Posts filed under ‘– Klein –’
Adam Smith: Proto-Austrian?
| Peter Klein |
Austrian economists have mixed views on Adam Smith and classical economics. Mises and Hayek admired Smith as a social theorist and system builder while rejecting much of his technical apparatus, especially the labor theory of value. Menger taught Smithian political economy to his most famous pupil, Crown Prince Rudolf. Rothbard considered Smith grossly overrated. More generally, Austrian economists have tended to distance themselves as much from the classical system as from its neoclassical descendant. (Kirzner’s review of George Reisman’s Capitalism, which tries to synthesize Austrian and Ricardian economics, is worth reading in this regard.)
A new paper by Michael Bradley argues that the distinction between classical and Austrian analysis is overdrawn, at least with regard to competition theory. (more…)
Economists on Economics
| Peter Klein |
We’ve blogged on some of these papers already (1, 2), but it’s worth mentioning that the April 2007 issue of the American Journal of Economics and Sociology includes a symposium called “Reflections and Self-Reflections on the Economics Profession”:
- “Economists’ Opinions of Economists’ Work” by William L. Davis
- “The Input Relationship Between Co-Authors in Economics: A Production Function Approach” by Marshall H. Medoff
- “Is There a Free-Market Economist in the House? The Policy Views of American Economic Association Members” by Daniel B. Klein and Charlotta Stern
- “What Do Economists Talk About? A Linguistic Analysis of Published Writing in Economic Journals” by Nils Goldschmidt and Benedikt Szmrecsanyi
Good reading for the narcissistic economist (is there another kind?).
O&M Classic: Grading Essay Exams
| Peter Klein |
This classic post from last year deserves another go.
Economic Advisers to Presidential Candidates
| Peter Klein |
Last week’s Freakonomics column in the NY Times asked “What Does A Presidential Candidate’s Economic Adviser Actually Do?” McCain adviser Douglas Holtz-Eakin gives the best (facetious) response: “The first thing that the economics adviser brings to any campaign staff is a hip coolness and bling.” The serious answers are interesting too.
Several high-profile academic economists are involved with the 2008 campaign: Greg Mankiw and Glenn Hubbard are advising Romney, Micheal Boskin works for Giuliani, and Austan Goolsbee is helping Obama. Maverick Republican Ron Paul hasn’t announced any official economic advisers — “my advisers [are] Mises and Hayek and Sennholz,” he told Business Week — but this list of academic supporters includes some distinguished economists (scroll down to the Ks).
Open-Source Chinese Food
| Peter Klein |
“And bring me a side of Mozilla.”
Mark Liberman explains how this likely happened. My advice: check the “history” tab before ordering. (HT: NameWire)
Opera and Mandated Standards
| Peter Klein |
More on Opera and Microsoft. Besides demanding that Internet Explorer be unbundled from Windows, Opera wants the European Commission “to require Microsoft to follow fundamental and open Web standards accepted by the Web-authoring communities.” But what standards? Determined how, and by whom? “[S]peaking as a web developer,” writes Mike Gunderloy on WebWorkerDaily, “I do not believe that I want the courts stepping in to determine what standards must be implemented in shipping products.” He notes:
- It’s not at all clear just what are the “fundamental and open Web standards.” Some sites are already experimenting with HTML5 and CSS3, even though the standards are in flux and not thoroughly implemented. Are these fundamental yet? Are things like MathML fundamental? Who decides?
- No browser is perfect. Depending on how closely your read the standards and interpret them, you can always find a test to break any given browser. Will some other vendor turn around and demand that Opera be pulled until it fixes its own rendering bugs? If the end result is that only perfect browsers can be shipped, we will have no browser at all.
- Once they get involved, why would the courts stop at regulating browsers? Imagine a takedown order aimed at a site you just deployed because it won’t validate. There are people out there determined to make the Internet a better place by forcing us all to be less sloppy. I’m not sure I want them to end up in control.
As the critics of Microsoft’s critics have frequently pointed out, asking the courts to determine optimum technical standards makes no sense — and neither does asking the courts to determine the optimum bundle (“you can buy a suit coat and a pair of suit pants, but not a suit”), the optimum set of vertical contractual restraints (“software licenses are OK, per-processor licenses aren’t”), and so on. Why can’t we let the market decide?
Experimental Methods in Development Economics
| Peter Klein |
Readers interested in the J-PAL approach to development may enjoy an upcoming conference on “New Techniques in Development Economics,” 19-20 June at Australian National University. “[T]he conference will focus on new methodological approaches to development economics research, particularly field experiments and natural experiments.” Details, courtesy of SSRN, are below the fold. (more…)
Impact of the Commodore 64
| Peter Klein |
If Nicolai’s calculator fetish isn’t nerdy enough for you, check out this videotaped lecture on the impact of the Commodore 64 computer. A panel of industry pioneers (including Steve Wozniak) explain the Commodore 64’s impact on the computer industry.
