Sporting economics

These days I try to read all the economic commentary I can find. High on my ranking of economic journalists is James Surowiecki of the New Yorker. He writes in his latest “Financial Page” column about the regulation proposals being thrown around the US Treasury Department. The selling pitch of the new regulation package is a move from a “rule-based” approach towards a “principle-based” approach. Surowiecki brings it all down to the turf with a sports analogy…

It’s something like the difference between football and soccer. Football, like most American sports, is heavily rule-bound. There’s an elaborate rulebook that sharply limits what players can and can’t do (down to where they have to stand on the field), and its dictates are followed with great care. Soccer is a more principles-based game. There are fewer rules, and the referee is given far more authority than officials in most American sports to interpret them and to shape game play and outcomes. For instance, a soccer referee keeps the game time, and at game’s end has the discretion to add as many or as few minutes of extra time as he deems necessary. There’s also less obsession with precision—players making a free kick or throw-in don’t have to pinpoint exactly where it should be taken from. As long as it’s in the general vicinity of the right spot, it’s O.K.

And Wall Street is apparently pro-soccer, which I gather is also very un-American.

Regardless of the subtext, what raises my thick eyebrows is the sports metaphor. If in trouble you can always illuminate love, war and economics with a story about youthful play. Life immitates sport.

Hoarding

In February 1973, Paul Volcker announced a 10% depreciation of the dollar. It was the second such move in less than two years and a final blow to the appreciated dollar and the fixed exchange regime.

The respectable way to tell this story is to look at the dollar-gold parity. The inebriated way and somewhat more fun, is to look at the dollar-wine parity. Did Americans load up their cellars of French wine? Did they speculate on wine futures? Did the wine speculators understand monetary uncertainty?

Ad from the The New York Times, March 3, 1973, page 9.

The usual suspects

Although generally recognized as dull, economists have on occasion colorful and influential public representatives. In the last half a century few rank as high as Milton Friedman and John Kenneth Galbraith. Both died in 2006 after long and full lives. 

To monitor cultural influence of public intellectuals we have the tools of the historian, examining the textual record and constructing a narrative measure of impact. In the era of the web some new tools are on offer, such as Google Trends, a record of past searches and hits to news pages through Google’s Search Engine. One confirms a intuition. Friedman’s web presence is much more pronounced than Galbraith, and it does not seem to fade with time. What representations and uses are made up of these references the search tool does not say, for that one needs to “examine the textual record and construct a narrative measure of impact.”

The desert of the virtual

The past of the world wide web is the barren province of “Server not Found.” There are some beginnings of web archives, aptly called archive.org, but once you stop paying the annual rental or you turn off your server, the record disappears into an error message.

I found another kind of past trace that although less frustrating is somewhat haunting. Looking for more information on the Wall Street Journal former economic editorial writer, and “Suply Side Economics ideologist”, Jude Wanniski, I found the website of his Polyconomics, Inc.

The website survives in neglect. The web design is ancient, the “news” items are over three years old, the highlighted “essays” of the deceased Wanniski are on show as if he was alive and unrelenting in his familiar advocacy. If you look close enough, and long enough, you will see tumbleweed pass through your screen. And yet, hidden bottom left corner, the flame is still bright. A price ticker reports the current trading on precious gold, silver and platinum, remembering Wanniski and friends’ conviction in the gold standard. Eerie stuff.

Packaging economics

In 1970 the media juggernaut Time Inc created “Time’s Board of Economists.” Sitting on the Board were Otto Eckstein (Harvard), Walter Heller (Uni. Minnesota), David Grove (IBM), Robert Nathan (Nathan Associates), Arthur Okun (Brookings), Joseph Pechman (Brookings), Beryl Sprinkel (Harris Trust & Savings Bank), and Robert Triffin (Yale). This brain trust met with the editorial staff of Time four times a year and was a source of great pride. At the New York Times they were advertised as an all star team of economic savants.

I could not find evidence of its continued existence (granted that I did not look very hard). Besides, they show up two years later in a Wall Street Journal ad. By 1973 the wisdom of economists was recorded on video cassette. There was the small matter of an $800 dollars fee, which makes me ask: what is the price of video technology and what is the price of economic advice?

Speaking to the dead

Yesterday, the guest of Comedy Central’s The Daily Show with Jon Stewart was P J O’Rourke [video here]. He was there pitching his latest book: On the Wealth of Nations, a book about Adam Smith’s The Wealth of Nations.

I am not one to treat the “old masters” as a professional treasure, in need of constant attention and shelter. Nonetheless, I found O’Rourke disturbing, and not just for his nervous attempts at being funny. O’Rourke was “channeling” Smith. No one cares much about what O’Rourke thinks, so questions were posed to Smith. And O’Rourke diligently communicated the great Scot’s updated views on the sub-prime debacle, fiscal stimulus and the like.

I protest not because it’s unscholarly, but because it’s cryptic.

