Posts filed under ‘– Klein –’
Strategic Entrepreneurship Journal
| Peter Klein |
Teppo Felin offers some thoughts on the new Strategic Entrepreneurship Journal. (Of course, you read about it here first.)
More on Quantitative Methods in Social Science
| Peter Klein |
Thanks to Cliff Grammich for his reading suggestions in the comment below. Let me add some details and links:
Richard Lewontin’s “Sex, Lies, and Social Science” (New York Review of Books, April 20, 1995; online version for NYRB subscribers only), savages three books on sex by sociologists. The resulting replies and rejoinders (here and here) make for interesting reading. In one rejoinder, Lewontin describes “the central methodological issue” raised by one set of authors under review:
It is their view that, although people may lie or exaggerate in autobiographies because they are trying to create a public persona, they will tell the truth in anonymous interviews, because there is no motivation to manipulate the impression that strangers have of us. Is it really true that quantitative sociologists are so divorced from introspection and so insensitive to social interactions that they take such a naive view of human behavior? Do they really believe all those things they hear from the person on the next bar stool or the seat next to them in the airplane? The Yellow Kid, who made a living from fleecing the gullible, used to say that anyone who could not con a banker ought to go into another line of work. Maybe, but before giving up, they should try professors of sociology.
Friedman on Method
| Peter Klein |
There is a huge secondary literature on Friedman’s 1953 essay “The Methodology of Positive Economics” (one summary of the various debates is here), and I have little to add to it. Two quick notes, however:
1. Samuel Brittan’s lengthy and informative obituary in today’s Financial Times includes this interesting remark:
The very modernity of Friedman meant that he was vulnerable in his technical findings to new researchers claiming to refute his work by still more up to date statistical methods. Indeed, Friedman lived long enough to see a reaction against basing economics on discoverable numerical relationships and the revival of so-called Austrian methods which concentrated on predicting general features of interacting systems on the lines of biology and linguistics.
2. Hayek reports (Hayek on Hayek, p. 145), that “one of the things I most regret is not having returned to a criticism of Keynes’s [General Theory], but it is as much true of not having criticized Milton Friedman’s [Essays in] Positive Economics, which in a way is quite as dangerous a book.”
Randomness and the Black Swan
| Peter Klein |
I’m on a private discussion list where the subject of resampling/bootstrapping techniques, and their application to empirical social science research, is being discussed. A commentator pointed to a 1988 New York Times article in which Stanford’s Jerome Friedman calls bootstrapping “the most important new idea in statistics in the last 20 years, and probably the last 50.” Murray Rothbard invoked bootstrapping, indirectly, in a 1989 article criticizing empirical methods in economics:
As improbable as this may seem now, I was at one time in college a statistics major. After taking all the undergraduate courses in statistics, I enrolled in a graduate course in mathematical statistics at Columbia with the eminent Harold Hotelling, one of the founders of modern mathematical economics. After listening to several lectures of Hotelling, I experienced an epiphany: the sudden realization that the entire “science” of statistical inference rests on one crucial assumption, and that that assumption is utterly groundless. I walked out of the Hotelling course, and out of the world of statistics, never to return.
The “crucial assumption” to which Rothbard refers is the assumption of normality. Of course, it is possible to do statistical inference without assuming data are normally distributed, and the central limit theorem tells us not to worry about distributional properties as samples become “large.” But how large is large? (more…)
The Intellectuals and Socialism
| Peter Klein |
Why do academics lean left? This is been a frequent topic here at O&M (1, 2, 3, 4, 5). My own modest contribution to this debate appears as today’s Daily Article at Mises.org. Comments are welcome below or at the Mises blog.
Chaired Position in Entrepreneurship
| Peter Klein |
The University of Missouri’s Division of Applied Social Sciences, where I am housed, is recruiting for the McQuinn Chair of Entrepreneurial Leadership. Here is the position announcement. Economists, sociologists, management theorists, and other social scientists are encouraged to apply. I am on the search committee, so if you know any suitable candidates, please encourage them to get in touch with me. And I’d appreciate your help spreading the word to those who might be interested in applying.
