Posts filed under ‘Myths and Realities’
Management Journal Impact Factors 2006
| Nicolai Foss |
The new journal impact factors for 2006 are now available from the ISI Web of Knowledge (here). Consider the journal list within “management” or “business” (the former includes information system journals, the latter includes marketing journals). (more…)
Industrial Recycling: Nothing New
| Peter Klein |
Popular myth holds that pre-industrial societies were models of environmental sensitivity, practicing “sustainable development” and minimizing waste. Industrialism, it is said, upset the delicate balance between man and environment, encouraging overproduction, overconsumption, and a disregard for the natural world. To many environmentalists, capitalism’s primary legacy is the strip mine and the garbage dump.
Shephard Krech’s Ecological Indian: Myth and History has done much to debunk the fable of pre-modern environmentalism, at least in the North American context. Pre-industrial societies produced massive amounts of garbage and cared little for environmental stewardship. Now we learn from Pierre Desrochers and Karen Lam that industrial recycling — a key component of modern sustainable development programs — was widespread during the Gilded Age. In “‘Business as Usual’ in the Industrial Age” (Electronic Journal of Sustainable Development, vol. 1, 2007) Desrochers and Lam describe how woollen rags, old iron, manure, animal parts, butter-making waste, and other byproducts were recycled, for profit, in the UK and US. Here’s but one of many colorful examples (not for the feint of heart or weak of stomach): (more…)
What Job Instability?
| Peter Klein |
A truism among management scholars is that jobs, in the new, knowledge-based, hypercompetitive, deregulated, entrepreneurial, dog-eat-dog, Schumpeterian, long-tail economy, have become less secure. Perhaps my father or grandfather spent his career with a single firm and got a gold watch upon retirement but I constantly switch jobs, by choice or necessity, resulting in a loss of firm-specific or job-specific human capital, increased employee anxiety, and a deterioration of social bonds.
The data, however, suggest otherwise. In “The More Things Change, The More They Stay the Same: Trends in Long-Term Employment in the United States, 1969-2002,” Ann Huff Stevens finds in 1969, the average tenure for US men in their longest job was 21.9 years. In 2002, the figure is 21.4 years. The percentage of male workers working for a single employer for 20 years or more is the same was the same in 2002 as it 1969. By this measure, at least, jobs are as “stable” today as they were in the Good Old Days.
Is Innovation Overrated?
| Peter Klein |
Technological innovation is not as important as we think, argues David Edgerton in The Shock of the Old: Technology and Global History since 1900 (Oxford, 2006). Edgerton’s book, writes Steven Shapin in the New Yorker,
is a provocative, concise, and elegant exercise in intellectual Protestantism, enthusiastically nailing its iconoclastic theses on the door of the Church of Technological Hype: no one is very good at predicting technological futures; new and old technologies coexist; and technological significance and technological novelty are rarely the same — indeed, a given technology’s grip on our awareness is often in inverse relationship to its significance in our lives. Above all, Edgerton says that we are wrong to associate technology solely with invention, and that we should think of it, rather, as evolving through use. A “history of technology-in-use,” he writes, yields “a radically different picture of technology, and indeed of invention and innovation.” (HT: Against Monopoly)
Edgerton provides numerous examples, mainly from military history, of old technologies proving more important than new technologies (horses, for instance, were more important in World War II than V-2 rockets or atomic bombs). Useful innovation, not innovation per se, is what matters.
Most of us are attracted to novelty; it’s no wonder that we tend to overrate its importance. We also forget that many new technologies are modest variations on existing technologies.
