Posts filed under ‘– Klein –’
The Case for Killing the FCC
| Peter Klein |
Jack Shafer has a very nice piece in Slate on the Federal Communications Commission:
Although today’s FCC is nowhere near as controlling as earlier FCCs, it still treats the radio spectrum like a scarce resource that its bureaucrats must manage for the “public good,” even though the government’s scarcity argument has been a joke for half a century or longer. The almost uniformly accepted modern view is that information-carrying capacity of the airwaves isn’t static, that capacity is a function of technology and design architecture that inventors and entrepreneurs throw at spectrum. To paraphrase this forward-thinking 1994 paper (PDF), the old ideas about spectrum capacity are out, and new ones about spectrum efficiency are in.
As every freshman economics student knows — but most regulators (and ecologists) do not — the degree to which a particular resource is “scarce,” in the economic sense, depends on consumer preferences and the state of technology. Oil was not a scarce resource until people learned how to refine it into useful products like kerosene and gasoline. The supply of a given resource, like spectrum, is not fixed, but varies with our knowledge of how, and for what, to use it.
Shafer also points out that the FCC has been not an enabler, but an obstacle, to technological advances in telecommunications. The Commission “stalled the emergence of such feasible technologies as FM radio, pay TV, cell phones, satellite radio, and satellite TV, just to name a few. As Declan McCullagh wrote in 2004, if the FCC had been in charge of the Web, we’d still be waiting for its standards engineers to approve of the first Web browser. ”
Update: James Delong likes it too.
Ode to the RIAA
| Peter Klein |
Regular readers will know that we are not entirely sympathetic to the concept, let alone current legal treatment, of intellectual property (1, 2, 3). Fellow IP-skeptics are sure to enjoy David Pogue’s “Ode to the R.I.A.A” (Recording Industry Association of America), to the tune of the Village People’s “YMCA.” (more…)
The Galileo Legend
| Peter Klein |
We noted previously how little most practicing scientists know about the history and philosophy of science. In many cases this is harmless; does the average chemist really need to know Lavoisier from Priestly? However, when scientists speak and write about the meaning of science, the role of science in society, public policy toward science, and such broader issues, such ignorance can be devastating.
An example is the legend that Galileo Galilei was persecuted by the Catholic Church for his heretical belief that the earth revolves around the sun. In popular myth Galileo represents the lone crusader, the revolutionary with the courage to speak out against the Establishment and the popular fallacies of his day. Don Boudreaux titles an (otherwise excellent) item on free trade “What Galileo Must Have Felt,” writing that “[w]hen I read or hear protectionists such as Sen. Byron Dorgan, I think that I can imagine what Galileo felt as he listened to the Leaders of his day insist that the sun revolves around the earth.”
The problem is that the leaders of Galileo’s day didn’t think the sun revolves around the earth. My former colleague Thomas Lessl is an expert on Galileo, and from him I learned that virtually every aspect of the Galileo legend is false. (more…)
The Procastinator’s Clock
| Peter Klein |
Thomas Schelling, in his 1984 paper on voluntary self-restraint, popularized the example of the man who tends to oversleep and, knowing he tends to hit the snooze button several times on his alarm clock, places the clock across the room where he can’t reach it. My grad-school buddy Ted O’Donoghue has written several papers (with Matt Rabin) applying behavioral economics to procrastination, addiction, and other cases of what Ted calls “time-inconsistent preferences,” showing how rational agents deal with problems of self-control.
A simple solution for the procrastinator is setting the clock 15 minutes fast, but that only works if you forget you did it. David Seah has come up with a better solution: the Procrastinator’s Clock. It’s “guaranteed to be up to 15 minutes fast. However, it also speeds up and slows down in an unpredictable manner so you can’t be sure how fast it really is.” Brilliant. (HT: WebWorkerDaily)
Coase and Hayek in Law School
| Peter Klein |
My colleague, law professor Thom Lambert, begins his Business Organizations class with Hayek (1945) and Coase (1937). Coase is obviously extremely well known in legal circles, but I doubt Hayek is assigned in many law-school classes. Thom’s students are fortunate.
(Thom’s blog entry also alerts me to Henry Manne’s “Hayek, Virtual Markets, and the Dog that Did Not Bark,” which I hadn’t seen before, and which seems to deal with market-based management.)
StrangEconomics
| Peter Klein |
Freakonomics not freaky enough for you? Try the papers listed at StrangEconomics. Learn the economics of olympic medals, primping (not pimping, though that has been studied too), toilet seat etiquette, long-distance running, and more. (HT: Bayesian Heresy)
Who says economists are attracted to puzzles, not problems?
