Month: November 2008

The Life and Times of Raul Prebisch 1901-1986

The author is Edgar J. Dosman and this is a clear winner for most neglected book of the year.  It is a very good economic and intellectual history of Argentina, a first-rate history of economic thought on the idea of import substitution, and an excellent biography, all at the same time.

It cost me $40 and I haven't regretted it.  Every page is full of content.  It's not easily excerpted but on Thanksgiving here is one bit I enjoyed:

Raúl and Adelita were now impatient to get home; they had been away for a full three months, but there was no escaping the boredom of wartime travel in the Americas, with one uncomfortable and bumpy flight after next and numerous stopovers — Miami, Mexico, Panama, Lima, Santiago, and finally Mendoza, where they boarded a train for the last leg to Buenos Aires.

You can buy it here.  And if you agree with Dani Rodrik more than you agree with me, you may like the book more yet.

Here is some background information on Raúl Prebisch.

Comments on Prebisch and other matters of the day

This is Tyler here, not Alex.  For some reason Typepad denies the comments function to my posts only.  If you would like to leave comments on the Prebisch post, or other matters of the day, please use the comments section to this entry.  I do hope the problems are resolved soon and like Alex I wish you all a happy Thanksgiving.  You should be grateful for what you have received in life but also think what you might do in the year to come to assist others.

Justin Wolfers throws down the gauntlet — Paul Krugman will judge

Tyler Cowen has laid down the gauntlet to the Marginal Revolution readers, pointing them to our contest to caption the infamous Bush-congratulates-Krugman photo, and urging them to “see if you can beat their readers.”

I’m also excited to announce that we have a very special guest judge: Nobel Laureate Paul Krugman has agreed to pick the winning entry.

Freako readers, add your entry here; Marginal Revolters, try here.

And Tyler, I’m willing to bet on my readers; are you interested in a side bet?

The link is here.  If Justin (and indeed Paul) is willing to count the MR entries that already have been created (here and here) and since Typepad comments are currently down leave new ideas here, I'll bet Justin dinner at the restaurant of the choice of the winner, U.S. only.  Justin, are we on?

Atlas Shrugged – Updated

"Damn it, Dagny! I need the government to get out of the way and let me do my job!"

She sat across the desk from him. She appeared casual but confident, a slim body with rounded shoulders like an exquisitely engineered truss. How he hated his debased need for her, he who loathed self-sacrifice but would give up everything he valued to get in her pants … Did she know?

"I heard the thugs in Washington were trying to take your Rearden metal at the point of a gun," she said. "Don’t let them, Hank. With your advanced alloy and my high-tech railroad, we’ll revitalize our country’s failing infrastructure and make big, virtuous profits."

"Oh, no, I got out of that suckers’ game. I now run my own hedge-fund firm, Rearden Capital Management."


The story, which is awesome, continues here.  A big hat tip to Phil Izzo at WSJ’s Real Time Economics.

More Krugman-Bush captions

Sadly typepad is slow with some comments, I believe due to a switch of platforms (you’ll notice some funny formatting and spacing in some posts as well; our apologies).  Some of the Krugman-Bush photo captions are still not up but I wanted to pass along a few of my not-yet-published favorites.

Can you show me that ‘push on a string” trick again?

Paul, I did everything I could to make that book of yours,
The Return of Depression Economics, a bestseller.

Boy, did we put one over on those gullible Americans

“I’m glad this is almost over, he must not understand what I

“They think we actually believe the $hit we say; pretty
funny, huh?”

My favorite is: “So Paul, ever been to Cuba before?”

If you think you can beat these, please let further suggestions in the comments on this post.

Volcker and Goolsbee

President-elect Barack Obama will appoint former Federal Reserve
Chairman Paul Volcker on Wednesday to be the chairman of a new White
House advisory board tasked with helping to lift the nation from
recession and stabilize financial markets, Democratic officials say.

University of Chicago economist Austan Goolsbee, one of Mr. Obama's
longest-serving policy advisers, will serve as the board's staff
director, along with his duties as a member of the White House Council
of Economic Advisers.

