Category: Books

Adam Smith on Charles Murray

by  Tyler Cowen in

From Book V, chapter I:

In every civilised society, in every society where the distinction of ranks has once been completely established, there have been always two different schemes or systems of morality current at the same time; of which the one may be called the strict or austere; the other the liberal, or, if you will, the loose system. The former is generally admired and revered by the common people: the latter is commonly more esteemed and adopted by what are called people of fashion. The degree of disapprobation with which we ought to mark the vices of levity, the vices which are apt to arise from great prosperity, and from the excess of gaiety and good humour, seems to constitute the principal distinction between those two opposite schemes or systems. In the liberal or loose system, luxury, wanton and even disorderly mirth, the pursuit of pleasure to some degree of intemperance, the breach of chastity, at least in one of the two sexes, etc., provided they are not accompanied with gross indecency, and do not lead to falsehood or injustice, are generally treated with a good deal of indulgence, and are easily either excused or pardoned altogether. In the austere system, on the contrary, those excesses are regarded with the utmost abhorrence and detestation. The vices of levity are always ruinous to the common people, and a single week’s thoughtlessness and dissipation is often sufficient to undo a poor workman for ever, and to drive him through despair upon committing the most enormous crimes. The wiser and better sort of the common people, therefore, have always the utmost abhorrence and detestation of such excesses, which their experience tells them are so immediately fatal to people of their condition. The disorder and extravagance of several years, on the contrary, will not always ruin a man of fashion, and people of that rank are very apt to consider the power of indulging in some degree of excess as one of the advantages of their fortune, and the liberty of doing so without censure or reproach as one of the privileges which belong to their station. In people of their own station, therefore, they regard such excesses with but a small degree of disapprobation, and censure them either very slightly or not at all.

Did Oprah steal book sales with her reading club?

by  Tyler Cowen in

There is a new paper (pdf) from the excellent Craig Garthwaite, here is the abstract:

This paper studies the economic effects of endorsements. In the publishing sector, endorsements from the Oprah Winfrey Book Club are found to be a business stealing form of advertising that raises title level sales without increasing the market size. The endorsements decrease aggregate adult fiction sales; likely as a result of the endorsed books being more difficult than those that otherwise would have been purchased.  Economically meaningful sales increases are also found for non-endorsed titles by endorsed authors.  These spillover demand estimates demonstrate a broad range of benefits from advertising for firms operating in a multiproduct brand setting.
For one thing, it’s really hard to get people to read more.

Book splat (What I’ve been reading)

by  Tyler Cowen in

Jean Edward Smith, Eisenhower in War and Peace, very well written, not that much economics.

Alasdair Roberts, America’s First Great Depression: Economic Crisis and Political Disorder After the Panic of 1837, stronger on aftermath than causes.

David Tuckett, Minding the Markets: An Emotional Finance View of Financial Instability, a behavioral/cognitive/neuro interpretation of the actions of four fund managers, as they related to the financial crisis.

Alan Peacock, Anxious to do Good: Learning to be an Economist the Hard Way, memoirs, gentlemanly not juicy.

David Wolman, The End of Money: Counterfeiters, Preachers, Techies, Dreamers — and the Coming Cashless Society, an informed and well-written look at the continuing evolution of money.

In my pile is Michael J. Sandel, What Money Can’t Buy: The Moral Limits of Markets (how many times has this book been written by now?), Kevin A. Clarke and David M. Primo, A Model Discipline: Political Science and the Logic of Representation (philosophy of science), and Robert V. Dodge, Schelling’s Game Theory: How to Make Decisions.

The very good The Coming Prosperity: How Entrepreneurs are Transforming the Global Economy, by my colleague Philip Auerswald, will be out very soon.

An anecdote of Athens

by  Tyler Cowen in

A friend and I met up at a new bookstore and café in the centre of town, which has only been open for a month. The establishment is in the center of an area filled with bars, and the owner decided the neighborhood could use a place for people to convene and talk without having to drink alcohol and listen to loud music. After we sat down, we asked the waitress for a coffee. She thanked us for our order and immediately turned and walked out the front door. My friend explained that the owner of the bookstore/café couldn’t get a license to provide coffee. She had tried to just buy a coffee machine and give the coffee away for free, thinking that lingering patrons would boost book sales.  However, giving away coffee was illegal as well. Instead, the owner had to strike a deal with a bar across the street, whereby they make the coffee and the waitress spends all day shuttling between the bar and the bookstore/café. My friend also explained to me that books could not be purchased at the bookstore, as it was after 18h and it is illegal to sell books in Greece beyond that hour. I was in a bookstore/café that could neither sell books nor make coffee.