Measuring Research Productivity
| Peter Klein |
The Chronicle of Higher Education reports rankings of 7,294 PhD programs in 104 disciplines at 354 US universities. The rankings are from the Faculty Scholarly Productivity (FSP) Index computed by Academic Analytics. Unlike the Business Week and US News and World Reports rankings, based largely on subjective, peer evaluations, the FSP purports to be an objective performance index. (I’m reminded of Frank Knight’s reported interpretation of Kelvin’s dictum: “If you can’t measure, measure anyway.”)
A few surprises: In economics, Johns Hopkins, Duke, and UC-San Diego make the top ten, ahead of Chicago, Stanford, and Berkeley. Iowa ranks #5 in management, behind heavyweights Columbia, Wharton, MIT, and Northwestern (Cornell and Florida also make the top ten). The top ten in finance includes Emory, Temple, Boston College, and Houston. No surprises in sociology (at least to my untrained eye).
Thanks to Rich Vedder for the pointer. Rich interprets these data as evidence that the traditional, subjective rankings are biased toward the elite universities. On the other hand, quantitative metrics for intangibles like knowledge creation can’t possibly incorporate quality in a satisfactory way.
Bloggers versus Journal Editors
| Peter Klein |
Arnold Kling on the folksonomic nature of blogs:
I think that we’re at a point where blogs can legitimately crowd out other reading. That is, if you spend a few hours a week reading blogs and cut back on something else, you probably are better off. The “something else” that I think can be cut back is periodicals and journals. I can find bloggers who do a better job than journal editors of selecting what I should read.
Chandler the Misesian?
| Peter Klein |
I spent some time a couple of summers ago reading through Murray N. Rothbard’s personal correspondence, housed with the rest of his papers at the Mises Institute in Auburn, Ala. Rothbard was an extremely prolific writer, and his many letters — long, detailed, provocative, and funny — are as valuable and informative as his published writings.
I came across one curious exchange of letters from the early 1950s between Rothbard and Alfred D. Chandler, Sr., father of Harvard’s Alfred D. Chandler, Jr. Rothbard is describing his plans for producing a textbook expounding Misesian principles (what became Man, Economy, and State). Chandler writes: “I would like to show you what I have already done on a popular Mises, as well as to discuss plans for its future. Also as you say it is time for all good ‘Misesians’ to come to the aid of the party.” In a subsequent letter Rothbard notes: “As a Misesian, I think you’ll be interested in learning that the latest issue of the American Economic Review, just published, has its lead book review devoted to [Mises’s] Human Action. . . .”
Chandler Jr. tells me he doesn’t recall his father working on any such “popular Mises.” Mises’s student Percy Greaves later came out with a glossary, Mises Made Easier, and Bob Murphy is currently preparing a study guide for Human Action. But no record of Chandler, Sr.’s project seems to have survived. If readers know anything about this, please let me know.
Richard Florida’s Blog
| Peter Klein |
Richard Florida, author of The Rise of the Creative Class, has a new blog.
Best Blog Post Opening Lines I Read Today
| Peter Klein |
My associate Roderick Long gets the prize:
Wish you’d been a fly on the wall at last month’s Molinari Society symposium on “Anarchist Perspectives”?
Well, of course you don’t. A fly’s brain is too small to process the event properly. Plus you might have gotten squished against the wall by a stampeding bewilderment of philosophers.
The Canon of Management Thought
| Peter Klein |
Gordon Smith points us to David Kennedy and William W. Fisher’s edited volume The Canon of American Legal Thought (Princeton, 2006). The volume features the “twenty most important works of American legal thought since 1890.” Click Gordon’s link for the list, which includes a few items familiar to O&M readers (Coase’s 1960 “The Problem of Social Cost”; Calabresi and Melamed’s 1972 “Property Rules, Liability Rules, and Inalienability”; and possibly Macaulay’s 1963 “Non-Contractual Relations in Business”). The more recent stuff is mostly “critical legal theory” (pomo alert!).
So, what are your selections for the canon of management thought? Both books and articles are fair game. (I imagine the after-1890 constraint won’t be binding.) You can include works in organizational economics if you like.
Grad Skool Rulz
| Peter Klein |
A new feature from Fabio Rojas at orgtheory.net. Highly recommended for (current or prospective) graduate-student readers.
I have some resources for graduate students listed on my site. A few are specific to my own department, but most are general (especially “Writing, speaking, and listening,” “Teaching,” and “Miscellaneous”).
Psychology and Economic Development
| Peter Klein |
A Vietnam story for Nicolai to enjoy during his holiday. Writes a World Bank staffer:
At the end of the day, it is the mentality of our government clients that matter. It is their willingness to reform and their interest in facilitating private sector development that make the difference. We just give them the tools. We have to put more emphasis on why they should change their mentality and adopt the “Vietnam approach.” But we are not psychologists — we are economists, lawyers, bankers, investors, bureaucrats, you name it, but not psychologists.
