The Economics Major as the Path to Law School

 One of the things that Gary Hoover talked to Kennedy Owen about in in this video was the things that an economics major prepares students for. He mentioned that many of his students have gone on to law school and noted that Econ was the major that tended to do the best on the LSAT.

This is from the Law School Admissions Council. 

You can see that Economics majors have the highest mean and median LSAT scores as well as one of the highest admission rates.

More Time to Speak Econ

Kennedy Owen produces interviews at a pretty rapid pace. She has posted several new ones since I blogged about Time to Speak Econ a few days ago, including this one with Gary Hoover.

Time to Speak on Econ

 I received an email yesterday from Kennedy Owen, who is currently a junior in high school, telling me about Time to Speak on Econ a series of interviews she has done with economists. I checked them out and noticed there was one with the economic historian Josh Rosenbloom. I listened to the interview with Rosenbloom and then a couple of others. I like them. She asks questions about the education and careers of each person from the perspective of a young person who is considering studying economics in college. She has one of my favorite qualities in an interviewer: she asks relatively broad questions and then just lets the interviewee talk. 

I hope other people find them useful and enjoyable.

Recent NBER Meetings

 

Yes, NBER charges for downloads of working papers, but you can watch some recent meetings for free. By the way, it has also been my experience that you can usually find ungated versions of most NBER working papers if you look around.

 

I think both the Race and Stratification Economics and the Development of the American Economy meetings should be of interest to readers of this blog.

 

The final presentation at the Race and Stratification meeting is University of Mary Washington economics alum Lavar Edmonds, who is currently working on a Ph.D. in economics at Stanford, presenting his research on the impact of HBCU trained teachers.

 

I also liked that the Race and Stratification meeting about how one could incorporate race and stratification economics into introductory economics courses.

 

NBER Race and Stratification Working Group on YouTube

 

https://www.nber.org/conferences/race-and-stratification-working-group-spring-2023

 

Caste-based and Racial Wealth Inequality in India and the United States

Ishan Anand, Indian Institute of Technology Delhi

 

Discussants:

Ellora Derenoncourt, Princeton University and NBER

Ashwini Deshpande, Ashoka University

 

Perceptions of Racial Gaps, their Causes, and Ways to Reduce Them

Matteo F. Ferroni, Boston University

Stefanie Stantcheva, Harvard University and NBER

 

Discussants:

Michael Kraus, Yale University

Candis Watts Smith, Duke University

 

Unequal Gradients: Sex, Skin Tone, and Intergenerational Economic Mobility

Luis A. Monroy-Gómez-Franco, University of Massachusetts, Amherst

Roberto Vélez-Grajales, Centro de Estudios Espinosa Yglesias

Gastón Yalonetzky, Leeds University

 

Discussants:

Art Goldsmith, Washington and Lee University

Chantal Smith, Washington and Lee University

 

Teaching Discrimination in Introductory Economics: An Approach Incorporating Stratification Economics

Jorgen M. Harris, Occidental College

Mary Lopez, Occidental College

 

Complementary Investments Over the Life Course and the Black-White Earnings Gap

Sonia R. Bhalotra, University of Warwick

Damian Clarke, Universidad de Chile

Atheendar Venkataramani, University of Pennsylvania and NBER

 

Estimating Disenfranchisement in U.S. Elections, 1870-1970

Jeffery A. Jenkins, University of Southern California

Thomas R. Gray, University of Texas at Dallas

 

The Determinants and Impacts of Historical Treaty-Making in Canada

Donn. L. Feir, University of Victoria

Rob Gillezeau, University of Toronto

Maggie E.C. Jones, Emory University and NBER

 

A Simple Model of Group Conflict, Inequality and Stratification

Daniele Tavani, Colorado State University

Brendan Brundage, Colorado State University

 

Discussants:

Pablo Beramendi, Duke University

Patrick L. Mason, University of Massachusetts Amherst

 

Racial Disparities in the Tax Treatment of Marriage

Janet Holtzblatt, Tax Policy Center

Swati Joshi, Brookings Institution

Nora R. Cahill, Brookings Institution

William Gale, Brookings Institution

 

Not so Black and White: Uncovering Racial Bias from Systematically Misreported Trooper Reports

Elizabeth Luh, University of Michigan

 

Economic Inequality and Stratification after a Natural Disaster

Anita Alves Pena, Colorado State University

 

Role Models Revisited: HBCUs, Same-Race Teacher Effects, and Black Student Achievement

Lavar C. Edmonds, Stanford University

Discussant:

Michael Gottfried, University of Pennsylvania

Karolyn Tyson, Georgetown University

 

 

NBER Development of the American Economy Program meeting on YouTube

 

https://www.nber.org/conferences/development-american-economy-program-meeting-spring-2023

 

A Penny for Your Thoughts

Walker Hanlon, Northwestern University and NBER

Stephan Heblich, University of Toronto and NBER

Ferdinando Monte, Georgetown University and NBER

Martin B. Schmitz, Vanderbilt University

 

Legal Activism, State Policy, and Racial Inequality in Teacher Salaries and Educational Attainment in the Mid-Century American South

Elizabeth U. Cascio, Dartmouth College and NBER

Ethan G. Lewis, Dartmouth College and NBER

This paper was distributed as Working Paper 30631, where an updated version may be available.

