Other Things and Stranger Things

The top of this page says that “This is a blog about economics, history, law and other things that interest me.” Anyone who has read the blog knows that I don’t usually write about “other things that interest me.” This blog post is an exception to the rule. The other thing is Stranger Things. I am certainly not the first person to suggest that it is not only one of the best television shows this year, but one of the best ever. Several years ago Salman Rushdie made an argument for the virtues of television as a medium for creative expression. I think Stranger Things supports his argument.

Part of the appeal for me is that I tend to enjoy series that are structured like Stranger Things: there is a story in each episode but each story is part of a bigger mystery. It is essentially the format of the old serials they used to show at movies, or serialized stories even before that. Twin Peaks did it well. Lost probably did it best. Yes, I even liked the finale. Orphan Black may turn out to be the best. We’ll find out next year.

The trouble with these types of series, however, is that they often fall apart the closer they get to the bigger mystery.  Under the Dome, for instance, was fun the first season, but when the closer they got to the bigger mystery the more it turned to crap. Nevertheless, I am hoping for a second season of Stranger Things. I would like to see more of the characters and see more of the bigger mystery resolved. What is the upside down? What is the monster? What is it doing with its victims and those slug things? One option would be for it all to be creations of Eleven’s mind. I don’t mean that it is all in her head like St. Elsewhere. I mean that her mind makes these things real, like characters in Joe Hill’s NOS4A2 or Steven King’s Lisey's Story. I actually hope they don’t take that route. It has been done and it would make Eleven too similar to Vic McQueen (using their powers takes a physical toll on both of them). I think I would prefer if the boys were right about it actually being another dimension. I am hopeful that the Duffer Brothers will not screw it up because they did such a great job with the first season and they appear to have given more than a little thought to the bigger mystery. There is supposedly a 30 page document about the Upside Down. If I were them I would make sure it is not on any device that can be hacked.

The mystery I am most curious about is, What is going on with Hopper? I don’t mean the leftovers and Eggos. Eleven is alive. My guess is that she is hiding in the Upside Down because she knows that Mike is in danger when she is with him. After all, Brenner basically told her they would hurt the boys if she didn’t come with him. I have a hard time believing that he actually betrayed Eleven. It was completely inconsistent with everything we have seen about him. Moreover, asking Brenner for his word when he had to believe that Brenner’s word was worthless also suggests there was something more going on. Something must have happened between Hopper and Eleven that we did not see.

Of course all of the great writing would not amount to much if not for the great acting. The show is set in 1983, and Mathew Modine and Winona Ryder remind us why they became stars back in the ‘80s. That said, Finn Wolfhard, Noah Schnapp, Gaten Matarazzo, Caleb McLaughlin and Millie Brown are what really make the show standout. I think Millie Brown’s performance was particularly important to the success of the show. I told my daughter that it reminded me of Kristen Stewart in Panic Room. I believe Stewart was around the same age Millie Brown is now when Panic Room was filmed. When I first saw Panic Room I was amazed that someone so young could express so much with so few words. Millie Brown has even less less lines, and her performance is even more amazing.

Netflix has not yet announced a second season, but they should probably hurry up and do so while they can still afford the cast. To finish with a little economics, I’ll illustrate the problem with a little supply and demand analysis. I predict that Stranger Things will cause a dramatic increase in demand for Millie Brown. Ceteris paribus, as demand increases from D1 to D2, given that the supply of Millie Brown is fixed at 1, the result will be an increase in the price from P1 to P2. I don’t see any reason to believe that this trend won't continue into the foreseeable future. 

So, I wasn’t even able to get through this post without some economics. And, yes, it is a pretty crappy looking graph for a professional economist, but this is just a blog post about other things.

some economic history stuff

I have not been blogging because I have been busy trying to finish up a paper and prepare for class, but here is some recent economic history stuff.

Some podcasts (I listen to podcasts when I am walking Dodger the Doggy):

David Beckworth at Macro Musings interviews Doug Irwin. The interview covers a number of topics related to trade and American economic history: the costs and benefits of trade, the political economy of protectionism, and the gold standard. Irwin also explains why Ha Joon Chang’s analysis of the role of trade policy in development is at best “superficial.” For those of you who are not familiar with his work, Ha Joon Chang is a professor at Cambridge and one of the sources on economic history most admired by people who don’t know anything about economics or history.

Michael Munger talks about slavery and racism at Econtalk.