Against Holism: The Boudon-Montaigne Farting Example
| Nicolai Foss |
Sophisticated attacks by methodological holists on methodological individualism often take the form of admitting that while, strictly speaking, only individuals act, individuals are so strongly influenced and constrained by institutions (in a broad sense) that we might as well disregard those individuals and instead reason directly from institutions to social outcomes. Individuals are effectively malleable by social forces. “There is no such thing as a human nature independent of culture,” Clifford Geertz famously argued, tying the holist argument to cultural relativism. (more…)
More on Terrorism and Incentives
| Peter Klein |
In a recent post on intrinsic and extrinsic motivation I referred to Robert Pape’s analysis of suicide bombings and his conclusion, supported by substantial empirical evidence, that the specific pattern of contemporary suicide attacks cannot be explained by the attackers’ general belief systems (such as religious ideology) but by particular tactical objectives. Suicide bombers, in other words, economize on scarce means to achieve specific ends and adjust their behavior in response to the incentives they face.
For instance: What group is responsible for the most suicide bombings? Al-Qaeda? Hamas? Hezbollah? No, it’s the Tamil Tigers, a secular nationalist group fighting for an independent state in northern and eastern Sri Lanka. Tamil attackers are motivated not by visions of 40 virgins, but by the belief that such attacks are their only effective weapon against a better-armed foe.
For more on these questions check out this NBER working paper by Efraim Benmelech and Claude Berrebi, “Attack Assignments in Terror Organizations and the Productivity of Suicide Bombers.” Benmelech and Berrebi analyze a detailed dataset on the personal characteristics of Palestinian suicide bombers and find that older and more educated suicide bombers are systematically assigned to more important targets. Older and more educated bombers are less likely to fail in their missions and more likely to cause significant damage when they succeed. The authors take this as evidence that terrorist organizations behave “rationally,” in the economist’s usual sense of that term.
War, American Idol, the New “Kidney” Reality Show, and Markets for Attention
| Chihmao Hsieh |
I read two news articles today. One of them describes Cindy Sheehan’s decision to give up her anti-war protest, where she exclaims that Americans live in “a country which cares more about who will be the next American Idol than how many people will be killed in the next few months.” (For those of you who don’t watch any TV, American Idol is the American version of that popular season-long show where 15-20 contestants sing and compete for a record contract, voted upon via SMS text messaging by TV viewers like you and me.) The other news article describes the newest reality TV program in the Netherlands, where a patient with an inoperable brain tumor is donating her kidney and choosing the beneficiary based on televised interviews of three contestants, in a manner apparently reminiscent of a game show format.
How I described the latter article may not make you furl your eyebrows, but listen to this: TV viewers will vote via SMS text messaging who gets to receive the kidney.
Likely many types of societal issues are raised by the juxtaposition of these two news articles. One of the likely-provocative questions I have for the readership: Would you prefer to associate with a world that promotes “American Idol” or a world that promotes this new kidney donation game show?
UPDATE: The kidney reality show was all apparently an elaborate hoax.
This Bud’s For You
| Peter Klein |
Most of my academic colleagues are anti-American food snobs. Why, those poor Yanks, they think Parmesan cheese is the white, powdery stuff in plastic cylinders rather than the expensive, thick wedge with its maker’s mark on the skin. (Note the section “Other cheeses erroneously named Parmesan” in the Wikipedia entry on Parmigiano Reggiano.) Americans even think Budweiser comes from St. Louis, not České Budějovice!
Well, I myself am a bit of an anti-American food snob but I do insist on getting the facts right. In Bud’s case, as pointed out in this brilliant piece by Daniel Davies, the original, and better, Budweiser is Adolphus Busch’s American brew, not the Czech Budvar pretender. Davies explains:
- Anheuser-Busch has been selling Budweiser since 1876, 20 years before the Budvar brewery was even built. Its brew is the original Bud.
- Bud is all natural, failing to comply with German “purity” standards only because it contains rice (as do Kiran, Bintang, and Efes).
- More generally, and most importantly, the beer we know and love today — even the fanciest, premium beer — is a product of capitalism, not some romanticized, pre-industrial “craft brewing” era. Beer brewed before the Industrial Revolution was probably horrible and until recently couldn’t be produced in small batches with any acceptable level of quality. Three cheers for the Factory System!
