Archive for the ‘economics’ tag
This is one of those points that’s obvious once stated but rarely considered. The Heteconomist breaks down exactly why the kind of job you want to have is precisely the opposite of the kind of job an employer wants to offer.
Satisfying jobs – let’s call them ‘good jobs’ – will generally be ones where learning occurs at a steady pace more or less indefinitely, probably as part of a defined career path. Bosses would prefer not to offer these, and will always be looking for ways to deskill roles that, for now at least, need to allow workers greater autonomy, ingenuity, and scope for on-the-job learning.
(via Marginal Revolution)
Jared Diamond’s review of Why Nations Fail isn’t all that positive, but this distinction from the book was one I’d never thought of:
Among non-European countries colonized by Europeans during the last five hundred years, those that were initially richer and more advanced tend paradoxically to be poorer today. That’s because, in formerly rich countries with dense native populations, such as Peru, Indonesia, and India, Europeans introduced corrupt “extractive” economic institutions, such as forced labor and confiscation of produce, to drain wealth and labor from the natives. (By extractive economic institutions, Acemoglu and Robinson mean practices and policies “designed to extract incomes and wealth from one subset of society [the masses] to benefit a different subset [the governing elite].”)
But in formerly poor countries with sparse native populations, such as Costa Rica and Australia, European settlers had to work themselves and developed institutional incentives rewarding work. When the former colonies achieved independence, they variously inherited either the extractive institutions that coerced the masses to produce wealth for dictators and the elite, or else institutions by which the government shared power and gave people incentives to pursue. The extractive institutions retarded economic development, but incentivizing institutions promoted it.
By all accounts I’ve seen Charles Murray’s new book is important. David Brooks offers a pretty succinct summary of why:
His story starts in 1963. There was a gap between rich and poor then, but it wasn’t that big. A house in an upper-crust suburb cost only twice as much as the average new American home. The tippy-top luxury car, the Cadillac Eldorado Biarritz, cost about $47,000 in 2010 dollars. That’s pricey, but nowhere near the price of the top luxury cars today.
I enjoy occasional dips into the field of Marxist cultural analysis, but I know it’s not for everyone. If you like it too, or are just interested to try some, this piece by Slavoj Žižek highlights many of the best things that those theories can contribute to out modern understanding of the world. A sample:
If the old capitalism ideally involved an entrepreneur who invested (his own or borrowed) money into production that he organised and ran and then reaped the profit, a new ideal type is emerging today: no longer the entrepreneur who owns his company, but the expert manager (or a managerial board presided over by a CEO) who runs a company owned by banks (also run by managers who don’t own the bank) or dispersed investors. In this new ideal type of capitalism, the old bourgeoisie, rendered non-functional, is refunctionalised as salaried management: the new bourgeoisie gets wages, and even if they own part of their company, they earn stocks as part of their remuneration for their work (‘bonuses’ for their ‘success’).
(via The Browser)
Have I ever told you how much I love David Brooks? (Yes, yes I have.) It’s because he says sensible things like this:
In sum, in the progressive era, the country was young and vibrant. The job was to impose economic order. Today, the country is middle-aged but self-indulgent. Bad habits have accumulated. Interest groups have emerged to protect the status quo. The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis.
I link to this disproportionately popular article mostly because I linked to “I, Pencil” recently and it’s essentially the same thing, only food based. (And in this case, rather than having an irrelevant plea for privatized mail service tacked on at the end, we get one about home-grown turkey.) But it remakes a point I think absolutely vital:
Anyone who tells you that life was better in the past is a dummy. Anyone who dreams of self-sufficiency a fool. We live in a magical time filled with uncountable objects no person would ever dream of making on their own. Everything about our lives is a minor miracle; we’re far more deeply connected than we even realize.
That felt good. Thanks for listening, internet.
This is another one of those stories I ignored the first five times I saw it. But it actually raises some very interesting issues about the nature of McDonald’s, modern food production, and economics, and thus worthwhile regardless of the defensibility of its core conceit.
(John Gruber is the reason I actually read it)
The basis of “I, Pencil” is one of the most important ideas you’re likely to ever encounter. Anyone who, encountering its premise for the first time, is not at least a little awed is probably dead inside.
I am a mystery—more so than a tree or a sunset or even a flash of lightning. But, sadly, I am taken for granted by those who use me, as if I were a mere incident and without background. This supercilious attitude relegates me to the level of the commonplace. This is a species of the grievous error in which mankind cannot too long persist without peril. For, as a wise man observed, “We are perishing for want of wonder, not for want of wonders.”
[I refer in my generous praise to the first two-thirds of the piece. While the bit about the mail isn’t obviously wrong, it’s much less obviously right than the part about the pencil. While I won’t here mount a strong defense of the US Postal Service, I believe one can adequately be mounted. I favor wonder and awe, not militant libertarianism in all matters.]