There are also a lot of podcasts related to economic issues in early America at Liz Covart’s Ben Franklin’s World, e.g., slavery, Shay’ Rebellion, the Stamp Act riots, and financing military expenditures. Most recently I listened to the interview with Abigail Swingen about her book Competing Visions of Empire; in the podcast she puts the American colonies and the development of slavery in America into the broader context of the British Empire.  

Some other stuff:

You can read Jared Rubin’s forthcoming Rulers, Religion, and Riches: Why the West got rich and the Middle East did not at his website.

Richard Sambisavan asks what we can learn from bond prices in early America.

Mark Koyama examines the decline of the Roman economy and questions the usefulness of the peasant mode of production.

Program of the World Congress on Business History

I am still waiting for my copy of Slavery’s Capitalism, but I intend to write about it as soon as I can.

BTW this is Dodger the Doggy

Inequality in Economic History

I found the initial reactions to Piketty’s Capital interesting because assessments of the empirical analysis seemed to line up immediately on ideological grounds before anyone had a serious opportunity to evaluate so much evidence. People on the right were certain it was wrong; people on the left were sure that it was right. Both were clearly basing their conclusions on what they wanted to be true. This was particularly clear in the uncritical use of his work by the New Historians of Capitalism. See this video (41 minutes in) where Jefferson Cowie says how bad Piketty is as a historian and follows that with how he still uses his numbers blindly. What ever happened to critical evaluation of the evidence? In NHC it has been replaced by the ability to repeat clever phrases like “tyranny of the market” and “cash nexus.”  

Enough of my rant against NHC. Capital was a big book; it takes time to really evaluate the empirical work in such a book. Well, time has passed, and some of that work has now been done. In general, it does not seem to support Piketty.

Richard Sutch challenges the reliability of many of the estimates for the U.S.

Carlos Goes fails to find empirical support for the central hypothesis about inequality and capitalist development.;

Does this mean that Capital was a bad book? I don’t know. Some big idea books are serious efforts to make sense of the available information. Sometimes they turn out to been wrong in fundamental ways. I think examples of this might be Doug North’s Economic Growth of the United States (overemphasis on trade, especially, interregional trade), Fogel and Engerman’s Time on the Cross (underestimated use of coercion and overestimated nutrition), and Pomeranz’s Great Divergence (divergence appears to have started earlier than Pomeranz thought). All of these were reasonable attempts to make sense of the available information, but they prompted a lot of research which ultimately contradicted at least some of their conclusions. All of these authors, while not necessarily accepting all the critiques of their work, acknowledged when subsequent evidence persuasively contradicted their earlier interpretations. The ultimate test for Piketty will be how he responds to the critiques of his work that have provided more evidence on inequality over time.

In any case, if Piketty’s analysis of inequality is flawed, what should you read. I would suggest Lindert and Williamson’s  Unequal Gains: American Growth an Inequality. The book is very dense with descriptions of how the estimates were developed. If you are short on time you can get a preview at VOX or read Vincent Geloso’s review at Essays in Economic and Business History.

Open Access in History and Economics

The Exchange had a post the other day about a special issue of the Journal of the Gilded Age and Progressive Era focusing on the history of capitalism. Several of the papers looked interesting. Unfortunately, I discovered that I only have access to JGAPE with a one year delay. My wife teaches at American University, and their access also has a one year delay. I then took the next step of searching for open access versions of the papers: working papers or papers presented at seminars. I put the title and author of each paper into Google Scholar. I did not find an open access version of a single one of the papers. I then tried the same thing with the first seven papers in the August issue of American Economic Review. Granted, this is a small and unscientific sample. Nevertheless, the result is consistent with the impression that I have had for a while that economics is more open access than history. What I am not sure about is why. I think economists believe that there is no cost to providing open access to working papers, and, as best I can tell, there is not. Do historians believe there is a cost? Is there? I know there are concerns about open access to dissertations reducing the demand for a book derived from that dissertation. Are these concerns well founded? And what about journal articles? 

