by Tyler Cowen
on January 10, 2013 at 3:09 pm
in Economics, Education
Wow, the below reminds me of some sort of sci-fi short story by Jorge Luis Borges. I’ll have to add B’s book to my “must read” list. RL Buchanan: “You face a choice. You must now decide whether to read this Preface, to read something else, to think silent thoughts, or perhaps to write a bit for yourself. The value that you place on the most attractive of these several alternatives is the cost that you must pay if you choose to read this Preface now. This value is and must remain wholly speculative; it represents what you now think the other opportunity might offer. Once you have chosen to read this Preface, any chance of realizing the alternative and, hence, measuring its value, has vanished forever. Only at the moment or instant of choice is cost able to modify behavior. “
I thought you just said you weren’t going to read him 😉
Ha! The jokes on him. I read his preface because I could not think of anything better to do!
sounds like a free lunch
I mentioned Borges and I see there’s a quote from him in Buchanan’s dedication page. Maybe Dr. B was a fan? Inspired by Borges who like a chess player always was into recursive thinking? I just got Steve Pressman’s book “50 Economists” and it looks good–300 pages, so 6 pages per economist. These kind of books are like Cliff Notes–you can read one book and get the distilled wisdom of 50 economists. I know it’s not the same as reading the primary sources, but for me, a non-economist, it’s good enough.
It’s one of the most self-important blog posts I’ve ever read.
“One of the few people smarter than me has died. It’s a pity that nobody who disagrees with me is smart enough to appreciate him.”
Without disagreeing, Kling offers a criticism of economics that I think deserves greater consideration and can be explained in 3 steps.
1. Often economists (and sociologists, literary critics, anthropologists, etc) proclaim the “discovery” of, say Human Tendency XYZ, which is known to other fields like sociology, literature, anthropology, etc. (or economics). They’ve illustrated a known human tendency within the jargon/methods/visual representations of their own field.
2. This straw-economist could declare that his methods confirm what other fields “broke” first. But instead, straw-economist announces the “discovery” or “news” that Human Tendency XYZ exists, or emphasizes that his method (graphs and curves!) is the first proof of Human Tendency XYZ. This celebrates novelty and difference over broadly agreed upon truth.
3. Lay people don’t trust “new studies” reported by newspapers or cited by their friends announcing a result from a self-selecting group of academics (like economists, sociologists, literary critics, philosophers, anthropologists). They’re dime-a-dozen. Only after numerous fields agree on Human Tendency XYZ, the lay person may start trusting the consensus more than his ownself.
If that’s true at all, then Kling’s right that thinking and communicating more like (or acknowledging the merit of) other fields means that economics will join with them to propel the broader understanding of human activity.
I’m not sure, but it’s a thought worth having.
You’ve got to differentiate yourself in your pursuit of generality.
That cost me my keyboard.
Well, it is Arnold Kling…
Tyler, as you work at NY times, kudos on that paper’s surpisingly excellent obituary notice. Although, par for the course, they left out any mention of the departed’s religious beliefs, I will hope for the best and
toast him with some Tennessee whiskey and maybe pop into the old
8-track a vintage version of bringing in the sheaves
“toast him with some Tennessee whiskey”
A fitting tribute to a native born, raised and educated in Middle Tennessee. He also served on Admiral Nimitz staff, so an additional toast for that might be in order.
Ya. I missed Krugman’s tribute. Oh wait. There was none. Most of his blog posts this past week have been describi g a detailed strategy of using the treasury to create money with the trillion dollar coin.
“…the legal case. It’s based on 31 U.S.C. § 5112(k), which provides that Treasury may mint platinum bullion coins in accordance with specifications subject to the Treasury secretary’s discretion.”
(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
The value of bullion is typically determined by the value of its precious metals content, which is defined by its purity and mass.
I’m not questioning its legality, nor in fact its economic impact, which may in fact work, but it still is on the fringe in terms of strategy (since the intent of that law appears to be for the purpose of commemorative coins). My point was that I doubt you will see any acknowledgement of this scholar’s passing from PK. I can’t recall any time in print or on TV where he treats with respect anyone he disagrees with. To my recollection, when Milton Frieman died, PK’s “tribute” was calling him a liar. But he earns his NYT fame by responding to the incentive of being this type of persona, so again, back to my point, it’s not surprising.
That’s cool. But why not also question its legality?
Depending on how you construe the word “bullion” in the law, it may mean that the nominal value of the platinum coin needs to be somewhat commensurate with the value of the platinum.
Quoting Kling’s quote:
1. Most importantly, cost must be borne exclusively by the decision-maker; it is not possible for cost to be shifted to or imposed on others.
2. Cost is subjective; it exists in the mind of the decision-maker and nowhere else.
3. Cost is based on anticipations; it is necessarily a forward-looking or ex ante concept.
4. Cost can never be realized because of the fact of choice itself: that which is given up cannot be enjoyed.
5. Cost cannot be measured by someone other than the decision-maker because there is no way that subjective experience can be directly observed.
6. Finally, cost can be dated at the moment of decision or choice.
Restating in light of 2000-2008:
1. the victim of the ponzi scheme must bare the entire cost
2. the trick is panicking the victim into buying the house that cost $100K to build to pay $200K
3. in ponzi scheme’s the $200K paid for a $100K house is in anticipation of flipping it for $300K one day after long term capital gains tax rates kick in
4. neither the $300K price nor $200K cost can ever be realized because real estate prices really do collapse, like during the presidencies of Reagan and Bush
5. regulating mortgages is wrong because no real estate evaluation can possibly justify a $250K mortgage on a property bought at a cost of $200K which cost $100K to build new.
6. cost is dated to when the suckers are hooked and you walk away with the cash
I can apply the same interpretation to my dumping my toxic waste on your property into your well. As the decision maker, I rate the cost as very low for doing so.
One thing for sure, no Wal-Mart buyer would ever agree with those rules for cost, nor would Apple negotiating with suppliers – costs are very objective and tied ultimately to the amount of labor times its cost.
It is the same logic that holds a worker in the US should cost $3/hr because the decision maker wants workers to buy cars and clothes and whatever for $50K a year and in order to be qualified to work for $5000 cost a year.
“1. Most importantly, cost must be borne exclusively by the decision-maker; it is not possible for cost to be shifted to or imposed on others.”
“1. the victim of the ponzi scheme must bare the entire cost”
That’s not even close to a reasonable interpretation of the quote you are replying to. Nowhere in that quote does it say the “decision-maker” can’t be deceived and doesn’t deserve compensation if he is. It’s clear that the quote is in reference to external subsidies not about fraud.
Your post is just a straw man attack.
No, the post isn’t. The subjective, individual valuations of costs are as ‘stable’, subjective and individual as a fashion preference. Beauty is in the eye of the other beholders. It’s the same with costs.
Anybody seen Tullock’s?
Or have a link perhaps?
Tullock being a co-founder of the center that Prof. Cowen apparently currently directs, that is – ‘While at Tech, Buchanan and economist Gordon Tullock founded the Center for Study of Public Choice. They moved the center to George Mason in 1983, the New York Times reported Wednesday.’ http://www.roanoke.com/news/breaking/wb/318814
And I left out this part from the Roanoke Times –
‘In 1998, Buchanan retired to Blacksburg and returned to Tech as a distinguished emeritus professor of economics and philosophy, where he organized and financed lectures, workshops and symposia, according to the economics department Website.’
This is past my time at GMU, but it does seem as if he had enough reputation to go around for multiple universities to claim it. Oddly, I can never remember any GMU source noting what the Roanoke Times did. Well, some blindspots grow over time, it seems.
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