Saturday, December 31, 2011

sovereignty and the american revolution: new research

I was surprised to see that the Legal History Blog didn't link to this symposium in the William and Mary Quarterly on "patriot royalism" during the American Revolution, since one of the cornerstones of the debate is the question of what it meant to be legally and ideologically separate from Britain. It kicks off with an intriguing paper by Eric Nelson, an up-and-coming political historian from the Harvard Kennedy School (he received his PhD from Cambridge University in 2002). Heavyweights such as Gordon Wood weigh in, with a hard criticism of the work. Unfortunately, ungated copies of the papers are not available.

But here's the abstract to Nelson's paper:
'Patriot Royalism' makes the case that American patriots of the early 1770s became the last Atlantic defenders of the early Stuart monarchs. Their constitutional argument—that America was “outside of the realm” of Great Britain and therefore to be governed not by Parliament but by the royal prerogative—had famously been made by James I and Charles I in their acrimonious disputes with Parliament over colonial affairs in the 1620s. Most patriot writers were fully aware of the provenance of this new position and enthusiastically embraced its ideological implications. In the process they developed a radical, revisionist account of seventeenth-century English history. A proper reckoning with the story of patriot Royalism should allow us to appreciate the true drama of the republican turn in 1776, as well as to understand the persistent allure of prerogative powers in the formative period of American constitutionalism.
In his response to Nelson, Wood downplays the idea of patriot royalism because he has argued, for many decades now, that the Revolution is characterized by a more radical ideological break from Britain. Nelson, in establishing a bit more nuance to the story, is drawing some fundamental interpretations in how we understand the nature of the American Revolution -- specifically trying to show that an undercurrent of conservative British principles of government runs through Revolutionary rhetoric. The study may in fact lead to a more radical questioning of the consensus view that the Revolution itself was so thoroughly libertarian, in place of a more nuanced view of the ideology of the elites who came to power in the years immediately following the Revolution (and leading up to 1789).

Of course, this debate must stay faithful the available historical evidence, which is not exactly on the side of Nelson (at least in terms of quantity of rhetoric in his favor) -- but do read through Nelson's paper if you have the opportunity, as he remains convincing throughout the debate. Another important point in the debate between Wood and Nelson worth considering is how to accurately trace the relative impact of certain speeches or treatises which were being circulated in the early 1770s. Very interesting stuff and highly recommended.

Thursday, December 29, 2011

economic historians on the job market, 2011-2012

The start of a continuing series.

A brief look at a few of the top mainstream departments (Harvard, Berkeley, Chicago...) does not reveal much in the way of budding economic historians (... I guess I shouldn't be surprised. Check back soon for more interesting candidates). However, one of Daron Acemoglu's students is working on some interesting projects related to political economic history: his name is Pablo Querubin. His job market paper is an econometric study of rent-seeking by U.S. politicians in the second half of the 19th century. Abstract and other papers (some of which are also on economic history) here.

The story according to mainstream economists is as follows. Politicians are assumed to be self-interested profit maximizers who seek to gain from the system by acting on their own interests -- interests which do not necessarily line up with the interests of their constituents. The amount of this rent-seeking behavior, furthermore, is strongly related to the accountability of the underlying political system (how fair the electoral system is and so on). In short, a democratic government such as what we have in the U.S. would probably have relatively fewer rent-seeking politicians than a despotic one would.

Now, if we consider the second half of the 19th century-United States, "democratic" usually isn't the first word that comes to mind. Nevertheless, the question is, what would we expect given the postbellum United States? Was there significant rent-seeking? How would you test for it? Querubin uses a methodology which allows him to test whether politicians who were elected by a close margin saw their incomes increase more than the losers of that close electiono over the course of the rest of their careers.

He finds that this was not the case for politicians who were elected in the 1870s, but that it was the case during the Civil War. He interprets this finding as suggesting that in periods when a democracy is in some kind of (political or economic or both) crisis, the space is opened for rent-seeking. Otherwise, a democracy like the U.S. operates pretty well at insulating against such behavior. This is further supported by evidence that a team headed by Acemoglu found recently supporting the idea that "financial firms connected to Timothy Geithner experience an abnormal return of 15% after his nomination as Treasury Secretary," which, since it took place during the financial crisis, qualifies in his story. Although it really doesn't, since Geithner is just one person and I'm not sure that the other contenders for the Treasury Secretary position are necessarily doing any better or worse than him (which would be the true test of the hypothesis).

But should we be surprised that in a capitalist democracy we find such results as Querubin's? Politicians already occupy certain class positions before they gain power, suggesting that if there is some disturbance to democracy, it occurs before anyone approaches the ballot box. If you're looking for a malfunctioning democracy, rent-seeking behavior is not necessarily the first place you would look. I suggest you look instead at the politics of the capitalist state itself: why didn't we see a full democratization of the south after the Civil War (indeed, the period under which Querubin finds no rent-seeking!), for example? The story that we usually find is that different groups of elites are fighting over public policy, often ignorant of the mass of workers, poor people, women and blacks below. It's not rent-seeking, but it is politics from a privileged position in the economic system.

In summary, Querubin's paper seems to present solid evidence against the public choice thesis that politicians are rent-seekers. And he seems to have some good things to say about our political system in the end -- we have a fair amount of checks in our electoral system to counterbalance any self-interested behavior by politicians. But it's only 2 cheers for democracy. Capitalist democracy may not produce rent-seeking politicians but it certainly does produce a situation in which not everyone has equal say in designing the "rules of the economic game".

Friday, December 23, 2011

re-imagining history

Since I started up this blog project in May 2009 it has taken several unexpected turns. First I stopped posting so much about videogames, then I brought in Anti-Mankiw stuff, and lately the blog has become more contemporary and political. I'm leaving that all behind in order to focus more on recent exciting research in law and economy/society and economic history. Turns out there isn't a really good "Economic History Blog", the way that you have a "Legal History Blog" or even Marginal Revolution (which, aside from doing everything else, is also able to keep the interest of an academic core). So, in some ways Imagining History will try to fill a niche with this latest idea.

But no need to fear! My angle will be anything but run-of-the-mill. I anticipate most of the coverage, at least on the economic history side, will be based pretty heavily on hard criticism. So I promise it will be fun to read!

And we'll see where that takes me after a while...

Saturday, December 17, 2011

this just in: daron acemoglu down with #ows

In an interview on his top 5 recommended books on inequality:

"I’m definitely in that camp. I do believe in markets. I passionately believe in the importance of property rights and private property. I think they are absolute sine qua nons for prosperity. But I also believe that these things are very political and the politics shouldn’t be one-sided. Gore Vidal said, “The United States has only one party – the property party. It’s the party of big corporations, the party of money. It has two right wings; one is Democrat and the other is Republican.” If that is true, that’s a real threat to a free market and a fair society. For that reason I think Occupy Wall Street is very important. It’s a grassroots movement that tries to stand up to this tendency of our political system." 
Read the full interview here.

Sunday, December 11, 2011

quote of the day: legal consciousness in early america

We don't often get to see how laws developed in and around courts (in legal treatises and reporters) trickle down to affect actual working people in the early 19th century. Much rarer to find such evidence in newspapers. But here is a gem, “From the Witness,” The Sun (Pittsfield, MA), 6 Sept. 1806:
I walked near a snug farm house -- everything around wore the aspect of industry and improvement. I saw the aged inhabitant and his family departing from their dwelling -- I saw them turn and take a farewell view, and march away in silent sorrow. This property had been bequeathed to him by an affectionate wife, now deceased. He had sold his other property and laid out the avails in the improvement of this favorite spot, on which he wished to close his eyes. The common law of a foreign country, the odious remnant of a barbarous feudal system had dispossessed him of this, and turned him and his children, houseless and destitute, upon the world.

