Dr. Fauci: "There is the danger that there will be so many people who are being isolated who are asymptomatic for the full ten days, that you could have a major negative impact on our ability to keep society running. So the decision was made of saying let's get that cut in half."
Civil libertarians: a wholly unaccountable government agency records 100% of your electronic communications.
Americans: *yawn*
Media: a private firm, accountable to its board, shareholders, and customers, has been sharing some information you gave it.
Americans: *meltdown*
Imagine The Atlantic running a piece titled "Sometimes You Just Have to Ignore the Epidemiologists" or "Sometimes You Just Have to Ignore the Climate Scientists"
Today, the greatest threat of extinction we face is not asteroids or climate change or disease or famine. It’s society’s refusal to heed the warnings of scientists.
One of the worst aspects of the war mentality is its collectivism. Lots of calls to punish "Russia" by banning Russian individuals or firms from participating in international trade, accessing the global financial system, studying in the US, even submitting to academic journals.
Sad to report that Oliver Williamson passed away yesterday at age of 87. I'll have more to say in the coming days. He was a giant in economics and management and had a huge influence on my thinking and career. RIP.
I can barely wrap my head around it, but I have to admit that I am, in fact, hearing people argue that, yes, it's worth taking the risk that MILLIONS of Americans will die in exchange for an inscrutably indeterminate chance of improvement in the economic outlook.
People are starting to realize you can't "shut down" an economy then simply turn it on again. (Economists who believe in "shmoo" capital and abstract away from time, uncertainty, and the stages of production still don't get it.)
Besides his contributions to auction theory, Milgrom is one of the most important figures in modern organizational economics. His 1992 book with John Roberts, "Economics, Organizations, and Management," had a huge influence on the teaching of managerial economics. 1/
Many young people seem unaware of the origins of the term "politically correct."
Two Soviet factory managers are preparing a glowing report on their production levels.
"Comrade, I don't think these numbers are correct."
"Yes, but they're politically correct."
Timur Kuran has a nice paper on this - in the Ottoman empire, Muslims faced higher borrowing costs than non-Muslims because market participants assumed (correctly) that, in a contractual dispute, courts would be biased in favor of the Muslim litigant.
Social science twitter, not during a crisis:
"Can we really say X causes Y? Without multiple RCTs or preregistered quasi-experiments with valid instruments, we don't actually know."
Social science twitter, during a crisis:
WE MUST IMPLEMENT POLICY X NOW OR WE ALL DIE
Here is the syllabus from Oliver Williamson's ECON 224, "The Economics of Institutions," Fall 1988. (I took it in 1989 but can only find this version.)
One of my treasures is a first edition of Frank Knight's Risk, Uncertainty, and Profit (1921). I picked it up years ago for $5 at Berkeley flea market. There is an inscription in what is presumably Knight's own hand: "To M. M. With regards, F. H. K." 1/
Actually, the opposite is true. Allowing trophy hunting increases the economic value of elephants and provides incentives for locals to protect and preserve. People, stop listening and following celebrities.
The fact that Trump has lifted President Obama's ban on elephant trophies being imported into the country is a devastating blow to the survival of these beautiful animals. It's savage and pointless. It breaks my heart.
Very excited to be taking on a new role as Strategic Entrepreneurship Journal co-editor along with Gary Dushnitsky and Melissa Graebner.
@Strategic_Mgmt
DEBT IS MONEY WE OWE TO OURSELVES
DEBT IS MONEY WE OWE TO OURSELVES
DEBT IS MONEY WE OWE TO OURSELVES
DEBT IS MONEY ....
It only make us poorer in aggregate if it crowds out investment — which is isn't doing
Tacit knowledge is trending so I thought I'd share some classroom activities I use to teach the concept. I start with an in-class exercise with questions like these.
Did you know that the first
@mises
website was created by Yours Truly in 1995? This Oct 1996 version is the oldest preserved on the Wayback Machine and the original was similar, but without the fancy graphics (and hosted on a university server.)
#Web30
Review paper with 13 (!) authors on empirical measurement of risk and uncertainty. A good summary of how neoclassical economists understand these constructs.
Delighted to receive the 2022 Academy of Management Perspectives Best Paper Award for "Capitalism, Cronyism, and Management Scholarship: A Call for Clarity" with Michael Holmes,
@NicolaiFoss
,
@siriterjesen
, and Justin Pepe.
@AOMConnect
#AOM2023
@jncohen
Future Nobel laureate told me, "Our colleagues will insist they care only about formal models and sophisticated empirical work but, if you really want to convince them something is true, give them a bunch of examples."
Perhaps inspired by the NYT's disappointing Dealbook series, we're seeing an avalanche of articles on Friedman's famous 1970 essay on corporate social responsibility, most of which (like this one) can't be bothered to state Friedman's argument correctly.
🚨New paper alert!🚨
@NicolaiFoss
and I ask, "Why Do Companies Go Woke"? We define a woke company as one embracing progressive, politically left-wing practices, language, and imagery, even when these are not demanded by owners, executives, most workers, or customers. 1/
The issue is this: each additional day of lockdown purportedly increases public health by X (by reducing Covid-19 spread) and decreases public health by Y (through short- and long-run effects of economic decline). At what point does MC > MB? 6/
The last two years have highlighted how public officials often spread misinformation for strategic purposes. A salient example is Fauci's admission that he discouraged masking in early 2020, not because he thought masks were ineffective, but to avoid public hoarding of masks. 1/
This rant is a good example of the need for better economics education. No one disputes that the USPS does these things. The economic question is whether the value to consumers of the goods and services produced exceeds the opportunity cost of the resources used to produce them.