From @economistmeg, here is more, none of it especially encouraging.  She is, by the way, one of the very best people to follow on Greece and the eurozone.

What is the oddest book title of the year (markets in everything)?

by  Tyler Cowen in

As in most years, there is some serious competition, here is the short list of contenders:

A Century of Sand Dredging in the Bristol Channel: Volume Two by Peter Gosson (Amberley). A book that documents the sand trade from its inception in 1912 to the present day, focusing on the Welsh coast.

Cooking with Poo by Saiyuud Diwong (Urban Neighbours of Hope). Thai cookbook. “Poo” is Thai for “crab” and is Diwong’s nickname.

Estonian Sock Patterns All Around the World by Aino Praakli (Kirjastus Elmatar). Covers styles of socks and stockings found in Estonian knitting.

The Great Singapore Penis Panic: And the Future of American Mass Hysteria by Scott D Mendelson (Createspace). An analysis of the “Koro” psychiatric epidemic that hit the island of Singapore in 1967.

Mr Andoh’s Pennine Diary: Memoirs of a Japanese Chicken Sexer in 1935 Hebden Bridge by Stephen Curry and Takayoshi Andoh (Royd Press). The story of Koichi Andoh, who travelled from Japan to Yorkshire in the 1930s to train workers at a hatchery business the art of determining the sex of one-day-old chicks.

A Taxonomy of Office Chairs by Jonathan Olivares (Phaidon). Exhaustive overview of the evolution of the modern office chair.

The Mushroom in Christian Art by John A Rush (North Atlantic Books). In which the author reveals that Jesus is a personification of the Holy Mushroom, Amanita Muscaria.

The story of the prize is here, and for the pointer I thank www.artsjournal.com.  Sadly, only one of these books can be bought in digital format, can you guess which one?

More on *Fairness and Freedom*, by David Hackett Fischer

by  Tyler Cowen in

I very much liked this book, which compares the histories of New Zealand and the United States, and in particular I liked:

1. The discussion of how the New Zealand government encouraged smaller land holdings through some deliberate policy decisions in the late 19th century (p.165).

2. The discussion of how New Zealand abolished its provinces in 1875 (circa p.193), and the importance of that decision (passim).

3. The near-uniformity of the crime rate throughout New Zealand (p.198).

4. The comparison between labor movements in the two countries and the possibly differing history of labor-saving devices (circa p.328).

5. The comparison between Bills of Rights; New Zealand for instance has a right not to be subjected to medical experiments and a right to refuse medical treatment, but no right to a jury trial (circa p. 464).

It is probably the best introduction to New Zealand history for an American, even though much of the book is not about New Zealand history at all.  That said, while I found this a very good book, and certainly a book to recommend and to make the year’s “best of” list, it did not for me quite live up to its full potential.  I have high standards in this particular area, so I would have liked:

6. A discussion of “cutting down tall poppies” before p.487.

7. A deeper discussion of the differences in role models in the two countries.  New Zealanders admire Sir Edmund Hillary more than a successful businessman, though this has changed somewhat.

8. A comparison between American social conformism, as outlined brilliantly by Tocqueville, with the more outwardly conformist New Zealand working class variety.

9. A discussion of why New Zealanders are less prone to extreme thought and explicit missionary dedication; can you imagine a Kiwi version of Whittaker Chambers?

10. More attention to the commodities dependence in the New Zealand economy, and the importance of the UK abolishing NZ trade preferences in 1972-3, and the ongoing struggles to suss out a coherent vision for a relationship with Asia and China.

11. More discussion of how it mattered for New Zealand as many centres of activity shifted over time from the South Island to the North Island, culminating in the centralization of so much activity in or near Auckland.

12. Much more discussion of religion, and of the extreme enthusiasms which are bred in the United States.

13. A greater understanding of how Americans would not necessarily regard their society as “less fair,” but rather that some benefits are to be portioned out in accordance with a peculiarly American notion of what a person deserves.

14. A discussion of Upper Hutt or Lower Hutt, ideally both.

15. Why are New Zealanders perhaps the most polite people in the Western world?

16. The importance of having so many people living so close to the water, and (in some parts of the country) being surrounded by relatively few trees, and the much lower productivity of hunting in New Zealand, as there is not so much to hunt.

17. A more explicit discussion of economies of scale, and of why New Zealand is sometimes accused of being boring.  There is one quotation offered from an outside visitor: “”I suppose they are happy,” she wrote in her contemptuous way. “I couldn’t bear it.”” (p.xix).