Poring over this old piece, its arguments strike the reader of the common “few against the many” polemics that have found their place the historiography of post-Revolutionary society. Still, there is much more to the writer’s discussion than simply an attack on the “privileged”. The idea of the “few against the many,” alive today in popular media with discussions of who exactly constitutes the "99%", was used in post-Revolutionary America to criticize those who owned property, and therefore held status, without the necessary hard work to earn it. In the above, however, there is hard work: there is “industry and improvement,” and yet something still disturbs this social commentator about the nature of the legal system – one that has feudal remnants but continues to affect those in republican America. And are the claims of this farmer baseless or can we find evidence of them in the common law? The following suggests answers

The law of waste as it applied to inheritance changed over the course of the late eighteenth to early nineteenth century. The American legal understanding of waste is that it is any action which causes “permanent harm to real property committed by a tenant” (Black’s Law, 2009), though it could simply mean productive investment in the land by the tenant, as was the 18th century English understanding of the term. The common law view of waste as applied to inheritance developed over time to hold that one could not receive unproductive lands in inheritance, because that land had no inherent value. The economic logic behind the "instrumental conception” of the law was that the market for land knew best, especially in the early nineteenth century, so that a dower in unimproved lands would constrain the future productive value of the land. Indeed, this is the only way to explain the court's (contradictory!) claim that women themselves could not, after inheritance, make the land productive, because that would constitute waste! Horwitz goes so far as to suggest that these irrational decisions suggest that the judges’ goal in this thread of case law was to “undermine the right of dower itself.” For a discussion of the issue, see Horwitz, Transformation of American Law, pp. 56-58. 

Thursday, December 8, 2011

"no matter what happens, isn't it important to try?"

         "Cloud says they are trying to save the planet."
         "Honestly, I don't think it can be done."
         "For even if they stop every reactor on the planet, it's only
going to postpone the inevitable."
         "Even if they stop Sephiroth, everything will perish."

(Bugenhagen stops and looks at Red XIII.)

     "But, Nanaki [i.e. Red XIII]. I've been thinking lately." 
         "I've been thinking if there was anything WE could do."
         "As a part of the planet, something to help a planet already in
         "No matter what happens, isn't it important to try?"
         "Am I just wishing against fate?"

Wednesday, December 7, 2011

legal standard of the day -- when could workers recover wages in 1840s pennsylvania

The ruling here established the fact that "faithful service" is an agreement implicit in the employment contract. That is to say, if a worker "misbehaves" on the job, he is not legally entitled to any back pay (e.g., if he misbehaves on the 29th of the month and the employer fires him promptly and wages for the month are due to him on the 30th, he gets nothing). From Libhart v. Wood (PA, 1841) argued before the Supreme Court of Pennsylvania:
When a servant, who has engaged for a certain time at certain wages, is turned away by his master before the period for which he has engaged to serve has expired, and his dismissal be in consequence of his own misconduct, he will be entitled to no wages; for his faithful service is a condition precedent to his right to wages, and that condition, in the case supposed, he has not performed. But if his dismissal be unjust, the master can not, by his wrongful discharge, prevent the servant from recovering a compensation for his services. Thus the law carefully protects the rights of both master and servant

Thursday, December 1, 2011

quote of the day: law and labor in early america

Law hung old women in Salem because it was proved, said the courts of law, that they were witches. Law hung the Quakers in Boston, because they wore strait coats and broad brimmed hats. Law whipped the members of the same sect, at the cart tail, from town to town in New Hampshire. Law bared the backs of the Baptists in Boston, and lashed them until the skin was flayed off, because they said 'every man has a right to worship God according to the dictates of his own conscience;' and law in Connecticut compelled every body to cut their hair in a particular manner and prosecuted men for kissing their wives on the first day of the week. Law laid the stamp tax, and the tea tax, and our fathers resisted those unjust laws even unto blood.... Must we be told to submit in silence to law, merely because it is law, without reference to its constituent principles? No law will ever command the respect of any, not even a slave in every sense, unless that law is just.
From An Address delivered before the Mechanics and Working-Men of the City of Brooklyn, on the Celebration of the Sixtieth Anniversary of American Independence (1836) by Seth Luther, quoted in Tomlins, Law, Labor, and Ideology in Early America.

Monday, November 7, 2011

tomlins and uci law - changes in the air

Christopher Tomlins, who recently left his position at the American Bar Association to join the faculty at the newly created UC Irvine law school, is taking some important steps there toward making the study of law more interdisciplinary:

A good quote from the article:

[Tomlins] plans to have common colloquia, luncheon workshops, social functions and retreats so that students and faculty from different disciplines can swap perspectives. 
“It will create a sense of interdisciplinary community and tie the law school into the rest of the campus,” Tomlins says. “Irvine is an especially appropriate place for such a program because there’s already an unusually large concentration of faculty outside the law school doing law-related work.” 
The Program in Law & Graduate Studies, he says, is ideal for students interested in professional or academic careers involving law and legal institutions, policy analysis or applied research in law-related fields. These include criminal justice and criminology, urban planning and environmental issues, discrimination, human rights and intellectual property.

Tomlins, who is currently one of the most influential researchers of colonial and early American legal history, recently finished a mammoth book on law, labor and the shaping of civic identity in early America entitled Freedom Bound. It came out in 2010 via Cambridge Press and it is a masterpiece.

Even though Tomlins' work is still essentially legal history, where the evolutionary mechanisms behind rules takes center-stage, some of his latter works have dipped into the intersections of law and the literary mind (including research into the works of Walter Benjamin) and his overall approach to the law is basically Althusserian -- that is, studying the internal mechanisms of law as relatively autonomous from a materialist (feudal/capitalist) base. He is truly an excellent match for taking on such an interesting task at UCI.

Tuesday, November 1, 2011

thought/quote of the day: english law and trade in late-18th century africa

From the Wikipedia article on tortious inference:
In a similar case, Tarleton v. McGawley, 170 Eng. Rep. 153 (K.B. 1793), the defendant shot from its ship Othello off the coast of Africa upon natives while “contriving and maliciously intending to hinder and deter the natives from trading with” plaintiff’s rival trading ship Bannister. This action caused the natives (plaintiff’s prospective customers) to flee the scene, depriving the plaintiff of their potential business. The King's Bench court held the conduct actionable. The defendant claimed, by way of justification, that the local native ruler had given [defendant] an exclusive franchise to trade with his subjects, but the court rejected this defense.

Friday, October 28, 2011

1Q84 first impressions

200 pages in; I'm taking my time with this one. Some people are speculating on whether this will be his all-time best work. It is still early to tell: slow-moving plot, mainly because even the main characters are getting a lot of back-story attention. And, there is just so much here, going on, already, in terms of characters and plot complexity. So it's uncertain where and how everything will tie up. In this way we are seeing a shift from most of his earlier approaches, but it is indeed similar to Wind-Up Bird Chronicle and could therefore leave some readers quite upset by the end (though, this did not happen to me).

He's also elevating his themes -- religion, politics, the state -- thereby entering relatively unexplored territory given the ultra-personal approach of most of his other novels/short stories. He could therefore really be trying to do too much if he still wants to maintain the classical Murakami elements. Early evidence suggests he's trying to do both though (Fuka-Eri is a particularly striking example). But if he pulls it off, there is no doubt that this could be a true masterpiece.

Some magical realism but it's really a matured version of even his somewhat more recent examples (e.g., Kafka on the Shore). It makes me feel less guilty about reading it but all the more amazed at how he still pulls it off.

Thursday, October 27, 2011

thought of the day: radical economics and intro textbooks

Reflecting on yesterday's post, which had a quote that was admittedly out of context, I started thinking about how Mankiw treats neoclassical theory vis-a-vis other economic theories.

Of course we know that Mankiw intends to present the consensus view of the mainstream of the economics profession, which is (apparently) why he pretends not to be making any conscious decisions about what to include in his book. Rather, he can say that he doesn't mention radical economics because the mainstream no longer engages with radical economics.