Women and Econ Blogs

Claudia Sahm blogged about the lack of women among econ bloggers

I looked at intelligenteconomist.com’s list of top economic blogs an only found four (out of one hundred)

Carola Binder

Jodi Beggs at Economists Do It With Models

Lynne Kiesling (with Michael Giberson) at Knowledge Problem

Muriel Niederle at Experimental and Behavioral Economics

Economic History from the Last ASSA

Historical Perspectives on Financial Crisis, Banks and Regulation 
Presiding: Gary Richardson 
Crisis and Collapse in the Long Run: Some Microeconomic Evidence Raghuram Rajan and Rodney Ramcharan
What Ends Banking Panics? Gary Gorton and Ellis Tallman
Interbank Markets and Banking Crises: New Evidence on the Establishment and Impact of the Federal Reserve Mark Carlson and David Wheelock 
Commercial Bank Leverage and Regulatory Regimes: Comparative Evidence from the Great Depression and Great Recession Christoffer Koch, Gary Richardson and Patrick Van Horn 
View Webcast

Critiquing Robert J. Gordon's Rise and Fall of American Growth (Panel Discussion)
Presiding: Robert Shiller
Gregory Clark
Nicholas Crafts
Benjamin Friedman
James T. Robinson
View Webcast

Evononsense and Homo Paleas

I was just looking at Evonomics.com, an important new source of misinformation about economics. Numerous essays there talk about how economic analysis is based on the study of homo economicus, a creature that is only concerned about its own selfish material interest.  

More specifically:

“homo economicus… is the character that inhabits the economics texts, and the computer models that are the silent dictators of analysis and policy. Econ, as I will call him, is a myopic integer of self-seeking, who goes through life with a relentless and unfailing calculus of personal loss and gain. He has no social affinities, is oblivious of social context, and has no capacity or inclination to think of anyone besides him or her self.” (Jonathan Rowe at Evonomics)

It is easy to see how foolish those economists are and what a waste of time economics is. There is only one small problem. The imaginary being is not homo economicus, it is homo paleas. Homo paleas is an imaginary economist created by people who want to criticize economics without having to go to the trouble of studying what economists actually do.

Economists generally do analyze models in which people are assumed to maximize utility, but these people can get utility from anything they like. No real economist says that you can’t get utility from someone else’s pleasure, or, for that matter, someone else’s pain.

What have economists actually said?

Adam Smith wrote in his Theory of Moral Sentiments that

“How selfish soever a man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though h derives nothing from it except the pleasure of seeing it.”

Well, Smith was special. It must have been after him that economists starting studying homo economicus. What did Alfred Marshall say?

Alfred Marshall wrote in his Principles of Economics that

“Thus though it is true that "money" or "general purchasing power" or "command over material wealth," is the centre around which economic science clusters; this is so, not because money or material wealth is regarded as the main aim of human effort, nor even as affording the main subject-matter for the study of the economist, but because in this world of ours it is the one convenient means of measuring human motive on a large scale. If the older economists had made this clear, they would have escaped many grievous misrepresentations; and the splendid teachings of Carlyle and Ruskin as to the right aims of human endeavour and the right uses of wealth, would not then have been marred by bitter attacks on economics, based on the mistaken belief that that science had no concern with any motive except the selfish desire for wealth, or even that it inculcated a policy of sordid selfishness.” (Book I Ch. II).

Okay, it wasn’t Marshall. Maybe economists now think that people can’t care about others.

In 2011, Andersen, Ertac, Gneezy, Hoffman and List explained that

“where economics provides its most basic predictions revolves around how people should respond to changes in incentives—pecuniary or nonpecuniary (Gneezy and Aldo Rustichini 2000)—not whether subjects have fairness, spite, or altruistic proclivities.” (Stakes Matter in Ultimatum Games)

Because they analyze the actions of the imaginary homo paleas rather than actual economists, these critics of economics think they have shown the weakness of economics when they point out that people vote, or give to charity, or are willing to incur a cost to punish economic experiments are concerned with fairness. The trouble is that there is actually nothing in economics that suggests a person cannot care about other people.

Economics theory does not suggest that people should not give to charity. It suggests that people will do it more if you lower the cost by, for instance giving a charitable deduction.

Some New Stuff

Here is the program for the Development of the American Economy section of the NBER summer Institute. There are links to many of the papers.

Here is the program for a conference on the history of capitalism. Although I have been critical of much of what has been labeled the new history of capitalism, there are some interesting looking papers here. I don't plan to go to the conference, but I look forward to seeing Sharon Murphy's work on bank financing and slavery at some time in the future.

Here is Jeffrey Beall blogging about a new paper on open access publishing (particularly the fraudulent form of it) by my colleague Margaret Ray. He provides a link to the paper.

Based upon this tweet, it appears that someone at Cornell's History of Capitalism Camp was talking about Mary Eschelbach Hansen's work on bankruptcy. She is, by the way, my favorite economic historian.