Wittgenstein and the PoP System
| Nicolai Foss |
At the end of my stay in Columbia, MO where I was working with co-blogger Peter on our forthcoming book, “Organizing for Entrepreneurship: Opportunity Discovery and the Theory of the Firm” (Cambridge University Press), I borrowed Edmonds and Eidonow’s Wittgenstein’s Poker from him so as to have something to entertain me on the long flight back to Denmark. The book is a fun and light read, in fact, so light that I also had time to peruse another book borrowed from Peter (this one).
The book is an attempt to reconstruct the famous poker episode in 1946 where Wittgenstein allegedly threathened Popper with a poker during an Oxford University philosophy seminar, and a discussion of the inevitability of a clash between these two philosophers, given their extremely different philosophy, background, etc. At one point the authors observe that Wittgenstein would never have made it under the current tenure system; apart from the Tractatus, he apparently only published one minor paper. Still, he was promoted to Full Professor of Philosophy almost twenty years after the publication of this slim volume, and remained a Full Professor for almost a decade more. However, the philosopher who according to this (somewhat bizarre) poll was the third greatest philosopher ever wouldn’t have academically survived the present publish or perish system. (more…)
Frank Knight and the Chicago School
| Peter Klein |
Frank Knight is generally regarded, along with Jacob Viner, as the founder of the Chicago school of economics. But Knight’s relationship to the later Chicago school of Friedman, Stigler, and Director is ambiguous. Knight’s theories of capital and competition were incorporated into the mainstream Chicago (and contemporary neoclassical) tradition but his account of profit and entrepreneurship, his quasi-Austrian methodology (inherited from his teacher Herbert J. Davenport), and his eclectic social and political theories were largely ignored or forgotten.
Ross Emmett has a new paper, “Did the Chicago School Reject Frank Knight? Assessing Frank Knight’s Place in the Chicago Economics Tradition,” exploring this in detail. The conclusion: “Without [Knight’s] initiation of eaching price theory and persistence in defending it, there ould be no Chicago tradition. Yet the methodological approach and research infrastructure which propelled the Chicago School to a central position in the economics profession owe little or nothing to him.”
(Incidentally, critics of economics often target a stylized version of Chicago economics circa 1970 (see here), but these critics often seem unaware that the Chicago school of economics no longer exists. While there is still a (top-notch) economics department at the University of Chicago, there is no longer a distinct Chicago approach. The economics taught at Chicago is the same as the economics taught at MIT, Harvard, Stanford, or any other top mainstream department.)
Pomo Periscope XI: Clive James on Sartre
| Peter Klein |
Clive James on Jean-Paul Sartre, from Slate’s series of excerpts from James’s book Cultural Amnesia.
Skeptics might say that a knack for making duplicity look profound was inherent in Sartre’s style of argument. Students who tackle his creative prose in the novel sequence The Road to Freedom or the play Kean (his most convincing illustration of existentialism as a living philosophy) will find clear moments of narrative, but all clarity evaporates when it comes to the discursive prose of his avowedly philosophical works. But it should be said in fairnesss that even English philosopher Roger Scruton, otherwise a severe critic of Sartre, finds Sartre’s keystone work Being and Nothingness a substantial work; and Jean-François Revel, who took Sartre’s political philosophy apart brick by brick, still admired him as a philosopher who earned his own credentials, without depending on the university system for his prestige. But those of us unfettered by being either professional philosophers or patriotic Frenchmen can surely suggest that even Sartre’s first and most famous treatise shows all the signs of his later mummery. Where Sartre got it from is a mystery begging to be explained. It could have had something to do with his prewar period in Berlin, and especially with the influence of his admired Heidegger. In Sartre’s style of argument, German metaphysics met French sophistry in a kind of European Coal and Steel Community producing nothing but rhetorical gas.