But, my point yesterday is partly that we are taking this intention of presenting the consensus for granted. Samuelson, as it may or may not be evident from reading yesterday's quote, felt as though he needed to address Marx and Marxism on their own terms. He actively engaged with "the old man", pointing out what he thought were both the strengths and weaknesses of his ideas. And as one of my professors at UMass Econ (who is an MIT PhD) would tell us in class, Samuelson was always bringing up Marx in his graduate classes! You would walk in the room, hear this guy talking about Marx, and wonder where the hell you were. One certainly does not find that kind of active engagement with radical economics in graduate courses at the top schools today.

But, there's a flip side of the coin. At times, Samuelson fails to accurately portray Marxist ideas. Just as Mankiw sometimes glosses over core logical steps in neoclassical economics, so Samuelson did similarly with Marxism. And that kind of treatment may be as bad, if not worse, than not talking about him at all (a la Mankiw -- who does not mention Marx a single time in his intro book).

The question is, which is worse? No mention of Marx, or mention some things about him, get some things right, and some things wrong?

What do you think?

I tend to believe that some mention of Marx, even if it's not the best portrayal of his ideas, is the best option for effective pedagogy. And I would say, as a kind of meta-analysis of economics textbooks,  that there is something to be said about the evolution of bourgeois ideology that they do not even actively recognized the existence of this countervailing force in their intro textbooks.

The question I leave you with is the following: what does choice of reducing exposure to Marxist ideas imply about the state of bourgeois economics? From the perspective of instruments of bourgeois ideology (an extremely important point to keep in mind), have Marx's ideas become more politically relevant than they were in the 1960s, thus, the need for more forceful repression of them? (This could mean that class struggle has become more acute in society since the 1960s.)  Or have the instruments of bourgeois ideology simply found a more effective (efficient, whatever) means of dealing with radical theories? Are both ideas right?

What do you think?

Wednesday, October 26, 2011

quote of the day

Marxism may be too valuable to leave to the Marxists. It provides a critical prism through which mainstream economists can -- to their own benefit -- pass their analyses for audit.
Samuelson, Economics [Introductory Textbook], 9th Edition (1973), pg. 866

How the world has changed.

Sunday, October 23, 2011

quote of the day: lawyers and justice in colonial vermont

On attitudes toward the law in colonial Vermont and New Hampshire:
The Yankee pioneers, and especially the judges, who were invariably laymen, viewed trained lawyers with suspicion. One lawyer complained that a chief justice in New Hampshire, 'having no law learning himself, did not like to be pestered with it at his courts.' Another lawyer attempted to file a demurrer, only to have it ridiculed by the judge as 'an invention of the Bar to prevent justice.' (John Page, "The Economic Structure of Society in Revolutionary Bennington", Vermont History 49 [1981], pp. 69-84)
You really have to wonder how much such attitudes have changed over time, or where this view is found in the general population today. Most of us have heard jokes about lawyers and their uselessness to society. But, what other way would we have it? Do we really want to go back to the mid-18th century when a single judge, member of some privileged elite, would argue and then decide on our cases instead of some weasel-of-a-lawyer? Aren't things made just a tiny-bit better by such improvements?

And yet, popular opinion of lawyers is sour. There seems, in the end, to be a kernel of this conservatism in our modern discourse still left over from our distant past.

Although, it is useful to remember at this point that there is a third way, definitely distinct from the two above -- more revolutionary in scope. Abolish the institutions of capitalism which give rise to a professional class of lawyers, and maybe the path to justice, obfuscated by the lawyer (according to the quote above!), might end up being a bit clearer.

Monday, October 17, 2011

link roundup

Been reading too much lately. Here is a menu of select links for your enjoyment:

History of the Rhode Island Supreme Court highlights the interaction between economic growth, distribution, and institutional change. I enjoyed the discussion of how the rise of the textile towns led (or did not lead to) changes in political representation in the state.

Glenn Gould wikipedia entry. One of the new graduate students in our department (hi Luke!) knows too much about non-economics stuff and has recently introduced me to Gould's academic writings on art. Gould has done some amazing interpretations of classical pieces including two very striking renditions of Bach's Goldberg Variations. Start listening to the 1955 version here. 1981 version here. Gould felt that the best strategy for classical player is to come up with completely new and innovative interpretations of existing pieces, not necessarily striving for what the composer may or may not have intended (who could really know that?) but instead trying to make something that is internally consistent and sounds beautiful.

A truly excellent Lapham's Quarterly history of financial speculation. The story they tell is how financial speculation is a tale of how we as humans fall in love with our ideas and creations but in the end how we're fallible. Some really remarkable quotes in a well-written piece. Here's one that comes at the end of the article: Speaking about the technologies that in part drove the financial boom and eventual bust:
Nearly fifty years ago, Marshall McLuhan wrote about our tendency to become fascinated by our inventions, which are, ultimately, extensions of ourselves. As McLuhan tells it, the death of Narcissus had to do not only with his reflection but with his inability to see himself in it. Just as the words “narcosis” and “narcotics” derive from his name, Narcissus was numb; he treated his image as an object of courtship, and he willingly became its slave. McLuhan, ever alert to the perverse urge to lose our uncomfortable selves, described how Narcissus died so that we could live. We court an exquisite ruin whenever we succumb to a pretty face that we fail to recognize as our own.
Somewhat of an "oldie", this article from Daron Acemoglu outlines (in an extremely broad sense of the word "outline") the tasks of institutional economics as economic theorists move forward. As some of you may know, Acemoglu has been a real leader in this field and his works are absolutely recommended (though maybe, you can skip some of the math!). If you want to see where some of his work is headed, check out page 23 of his Political Economy Lecture Notes, "Towards a Framework".

There has been way, way too much aimless debate over Corey Robin's book The Reactionary Mind. To the point of pure frustration of people like me, who understand exactly where Robin is coming from. While engaging in the debates somewhat peripherally over at Rortybomb, I began to realize that people just don't understand the terms in which a classical conservative would make his or her point. Liberals are either too elitist to think that conservatives could be making an intellectual argument (though it's hard to blame them on that front), or their minds are too ingrained into a narrow view of politics that sees the "Republican-Democrat" division as the universal axis of all politics. let's get something straight: classical conservatives understand power and politics and class much better than any progressive Apple-loving Obama-revering hippie. It's not their fault that conservatives live in a different world. No, I take that back -- it is their fault, and that's part of the reason why America is in such a bad shape today. In short, Robin is the only one who really makes sense of modern politics and it's too bad that mainstream liberals can't own up to that fact.

The Chronicle of Higher Education exposes some of the intellectual roots of the beautiful movement that is #OWS.

Sunday, October 16, 2011

will write a paper on this, someday...

...But until I do, you should all send me your comments on the following idea :)

Google ngram for "Think Like an Economist" and "Thinking Like an Economist"

Friday, October 14, 2011

call to arms

Readers of this blog --

For those of you who expressed interest way back when the Anti-Mankiw movement started, I have an idea for a collectively-written blog project. We would need at least 5 or 6 people for it to run smoothly. If you're interested in helping out, please leave a comment with your email in the comments section of this post.


Wednesday, October 12, 2011

empirical dimensions of class conflict, part iii (final)

See the previous two installments of this series here and here. Recall where we ended: we wanted to know how workers respond to a wage increase or decrease depending on the social conditions around them.

The idea that the employment relationship is composed of more than a (wage, effort) contractual agreement between the worker and employer is not new, even in the neoclassical canon. The theoretical notion of an implicit labor contract, which was first developed in the 70s and 80s by theorists interested in the dynamics of asymmetric information (and separately, the economic effects of unions), admits that notions of trust, reciprocity, and authority are key ingredients of the formal employment relationship. Nevertheless, the neoclassical tradition has for the most part taken these factors as exogenous. To wit: theorists have traditionally assumed that trust, reciprocity and so on are ingredients of the labor relationship and then looked at the impact of those factors on wages, productivity, and so forth.

