Archive for November, 2010

The Early, British Hegemony in Economics

November 30, 2010

I’m still reading New Ideas from Dead Economists by Todd Buchholz (progressing slowly; see Living Among the Dead). Although I haven’t seen much to the promising new ideas yet, Buchholz give a great, historical account of the development of economics.

The father of Economics was, as every economist know, Adam Smith, at least if we are talking about economics as its own, scientific disipline (and we are!). Adam Smith was from Scotland. Given that and Brittain’s position as world leader (in politics, trade, military, you name it), it comes as no surprise that all the early, great economists were British. They were also all rather close; this is how Buchholz begins the chapter on John Stuart Mill:

Almost all renowed British economists since Adam Smith have been linked through close friendships. Remeber that Smith’s good friend David Hume was a “godfather” to Thoms Malthus, who was an intimate friend with David Ricardo, whose comrade James Mill encouraged his economics. James begot John Stuart Mill. A slight break occurs since Mill did not befriend his successor Alfred Marshall. But Marshall learned from Mill’s works (and from the economist F.Y. Edgeworth, nephew or Ricardo’s friend Maria Edgeworth) and then thaught Keynes, who dominated British economics until World War II and produced numerous prominent disciples [p. 91].*

No surprise, perhaps, that the early development of a new field has a geographical structure, so to speak; after all, they had to learn from each other and compete for the same, few positions. Anyway, that it was a hegemony is beyond doubt:

In 1848, Mill published his chief work on economics, Principles of Political Economy. For decades it dominated the book market like monopolies Mill discussed within its pages. Oxford relied on the Principles until 1919, probably because its successor was written by Marshall, a Cambridge man. Indeed, the works of all the great economists illuminate long paths. [Here it comes:] From 1776 to 1976, just five books regined over economics in nearly unbroken succession: Smith’s Wealth of Nations, Ricardo’s Principles, Mill’s Principles, Marshall’s Principles, and Samuelson’s Economics. What they lack in imaginative titles, they make up in endurance [p. 102].

Looks like I just got five new books on my ‘buy and read’ list. Perhaps a tall order, but 200 years of economics, almost 90% of its history, in just five books sounds rather cheap. (But how many volumes?)

* New Ideas from Dead Economists, Revised Edition, Todd G. Buchholz, 1999, Penguine Books.

Big, Unsolved Problems in Economics

November 23, 2010

Earlier this year, experts gathered at the hub of the universe (which is Harvard, it seems) to suggest and debate the big, unsolved problems in the social sciences, economics between them. From a press release:

Initiated and funded by the non-profit Indira Foundation, this effort was inspired by David Hilbert, who challenged the world to solve 23 fundamental mathematical problems in 1900. Since then, mathematicians have solved 10 of the now-famous ‘Hilbert Problems’, creating new fields of knowledge along the way.

“Hilbert made two powerful observations,” said Nicholas Nash, a member of the Indira Foundation. “First, having important, unsolved problems is essential to the vitality of a discipline. And, as important, by identifying those problems, we can inspire future generations to solve them.”

Taleb was there, not surprisingly, and suggested the ‘Black Swan problem’:

How can we be robust against “Black Swans”; that is, how can we (1) identify domains where these consequential rare events play a large role (these are too rare for any statistical models track them properly), and (2) instead of predicting Black Swans, build systems and societies that can resist their shocks.

King suggested the problem of international institutions:

What is the relationship between strong international institutions and international cooperation? Do strong international institutions lead to or result from international cooperation?

King also suggested a methodological problem:

A major methodological problem is how to avoid (or ameliorate) post-treatment bias in big social science questions. Post-treatment bias occurs when the causal ordering among predictors is ambiguous or wrong or when, in an attempt to control for confounding variables, one controls away a consequential variable.

Dealing with Referees

November 19, 2010

It is hard and frustrating to work on a revision and a letter to the referee, in general, but particularly when the editorial board finds it hard to decide whether to ask for a revision or that the paper is not suited for their journal.

In weak moments, I see the value and purpose of the peer-review process the way it currently works in economics and most other scientific disiplines today. They are, however, weak moments. What comes out of the peer-review process? Usually a long list of minor issues which, for the general finding, has no real importance. Sometimes, of course, major flaws are pointed out. Ultimately, peer-review (is supposed to) guarantee quality and relevance.

How would the world be like without the process? Crazy, perhaps? Would it be a world where one could not trust the written word, and where quality, relevance, and importance were without meaning? Of course not. Instead, every journal would have an open-source, continually ongoing review process, where the responsibility for quality and relevance was placed solely with the author and the editorial board; where poor work would be openly critisized in responses and comments; where authors could focus more on developing ideas and writing skills (instead of excuses, irrelevant details, and cover-up operations); and where authors would be forced to think harder about problems before submission (and not during the revision). Scientists would perhaps write more monographs and fewer articles as the main difference (the peer-review process) ceased to exist, and as the monograph are better suited to report on many scientific findings. Citations would be a better measure of importance and influence; today, a good deal of the references are included on the whim of referees. Finally, perhaps it would dawn on us that knowledge evolve, and that to be knowledgable on a given subject requires familiarity with a whole literature, not only a handful of articles from the leading journals.

Keynes on the Master Economist

November 10, 2010

Keynes once wrote that the ‘master economist’ must fulfill an extraordinary set of attributes:

He must be a mathematician, historian, statesman, [and] philosopher […] He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.*

* The quote is from an essay on Alfred Marshall.

Living Among the Dead

November 10, 2010

A colleague recommended New Ideas from Dead Economists by Todd G. Buchholz. I just started it, and progress is as always rather slow, but I think I’m in for a fun read; the following paragraph from the Acknowledgements holds promise of the kind of dry humor probably characteristic of academics, but which I like nonetheless:

I want to apologize to those economists mentioned in this book who are living today. The title, New Ideas from Dead Economists, is not meant to refer to them, their personalities, or their public speaking abilities   although I cannot be held responsible for resemblances. They should take comfort in the honor of being mentioned alongside Smith, Ricardo, Keynes, and others.

Quote of the Day

November 3, 2010

It is just as foolish to complain that people are selfish and treacherous as it is to complain that the magnetic field does not increase unless the electric field has a curl.
– John von Neumann (1903-1957)