Sartre’s admiration for Communist regimes, even after their atrocities were laid bare, is also emphasized. And there’s this: “After Camus died prematurely in a car crash, Sartre’s gauchiste vision was the style setter of French political thought, founding an orthodoxy that still saturates French intellectual life today and, to a certain extent, continues to set a standard of engagement for intellectual life all over the world.” (HT: Right Reason)
Pomo Periscope X: Foucault Deconstructed
| Peter Klein |
This week’s Times Literary Supplement includes Andrew Scull’s review of a new translation of Foucault’s History of Madness, the book that launched the French philospher’s public career. (HT: A&L Daily.) The first English edition, Scull notes, had the great merit of brevity, if not accuracy.
Madness and Civilization was not just short: it was unhampered by any of the apparatus of modern scholarship. What appeared in 1965 was a truncated text, stripped of several chapters, but also of the thousand and more footnotes that decorated the first French edition. Foucault himself had abbreviated the lengthy volume that constituted his doctoral thesis to produce a small French pocket edition, and it was this version (which contented itself with a small handful of references and a few extra pages from the original text) that appeared in translation. This could be read in a few hours, and if extraordinarily large claims rested on a shaky empirical foundation, this was perhaps not immediately evident. The pleasures of a radical reinterpretation of the place of psychiatry in the modern world (and, by implication, of the whole Enlightenment project to glorify reason) could be absorbed in very little time. Any doubts that might surface about the book’s claims could always be dismissed by gestures towards a French edition far weightier and more solemn — a massive tome that monoglot English readers were highly unlikely, indeed unable, to consult for themselves, even supposing that they could have laid their hands on a copy.
From the extended edition, published now in English for the first time, we learn that Foucault’s primary sources were narrow, outdated, and superficial. (more…)
Taxes al Carbon
| Steven Postrel |
Let’s suppose you’ve been swept up in the recent frenzy and decided that it actually makes sense to apply coercive regulations to reduce human carbon dioxide emissions. Let’s further suppose that you’ve caught up to the 21st century and know that imposing specific technology standards on particular sources of emissions is a sign of policy incompetence: (more…)
I Do “Simplistic” and “Comical” Work
| Nicolai Foss |
Of course, all of you knew already — but I confess that it came as a bit of a surprise to myself to have my work (rather than my blog posts) with Christian Bjoernskov, “Economic Freedom and Entrepreneurship: Some Cross-country Evidence” (here is an early version and here is a revised Danish version), characterized as “simplistic” and “comical” by the Danish deputy prime minister and the chief economist of the Danish labour unions, respectively. Here is the context. (more…)
Entrepreneurship: Ameliorative or Transformative?
| Peter Klein |
Amar Bhide and Carl Schramm take the O&M position on microfinance in a Monday WSJ op-ed. Comparing the views of Nobel Laureates Mohammad Yunus and Edmund Phelps, they write:
Mr. Yunus’s ameliorative entrepreneurship however is very different from the transformative entrepreneurship that Mr. Phelps argues has been central to modern capitalism. . . .
Economic development does wonders for peace, but what does microfinanced entrepreneurship really do for economic development? Can turning more beggars into basket weavers make Bangladesh less of a, well, basket case? A few small port cities or petro-states aside, there is no historical precedent for sustained improvements in living standards without broad-based modernization and widespread improvements in productivity brought about by the dynamic entrepreneurship that Mr. Phelps celebrates.
In principle, microfinance does not preclude modern entrepreneurship. But in practice, we wonder if the romantic charm of the former might distract governments in impoverished countries from undertaking reforms needed to foster the latter.
It’s a nice piece — and how often do you see both F. A. Hayek and Frank Knight lauded in a newspaper editorial?
Built to Regress to the Mean
| Peter Klein |
Of 35 “Excellent” companies studied in In Search of Excellence, 30 declined in profitability over the 5 years after the authors’ study ended in 1979. . . . Similarly, of 17 of the 18 “Visionary” companies studied in Built to Last, only 8 outperformed the S&P 500 market average for the 5 years after the authors’ study ended in 1990.