Relatively little has been done on endogenizing (i.e. explaining the actual origins of) trust, reciprocity, and other institutional features of the labor contract. This question is arguably the more important one: rather than examine how informal institutions impact some kind of optimal relationship, shouldn't we look at the actual origins of  informal institutions? Shouldn't the question of optimality be relegated to second-place status given how unrealistic it often is? Theory has begun to open up to these questions, but because such work usually involves "fuzzy" notions of informality with connotations of sociology, anthropology and other "soft" sciences, they are rarely accepted by economists, and always with a good deal of reluctance. A recent (accessible!) paper by Daron Acemoglu highlights some of the important work needed to be done in the mainstream if they are to make progress on the important issues.

But for someone steeped in a more radical political economy tradition, the study of the origins of informal institutions such as trust, reciprocity, and conflict is old news. Quantitative studies of the impact of such institutions on economic outcomes, however, is a little less explored. That is where the end contribution of my paper lies (hopefully): giving an account of how political economic conditions shaped the contours of class conflict in early America and tying it to worker behavior on the job to see how such conflict manifested itself.

And this is ultimately where the informal contracts literature needs to go -- it needs to integrate work in other social sciences or else it will never be able to give a good account of the economic effects of institutions. Providing some empirical support is the first step. The particulars of class conflict as an institution arise from political and economic "objective" conditions, including the legal framework in which contracts are drawn up, the distribution of property in society (i.e. who owns the means of production), the availability of labor in reserve, the technology being used, and so on. Those particulars then shape economic outcomes -- wage rates, productivity -- in the firm. It becomes immediately evident that understanding these connections is absolutely crucial for understanding capitalist economic growth.

Monday, October 10, 2011

columbus day

Arawak men and women, naked, tawny, and full of wonder, emerged from their villages onto the island's beaches and swam out to get a closer look at the strange boat. When Columbus and his sailors came ashore, carrying swords, speaking oddly, the Arawaks ran to greet them, brought them food, water, gifts. He later wrote of this in his log:
They ... brought us parrots and balls of cotton and spears and many other things, which they exchanged for the glass beads and hawks' bells. They willingly traded everything they owned.... They were well-built, with good bodies and handsome features.... They do not bear arms, and do not know them, for I showed them a sword, they took it by the edge and cut themselves out of ignorance. They have no iron. Their spears are made of cane.... They would make fine servants.... With fifty men we could subjugate them all and make them do whatever we want.
These Arawaks of the Bahama Islands were much like Indians on the mainland, who were remarkable (European observers were to say again and again) for their hospitality, their belief in sharing. These traits did not stand out in the Europe of the Renaissance, dominated as it was by the religion of popes, the government of kings, the frenzy for money that marked Western civilization and its first messenger to the Americas, Christopher Columbus.

From chapter 1 of Howard Zinn's A People's History of the United States (pg. 1)

(Yes, this was posted last year on the blog as well...)

Saturday, October 8, 2011

analogical reasoning in mankiw's principles text: an introduction

In chapter 2, amusingly titled "Thinking Like an Economist", Mankiw sets out to describe the economist's world view. The chapter is similar in scope to some of the most popular economics textbooks of the last 50 years, demonstrating a long tradition of taking time in an intro text to introduce the student to the language and tools of economics before jumping into supply and demand.

But, for whatever reason, Mankiw's treatment of the topic is remarkably different than his predecessors, and in some very important ways. What I want to concentrate on today, briefly, is the role of analogical reasoning in chapter 2 of Mankiw's text.

Now, readers of this blog who have taught before know that analogies can be extremely powerful tools for comprehension. Have a difficult topic you need to cover, and not everyone seems to get it? Try an analogy by drawing a connection between the theory and some experience they have in their daily lives -- like back at their dorm room or at home or something.

But, as some of you may also have realized when trying to deliver these analogies, there are also a lot of problems with them. There are minor issues. It's easy to have your analogy miss some part of the audience, for example. Talk about Buffy the Vampire Slayer when maybe 5% of the room has ever even seen an episode makes your point less effective. Basically, if people aren't familiar with what you're drawing an analogy to, your argument immediately loses credibility.

But there are more serious problems with analogical reasoning. On the most basic level, analogies cannot be used as air-tight proofs of some conjecture because they derive their credibility from the likeness of two separate concepts and the images people have in their minds of those two concepts. Analogies are really best used as helpful mnemonics or for some humorous or otherwise playful purpose. Thus, while they might be good last-resort methods, they are poor substitutes for a sound argument. This point is essentially derived from the fact that the actual effectiveness of an analogy is only as good as the similarity is between the two objects being analogized. Drawing poor analogies will only confuse the student -- because they will start thinking "well, is economic concept A really like analogous concept B? There are some important differences between A and B such as..." -- as soon as they start down that road, you've lost them on your original argument for economic concept A.

Unfortunately, Mankiw commits these mistakes all over the place in chapter 2 of his favorite textbook. The result? Analogical reasoning may help to improve on a basic understanding of economic methodology, but you can never actually prove anything using analogy -- nor can you give a deep analysis of a concept by relying on analogy. At best, Mankiw's analogical reasoning approach to economic methodology perpetuates an incomplete understanding of the role of methodology in economics. At worst, the (poor, insufficient) analogies lead to pure intellectual brainwashing by failing to provide a rigorous account of the core (crucial, politically contingent) ideas.

Example from the text: Mankiw on the use of assumptions in economics

The premise: assumptions are important in economics because they force us to boil down a situation into its essential aspects. We can then use logic and reasoning -- i.e. the deductive method -- to derive economic predictions based on our assumptions.

Analogy: it is similar to the situation of a physicist who wants to know how long it will take for a marble to fall from a building. The physicist abstracts from other forces, such as wind, which might impede the fall of the marble. In other words, the wind force is said to be "negligent". In this manner, the physicist can obtain a good approximation of how long it will take the marble to reach the ground. And obviously, we might adjust this assumption of no wind in the case of a beachball, in order to obtain a better prediction.

How competing textbooks dealt with the same idea: Samuelson (1985) deals with methodology but not assumptions per se. Nevertheless, a large majority of his discussion of methodology relies on logical discussion, illustration of the core ideas (but not until the argument has been explained in words). McConnell (1978) discusses simple critiques of the above premise -- for example, that assumptions tend to be unrealistic, thereby leading fall predictions of behavior. He also spends some pages discussing the shortcomings of the deductivist approach in general (i.e. the proliferation of mathematics, of unrealistic but complex models), in light of the debate over assumptions. Lipsey and Steiner (1975) go a little further. They give a lengthy discussion about how the realism of assumptions does not matter as long as the theory has predictive power. L-S, it should be noted, are much more mathematical and methodlogically conscious than the other texts.

Why does it all matter: students could become caught up in the many ways in which physics is not like economics -- in the relative lack of experimental data, or the fact that molecules can't think, or in the lack of any "universal laws" or constants which define the core theory of the field. This immediately weakens the analogy -- which, as was stated above, should only be used in informal situations to begin with. In the end, it is an ineffective tool and only perpetuates the idea -- already hinted at in chapter 1 -- that this textbook seriously lacks intellectual integrity.

Wednesday, October 5, 2011

class warfare: a clarification

Greg Mankiw joins the chorus of right-wing politicians and members of the media claiming that Barack Obama is engaging in class warfare against the rich by enacting redistributive changes in the American tax code.

Now, I wouldn't normally engage in such lowly politicking, particularly when we shouldn't be surprised by who is spewing such nonsense into the blogosphere. But since my reply has a historical component to it, I thought, why not.

Shays' Rebellion, 1787. Here we have a 9-month revolt by farmers who were very much in debt following the Revolution and did not have sufficient means to pay it back. Members of the Massachusetts supreme court at the time -- consisting of a group of wealthy landowners and other elites with strong connections to them -- enlisted the state militia to crack down on the revolts. Farmers had tried occupying the court rooms and at one point, breaking into the Springfield Armory to arm themselves (they ultimately failed). It was essentially a class war waged by propertied interests against destitute farmers -- and thus it represents one of the first examples of class conflict in the new Republic's history.

Homestead Strike, 1892. This was a particularly violent strike during an era of severe labor unrest.  Here we see militiamen -- following on the backs of Pinkerton (a local detective agency) agents -- preparing to retaliate against the steelworkers. Andrew Carnegie, owner of the steel company, fled to Scotland before the strike really got under way. The confrontation left 10 dead and hundreds injured in what is a prime example of class conflict in the era of big business and industrialization.