(via Google, The Rational Optimist, and an email I was drafting)
I’m not sure whether to blame myself, or America’s Zionist or nothing relationship to Israel (non-Zionists only really care about Israeli-Palestinian relations, not Israel itself), but I learned a lot about modern Israeli society from this story about the summer housing protests there. (Like for example, the fact that there were widespread protests.)
I saw this about five times before I gave it a serious look, but I actually think there’s a lot of good, thought-provoking stuff in this essay by Douglas Rushkoff. This rings true to me:
Our problem is not that we don’t have enough stuff — it’s that we don’t have enough ways for people to work and prove that they deserve this stuff.
Another in the large pile of “most things about wine are bullshit” stories. This author did a statistical analysis:
Using descriptions of 3,000 bottles, ranging from $5 to $200 in price from an online aggregator of reviews, I first derived a weight for every word, based on the frequency with which it appeared on cheap versus expensive bottles. I then looked at the combination of words used for each bottle, and calculated the probability that the wine would fall into a given price range. The result was, essentially, a Bayesian classifier for wine.
(via more of what i like)
An interesting idea from David Brooks:
If you look at America from this perspective, you do see something akin to the “British disease.” After decades of affluence, the U.S. has drifted away from the hardheaded practical mentality that built the nation’s wealth in the first place.
The shift is evident at all levels of society. First, the elites. America’s brightest minds have been abandoning industry and technical enterprise in favor of more prestigious but less productive fields like law, finance, consulting and nonprofit activism.
This is, at minimum, an unconventional view. And it is precisely that reason that David Graeber’s history of debt is so interesting.
While the claims of the impersonal market and the claims of “society” are often juxtaposed – and certainly have had a tendency to jockey back and forth in all sorts of practical ways – they are both ultimately founded on a very similar logic of violence. Neither is this a mere matter of historical origins that can be brushed away as inconsequential: neither states nor markets can exist without the constant threat of force.
I apologize heartily for the cringe-worthy title. I bear no responsibility for it’s creation, merely it’s prorogation. But Reihan Salam, among others, thinks that men and machoness are unlikely to emerge from this recession unscathed. While part of me is screaming “bogus trend story,” I can’t condemn it as meritless:
As behavioral finance economists Brad Barber and Terrance Odean memorably demonstrated in 2001, of all the factors that might correlate with overconfident investment in financial markets—age, marital status, and the like—the most obvious culprit was having a Y chromosome. And now it turns out that not only did the macho men of the heavily male-dominated global finance sector create the conditions for global economic collapse, but they were aided and abetted by their mostly male counterparts in government whose policies, whether consciously or not, acted to artificially prop up macho.
(via Idea of the Day)
This is interesting:
Greenland’s [increasingly independence-minded] government, using US Geological Survey data among others, says that the mean estimates for its oil reserves is about 50 billion barrels. That number is a bit abstract, so I did some math: The island has about 56,000 people, and if things go as they appear to be going, it will be an independent country some time in the next couple of decades. That means each Greenlander will own about 900,000 barrels of oil.
That is more per capita than any oil-rich country you’ve heard of. But, it’s largely unverified — no oil has been found in Greenland — and is less than a fifth of the total reserves of Saudi Arabi. If these estimates are accurate, Greenland would be between Russia and Libya, a few spots down from Kuwait, in total reserves.
Apparently, economists think there are better and worse ways for us to spend our way out of the recession. Some of their most interesting suggestions:
Tyler Cowen, George Mason University: In my view, fixing the banking sector is more important than getting the stimulus right. So if you can afford to lose the money, go to a large bank (more likely to be insolvent), find their most overpriced service, and buy as much of it as you can. That way you are doing your part to recapitalize our banking system.
Ethan Harris, Barclays Capital: Get a haircut. It is a purely domestically produced service with extremely high labor content. This means no drain in spending power out of the country: it is “Buy American” without violating any trade agreements.
Robert Shiller, Yale University: I suggest using it to give an extra-generous tip to taxi drivers. They talk to lots of people, especially active business-oriented people, and they will be feeling more upbeat, sensing that some people are feeling flush, and they will communicate this feeling to numerous people, thereby helping restore confidence.
Chipping away at the “to read someday” pile, I found this bit from The Economist.
To be on the right-hand-side of an eye-level selection is often considered the very best place, because most people are right-handed and most people’s eyes drift rightwards. Some supermarkets reserve that for their own-label “premium” goods.
I’m definately going to be thinking about this next time I’m shopping.
In the category of bogus scientific-sounding conclusions, NYU professer Ken Maymin claims that the popularity of Beyonce’s “Put a ring on it” — with its regular beat — indicates coming stock market volitility. Or said psuedoscientifically:
After studying decades of Billboard’s Hot 100 hits, Maymin found that songs with low “beat variance” had an inverse correlation with market turbulence.
(via Passport; Apologies if this post got that infernal song stick in your head. You can take some solace in the fact that it’s presently stuck in mine.)