 

US Educational Mobility in the Early Twentieth Century

Martha J. Bailey, University of California, Los Angeles and NBER

Abdul Raheem Shariq Mohammed, Northeastern University

Paul Mohnen, University of Pennsylvania

 

The Value of Ratings: Evidence from their Introduction in Securities Markets

Asaf Bernstein, University of Colorado at Boulder and NBER

Carola Frydman, Northwestern University and NBER

Eric Hilt, Wellesley College and NBER

This paper was distributed as Working Paper 31064, where an updated version may be available.

 

Germ Theory at Home: The Role of Private Action in Reducing Child Mortality during the Epidemiological Transition

James J. Feigenbaum, Boston University and NBER

Lauren Hoehn-Velasco, Georgia State University

Sophie Li, Boston University

 

“Muddling Through or Tunnelling Through?”: UK Monetary and Fiscal Exceptionalism during the Great Inflation

Michael D. Bordo, Rutgers University and NBER

Oliver Bush, Bank of England

Ryland Thomas, Bank of England

Economic History in The American Historical Review

 

Everyday Economic Justice: Mediating Small Claims in Mexico City, 1813–1863

Louise E. Walker

Abstract

This article examines economic justice in nineteenth-century Mexico City through analysis of small-claims conflicts—juicios verbales. After the promulgation of the 1812 Cádiz Constitution, this centuries-old tradition of judicial arbitration was shaped by liberal constitutionalism. A new class of officials, the alcaldes constitucionales, were elected by residents to decide cases. Cádiz liberalism inaugurated a new world. What happened when people faced a classic problem, when they did not pay their debts? Microeconomic history—the quantitative and qualitative study of the economic relationships, decisions, and actions of individuals, households, and small enterprises—exposes the workings of economic justice. From 1813 to 1863, tens of thousands of residents pressed their claims before magistrates. As this article shows, justice grounded in Cádiz liberalism was relatively effective for ordinary people and evinced a gender fairness. These small-claims conflicts might seem a petty world of negligible amounts and narrow-minded disputes, but analyzed together, they challenge conventional interpretations about institutional deficiency and historical underdevelopment. Cádiz liberalism established a judicial institution to protect property rights, especially for creditors, that enjoyed broad legitimacy.

 

When Hay Was King: Energy History and Economic Nationalism in the Nineteenth-Century United States

Ariel Ron

Hay was a linchpin of the early industrial energy regime. It was the primary fodder for working horses, who became more rather than less important over the 1800s. Though largely ignored by historians, hay was of comparable value to cotton and wheat in the nineteenth-century United States. The crop’s historiographical invisibility is partly due to its relatively informal and decidedly subglobal production and exchange patterns. Whereas cotton and wheat exports passed through customhouses and institutionalized exchanges that carefully recorded trade volumes, hay was almost never exported and often underwent no market transaction at all, instead being used as an intermediate good on farms. Only when the US federal government added a detailed agricultural census in 1850 did the magnitude and importance of hay production become publicly legible. At that point, hay was drafted into a wide-ranging debate about economic development between Northern antislavery nationalists and Southern proslavery free traders, with “King Hay” emerging as a foil for “King Cotton.” King Hay thus urges historians to pay more attention to the trade patterns, developmental policies, and economic ideologies that generated distinctly national, as opposed to global, economic spaces within nineteenth-century capitalism.

Economics and History

 I have argued numerous times that the differences between economic and history tend to be exagerated, usually by economists who want to criticize history or historians who want to criticize economics. So, I really liked this paper by Sheilagh Ogilvie that reviews research on serfdom by both historians and economists and makes the case that the differences are exagerated and that the diferences that do exist make the fields complements, not substitues.

Economics and History: Analyzing Serfdom

Economics and history are often regarded as antithetical. This paper argues the opposite. It builds its case by showing how economics and history provide complementary approaches to analyzing a fundamental historical institution: serfdom. The paper scrutinizes three questions: how serfdom shaped peasant choices, how it constrained those choices, and how it affected entire societies. By working together, economics and history have generated better answers to these questions than either discipline could have achieved in isolation. Economic and historical approaches, the paper concludes, are not substitutes but complements.