For a more scholarly treatment of this industry’s evolution see Dick Langlois’s “Cognition and Capabilities: Opportunities Seized and Missed in the History of the Computer Industry,” in Garud, Nayyar, and Shapira, eds., Technological Innovation: Oversights and Foresights (Cambridge University Press, 1997).
Et Tu, Opera?
| Peter Klein |
Opera is an innovative company that makes a fine web browser and has a devoted following. I use Opera Mini, which is in many ways superior to the native browser on my BlackBerry. So I was dismayed to learn that Opera has adopted the “if you can’t beat ’em, file an antitrust suit against ’em” approach to its dealings with Microsoft. Happily for Opera, the company is based in Norway, allowing it to make its case before the Microsoft-unfriendly European Commission without being accused of forum-shopping. But, really, haven’t we been through all this already?
Accountics in Japan
| Peter Klein |
We discussed earlier the increasingly quantitative nature of accounting research, what some call accountics. (When I hear that term I’m reminded of a cartoon I once saw showing a woman dressed as a dominatrix standing before a company reception desk: “Oh, you must be the new accountrix.”)
Tomo Suzuki’s paper, “Accountics: Impacts of Internationally Standardized Accounting on the Japanese Socio-economy” (Accounting, Organizations, and Society, April 2007), argues that the postwar spread of Western accounting practices “directed new courses of the Japanese economy and firms through the development of ‘statistical habits of thought.’ ” A follow-up paper (same journal, August 2007 issue) traces the history of Japanese accounting practices in more detail, emphasizing the role of academic accountants in fostering the postwar accounting revolution. (See, professors can make a difference!)
Summer Workshop on Social Norms
| Peter Klein |
It’s hosted by Spain’s Urrutia Elejalde Foundation and takes place in San Sebastián, 14-17 July 2008. (Basque Country, not Spain, if you prefer.) The impressive speaker list includes Jon Elster, Diego Gambetta, Herb Gintis, Russell Hardin, and Edna Ullmann-Margalit, among others. Details here.
Ben Hermalin’s Teaching Materials
| Peter Klein |
Many years ago I had the pleasure of taking Ben Hermalin’s class on mechanism design and agency theory. In those days (around 1990) Ben was a baby-faced assistant professor (now a baby-faced chaired professor), just arrived from MIT where, according to rumor, he had single-handedly proofread — and therefore solved — all the exercises in Tirole’s Theory of Industrial Organization. Naturally, this gave him a certain aura among the PhD students. I also recall that, during Ben’s first year at Berkeley, George Akerlof audited his mechanism design course, leading Ben to joke that he would always remember Akerlof as one of his brightest students.
I happened to be on Ben’s website today and discovered that he’s posted a set of lecture notes (see the bottom of this page) from his PhD theory courses. See, in particular, his notes from Economics 201B, the second course in the first-year micro theory sequence. Very useful material for economics PhD students (and their instructors).
Also worth a read is this entry on contract law by Hermalin, Avery Katz, and Richard Craswell (in the new Handbook of Law and Economics, not to be confused with the earlier Encyclopedia of Law and Economics). Check it out.
Most Expensive Cities
| Peter Klein |
Luanda, Angola tops this year’s list, followed by Oslo and Moscow. Tokyo has dropped out of the top ten, replaced by London. Unfortunately for Nicolai’s purchasing power Copenhagen has moved up two spots to #5.
Best Web-Themed Passage I Read Today
| Peter Klein |
A succinct summary of government’s attitude toward the web, courtesy of today’s NY Times:
[M]any in the business world . . . understood years ago that the Web represented not simply another mass medium to be gamed but also a fundamental shift in the once static relationship between producer and consumer. It is by nature a participatory medium, in which customers demand a more personal stake in the products they consume. . . . Companies have realized that since they can no longer expect to unilaterally define the market the way they once did, they might as well let the market have some control over designing and branding the product.
Perhaps only in Washington, where so few people have dominated so much for so long, is this trend viewed as inherently negative.
From a short piece on the spontaneous, decentralized, web-fueled Ron Paul campaign (via Lew Rockwell). See more here and here.