Here’s To You, Mrs. Robinson
| Peter Klein |
I’m not a great fan of Joan Robinson but believe she has admirers among the O&M clientèle. So here’s a pointer to a new book on Robinson’s work and significance, Joan Robinson’s Economics: A Centennial Celebration (Cheltenham, UK: Edward Elgar, 2005). The volume, edited by Bill Gibson, stems from a 2003 conference on the centenary of Robinson’s birth. This passage from Michael Lawlor’s review in EH.Net may spark some interest:
One thing she particularly saw as useful in Marshall was his awareness of the difficulty of treating time by equilibrium constructs. Thus, rather than the highly artificial dynamic equilibria of modern theories of growth (of any stripe), she wanted dynamic economics to be “open” to uncertain expectations, technological change, habits, and the possible irreversibility that came with the “choice of technique.” In other words, she insisted that a theory of economic growth should be alive to the kinds of issues that, economic history teaches, have been real aspects of capitalist economies of the past. . . . She did not want to construct models that would reach the same “equilibrium” from radically different starting points, but ones that depended crucially on where a system began to determine part of where it ends up. In short, she wished for a dynamic economics in which a particular set of institutions and a particular history ought to be given its due as a factor that could influence the time path of an economy.
But as Donald Harris particularly emphasizes, this is no easy task. In fact one could say that her long struggle with a variety of complex approaches to such questions in the theory of economic growth (her most mature statements on this topic are to be found in Robinson, 1956 and 1962b) ended in her rejecting “equilibrium” altogether as a way to capture the manifold influences of “history” (Robinson, 1985).
Calligraphy by Committee
| Peter Klein |
The King James Bible, considered the greatest work of English prose, was composed a committee of 50 men.
Group projects, as any middle-school social-studies teacher can tell you, rarely produce inspiring results. But if you think writing by committee is hard, try drawing by one. That’s what Donald Jackson, the former official scribe for Britain’s Queen Elizabeth, signed up for when he agreed to create the first handwritten English Bible in 500 years.
Read the rest at OpinionJournal, and also visit the project’s home page.
I wonder how the 50 authors of the King James Bible got along? How did they control free riding? Were team members subject to peer review? How about 360-degree assessments? Did they work together on several projects or was this a one-shot game? (Sorry, a weekend of executive MBA teaching has left me unable to think like a regular human.)
Upcoming Events Page
| Peter Klein |
As a service to our readers, we have added an Upcoming Events page to O&M. You’ll see a button for it above. Here we will list and bookmark upcoming conferences, workshops, and symposia likely to interest the O&M crowd. (Well, likely to interest us, anyway.)
If you have a suggestion for an addition, please drop us a line.
Those Nutty Professors
| Peter Klein |
Anthony Grafton reviews William Clark’s Academic Charisma and the Origins of the Research University (University of Chicago Press, 2006) for The New Yorker. Clark focuses on Weber’s notion of charismatic authority and argues that the critical element in the development of the professorial role was not the lecture, but the “disputation,” or debate, a form of which survives today as the oral thesis defense. Peter Abelard was apparently a master of the disputation. Writes Grafton:
His triumphs in these “combats” made him, arguably, the first glamorous Parisian intellectual. A female disciple, Héloïse, wrote to him, “Every wife, every young girl desired you in absence and was on fire in your presence.” Their story has become a legend because of what followed: Héloïse, unwed, had a child by Abelard, her kin castrated him in revenge, and they both lived out their lives, for the most part, in cloisters. But even after Abelard’s writings were condemned and burned, pupils came from across Europe hoping to study with him. He had the enduring magnetism of the hotshot who can outargue anyone in the room.
I don’t wish Abelard’s fate, but it would be nice to have that kind of enduring magnetism. Anyway, the book sounds like a good read. (HT: Jackson Library Blog)
The Grameen Myth
| Peter Klein |
Jeff Tucker makes several interesting points today about Muhammed Yunus and the Grameen Bank. As you may know, microfinance in general, and Grameen in particular, have taken several hits here at O&M.