I'd like to thank the president for giving me the opportunity to go on a little rant reminding everyone that the US Postal Service is a fricking marvel, and people's complaints about it are largely bogus. Strap in... /1
No. The economic calculation problem (as described by Mises in his pioneering 1920 article) is about the role of private ownership, competition, and entrepreneurial judgment in allocating resources to their highest valued uses. It has nothing at all to do with computing power!
@_AtlasCapital
@RichardHanania
> the reasons planned economies are worse have nothing to do with available compute.
isn't the whole point of the "economic calculation problem that?
So we are comparing two sets of unknowns. Note how he uses "risk" for one and "inscrutably indeterminate chance" for the other, which is pure sleight-of-hand. 4/
This critique of free speech gets the 18th century context entirely wrong. The 1A was justified not by a utilitarian argument that truth necessarily wins in the marketplace of ideas, but by the idea that false speech does not violate anyone's natural rights.
My
@WashingtonPost
piece on why the very broadness of the First Amendment suggests we should have a hate speech law. And if we did, why the President might be in violation of it.
Rent control in SF reduces total rental housing, increases overall rental prices and destroys value overall. However, it helps those renters lucky enough to get rent-controlled apartments.
In 2009 I presented a research paper at the Federal Reserve Board of Governors. Afterwards we got on the elevator to the lunchroom, then Ben Bernanke and a bodyguard got on. My host introduced us and mentioned that it was my birthday, whereupon Bernanke sang me the birthday song.
This summary of Akerlof (1970) omits the punch line, which is not that used car markets can't exist, but that participants develop institutions - warrantees, inspections, reputation - to compensate for asymmetric information. What are the equivalents in the "market" for science?
Why "The Market for Lemons," a nearly 50 year old econ paper by George Akerlof, is nearly everything you need to know about why everything in science is the worst:
A thread brought to you by being late for the good train and being stuck on the local.
1/n
@Noahpinion
How does that line go? "No matter how much the government interferes in the economy and society, any problems will be blamed on whatever small pocket of freedom remains."
Very good thread but unfortunately skips 1/3 of the Marginal Revolution by omitting the approach developed by Menger and his followers, in which economic behavior is described as purposeful or goal-oriented, but not "rational" in the cognitive or behavioral sense. 1/
Re-upping this amazing thread by
@Undercoverhist
on the history of what rationality means in economics.
To be fair, defining rationality precisely is exactly what allowed it to be overturned by Kahneman/Tversky/Allais/co.
So kudos to Samuelson/Savage and co.
This is a common misconception. Austrian economists are not anti-empiricists -- far from it! They simply hold that empirical data must be interpreted in light of prior theory (a mainstream position in the philosophy of science, unlike the crude positivism of econ textbooks). 1/
This is unfortunate because the papers I have read by Austrian school scholars contain some useful ideas and insights. But as a group, the Austrian School folks are so dogmatic and anti-empiricism, that they become their own worst enemy in influencing wider economic thought.
I was greatly honored to receive the 2024 Mentor Award from the
@ENT_Div_AoM
. I was privileged to be mentored by great scholars such as Murray Rothbard, Israel Kirzner, Oliver Williamson, David Teece, Ray Bagby, Kendall Artz, and many more and I've tried to pass on what I know.
"Government is the problem"
"Get government out of my life"
"Starve the beast"
Well, here we are in the middle of a pandemic without a functioning federal government.
What now?
This is a variant of Schumpeter's thesis that capitalism is the only economic system capable of generating the surplus wealth necessary to support a class of anti-capitalist intellectuals!
Very interesting paper by
@juanrallo
,
@PhilippBagus
, and Miguel Ángel Alonso on "Knightian Uncertainty in Capitalism and Socialism." Focuses on the role of institutions in helping agents cope with uncertainty under different regimes.
Today has been a good reminder that if there's anything elite academics dislike more than actual diversity (of strategy, objectives, or organizational form), it's market entry.
Likewise, the number of people who will die or have a reduced quality of life from a deep and lengthy recession is also unknown. It could also be quite large - one study estimated 500k additional cancer deaths from the 2008 financial crisis. 3/
Speaking of language, the technical meaning of "socialism" is government ownership of the means of production, not high levels of spending on social programs. Even Bernie isn't a socialist, just a left-wing social democrat. (Most Republicans are right-wing social democrats.)
Howdy, comrades! :D
Today's
@bopinion
post is about socialism in America today.
What can we learn about socialism from Alexandria Ocasio-Cortez' platform? And how reasonable is that platform?
Of course, there are also legal, political, and constitutional issues associated with shelter-in-place orders but Wilkinson isn't interested in these. 8/
@wwwojtekk
"Our economy is dominated by powerful incumbents with unprecedented monopoly and monopsony power! They must be stopped!"
Startup university announced.
"LOL, what a joke, nobody should go there or work there."
First, we are dealing with uncertainties all around. The number of people who will die or have a reduced quality of life (e.g. from lung damage) from Covid-19 - and would not have otherwise - if lockdowns were ended sooner, is unknown, though we can make reasonable guesses. 2/