Over the course of the late-19th century and into the early 20th, court injunctions (orders) against unions, instead of a full trial, became increasingly common across the U.S. as businesses, backed by the judicial system, took more forceful measures against labor. Many of these issues were intended to be solved by the New Deal in the 1930s which, particularly in 1936, provided an institutional space in which capital-labor disputes would be subject to rules, regulations, and a fair trial.

Launching us into the so-called "golden age of American capitalism" where high productivity was matched by rising living standards for workers across the board, these New Deal institutions were symbols of a "capital-labor accord". Except that such stringent victories for labor hardly meant a truly more democratic economy -- while democracy on the workfloor is arguably the whole point of a labor movement, the voices and contracts of the golden age had been reduced to asking for yearly wage increases and increased profit-sharing. And then, even that began to change, as the unions themselves began to die out -- union membership began declining in the 70s and 80s.

Ronald Reagan made sure to maintain that trend in 1981:

In 1981 Reagan fired all the air traffic controllers who did not comply with his order to return to work, after 2 days of protests over their contract. Reagan showed what class power could do and quashed any resistance.
That's what class warfare looks like. 

If you want to know what redistribution looks like, see the following:

-8 hour workday
-Job benefits including health care and retirement funds
-Public education at affordable costs

Doesn't look like class warfare to me!!!!

Tuesday, October 4, 2011

october, by robert frost

O hushed October morning mild,
Thy leaves have ripened to the fall;
Tomorrow's wind, if it be wild,
Should waste them all.
The crows above the forest call;
Tomorrow they may form and go.
O hushed October morning mild,
Begin the hours of this day slow.
Make the day seem to us less brief.
Hearts not averse to being beguiled,
Beguile us in the way you know.
Release one leaf at break of day;
At noon release another leaf;
One from our trees, one far away.
Retard the sun with gentle mist;
Enchant the land with amethyst.
Slow, slow!
For the grapes' sake, if they were all,
Whose leaves already are burnt with frost,
Whose clustered fruit must else be lost--
For the grapes' sake along the wall.

From The Poetry of Robert Frost. Edward Connery Lathem ed., 1969, Henry Holt and Company

Sunday, October 2, 2011

some numbers to ponder

Take a close look at this table, which tabulates sales data for Samuelson's and McConnell's texts between 1948 and 1984. 

From Kenneth Elzinga, "The Eleven Principles of Economics," Southern Economic Journal. Vol. 58, No. 4, 1992, pg. 874.

While you could argue that there were some isolated years in the mid- to late-1960s when McConnell outsold Samuelson, upon closer look at the edition release years you can see that it's not until McConnell's 4th edition -- in press from 1969-1971 -- that it outsold Samuelson's competing new text, the 8th edition -- in press from 1970-1972. The previous editions of the two texts were certainly competitors, but Samuelson won by a hair in the previous edition wars: 389,000 for his 7th edition vs. McConnell's 378,000.

Also, notice the dwindling sales of the 11th edition of Samuelson (and the long revision date! for a while, both texts were on a 3-year cycle). For the 12th edition, released in 1985, McGraw-Hill brought Nordhaus on board as a cowriter of the text in order to try to reorient the ship. One of the big problems with Samuelson's book was its explicit Keynesian focus -- no doubt a product of the seminal intellectual and political influence of its author, but something which in the end would harm a textbook writer, since one needs to be able to adapt in some way to the shifting political winds (particularly if you're writing in the mid-70s, early 80s!).

the whole is bigger than the sum of its parts -- brief reflections on the classic snes game, chrono trigger

Detroit DJ (or DDJ), whose top 10 ads on videogame history have been featured on this blog before, has started up his own website with some interesting and original writing. For those interested in reading some really high-quality writing on games, I would check him out. He published a piece about a month ago which, while primarily about Final Fantasy 6 (FF6), contained some strong attacks on Chrono Trigger (CT), to which I'd like to add a few comments.

The article is entitled "Why Don't We Remember Final Fantasy 6?" and can be found here. I might agree with DDJ's argument about CT if his points were a little less obvious. He attacks CT's lack of a deep gameplay system, relatively simple story and characters, and a "gimmicky" time travel system as particular sore spots. All of these things are true, and they do indeed detract from what might have been an even better game. And DDJ might be right if the sum of the parts is greater than the whole. But that's certainly not true here. CT has staying power and is an excellent game precisely because of the charm of the overall package that it presents.

It is one of the only games that I can play from start to finish not particularly dreading any scene, boss battle, or dungeon. Everything works so seamlessly -- from rescuing Marle and Robo, to the Ayla scenes, to the magical world of 12,000 BC (the "Magic City", I can still recall the unbelievable music you experience in that era...), and finally, taking on Lavos of course. All of it just fits: while there aren't a lot of sidequests to keep you busy, or extra skills to master, just playing through the adventure itself is what makes the game so great. Each era moves seamlessly into the next -- as you first get caught up in resolving particular character conflicts and then finally uncovering an underlying connection between Magus/Janus/Lavos, leading you to some particularly stark scenes involving these enemies. It's a true adventure with a really great cast of characters and strong underlying themes camaraderie as well as human struggles for power and (on the opposite end) justice.

And that leads me precisely into the most crucial argument for why CT is such an excellent game: the replay value! Players are encouraged, and indeed want to play through the game multiple times and try to find all of the different endings because they are so charmed by the main characters and the story overall. Replay is also a particular strength of this game precisely because it's so short and there aren't a lot of "fringe" things to do. In contrast, playing through a mammoth 40+hour RPG a second time is significantly less appealing in most cases -- in those types of games, you try to do everything in one go-around -- experiment with all of the characters, do all of the sidequests, and in general explore every little area. CT actually takes that formula and flips it on its head: we have a short story with a lot of charm but with a lot of reasons to go through and learn more about the characters and game more than once.

And just a quick disclaimer: I'm not being simple-minded here about CT. I realize that the game is very basic in a lot of glaring ways. But it doesn't help to critique something based on those obvious aspects. If you're going to say something substantive, something new about a game, maybe you can think about how the game fits into comparative context with other SNES RPGs or how it fails to live up to some well-defined model of a quality RPG.

In short, Square-Enix created a wonderfully unique game in CT: it's hard to find a more humane set of characters and such a great (albeit small) adventure story. "The whole is bigger than the sum of its parts"  is a theme that applies to few games nowadays, as gamers ask for more and more detail and longer and longer adventures. This is not to say today's games are any worse than previous era -- in fact, in a lot of ways more detail is better and leads to a more real and beautiful world -- but art is not necessarily all about details: it's about message, too, and games like CT or FF7 pull that off superbly.

Friday, September 30, 2011

dynamics of the textbook industry - a quick thought

Some sentences to ponder regarding the dynamics of the textbook industry, from New Perspectives on Keynes by Cottrell and Lawlor:
Principal features of Samuelson's text remain unchanged over a period of forty-six years. We have argued that Samuelson's 'son' of Keynes was really the product of a virgin birth; it also appears true that, in common with other products of immaculate conception, the analytical apparatus of Samuelson's Economics has remained unsullied by its confrontation with the world. the larger uses of that apparatus have also remained unchanged: Samuelson of the eleventh edition remains the harmonist and neutral scientist of the first edition.
The authors are being less praising of Samuelson than they might seem, given this quote. As they observe in a footnote, Samuelson lost significant market power as early as the mid 60s. His text might have been praised as an excellent model of how to educate undergraduates, but that's not all what sells in the textbook industry. Politics and approach play a significant role -- which is a big reason (though not the whole reason) why big-name centrists (Mankiw), or smaller-name economists who keep a close ear to the ground for ideological shifts in the mainstream (what McConnell was), end up being the most successful.

in which n. gregory mankiw demonstrates the irrelevance of his ten principles

This post written earlier today is said by Mankiw to have demonstrated the relevance of his Principle 4, "People Respond to Incentives," but it's very possible students will not see his main point. From the (Wall Street Journal) article:
Top officials, in a bid to meet goals to win promotions or thousands of dollars in bonuses, directed many employees to refrain from issuing decisions on cases until next week, according to judges and union officials. This likely would delay benefits paid to thousands of Americans with pending applications, many of whom are financially needy and have waited for a government decision for more than a year.
So Mankiw decided to pick on government officials who responded to a blip in the government calendar by suggesting to their employees that they work less. While this does indeed demonstrate how officials responded to (perverse) incentives (hm... how does "People Respond to Perverse Incentives" sound as a principle?), some students may react by saying, "that's not the duty of government employees! They should be fulfilling their public duty!"