Here is more information.  That gives us an NEC, a CEA, and now this new Board.

The Superorganism

The subtitle is The Beauty, Elegance, and Strangeness of Insect Societies and that is the new book by Bert Hölldobler and Edmund O. Wilson. 

This is another plausible candidate for best non-fiction book of the year.  I liked this paragraph:

Ants and other social insects are good at what they do, and they get better by means of cooperative labor.  Their behavior fulfills principles of ergonomic efficiency embodied in the Barlow-Proschan theorems.  When individual competence is low, the first theorem says, the reliability of a system of individuals acting together is lower than the summed competence of the individuals acting singly; but when individual competence is high, above a certain threshold level, the reliability of the system based on cooperation is greater.  According to the second theorem, one redundant system, whose parts that can be switched back and forth (as in colony members), is more reliable than two identical systems with no such backup parts.

Here is another good bit:

Whenever two kinds or organisms live in close mutualistic symbiosis, as is the case in leaf-cutting ants and their fungus, we should expect communication between the two mutualists.  The fungus may signal to its host ants its preference for particular vegetable substrates or the need for a change in diet to maintain nutritional diversity or even the presence of a harmful substrate.

Here is a New York Times review of the book.  The photos are wonderful too.  Here is a short paper on the work of Barlow and Proschan and the general topic of "reliability"; it has implications for the financial crisis as well.

Million Dollar Arm

Singh and Patel came to the United States six months ago after being the top finishers in an Indian reality TV show called the "Million Dollar Arm" that drew about 30,000 contestants. The show sought to find athletes who could throw strikes at 85 miles per hour or faster….The contest was sponsored by a California sports management company that believed it could locate major league-worthy arms in a country of more than 1 billion…

They were just signed by the Pittsburgh Pirates.  Here is more and thanks to Michael Tofias for the pointer.  Here is the web site for the show.  Here is information on the initial announcement of the prize contest.

Wind Farming

President-elect Obama has called for the creation of more "wind farms."  Before jumping on that bandwagon, however, we ought to take a look at West Texas where wind farmers are farming subsidies almost as well as their agricultural cousins and, as a result, they are paying distributors to take their power.  Mike Giberson has the story:

In the first half of 2008, [electricity] prices were below zero nearly 20 percent
of the time…During these negative price periods, suppliers are paying ERCOT to take their power….the negative prices appear to be the result of the large installed capacity of wind generation.
Wind generators face very small costs of shutting down and starting
back up, but they do face another cost when shutting down: loss of the
Production Tax Credit and state Renewable Energy Credit revenue which
depend upon generator output. It is economically rational for wind
power producers to operate as long as the subsidy exceeds their
operating costs plus the negative price they have to pay the market. Even
if the market value of the power is zero or negative, the subsidies
encourage wind power producers to keep churning the megawatts out….You could, as a correspondent put it to me, build a giant toaster in West Texas and be paid by generators to operate it.

If President-Obama is serious about green energy it’s not wind he needs to look at but nuclear.  Nuclear is clean and green and we can build power stations where we need power, instead of having to invest in costly and inefficient transport networks.

What will we get from the stimulus?

Mark Thoma runs through some numbers.  Of course the plan has not been announced, so I don’t have a good sense of it.  There is talk of five million new jobs, however, and that figure makes me suspicious.  There is very often a trade-off between spending the stimulus money well and spending the money to create new jobs.  For instance the better "Green Energy" ideas mostly involve hiring or reallocating skilled people who already have jobs.  Many of the recently unemployed seem to be coming from construction, retail, finance, and, soon, manufacturing.  If we spend to build up mass transit, can we cobble together a team from these people?  And do they live in the right regions, have the right skills, and have the right willingness to lay some extra Metro track?  Don’t accept the rosy scenario numbers until you see at least partial answers to these questions. 

The New Deal put many people to work in the physical construction of infrastructure; at that time the skills of labor were more homogeneous, people were more desperate for work, and it was more expected that "labor" meant physical labor for able-bodied men.

Addendum: Arnold Kling makes a similar point.