:
We test the ‘law matters’ and ‘legal origin’ claims using a newly created panel dataset measuring legal change over time in a sample of developed and developing countries. Our dataset improves on previous ones by avoiding country-specific variables in favour of functional and generic descriptors, by taking into account a wider range of legal data, and by considering the effects of weighting variables in different ways, thereby ensuring greater consistency of coding. Our analysis shows that legal origin explains part of the pattern of change in the adoption of shareholder protection measures over the period from the mid-1990s to the present day: in both developed and developing countries, common law systems were more protective of shareholder interests than civil law ones. We explain this result on the basis of the head start common law systems had in adjusting to an emerging ‘global’ standard based mainly on Anglo-American practice. Our analysis also shows, however, that civil law origin was not much of an obstacle to convergence around this model, since civilian systems were catching up with their counterparts in the common law. We then investigate whether there was a link in this period between increased shareholder protection and stock market development, using a number of measures such as stock market capitalisation, the value of stock-trading and the number of listed firms, after controlling for legal origin, the state of economic development of particular countries, and their position on the World Bank rule of law index. We find no evidence of a long-run impact of legal change on stock market development. This finding is incompatible with the claim that legal origin affects the efficiency of legal rules and ultimately economic development. Possible explanations for our result are that laws have been overly protective of shareholders; transplanted laws have not worked as expected; and, more generally, the exogenous legal origin effect is not as strong as widely supposed.
What Bad Academic Writing Does to the Brain
| Peter Klein |
From the brilliant Jorge Cham (via Per).
Click to enlarge.
The Role of Missionaries in Social and Institutional Change
| Peter Klein |
First Brayden, then Fabio. Today another talented young sociologist, Robert Woodberry of UT-Austin, gave a research workshop in my building. Bob is leading a massive project to construct a comprehensive dataset of all Protestant and Catholic missionary activity from 1813 to 1968. Some of the data are here. Bob presented a working paper (not yet online) on the affect of missionary activity on the spread of democracy in the global south. Once Protestant missionary activity (missionaries per capita, length of time in host country, percent of local population evangelized) is controlled for, the usual predictors of democracy (British colonial origin, location, economic variables) drop out of regression models as statistically significant. One implication is that studies on the effect of religion on economic performance (e.g., Stulz and Williamson 2003) should control more carefully for the precise charactersitics of religious activity (not simply “Protestant,” “Catholic,” etc.).
The Rhetoric of Science
| Peter Klein |
Tom Lessl, who’s work on the history of science we’ve mentioned before, offers some interesting reflections on scientific rhetoric in this 2005 interview.
There is a popular and widespread misconception in the world that scientific communication is distinctly different from other forms of public communication, but this is not really so. Its persistence is explained by an old adage in my field, which I think comes from Roderick Hart at the University of Texas, which says that rhetoric is most effective which disguises itself as something else. And I would have to say that science is the master of disguises. . . .
In saying this I am not trying to suggest that science is not a profoundly powerful form of inquiry, that its truth claims are without substance or that many scientific questions cannot be answered with a definitive yes or no. But scientific communication has all the same kind of properties that we typically find in other arenas of communication.
This misconception, Tom argues, is actively promoted by scientists themselves, primarily as a means of securing resources:
What I call science’s “priestly voice” is the outcome of several hundred years of experimentation with different ways of relating itself to its patrons. Patronage is a perennial problem for science, one of huge proportions. Science is at once an exceedingly costly undertaking and also one that does not necessarily offer any immediate return on investments. We all know that science has produced applications of immeasurable benefit, but in history when scientific patronage has been dependent upon the promise of such payoffs, science work has suffered. This is because most of what we call basic science is exploratory and can’t promise applications. It produces knowledge that winds up in science journals but not in pharmaceutical patents or medical applications. The characteristic expectation of Americans that science is valuable because it pays off has traditionally deterred scientific growth. This was why the U.S. remained a backwater province of theoretical science until after WWII — when the public began to realize that theory might pay off in things like atom bombs. But more generally, scientific culture has responded to the pressures of patronage by trying to construct a priestly ethos — by suggesting that it is the singular mediator of knowledge, or at least of whatever knowledge has real value, and should therefore enjoy a commensurate authority. If it could get the public to believe this, its power would vastly increase. (more…)
State-Enforced Cartels
| Peter Klein |
Theory and evidence suggest that firms cannot form effective cartels on the free market. So, when producers wish to cartelize, they naturally turn to the state for help. Pennsylvania’s recent decision to forbid dairies from advertising hormone-free milk provides a vivid example. “It’s kind of like a nuclear arms race,” said State Agriculture Secretary Dennis C. Wolff in November. “One dairy does it and the next tries to outdo them. It’s absolutely crazy.” Right, next thing you know firms will be lowering prices, increasing output, improving quality — who knows what else! If only they could agree not to compete. . . . (Andrew Samwick helpfully declared Wolff’s office a “Microeconomics Free Zone.”)
The classic example of state-enforced cartelization is, of course, the National Industrial Recovery Act of 1933. The Depression, argued President Roosevelt, was exacerbated by excessive competition among firms, so firms must be compelled to form cartels to keep nominal prices and wages high (exactly the opposite, unfortunately, of what was needed to reduce unemployment). Despite a massive propaganda campaign to enforce participation the NIRA cartels largely fell apart by early 1934. Jason Taylor and I have a new paper exploring the role of expectations and enforcement in the collapse of the NIRA. Abstract below the fold: (more…)
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