The most rational man I ever met, whom I shall call Ysidro [when] told that he did not satisfy all of the v. Neumann-Morgenstern axioms, [..] replied that he thought it more rational to satisfy his preferences and let the axioms satisfy themselves.
This introduced in the extensive correspondence between Samuelson, Savage, Marschak, Baumol, and Friedman the idea of the “Ysidro Man” or “Ysidro functions.” In the letters (but not in published print) Samuelson also introduced his mother – as the non-economist acting on her common sense. Thus, for instance, Marschak would discuss with Baumol how best to axiomatize the behavior of Samuelson’s mother.
These archetypes are more commonly labelled homo economicus and homo sapiens – very dull terms indeed (and why the Latin anyway?). So, from now on, when we talk about the homo economicus let’s instead ask: What would Ysidro do? And when criticizing that economic conception as unrealistic, let’s do that by referring to what Samuelson’s mother would do.
have talent for economic theory?”, and started it as follows:
You should cultivate chiropractory or plumbing if you can’t give the right definite answer to the following question:
“If the minimum cost of achieving at least adequate amounts of calories and vitamins is $39 per year, what must the minimum cost be of achieving exactly the specified amounts of calories and vitamins?”
Does anyone want to try, just for fun, to formulate a question that would serve similarly to the history of economics? Hum… I guess it should start with Smith and end with Keynes…
I just read this and had to share it. It seems that universities haven’t changed radically for a good couple of centuries. That is, if Adam Smith’s writings in the Wealth of Nations are anything to go by:
The discipline of colleges and universities is in general contrived, not for the benefit of the students, but for the interest, or more properly speaking, for the ease of the masters. (Smith, 1776: V.i.f.15)
If nothing else, any suggestion of university curriculum change can now be prefaced by an Adam Smith quote.
Poetry pops up the strangest places… Stephen Ziliak was recently in the news for inspiring Haiku Economics, and I had gotten used to enjoying Voltaire’s prose on economics, but I was not expecting to find poetry in the US Office of Price Administration’s archives from the Second World War. But there it was, the poem “On Economists” from Fred Warner Neal at Harvard to Richard V. Gilbert, apparently unpublished, but in many places so very very spot on – even today. Neal wrote Gilbert that he was “delighted that an “economists’ economist” like yourself liked it. I don’t know how well some of the boys up here appreciated it”, and I think you’ll enjoy it too.
To avoid filling up the whole blog I have cut the poem at the third stansa, but click and it will fold out in all its glory, including some nice insights into 1943 economic thinking from the heartland of U.S. Keynesianism.
On Economists, By Fred Warner Neal:
Seeking cycles small and large,
Economists are want to barge
Upon a theory, here and there,
Devoid, perhaps (at least quite bare)
Of any rhyme of cogent reason
For being, now or in any season.
With scissors they seek to analyze
Things that never never crystalyze
Into reality, and plot curves smooth
That never will be, and try to soothe
Their brows, on fire for failing
To stop the leaks by only bailing.
Does the Margin fix the cost?
Debate on this means much time lost.
Some hide logic ’neath a hedge
Claim cost fixed at, not by, the edge;
While others, splitting hairs with sabre
Base their theories all on labor.
Or maybe on the land where sat
Once the mighty Physiocrat. Continue reading “Poetry in archives”→
We know economists sometimes like to use past economists to construct a lineage to the current practice. They like the idea of progress and appreciate triumphal histories. In reading Schmitt-Grohé and Uribe’s paper, “What’s News In Business Cycles,” I came across the following sentence (p.1, but the paper does have a page 0):
The idea that changes in expectations about the future path of exogenous economic fundamentals may represent an important source of aggregate fluctuations has a long history in economics, going back at least to Pigou (1927). Recently, these ideas have been revived in an important paper by Beaudry and Portier (2006).
The book by Pigou referred here is his “Industrial Fluctuations”.
Depite any rethorical device the authors may have employed, I keep wondering about the usefulness (for their audience of economists—sorry fellows, no way to avoid coming back to audience…) of such superficial “historical” claims. Why is it useful to have Pigou as one entry in a reference list of 14 items, most of them dated from the mid 1990s onward? Is it a way of showing one is “well educated”? Is Pigou a “giant” on whose shoulder one can stand? It will be interesting to see whether or not this sentence will be kept in the published version of the paper.
Here it is: “This is a book only by necessity. More seriously, it is an effort in human actuality in which the reader is no less centrally involved than the authors and those of whom they tell.Those who wich actively to participate in the subject, in whatever degree of understanding, friendship, or hostility, are invited to address the authors in care of the publishers. In material that is used, privately or publicly, names will be withheld on request.”
I am wondering whether anyone ever wrote to the authors/the publisher and what did he wrote?
The history … I have to tell you [is] this. You can put it on the record or off, whichever you want, it’s kind of amusing and you’ll enjoy it.
I went back in October of ’46, and the first thing I did when I got back to Washington for any period of time I had been back and forth all the time in between was to get my teeth fixed at the dentist. And the dentist was a great guy. He filled teeth with gold and he believed in the gold standard and these fool economists who wanted to get off the gold standard were silly, because all this meant was the price of gold went up. Anyhow, he’d get me there to fix my teeth and read me a lecture on the gold standard. He said, “Mr. Blaisdell, you know Lord Keynes?”
I said, “Yes, I know him.”
“Well, you know, when he was here last time?”
And I said, “Yes, I know, I know very well.”
He said, “Well, he has trouble with teeth and continuously failed to fix them. I looked at him and I [the dentist] said, ‘Lord Keynes, I think we’d better take this tooth out. It should be extracted. It’s causing you trouble.’ And Keynes said, “No.”
He said, “Well, Lord Keynes, really, it’s infected. It’s a bad abscess, and I would advise you to have it out.”
And Keynes said, “No, please drain it, I will have it taken care of when I get back to London.”
Said the dentist, “I told Lord Keynes, ‘You let that tooth go and in six weeks you’ll be dead.’ ”
And, by golly, in six weeks he was dead.
[Oral History Interview with Thomas C. Blaisdell, Jr. , pp.42-44. Retrieved from The Truman Library.]