The library online

Writing history evokes images of shuffling dusty papers, and pencils scribbling over yellow pads. Yet, history is a technology intensive activity as any other academic field. A recent New Yorker article makes this point neatly, recalling how cataloguing, note taking and referencing are devices to manage the flood of information.

It is now common knowledge that a new kind of library is in the making. Google has publicized its desire to scan the major libraries of the world and make books electronic. You can search titles and text in Google Book Search, and despite being a blunt tool prone to error, it testifies to the decreasing cost of bibliometrics. To turn books into strings of data has never been easier. The same is happening to newsprint, the New York Times has its archives available for public view.

The new media promises ease and access, if one knows the way around the new frontier lands. Fortunately, there is D-Lib an online magazine focused on the subject of digital libraries. Demand creates supply?

The freaks

Everyone writes blogs, firemen, astronauts, and economists too. And as in most things in life, they differ in writing skill, design and audience.

I went to see who was ahead according to Technorati. This tool ranks subscribing blogs by the number of different blogs that have referenced/linked it in the past 6 months. As a baseline, know that our blog has zero links and ranks 8,911,336.

Blogs by economic journalists in such prestigious publications as the Wall Street Journal (#6,59 and the Economist (#8,395) rank below blogs of professional economists. The economic journalist of the Financial Times and Slate, Tim Harford, doesn’t do any better (#38,755). On the top 10K are economists: Dani Rodrik (#8,963), Mark Thoma (#3,962), and the elder statesmen Gary Becker and Richard Posner (#4,527). I guess Brad DeLong would be among these, if he had listed his blog in Technorati.

The top three econ-blogs are Greg Mankiw (#709), Tyler Cowen and Alex Tabarrok (#629), and the freaks Stephen Dubner and Steven Levitt (#233!!!). So the top blogs in economics, if the freaks with their varied fare can still be counted in, are written by authors of popular books and regular columns in the traditional media. Not very surprising really…

In case you want some more econ-blogs, check here.

Having fun with brains

The July 2007 issue of Scientific American has an article by Michael Shermer of Skeptic.com, its title “The Prospects for Homo Economicus.” The article is a short indictment on the rational economic man, stating that “thousands of experiments in behavioral economics since [Kahneman and Tversky founded the field in 1979] have demonstrated that most of us are highly risk averse.” The curious bit about the article is not the introductory tribute to the Nobel economics, but what follows.

Shermer visited UCLA and got into a fMRI scanner to be subject of an experiment by Russ Poldrack and Craig R. Fox. Jason Zweig, journalist for Money magazine and author of Your Money & Your Brain (in that order), also got into a scanner numerous times as way of investigative journalism.

Because I doubt neuroscientists are keen to study journalists as ideal subjects (college students are cheaper and have model brains), my guess is that journalists are asking to be stuck in. Being “the body” (”the brain”) surely enhances journalists enthusiasm for the field of neuroeconomics. There is actually a testable hypothesis here, lets look at their dopamine levels.

Besides, one might dispense with elaborate, cognitive explanations. Neuroeconomics is sexy science journalism because it is about looking at thought decision, peeling off bodily veils, surely this of itself newsworthy.

The publisher

Paul Samuelson’s Economics sold up to 70,000 copies in its first year, in under two decades a million. If economics is a business, the entrepreneurs are not the economists but the publishers and McGraw-Hil Book Company ranks high on the list.

To follow the internationalization of American economics is to consider the influence of Samuelson, but to what extent is Samuelson’s success a corollary of the influence of McGraw-Hill? The internationalization literature makes passing reference to advances in communication that allowed dissemination of American texts. This frames the problem with publishers being ancillary to economists, but could it not be the other way round? After all, American economists had little to gain from an international economics, but publishers had a market to conquer.

Posed as a research question what is the publication trail of Samuelson’s Economics? Which is also to ask: who published it in each country? When? And for what reasons?

As far as I can tell, the history of McGraw-Hill is under researched. The only book length examination of its past is as old as 1959, The Endless Frontier by Roger Burlingame. A history of McGraw-Hill published by McGraw-Hill reads like an in-house piece to celebrate the company and its genius.

Klein on neoliberalism

To promote a book must be exhausting. The author, fresh-faced, smiling and clever, must fence questions from the media, from morning to evening, on radio, TV and print. For the public it isn’t easy either. After a week watching Alan Greenspan chatting his way from 60 minutes to the Daily Show, it is now Naomi Klein’s turn with The Shock Doctrine (next week: Paul Krugman).

On TV, Klein had to settle for C-SPAN, interviewed by New Republic’s Frank Foer. The conversation was not thorough or deep, Foer was too anxious eye-balling the camera between sentences and attempting an insincere critical distance. But the interview was long, and one gets from it a sense of Klein’s argument, close even to a retelling of her book’s anecdotes and narrative chain.

Elsewhere, Klein’s book has been favorably reviewed by Joseph Stiglitz in the New York Times, but other major newspapers have still to give it attention. In Britain, Klein’s daily Guardian was impressed, but the weakly Guardian (i.e. Observer) was furious. The charting of opinion is as curious as the book itself.