What are the best sources on how to be a good teacher?

by  Tyler Cowen in

Charlie Clarke, a Finance PhD student at UConn, and a loyal MR reader, writes to me:

Hi Tyler,

I’m a grad student teaching for the first time, and I was wondering if  you had any recommendations for a book relaying evidence based advice for teaching methods.  I know Cowen’s law, “There is a literature on everything.”  Just hoping there is a good book or two synthesizing that literature so that I can use it to improve my teaching.

Love the blog.

The most important lesson is to use the right textbook.  Beyond that:

1. Give a damn.

2. Get to the point when you speak.

3. Expect something from them.

4. Teach to the students who are interested in learning.

5. At all levels, do not overestimate the attention span of your audience.

6. Do not be afraid to be idiosyncratic, provided you adhere strictly to #2.

Those are my tips.  But to be honest, I do not consider them RCT-tested and I am not sure they maximize social welfare.  They instead start from the premise that the key question is what kind of person do I want to be, and then the method asks the students to conform to that vision.  Some or all of them might prove RCT-neutral, or worse.  Nonetheless, the approach is a good way to motivate me and that is part of the problem.

Doesn’t Bryan Caplan have a post on this?  Here is John Baez on how to teach.  Peoples, what can you recommend from the literature?

Hans-Werner Sinn on the “green paradox”

by  Tyler Cowen in

The period of real [energy] price declines coincided with the emergence of the “green” movement and the re-orientation of the world energy policies by way of inducing direct demand restraints and introducing incentive systems to foster the development of “green” replacement technologies.  Thus, the threat of market destruction may indeed have increased the supply of fossil fuels enough to more than offset the growing world demand, thereby inducing real energy prices to fall, contrary to what a forward-looking explanation along the lines of Hotelling’s theory would have suggested prima facie.

That is from Sinn’s new book The Green Paradox: A Supply-Side Approach to Global Warming.

Charles Duhigg’s The Power of Habit

by  Alex Tabarrok in

The skills necessary to ride a bike are multifaceted, complex and not at all obvious or even easily explicable to the conscious mind. Once you learn, however, you never forget–that is the power of habit. Without the power of habit, we would be lost. Once a routine is programmed into system one (to use Kahneman’s terminology) we can accomplish great skills with astonishing ease. Our conscious mind, our system two, is not nearly fast enough or accurate enough to handle even what seems like a relatively simple task such as hitting a golf ball–which is why sports stars must learn to turn off system two, to practice “the art of not thinking,” in order to succeed.

Habits, however, can easily lead one into error. In the picture at right, which yellow line is longer? System one tells us that the lhttp://i161.photobucket.com/albums/t225/SprinkleCoveredPocky/Optical%20Illusions/Illusion9.pngine at the top is longer even though we all know that the lines are the same size. Measure once, measure twice, measure again and again and still the one at top looks longer at first glance. Now consider that this task is simple and system two knows with great certainty and conviction that the lines are the same and yet even so, it takes effort to overcome system one. Is it any wonder that we have much greater difficulty overcoming system one when the task is more complicated and system two less certain?

You never forget how to ride a bike. You also never forget how to eat, drink, or gamble–that is, you never forget the cues and rewards that boot up your behavioral routine, the habit loop. The habit loop is great when we need to reverse out of the driveway in the morning; cue the routine and let the zombie-within take over–we don’t even have to think about it–and we are out of the driveway in a flash. It’s not so great when we don’t want to eat the cookie on the counter–the cookie is seen, the routine is cued and the zombie-within gobbles it up–we don’t even have to think about it–oh sure, sometimes system two protests but heh what’s one cookie? And who is to say, maybe the line at the top is longer, it sure looks that way. Yum.

System two is at a distinct disadvantage and never more so when system one is backed by billions of dollars in advertising and research designed to encourage system one and armor it against the competition, skeptical system two. Yes, a company can make money selling rope to system two, but system one is the big spender.

Habits can never truly be broken but if one can recognize the cues and substitute different rewards to produce new routines, bad habits can be replaced with other, hopefully better habits. It’s habits all the way down but we have some choice about which habits bear the ego.

Charles Duhigg’s The Power of Habit, about which I am riffing off here, is all about habits and how they play out in the lives of people, organizations and cultures. I most enjoyed the opening and closing sections on the psychology of habits which can be read as a kind of user’s manual for managing your system one. The Power of Habit, following the Gladwellian style, also includes sections on the habits of corporations and groups (hello lucrative speaking gigs) some of these lost the main theme for me but the stories about Alcoa, Starbucks and the Civil Rights movement were still very good.

Duhigg is an excellent writer (he is the co-author of the recent investigative article on Apple, manufacturing and China that received so much attention) It will also not have escaped the reader’s attention that if a book about habits isn’t a great read then the author doesn’t know his material. Duhigg knows his material. The Power of Habit was hard to put down.