Yes indeed, and guess what: "citizens usually act so as to fulfill their public duty" is not one of Mankiw's ten principles. So I guess Mankiw's 10 principles don't apply to government workers....

...or to families (who purposely do not respond to incentives when deciding whether to provide you with a home or food on the table) either...

I guess the 10 principles aren't really principles, are they? Either that, or whatever world Mankiw is envisioning in his textbook is a cold and barren wasteland.

Wednesday, September 28, 2011

the problem with orthodox economics

As though we needed another reason to make the point!

So, I was reading through an article from the journal of economic education entitled, "Textbooks, Taxes, and Objectivity in Economics Instruction" (always gotta love that word "objectivity" when talking about teaching economics). They present the standard textbook argument that taxes lower social welfare by creating some deadweight loss -- the standard argument of course, where the loss in consumer surplus is greater than the gain in profits. The author then laments that this is usually as far as textbooks take the argument in terms of the chain of logical reasoning.

And then, oh boy, I get to this quote:
If the textbook discussion... concludes at this point in the example, the student will be left with the impression that the public sector is necessarily a burden on society. A discussion of the benefits of tax-financed public expenditure will give the student a more balanced view.... Before the city council exercised its power to tax, the private demand for police protection was not strong enough to produce any police protection....If [citizens] reveal their preferences for police protection... the social demand for the services of police... can be identified by vertical addition of the private demands of the citizenry.
Cops! Really? That's what makes the neoclassical model balanced -- if you see that taxes will in turn fund public goods such as the police which has positive externalities. Take the logic of the model one step further and you might even get militarization for self-defense (and for smashing unions and wall st. occupations -- the pesky institutions are too market-distortionary!!!!).

I guess cops don't have diminishing returns to scale either -- they can share donuts or something.

Tuesday, September 27, 2011

empirical dimensions of class conflict, part ii

Last time, we ended with a somewhat banal point: that you can't really understand what goes on inside a firm without looking at the social conditions surrounding the firm. The idea becomes interesting and thought-provoking in comparative context -- either cross-sectionally or temporally -- because that way you can say something of value about how the details of different contexts lead to different behavior.

I take up the latter approach and argue that different stages of industrialization produced significantly different patterns of class conflict. Early in the history of the mill, the workforce was primarily composed of farm girls, who took temporary jobs to earn some money before eventually returning home to teach, go off and get married, or go back to work on the farm. Women didn't even necessarily see all of their wages since most of it would be sent home to their father or other guardian. Nevertheless, women were vocal at the mills about wage cuts and would actively protest negative turns in management policy.

Unfortunately, such turns were becoming increasingly common as we move from the beginnings of the mill in the mid 1830s into the early 1840s. Things change at home, too, as agriculture becomes less and less lucrative, thus making families more and more dependent on the womens' earned wages. Of course, protests still occur in this period but the goals become centered around legislative reform (10 hour laws, better working conditions, etc.) now that it had become increasingly apparent that the girls might be working on a more permanent basis. By the late 1840s and early 1850s, when managers at the mill had begun to employ Irish immigrants and had introduced various technological changes leading to increased intensity of work, working families were almost solely dependent on wage work for survival.

Stand back for a second and think about how you might respond, given these different eras, to an increase in your wage rate. In a period where you're relatively free to go and return as you please, a wage increase might be seen favorably as a way of management wanting to share in the profits of the firm -- so you might work a little harder in response, knowing that you'll be rewarded for doing so. But then, think about an era when you're really stressed for time and are already working 70, 80 hour weeks. Is an increase in your wage now necessarily going to mean that you'll put in another 4, 5 hours of work?

Of course not. Even if you're making more in the earlier era relative to the latter era, you might very well be at your "breaking point" in the latter era, with such a "point" significantly affecting your work-leisure preferences. And that is essentially what I am out to prove in the paper -- in short, that working conditions were being increasingly downgraded, causing a shift in response to how workers decided (partly as a group, partly individually) to react when managers dramatically increased or decreased their wages. This isn't a wealth effects model where increased income leads you to shift your time from work to leisure; rather, it is one of changing outside conditions compelling specific performance in the latter period where it was only optional in the previous.

That's it for now! In the final part to the series I'll present the conclusions in a bit more detail and argue a few "big picture" points -- for example, that we can learn a lot about labor contracts in this period from this case study.

Saturday, September 24, 2011

fall entertainment at imagining history

I often enjoy making lists of things I plan on enjoying after getting through difficult bouts of work. Given that I have 2-3 conferences and loads of other stuff to work on up until mid-November, here are some things I'm looking forward to enjoying (note that all of these have been featured at various points on this blog in one form or another) as all of that winds down.

Haruki Murakami, 1Q84 (October 25, 2011)

Murakami's latest is supposed to be a really sensational novel on the order of Wind-Up Bird Chronicle. Released in three separate volumes in Japan, the English translation will released late-October. A selection from it recently appeared in The New Yorker: "Town of Cats".

Assassin's Creed: Revelations (November 15, 2011)

Taking place in early 16th century Constantinople (i.e. Istanbul) promises to be a stunningly beautiful and expansive end to Ezio Auditore's story. (Might have to wait until Christmas break to tackle this one!)

The Rum Diary (October 28, 2011)

This movie adaptation of a classic but rather less well-known book by Hunter S. Thompson starring Johnny Depp is a unique, early look at the young author that is not present in most of his later works that releases, whaddya know, late-October.

Legend of Zelda: Skyward Sword (November 20, 2011)

Probably going to end up being the best example of the Wii's "last stand" before the new console (Wii U) rolls out. Apparently this game is huge. Invoking a less-mature look than Twilight Princess, the visuals on this game look promising. And let's hope that the WiiMotion Plus controls deliver!

Professor Layton and the Last Specter (October 17, 2011)

The latest installment of this fantastic puzzle series is actually a prequel in terms of the timeline of the story. Apparently it includes a lengthy RPG detailing Layton's "London Life"! Coming to stores mid-October.

At various times in my life I have determined that (1 or 1.5 hours) less sleep each night is worth it. I suspect this might be one of those times.

Thursday, September 22, 2011

empirical analysis of class conflict -- some current research

Consider this post to be the first in a series in which I attempt to explain some things I'm currently working on. The problem with stating anything definite about projects is that you risk it coming across the wrong set of eyes. Maybe once I get tenure I'll have a more relaxed tone, but for now (since I haven't even gotten a PhD!), I'll try to write in such a way that doesn't give away techniques, data sources, or references. See my research page here for a list of all current and past projects.

Of course, that stuff tends to be the boring part of any research paper anyway, and when I comment on research I usually avoid technique and references in a New York Times Sunday-esque "pop social science" sort of way, so I guess I'll just try to do that same sort of thing with my own work. Anyway, on to it:

The project I want to write about for the next few posts is both narrow and broad. I started out with a question that hasn't been adequately resolved in the empirical literature, and ended up manifesting about the importance of social context when evaluating model results.

The question: whether under a piece rate (where you get paid based on how much you produce), more productive workers in the firm are prone to work less hard than they should in order to reduce the possibility that the manager cuts their piece rate.

In a firm where all workers are under the same contract, like the one that I looked at, this possibility might arise if individual effort is observable and if workers gain significant experience on the job, or "learning by doing". In such a situation, managers might observe the total output of the firm, decide that productive workers are earning really high rents because the work is too easy for them, and cut rates on everyone in order to stop workers from earning as much and, of course, to keep the profits of the firm from slipping.

