Since no one is guessing…

Virginia Woolf: "And what d'you feel about immortality, Maynard?"

John Maynard Keynes: "I am an idealist, and therefore on the whole I suppose I think that something may continue. Clearly the brain is the only exciting thing — matter does not exist."

Cities of the world

London is great, if a little nihilistic. San Francisco has unbelievable natural beauty. Philadelphia surprised me with how much I liked it.

Dublin is like a very big, friendly pub with some cool statues and manuscripts in it. Cardiff is like a somewhat smaller pub with more drunks. The Germanic cities I've been in (Amsterdam, Strausbourg, Zurich, Luzerne, Berne) are stunningly orderly, clean, and aesthetically pleasing.

I could go on, but the fact remains: I lucked out. I live in the best urban neighborhood on the planet. Well, best for me anyway. Every time I take a stroll in it I try to remind myself how nice the place is.

(And the place I live is in one of the pictures Wikipedia uses: I'm not saying which one.)

Cross-cultural questionnaires

Storr cites studies that attempt to study trust as a factor in social capital, and thus in development. Typically, these studies ask questions such as, "Generally speaking, would you say that most people can be trusted, or that you can't be too careful in dealing with people?" (Understanding the culture of markets, p. 39.)

But wait a second? Aren't what it means to "trust people,"or what it means that "you can't be too careful," themselves going to be culturally defined phenomena? Why should we blithely except that the "same" answer provided by two respondents from significantly different cultures mean the same thing to each of them?

In particular, won't someone from a "high trust" culture be likely to have higher standards for what it means to trust someone than would someone from a "low trust" culture? For the first respondent, trusting someone might mean letting them sleep in one's house. For the second, it might mean not fearing that the person will kill you if you meet them on the road.

Who is in charge?

Storr notes literature connecting the belief that one is in control of one's own fate with entrepreneurial success. However:

"A person's contingency and competence expectations, Harper explains, are largely culturally derived." -- Understanding the culture of markets, p. 41

Doesn't this present a bit of a paradox? It seems that others are in charge of my own sense that I am in charge!

No exiting to that exit

There's a lovely set of doors marked "Exit" just 20 feet from me. But between me and that door, there's another set of doors marked "No exit." And the only way to get to that "exit" from inside is to go through the set of doors that says "no exit"!

Understanding the culture of markets

I'm reviewing the book by Virgil Storr with the above title And so, as usual, I'll be blogging some remarks upon it as I go along.

The first thing I wish to know is that Storr has set himself an interesting challenge. On the one hand, he wants to take culture into account in a more robust fashion than current economics tends to do. He must do more than simply treat culture as another variable in a consumption or production function, because if he does not the reaction will be "Well, yes, we already do that."

On the other hand, by doing more with culture, he risks leaving the field of economics altogether and beginning to write what Eric Voeglin would call "philosophical anthropology." In fact, as related in the introduction, this is exactly what Israel Kirzner wrote to Storr about his work: Very good and interesting work, but it's just not economics.

As I am only in chapter 1 at present I don't yet know if Storr succeeds in steering his ship between this Scylla and that Charybdis. I will report back as I read more.

I think I may have blogged this before, but...

I am sorely puzzled by the percentages that weather forecasters give to the chance of precipitation.

They say, for instance, that there is a 30% chance of rain in Milford on Monday.

What does this mean? There is a 30% chance that a single drop of rain will fall somewhere within the borders of Milford on Monday? That 30% of the day it will be raining and 70% of the day it will not? That it is likely to rain in 30% of the area of Milford, but the other 70% will be dry?

Not a single one of the above formulations of a "30% chance of rain" strikes me as plausible. Yet if none of those are correct, just what does it mean to say that there is a 30% chance of rain in Milford on Monday?

To add to my confusion, when the Weather Channel predicts a 30% chance of rain, for that day they show a rain icon along with the prediction. But doesn't this prediction mean that there is a 70% chance that it won't rain? Why, on a day when the odds are 7-to-3 against there being rain, is a rain icon the correct choice for symbolizing what will be going on that day?

Footnote Protocol

Why do publications ever collect footnotes at the end of a chapter, or, worse yet, and the end of the book? The latter involves flipping back to the footnote section, finding the section including the page you are on, finding the footnote in the section, then (typically) flipping back, with one finger stuck there, to where one was reading, because by that point the context is lost.

As a reader I hate that format: it must be done for the convenience of the publisher, right? (I am thinking it makes layout easier to collect all footnotes in one spot.)

Anarcho-Capitalism Vindicated?

I constantly read history, and so I keep finding examples of situations for which I did not know there were any cases.

Here is one:

In a relatively self-contained piece of the earth's surface, law and order had been provided by the noble class. But that noble class began to lose its power and withdraw its services. Faced with a power vacuum, did the local populace simply let anarchy of the bad sort (social chaos) ensue? No, they spontaneously formed private defense agencies. Sometimes these defense agencies fought each other, but on the whole, they realized it would be better if they formed a network of organizations that would cooperate. By and large these inter-agency agreements did work, and individual agencies largely (not always!) refrained from fighting each other.

Does this vindicate the anarcho-capitalism vision? You decide: The land in question was Sicily in the wake of feudalism's demise in the early nineteenth century, and the network of private defense agencies came to be known as the Mafia.

Who said it?

"And what d'you feel about immortality, X?" I asked.

"I am an idealist," said X, "and therefore on the whole I suppose I think that something may continue. Clearly the brain is the only exciting thing — matter does not exist."

You can actually make two guesses here: who asked the question, and who answers. Oh, and of course the second speaker is being a little sloppy here: if matter does not exist, clearly he means "the mind is the only exciting thing."

An Attorney Tells Us...

never talk to the police without an attorney present.

I have just started making my new video entitled "Never engage in transactions without hiring an economist to be at your side!"

If I could redesign the Macro I curriculum

First of all, I would clear out a lot of the clutter. Do Macro I students really need to be learning that 3% of our energy consumption is from biomass sources? That furniture manufacturing accounted for $7 billion of output in 2005? That the minimum for hours worked in a family business in order to be classified as employed is 15?

Instead, I would focus in like a laser on teaching them everything they need to know to understand a single macroeconomic model, like, say, the Keynesian cross. Then I would spend the last few weeks of the class comparing that model to an alternative, so that they could understand the differences.

I think that most students would actually remember my class five years later.