Some issues raised by Tucker and others he cites:
- The bulk of the wildly enthusiastic literature on Grameen — Tucker calls it “an echo chamber of hurrahs” — comes from the bank itself. Even the Nobel announcement cites not a single external source.
- The idea that the poor can best escape poverty through self-employment, rather than working for wages, goes against all historical experience. Rising living standards for the poor, in all other countries and historical episodes, has come from wage increases driven by increases in labor productivity.
- The claim that the binding constraint on entrepreneurial activity in countries like Bangladesh is credit, rather than management or entrepreneurship, has become a mantra that is asserted but never demonstrated.
- Yunus himself has founded 16 companies other than the Grameen Bank, all of which went bankrupt. Critics think he funds these projects via the Bank, siphoning off the huge government and philanthropic grants that fund the Bank’s activities. Because the bank does not publish audited financial statements, no one knows for sure.
- Bangladesh consistently ranks near the bottom of the standard indexes of economic freedom. The main obstacles to development in Bangladesh are high trade barriers, a vast array of state-owned enterprises, high taxes, corruption, political violence, etc. The claim that microfinance, rather than fundamental institutional reform, is the key to growth strains credulity.
More on Law and Entrepreneurship
| Peter Klein |
Our conception of “law and entrepreneurship” . . . encompasses positive law (including constitutions, statutes, and regulations), common law doctrines, and private ordering that relate to “the discovery and exploitation of profitable opportunities by new firms.” While much entrepreneurship research focuses on the characteristics of entrepreneurs or on the performance of entrepreneurial firms, law and entrepreneurship studies should focus on the legal structure and regulation of entrepreneurial firms.
Science and Public Funding
| Peter Klein |
As discussed previously on these pages, the relationship between scientific research (basic and applied) and public funding is more subtle and complex than is usually assumed. The current issue of the Independent Review features an article by William N. Butos and Thomas J. McQuade, “Government and Science: A Dangerous Liaison?”, exploring this relationship in detail. Write Butos and McQuade:
There are serious reasons . . . for thinking that the liaison between government and science carries with it unrecognized dangers for the functioning and integrity of science as a reliable generator of knowledge. It is not so much that government seeks to exert a blatant and crude control over the content and direction of scientific inquiry — although such heavy-handed intrusion has precedents, most notably in the USSR — but that the structure and conduct of seemingly benign and generous government funding of science has side effects that generate instabilities in scientific activity in the short run and corrode the structure and adaptability of the system of science itself in the long run.
Dan Klein’s fine EconJournalWatch has published two recent pieces on the effects of public funding on research in two branches of applied economics, by Larry White on monetary economics and E. C. Pasour, Jr., on agricultural economics.
Election Day
| Peter Klein |
Today is election day in the US and, like a majority of my fellow American citizens, I’m exercising my cherished right not to vote. Unlike most Americans, however — but like Brian Doherty — I’m proud, not ashamed. “Don’t vote,” I say. “It only encourages them.”
Just to show you that economists have a sense of humor, let me share these pictures of my office door, decorated by my colleagues in 2004 in a vain attempt to shame me for not voting. (Don’t miss the Dr. Seuss-inspired poem.)
Some good non-voting resources: this piece in Slate and this archive. I think Tyler Cowen gets it right: “Overall I view voting as a selfish act, usually done for purposes of self-image…. I fondly recall Gordon Tullock’s point: ‘The paradox is not why people vote, but why everyone doesn’t vote for himself.’ “
The Wizard of Oz as Monetary Allegory
| Peter Klein |
In recent remarks on literature in economic discourse (here and here) I forgot to mention Hugh Rockoff’s classic “The ‘Wizard of Oz’ as a Monetary Allegory” (Journal of Political Economy, August 1990):
The Wonderful Wizard of Oz, perhaps America’s favorite children’s story, is also an informed comment on the battle for free silver in the 1890s. The characters in the story represent real figures such as William Jennings Bryan. This paper interprets the allegory for economists and economic historians, illuminating a number of elements left unexplained by critics concerned with the politics of the allegory. It also reexamines Bryan and the case for free silver. Far from being monetary cranks, the advocates of free silver had a strong argument on both theoretical and empirical grounds.