The best way to test for the presence such "strategic" individual behavior would be to examine worker effort over time, and see how it responds to changes in his piece rate. Additional information on how long the worker has been at a firm, as well as other factors that might contribute to his or her productivity (how closely is management observing the worker?), would be good "controls" -- i.e., they allow you to tell the fullest story possible by evaluating the contribution of each possible factor to explaining worker effort. And finally, ideally, you would have a lot of workers to look at over a long period, in order to tell a convincing story.

The problem, however, is that if you want to tell a truly convincing story, those are not all the variables you need. Sure, from the inside of the firm, you might be able to explain the relationships among, say, worker effort and how productive he could have been, and then see if he's "lying" on the job. But what if his behavior is also affected by his fellow workers' ideas about why managers are changing their wage rates on them in the first place? A rate cut could mean one thing -- a rate hike, another. Or, what if the worker has to work for a certain amount of time in order to feed his family back home, because it's becoming harder and harder to do so as other options for work deteriorate? These are potentially very significant factors that simply cannot be included in a firm-level research design.

Well, that's it for now. I've outlined the ideal situation for testing the research question as well as a potential problem with that approach. Next time I'll talk a bit more about who these workers were and why running the model in the 1830s might be different from running the model in the 1850s.

Monday, September 19, 2011

old court-new court controversy in kentucky in the 1820s

One of the more interesting events I've encountered in my research lately is the Old Court-New Court controversy in the early 1820s in Kentucky. Reading through this, you might be struck with some parallels between current debt controversies. And, maybe even ways to get out of them.

It began with debtors unable to meet their obligations (a common theme of social unrest in the early Republic) and deciding to form a party which would stand against the repayment of debts. When this debt relief movement took hold, views on it obviously split into two camps: those representing the creditor interests such as banks who wanted to force payment, and those, in the party, representing debtors who either wanted to delay payment (for, say, a year) or to absolve the debtors of all responsibilities completely.

The situation was made worse from the fact that the cause of the debtors' problems stemmed from a speculative bubble in land in Kentucky that had burst. People had originally taken out loans in order to pay for the land, only to find that when the bubble burst, they owed large sums of money! Thus creditors, who included big insurance companies and banks, were very angry and fought hard against a legislature that had come out in majority support (in both houses of the General Assembly) of the relief party.

The courts, however, declared debt relief to be unconstitutional -- creating a split in the government between the judicial and legislative branch. But unlike most of the early clashes between a society rife with factions on the one hand and "friends of order", the judges, on the other hand, the Debt Relief Party made a radical move by deciding to simply create a completely new court! By the time it was abolished a few years later (once a legislature more strongly against debt relief had come in, and once economic conditions had improved), this "new court" dominated by debt relief interests had heard 77 cases!

Eventually, the cases heard by the New Court were declared null, but Kentucky's brief experience with a dual-court system represents a truly remarkable event in legal history, when people literally took institutions into their own hands to set up an alternative more in line with popular views. While there are many examples of court occupations throughout the history of the Early Republic, nothing quite like this can be found in the history books. It shows what happens when you combine hard times with enormous sums of debt and a government that is insufficiently responsive to majority interests. And, it might just teach us something about current events!

You can read more about the controversy at its Wikipedia site here:

Wednesday, September 7, 2011

beethoven, piano sonata no. 32, op. 111

This is a side of Beethoven we don't usually get to see in all the renditions of the symphonies and "Moonlight Sonatas"! The final sonata in Beethoven's opus is a delightful surprise, and here is the second (and last) movement of it. Serkin's gentle but I think it's a good interpretation. Enjoy!

First part:

And the second part:

Monday, September 5, 2011

something to reflect on this labor day

From E.J. Dionne's excellent Opinion piece in today's Washington Post:

So it would take a brave man to point out that unions “grew up from the struggle of the workers — workers in general but especially the industrial workers — to protect their just rights vis-a-vis the entrepreneurs and the owners of the means of production,” or to insist that “the experience of history teaches that organizations of this type are an indispensable element of social life.”

That’s what Pope John Paul II said (the italics are his) in the 1981 encyclical “Laborem Exercens.

Quotes from Abraham Lincoln as well in what is a good summary of the history of how laborers have been overlooked as the drivers of our economy. For a more current example, it is interesting to note that almost three years after the beginning of the U.S. recession (in December 2007), after trillions of dollars to save capital from a total collapse and refusing to raise taxes on the wealthy, President Obama is finally attempting to Get Serious ("Economic Adviser Pick is Known as Labor Expert", NYT 8/29/11) about jobs in the economy.

Makes me sick.

Saturday, September 3, 2011

american relative decline in blogs, academics, and policy

The stagnation of the American economy over the last few years (or as some would argue, even longer) has prompted a growing concern about the possibility of American "relative decline", echoing, in part, the discussions among policy and academic circles in the 1950s regarding British relative decline. And like those debates from the 1950s, people on both sides of the spectrum are weighing in.

From the center-right we have people like David Brooks (see here, "The Vigorous Virtues" NYT Op-Ed) and (from the further-right) Tyler Cowen, who argue that we have dried up a lot of our productive resources, largely from a sluggish public sector and a drift from "republican" virtues. In particular, Cowen's The Great Stagnation published earlier this year looks at median household income and some non-standard (if not thought-provoking) measures of technological growth to argue that American ingenuity is in serious jeopardy of a kind of "plateau".

Liberals, such as the further-left Dean Baker and liberal Dani Rodrik, argue against the view that America is on its way out. Baker in this piece ("Trade Arithmetic for David Brooks") concentrates on continuities, not breaks, in American policy since the 1970s regarding its attitudes towards organized labor as well as where a country's true strength's lie in its political economy. Baker gives a refreshing view of how America has always had an antagonistic view of what Brooks sees as the truly vital source of American productivity and prosperity -- the American worker. In other words, American economic policy is nothing new; it's simply exacerbated by other more important factors, including financialization.

Dani Rodrik looks at the issue on an international scale here (WSJ blog) and here (FT articles are gated, but you can get around the gate by Googling "don't expect china et al to save the world", the article's title, and clicking on the first link), arguing that unless emerging economies adopt a strict industrial policy allowing them to push out of manufacturing into higher-growth areas, relative decline is not likely to be the most important force in the international political economic landscape because developed countries will maintain an edge on the technological frontier.

Relative decline debates always seem to be instigated by conservatives who want to lament the passing of some better time when a country's citizens were more virtuous and hard-working, and "real" economy concerns were more important than finance. Marxists or Marxist-influenced scholars may join the fray by commenting on the labor politics involved, for example by arguing that a lack of a strong labor movement may hinder progress towards socialist revolution and thereby lead to economic/capitalist stagnation (Baker walks a fine line on this front, whereas Bill Lazonick is a solid example of this argument in the British decline debates).

Real progressives, on the other hand, see through the rhetoric most clearly by arguing that relative decline is a fiction manufactured by conservatives in order to skirt the main issues of capitalist development (I would place Rodrik in this camp). I have yet to encounter an explicitly Marxist take on the question and would be interested to hear if anyone has an article to recommend on it.

Monday, August 22, 2011

quote of the day

I've been involved in some odd research this summer as part of my dissertation, studying Harvard graduates from the 1700s. Lucky for me there is never a shortage of interesting quotes about these guys. Here's a clip from a Boston newspaper, quoted in Sibley's Harvard Graduates (Vol. 15):
Last Commencement Day a Number of the Disputants were led into what some think the good old Way, i.e. the Way of Blasphemy against God. They have a strange Proverb at College, viz. That 'tis no sin to tell Lies in Latin. So it seems to be looked on as no Sin there for God to be Blasphem'd, provided he is Blasphem'd only in Latin.
No words necessary for that one!

Sunday, August 21, 2011

it takes a lifetime to learn how to paint like a child

(Subject line is a modified version of a Picasso quote.)