Pomo Periscope XVII: Intellectual Property as Narrative
| Peter Klein |
[T]here remains a dissatisfying lack of a comprehensive explanation for the value of intellectual property protection. This is in part because the economic analysis of law tends to undervalue the humanistic element of intellectual property. This Article aims to fill that void. It offers a new explanation for intellectual property rooted in narrative theory. Whereas utilitarianism and natural rights theories are familiar, there is at least another basis for intellectual property protection. This Article contends that all the U.S. copyright, patent and trademark regimes are structured around and legitimated by central origin myths — stories that glorify and valorize enchanted moments of creation, discovery or identity. As a cultural analysis of law, rather than the more familiar economic theory of law, this Article seeks to explain how these intellectual property regimes work the way they do.
This is from Jessica M. Silbey’s paper, “The Mythical Beginnings of Intellectual Property,” in of the Berkeley Center for Law and Technology working-paper series. Postmodernism has had a growing influence in legal theory since at least the critical legal studies (CLS) movement of the 1970s. Proponents of that movement, according to the Legal Information Institute’s dictionary, “believe that logic and structure attributed to the law grow out of the power relationships of the society. The law exists to support the interests of the party or class that forms it and is merely a collection of beliefs and prejudices that legitimize the injustices of society.” (more…)
New Paper on Law and Entrepreneurship
| Peter Klein |
Gordon Smith and Darian Ibrahim’s paper “Entrepreneurs on Horseback: Reflections on the Organization of Law,” is up on SSRN. The paper surveys the emerging field of law and entrepreneurship and urges legal scholars to pay closer attention to the entrepreneurship literature. “In making our case, we argue that research at the intersection of entrepreneurship and law is distinctive. In some instances, legal rules and practices are tailored to the entrepreneurial context, and in other instances, general rules of law find novel expression in the entrepreneurial context.”
(The paper’s title alludes to an inside joke about the mythical “law of the horse,” a hyper-specialized branch of legal theory no serious law school would include in its curriculum. Law and entrepreneurship, in other words, is not quite as silly as the law of the horse.)
New Challenges for Business Educators
| Peter Klein |
Tuesday’s WSJ ran an interview with Daphne Atkinson, vice president for industry relations at the Graduate Management Admission Council (the organization that owns and administers the GMAT and provides various recruiting services for business schools). The interviews focuses on the challenges schools face in attracting and educating the newest generation of MBA students (the so-called Millennials). A few passages caught my eye:
[The current generation has] the sense that it is either irrelevant or meaningless to “pay dues.” It can be disappointing to find out that you won’t be president of the company in two years. Millennials want their dream job as early as possible. But entry-level jobs are seldom dream jobs, although they may be at dream companies or in dream industries.
Could the current emphasis on entrepreneurship, creativity, and the like — we are all entrepreneurial and creative, we just have to discover and nurture our inner entrepreneur — be partly responsible? (more…)
Strange Email Fact of the Day
| Peter Klein |
Donald Knuth, creator of 
Jeff Tucker finds gmail revolutionary, but I think it has important weaknesses as well as strengths. I use imap and archive really old messages to my local workstation, where they are indexed for easy search by Google Desktop. Of course no protocol is perfect, and I’m eager to see what the market will come up with next.
Do Transactional Lawyers Add Value?
| Peter Klein |
What do bosses do? asked Stephen Marglin in his famous 1974 article. Nothing productive, he said; they create hierarchies with task specialization to extract value from laborers. Despite heroic efforts by David Landes and others to set the record straight, the myth has persisted, in some quarters, that “management” — including intermediation, market-making, the facilitation of transactions, etc. — does not create economic value, but merely redistributes it. Making widgets is OK, but merely facilitating widget transactions is wasteful or redundant.
How about transactional lawyers? Do they add value by reducing transaction costs, minimizing the chance of ex post litigation, reducing regulatory burdens, acting as reputational intermediaries, providing confidentiality, or exploiting economies of scope? Or do they simply extract value from the transacting parties?
An interesting paper by Steven Schwarcz, “Explaining the Value of Transactional Lawyering,” uses survey data to examine this question and finds that reducing regulatory costs appears to be the main source of added value. The results “present a very different picture of how business lawyers add value than that portrayed by existing scholarship, challenging the reigning models of transactional lawyers as ‘transaction cost engineers’ and ‘reputational intermediaries,'” activities in which lawyers do not necessarily have a comparative advantage. Instead, suggests Schwarcz, it is precisely lawyers’ expertise in (business) law that gives them a role in the contracting process. (The broader question of whether legislators, most of whom are also lawyers, deliberately design rules of contract law, regulation, administrative procedure, and the like so that only other lawyers can understand them, is not addressed.) (more…)
Doing Business Blog
| Peter Klein |
The World Bank’s Doing Business group, which provides valuable information on business regulation and enforcement across the globe, has a new blog. (Via PSD.)
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