Kids Have Good Intuition
| Peter Klein |
My older son figured out, this Christmas, that Santa isn’t real. As with many kids, it was the physics of the thing that troubled him. However, the alternative explanation posed problems as well. “Dad, remember the desk I got last year? There’s no way YOU could have assembled that.” Even at a tender age he knows the difference between a tough, manly Dad who can build stuff and a nerdy, bookish Dad who can’t (Kevin Murphy notwithstanding).
But it could be worse: He could have a chemistry professor for a Dad. (Thanks to Craig Newmark for the link.)
It’s Built to Last, But Is It Made to Stick?
| Peter Klein |
Chip and Dan Heath’s Made to Stick: Why Some Ideas Survive and Others Die (Random House, 2007) is being touted as the Next Big Thing in the popular management literature. Here is the Amazon link. Here is Guy Kawasaki’s interview with the authors. Here are words of praise from Bob Sutton. And yes, of course, the authors have a blog.
Nature Gives Up on Open-Source Peer Review
| Peter Klein |
The open-source, wiki model does not, apparently, work well for scientific publishing. Nature had placed a selection of submitted manuscripts online and invited feedback from researchers around the world, promising to take the feedback into consideration as part of the formal review process. But the scientific community showed little interest. Few authors were willing to participate in the experiement, and the online papers didn’t get much feedback.
During Nature’s trial, only 5 percent of 1,369 papers ranging from astronomy to neuroscience that were selected for traditional peer review were also posted on the Internet for open commentary. Of those, 33 papers received no comments. The rest received a total of 92 technical comments.
The journal concluded that many researchers were either too busy or had no real incentive in evaluating their colleagues’ work publicly. In addition, none of the editors found the posted comments influenced their decision whether a paper gets published.
I’m a little surprised by this. According to Lerner and Tirole, the open-source model should work in settings with strong reputation effects. One would think that in small, close-knit, specialized scientific communities the incentives to provide useful feedback — assuming it’s not anonymous — would be fairly high. On the other hand, there are opportunities to do so at conferences, seminars, workshops, the faculty lounge — and even blogs! — and the opportunity costs of doing it via Nature’s setup may have been too high.
Call for Papers: Putting Social Capital to Work
| Peter Klein |
Those of you studying networks, clusters, and social capital may find this Call for Papers of interest:
Doing business is a profoundly social process. Social capital and its dynamics, therefore, are inescapable components of every interaction. Among other things, they affect group cohesiveness and functionality, and they give advantages or disadvantages to some individuals and groups relative to others. This special issue of Business History will explore the research and analytical opportunities in putting social capital to work.
Full details: (more…)
Do Multinationals Restrain the State?
| Peter Klein |
I referred early to Ralph Raico’s essay on the European Miracle, the unprecedented, long-term rise in living standards that began in late-medieval Europe. As discussed there, the consensus of mainstream scholars such as Rosenberg and Birdzell, Mokyr, North, Landes, and Weingast is that Europe grew rich because unlike more centralized Eastern civilizations, European political and social life was controlled by a complex, decentralized mosaic of institutions and organizations, each of which placed limits on the other.
The most important of these institutions was the transnational Church. The concept of the sovereign as subordinate not only to a Higher Law, but also to a higher earthly authority, located outside his realm, was unique to European politics. State power was thus restricted by horizontal competition among sovereign states and complex vertical relationships between church and state.
Today, of course, the Catholic Church no longer plays this limiting role. However, there are other multinational and transnational institutions that place powerful limits on state power. These include charitable and relief organizations such as the Red Cross or Doctors Without Borders, religious movements and groups, the news media (we bloggers especially!), and other voluntary associations. But the most important of these institutions is the multinational or transnational corporation. What role do multinational firms play in limiting the power of the state? (more…)
Arrow on Microfoundations
| Peter Klein |
Michael Greinecker shares this illuminating comment by Kenneth Arrow, quoted in Colander, Holt, and Rosser, ed., The Changing Face of Economics: Conversations with Cutting Edge Economists, (University of Michigan Press, 2004):
I’ve never understood [macroeconomics]. What I mean by this is that my idea of understanding is having a model that captures what is going on. In macro we don’t have that; instead we have empirical generalization, and those generalizations tend to break down rather quickly. The question is, can you get some understanding of the empirical evidence from the models? One attempt has been to generate empirical work out of very simplistic models- essentialy they are micro models blown up. I don’t give much credence to those models. One of the things that microeconomics teaches you is that individuals are not alike. There is heterogeneity, and probably the most important heterogeneity here is heterogeneity of expectations. If we didn’t have heterogeneity, there would be no trade. But developing an analytic model with heterogenous agents is difficult.
This sounds a lot like our critiques of “macro”-level explanations in organization theory (1, 2, 3, 4, 5, 6). Macroeconomics, labor economics, and industrial organization have become increasingly “micro” in the last two or three decades. Will organization theory follow, or is the resistance to economics in some quarters strong enough to block the move?
Organizations and Markets 
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