Bruce Carruthers' Economy of Promises: Trust, Power, and Credit in America

 

There are many good books on various aspects of the history of credit: Rowena Olegario’s A Culture of Credit: Embedding Trust and Transparency in American Business, Josh Lauer’s Creditworthy A History of Consumer Surveillance and Financial Identity in America , Louis Hyman, Debtor Nation: A History of America in Red Ink, Anne Fleming’s City of Debtors: A Century of Fringe Finance, Judge Glock’s The Dead Pledge: The Origins of the Mortgage Market and Federal Bailouts, 1913–1939. I can also point to some good books on law and credit, particularly bankruptcy law: Bruce Mann’s Republic of Debtors: Bankruptcy in the Age of American Independence, Edward Balleisen’s Navigating Failure: Bankruptcy and Commercial Society in Antebellum America, David Skeel’s Debts Dominion: A History of Bankruptcy Law in America, and our own Bankrupt in America: a history of debtors, their creditors, and the law in the twentieth century (Mary Eschelbach Hansen and Bradley A. Hansen). In addition, there are many excellent books on the history of banking. On the other hand, I have always had hard time pointing to a big picture book on the history of credit that I can recommend. Most are not as bad as David Graeber’s Debt, but they tend to have the same problem as Graeber. They try to cover so much ground that they get in over their head and glaring factual errors start to pile up.

 

Now I have a book I can recommend. Bruce Carruthers' Economy of Promises: Trust Power, and Credit in America provides a history of credit in the American economy that covers everything from the local storekeeper allowing customers to pay later, to retail trade credit, to bank lending, to corporate and government bonds, to mortgages, to credit cards, to student loans. He weaves these developments into a single over arching story and he does so without the sort of glaring factual errors that have afflicted other attempts to cover this much ground.

The overarching story is built around the idea that credit is a specific kind of promise: I promise to pay you in the future. Focus on this promise leads to a question: whom to trust? How do we tell which promises are credible. During the colonial era and early Republic, most people made such promises to people they knew. They were able to base their decisions about whom to trust on their extensive knowledge of the people in their community. Trusting people beyond this community required the creation of substitutes for this local knowledge. Caruthers first examines the expansion of trade credit. After the Panic of 1837 mercantile agencies began to collect and sell to merchants such local knowledge, making it possible for manufacturers and wholesalers to evaluate the credibility of merchants who lived far from them, merchants they did not know personally. Over time their assessments of the trustworthiness of merchants became professionalized and routinized, based on data rather than just ad hoc impressions. The process of formalizing the evaluation of debtors spread to other types of credit. People who specialized in determining who to trust developed ratings for the riskiness of trade creditors, corporations, municipalities, home buyers, and consumer credits.

In telling this story, Carruthers highlights one of the most important trends in modern business history, the transformation of activities that depended on the tacit knowledge of individuals into processes that could be made explicit and replicated on a large scale. He also gives attention to the role that the government has played in credit, helping to provide institutions that facilitate credible promises, but also promoting or impeding access to credit to achieve other objectives.

Economy of Promises is also a model for other work in social science history. Carruthers is a sociologist who values the work not just of other sociologists but of economists, political scientists, historians, and legal scholars. Consequently, he can tell a story that covers the traditional economic issues of credit but also blends them with concerns about the relationship between credit and issues of power.

In short, Economy of Promises is the best place to start if you want to understand the role of credit in the American economy.

More How I Built This and Business History

 

This is the second post on the podcast How I Built This and academic research on business history and entrepreneurship.

Danny  Meyer founded some of the most highly regarded restaurants in New York: Eleven Madison Park, Union Square Café, and Gramercy Tavern. He is also the founder of Shake Shack, which generates over $400 million in revenue a year. When he decided that he wanted to get into the restaurant business rather than go to law school a college friend got him an interview that led to his first restaurant job. Later he was able to use his father’s connections in the travel business to work with chefs in France and Italy. Another friend, who happened to be Bryan Miller, the food writer for the New York Times, who helped him make contacts with people in the New York food scene. When he found the perfect place to open his first restaurant, Union Square Café, he was able to obtain the lease for about $240,000 and spend another $500,000 building out the restaurant thanks to loans from his mother, aunt and uncle. This aspect of Meyer’s story is not that unique. Many of the stories on How I Built This involve getting loans of tens or even hundreds of thousands of dollars from relatives.  The mother of Daymond John, the founder of FUBU, borrowed $100,000 on her house to put into his business and then let him use the house as his factory. The founders of Whole Foods, Supergoop, Chipotle, MM La Fleur, Tempurpedic, and Crate and Barrel all received large loans or investments from family members.  

Help doesn’t always come from family. Holly Thaggard was able to get a chemist to help her develop the product and she was able to get a PR firm to take her on because of a phone call from Roxanne Quimby, founder of Burt’s Bees, who had befriended Thaggard at a trade show.

These stories reminded me of one of my favorite business history books, Pull: Networking and Success since Benjamin Franklin by Pamela Walker Laird. In the book Laird challenged the notion of the entrepreneur as a self-made man or woman by highlighting the role of connections in stories of business success. This is from the introduction

 

 

 

 

Far from being the self-made men or woman of entrepreneurial mythology, one of the common characteristics of successful business founders appears to be the ability to recognize when they need help and the willingness to go get it.