Another good resource is Michael Watts’s The Literary Book of Economics (Intercollegiate Studies Institute, August 2003).
Conference on Ragnar Nurkse
| Peter Klein |
The Tallinn University of Technology, Estonia, and The Other Canon Foundation, Norway, are organizing a 2007 conference to celebrate the birth of Ragnar Nurkse, often called a Norwegian or Swede but in fact the world’s most important Estonian economist. Here is the call for papers. “This conference will discuss Nurkse’s work also in relationship to his contemporaries in development economics, and the common elements of development economics from Antonio Serra to Nurkse — among them technology, finance, institutions, problems of foreign ownership — will be highlighted.”
Nurkse was an occasional visitor to Mises’ private seminar at the Vienna Chamber of Commerce. He rejected the Austrian theory of capital, however, preferring a model in which capital is virtually homogeneous and self-reproducing. (See his “The Schematic Representation of the Structure of Production,” Review of Economic Studies, June 1935.)
New Evidence on Multinational Transfer Pricing
| Peter Klein |
The economic theory of the firm is ultimately about the differences between inter- and intra-firm transactions. How, for example, are employment contracts different from arms-length transactions with independent contractors? (Alchian and Demsetz, in the famous passage in their 1972 article about “firing the grocer,” say there is no difference; Coase and Simon argue otherwise.)
We know little about how intra-firm purchase and supply arrangements differ from those between firms. However, thanks to a new dataset, the Linked/Longitudinal Firm Trade Transaction Database (LFTTD) from the US Census and Customs Bureaus, we now know something about how such transactions are priced. A new paper by Andrew Bernard, Bradford Jensen, and Peter Schott, “Transfer Pricing by U.S.-Based Multinational Firms,” uses the LFTTD data to compare export prices for “related-party” and “arms-length” transactions among US multinationals. Bernard, Jensen, and Schott find that intra-firm transactions are priced significantly lower than sales of the same good to arms-length customers. (more…)
“Original” Institutional Economics
| Peter Klein |
Nicolai has noted that evolutionary economics is weak on public policy. But things may be changing. The theme for the 2007 meeting of the Association for Evolutionary Economics is “Contributions of Institutional Economics to Public Policy Debates: Past and Present.” Here is the call for papers.
Note that “evolutionary” is defined here as “institutional/evolutionary.” The instructions say the papers “must be grounded in and contribute to the literature of Original Institutional Economics in the tradition of Commons, Veblen, Mitchell, Kapp, Myrdal, Polyani, etc.”
I confess this is the first I’ve seen the term “original institutional economics.” I can see why the organizers prefer it to “old institutional economics,” the term used by new institutional economists to describe the early twentieth-century American institutionalists whose contributions are largely forgotten today. (Coase: “Without a theory they had nothing to pass on except a mass of descriptive material waiting for a theory, or a fire.” )
David Landes on Family Firms
| Peter Klein |
Economic historian David Landes’s new book, Dynasties: Fortunes and Misfortunes of the World’s Great Family Businesses, focuses on the family firm (discussed here, here, and here). As described by the New York Times, Landes wants to suggest that “the business-school mythos of the ‘professional manager’ has led to a persistent underestimation of the importance of family firms. Fully a third of Fortune 500 companies can properly be characterized as family businesses, and on average they outperform the ‘professionally managed’ firm by a surprisingly large margin.”
Imagining the Company of the Future
| Peter Klein |
Gary Hamel and Harvard Business Review are conducting an open-ended, non-random-sample survey on the future of the company. “What will the company of the future look like? Will it be any different from today’s leading-edge businesses? What are the important ways in which today’s companies must change in order to thrive?” To participate, go here and answer the following two questions:
1. Twenty years into the future, what one characteristic — principle, process, practice, or structural feature — of the late twentieth-century industrial organization will appear to be the most antiquated or anachronistic?
2. Looking out a generation or two, what feature or characteristic — principle, process, practice, or structural feature — of leading-edge organizations will be most different from what we observe today? Use your imagination to describe this new feature or characteristic in detail and in a way that illustrates the difference it will make to organizational success.
Or, for even greater impact, add your comments below.
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