Economists looking for ways to tell stories in their classrooms -- stories intended to run counter to the oft-trumpted idealisms found in many mainstream textbooks -- might look to children's stories as a treasure-trove of leftist-inspired themes such as equity, fairness, and collective action.

At least, that's the message behind this article which appeared in the NY Times today by Motoko Rich, titled "Fairies, Witches and Supply and Demand" (if you have run out of your 20 articles this month, try typing the article title into a Google search or getting a service such as "NYTClean"). Rich gives many interesting examples, and all it would take is some clever adaptations in order to distill these stories into educational content for first year undergraduates.

Near the end of the article, Rich confronts the obvious question: why is it so much more difficult to find children's textbooks espousing the excitement of competition and market exchange? His answer:
By and large, the economic lessons in children’s books lean left of center. “I think the writers are not particularly sympathetic to or don’t understand how a market works,” said Gary S. Becker, the Nobel laureate who teaches economics at the University of Chicago. “It’s not easy to convey that to a child. It’s not always easy to convey it to grown-ups.”

For the most part, the economic concepts conveyed in the books reflect values like generosity and equity rather than competition. Raymond Fisman, an economist at Columbia University, said his 3-year-old daughter’s favorite books teach the importance of sharing and gift-giving, values that might not lead to the greatest wealth in the real world. But, he added, “I doubt that 3 is the age where you start teaching people the brutal economic truths of grown-up commerce.”
At first I thought -- wait a sec! I could do better than that! Not. So. Simple!

But then, after a bit of reflection on the hours I've spent glued to a Harry Potter book, or to some of my favorite games, or better yet, with my family, I came to the conclusion that No, Rich Has it Just About Right. ;)

Wednesday, August 17, 2011

supermarket economics

I was reflecting on the analogies used by economists to illustrate core ideas such as market equilibrium, consumer preference theory, as well as more advanced topics such as the equation of marginal utilities to prices in product market equilibrium, when I began to realize how artificial the supermarket analogy is. (Loosely stated, the supermarket analogy argues that a shining example of how markets work is the supermarket -- a large group of consumers congregating together in order to take part in impersonal exchanges that leave them better off than they would have been if they had to bargain individually with the farmer or manufacturer. Supermarkets therefore increase market efficiency and hence social welfare.)

One example has caught my attention as being a particularly serious example of this fallacy -- Abba Lerner's discussion on product market equilibrium in The Economics of Control. Lerner goes so far as to say that the equation of people's psychological marginal utilities of goods to the prices of those goods, represented in the standard model of market equilibrium, is one of the great achievements of mainstream economics, validating the use of the model in understanding general equilibrium in any market economy. And you can find this story of the triumph of the supermarket analogy anywhere that core economics principles are explained (even Greg Mankiw uses them in his Principles text, e.g. where he asks whether the price of turkey in a supermarket is "just" according to the principles of welfare economics).

Indeed, supermarket analogies constitute a large enough set of ammunition for mainstream economists that I would label that set "supermarket economics", for lack of a better term. (Apparently that term has been used more commonly in other contexts...)

Supermarket economics is deeply flawed because it doesn't address people's most common interactions with economics ideas in their daily lives -- the economics of work and the economics of the home or family. In fact, I would argue that supermarket economics is intentionally used by mainstream economists to mask the more relevant facets of economic life that most people deal with on an ordinary basis.

Think about it like this: even if "supermarket economics" did hold, what percentage of your day is spent in a supermarket? Now what about at work, or at home, or with friends? One of Mankiw's 10 principles states that "markets are usually a good way to coordinate economic activity". But employers don't go around to various islands in a giant market looking for the "right worker" for a particular job, nor do our parents take bids from the highest bidder to see who will be fed on any particular day. Employers plan the coordination of their workforces, and direct their workers not through market incentives but through threats or just because they command authority in the workplace. These are experiences that most of us have everyday -- before we go to the supermarket to pick up tonight's dinner.

My central point is simple but highly relevant to a critique of bourgeois economics. Supermarkets are just an idealized version of an economy: they mask some of the most important aspects of economic life for ordinary people. Standing back and looking at the different economic activities we engage in, we see that direct, impersonal exchange is not the norm.

Saturday, August 13, 2011

the art and science of financial markets

(links to image here and here)

Trying to follow the ups and downs of the stock market is difficult, but it's not a science. While traditional theories of financial markets might like to assume that it is, this cartoon illustrates a different argument for why stock prices move the way they do. Investors must make their decisions based on information about a company that is far from complete, and they also must factor in what all the other investors are thinking about where the stock is headed. If anything, this makes their decisionmaking jobs more complex than science, not less so. And in such situations, frenzies can easily break out where a few small rumors can lead to wide fluctuations in a stock's price. This volatility seems to defy any logical or scientific explanation, as the above picture clearly suggests.

NOTE: This cartoon is part of an ongoing project at Imagining History to cull cartoons and other illustrations around the web as part of the Anti-Mankiw project (making critiques of mainstream economics accessible at the introductory level). See the link below for a list of all cartoons gathered thus far here:

Thursday, August 11, 2011

or maybe because they love their land, no matter how polluted it gets

Robert Vienneau replies to my linking to a strategy videogames wikipedia article with some interesting research on the intersection of games and decision theory. Interesting stuff: I believe that people's performance in games can definitely shed light on understanding individual behavior in complex social phenomena of the "real world". But as I have argued on other occasions, I think that the actual structure of a gaming world, and the method of gamer interaction with that structure, can also be highly productive for teaching about social theory (and, as a corollary, reproducing certain political ideas).

What I'm thinking about is more abstract than saying "well, this is how people react in games to different stimuli... let's extrapolate what that tells us about economic theory!". What I'm going for is more along the lines of, "the worlds that are represented in these games are composed of certain institutions and ideas, which become socially and politically meaningful to the gamer who takes part in those worlds".

Consider the following situation which takes place in the first part of the classic RPG, Final Fantasy VII for the Sony Playstation.

Premise: A giant corporation with strong ties to a large city, Midgar, has endeavored on an environmentally damaging policy of extracting an energy source from the planet which also serves as the people's source of livelihood. To extract the energy, they have built 8 reactors in a circular fashion around the city. The city itself is composed of two tiers: an upper and lower "crust".

On the lower crust you have the slums. Then, you have a pie-like "disc" structure that separates this lower crust from the upper-area, where the corporation runs its day-to day options. (Needless to say, there are strong connections between the corporation and the city government.)

A picture of Midgar:

(click to enlarge. original link. the "slums" are located below the 8 panels you see represented in the image, where the main reactor sits in the center and serves as the corporation's HQ as well.)

Enter Barret and Cloud, who are having a conversation about the layout of the city and the problems with the corporation. Barret is part of a grassroots "terrorist" organization attempting to blow up the reactors in the name of a kind of environmental justice. Cloud has joined the group for the first mission (from which they are coming back after a successful attack on one of the reactors). The following dialogue takes place:
"The upper world... a city on a plate..."
"It's 'cuz of that &^#$# 'pizza', that people underneath are
"And the city below is full of polluted air."
"On topa that, the Reactor keeps drainin' up all the energy."

"Then why doesn't everyone move onto the plate?"

"Dunno. Probably 'cuz they ain't got no money. Or, maybe..."
"'Cuz they love their land, no matter how polluted it gets."

"I know... no one lives in the slums because they want to."
"It's like this train. It can't run anywhere except where its
rails take it."
(script thanks to this link.)

(screenshots thanks to this youtube video)

Really remarkable. I remember when I first read those lines, they really hit me like a brick. They still do, in fact. And the game is full of these types of themes and quotes, demonstrating how gaming worlds themselves can introduce the player to social nuances that many people would only consider possible to be fully expressed in a novel or some academic treatise.

Numerous other examples can be found, if you look closely: from the historically (politically, socially, culturally...) engrossing worlds of the Assassin's Creed series to the best Japanese RPGs out there, there is a lot to be learned from taking these games seriously as expressing real social themes on a surprisingly deep level.