This is from Phil Rosenzweig’s The Halo Effect (Free Press, 2007) (I’m quoting this summary in CFO Magazine). Rosenzweig’s book reads like a primer on research methods for producers (and consumers) of popular management literature. Rosenzweig, a management professor at IMD, explains the problem of selection bias, the difference between correlation and causality, the need to compare rival explanations, the difference between absolute and relative performance, and more.
“Some of what I talk about in The Halo Effect is Research Design 101,” Rosenzweig tells CFO. “You gather your independent variables, independently of the thing you’re trying to explain. You don’t confuse correlation with causality, and you don’t confuse ends with means. You control for other variables. It’s basic stuff.”
But that basic stuff is hard to translate into a BusinessWeek best-seller.
Thanks for the link to Gary Peters, who notes that the book might be good reading for a doctoral seminar on research methods.
NASA Didn’t Invent Tang
| Peter Klein |
Or velcro, the microwave oven, teflon, or nylon, not to mention semiconductors, microprocessors, or the internet, to name just a few innovations falsely credited to America’s giant, bloated, and highly inefficient space bureaucracy. Tim Swanson reminds us of all this, and adds:
In the end, regardless of what the state did or did not fund or invent, the take-away principle is the unseen. While everyone with a TV has been able to see the hordes of chemical rockets dramatically blast into the cosmos over the past decades, they were similarly unable to see the productive opportunities foregone and ignored via the reallocation of scarce resources.
The perceived benefits of a vain, nationalized space program include, among others, the fallacious need to fight the mythical shortage of scientists and engineers. Whereas in reality, it has stymied private tourism, exploration, and research for nearly half a century.
Tim also notes that during the Space Shuttle’s development, NASA engineers regularly testified before various appropriations committees that the Shuttle’s estimated failure rate was 1 per 100,000 missions. The actual failure rate has been 1 in 50.
I Am the Walras
| Peter Klein |
Was Léon Walras a Walrasian? “Walrasian” usually describes general-equilibrium models with instantaneous market clearing (guided by the famous “Walrasian auctioneer”). However, according to Donald Walker, Walras’s main interest was not the systems-of-equations approach for which he is best known, but what Walker calls Walras’s “mature comprehensive model.” This model features disequilibrium, process, path dependence, and is based on observation and experiment, rather than deduction. Maybe it’s time to give Walras a fresh look. (HT: Roger Backhouse)
Who Are (Really) the Cheese-Eating Surrender-Monkeys?
| Nicolai Foss |
My co-blogger is very fond of France, the French, etc. (And me? Well, I have actually lived there ;-)). In a recent post, Peter cited the familiar neo-con characterization of the French as “cheese-eating surrender-monkeys.” Here is Mark Steyn reflecting on who the real CESM are:
I’ve never subscribed to that whole “cheese-eating surrender-monkeys” sneer … As a neo-con warmonger, I yield to no one in my contempt for the French, but that said, cheese-wise I feel they have the edge. … In America, unpasteurized un-aged raw cheese that would be standard in any Continental fromagerie is banned. Americans, so zealous in defense of their liberties when it comes to guns, are happy to roll over for the nanny state when it comes to the cheese board. … The French may be surrender-monkeys on the battlefield, but they don’t throw their hands up and flee in terror just because the Brie’s a bit ripe (pp. 181-182 in America Alone, Regnery Publishing, 2006).
France may be the most commie nation in the World, but CESM they ain’t!
What’s So Great About Tacit Knowledge? — Cont’d
| Nicolai Foss |
Peter asks, “what’s so great about tacit knowledge?”, pointing out that there is a tendency in the KM literature (and, I may add, parts of the strategic management literature as well) to exalt tacit above explicit knowledge. He correctly points out that tacit knowledge may well be errorneous, to which it may be added that errorneous tacit knowledge is usually more of a problem than errorneous explicit knowledge, since the latter is presumably easier to correct. In a comment on Peter’s post, JC Spender points out that “for the most part the discussion of tacit knowledge is sheer obscurantism.”
I agree with both Peter and JC. But I may want to be even more radical, and ask “What’s — analytically speaking — so great about tacit knowledge?” (more…)
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