Category: Education

A new set of MRU videos is up.  In these videos, we cover:

·      How the poor spend their money

·      How stress can create a “tax” on the poor’s decision-making, focus, and cognitive abilities

·      Causes of “missing women” in developing countries and what is really the bottom line on this claim

·      The economics of child labor, and what is the nature of the potential market failure when sending children to work

·      How a test involving a pregnant mare’s urine illustrates the value of randomized controlled trials

·      Why private health insurance is relatively rare in poorer developing countries (hint: it’s not adverse selection)

·      Can cash transfers help with low birth weight?

·      How community participation can affect the success of health care programs

·      And finally, the ugly effects of cholera, diarrhea, worms, and HIV/AIDS in developing countries

Click here to get started on these videos, with an introduction to randomized control trials.  Or browse the whole list at MRUniversity.com, click on the Course section on the right to see the menu.

At the main Pondicherry temple, an elephant will bless you — by tapping its trunk on your head — if you hand it some money.  Of course this is a temple elephant and it is also a Mengerian elephant.  The elephant has no use for money but understands that it is a general medium of exchange.  The elephant hands the money over to the temple authority and is later rewarded with food.

The elephant is not merely trading, but it is engaged in indirect exchange and thus in monetary economics.

There is in fact a sign up forbidding such Mengerian transactions, but the elephant seems not to notice it.

And yet this is not the end of the story.  In many parts of Tamil Nadu, temple elephants have attained so much prosperity through Mengerian indirect exchange, and been able to consume so much leisure, that now elephant obesity is a more serious problem than elephant malnutrition.

Parents are asked to pay the fee so that their children at the Jiangdu District Shangmao Kindergarten will be hugged by teachers when they arrive in the morning and again when they leave, the Yangtze Evening Post reported.

It charged 80 yuan (US$12.80) per month per child.

Here is more, and for the pointer I thank Marco Haan.

Albert O. Hirschman has passed away. Hirschman was a deep thinker whose work has been influential in many fields. Most famously with the must-read Exit, Voice and Loyalty. I am also a fan of The Passions and the Interests his study of ideological transformations in the 17th and 18th century which promoted the pursuit of material interests as a way to tame the passions and thus opened the way to capitalism (profitably read alongside McCloskey’s Bourgeois Virtues). Hirschman’s early work in development, on backwards and forwards linkages, is now being rediscovered and formalized. Tyler looks at Hirschman’s work as it relates to development in a video at MRUniversity. Tyler also wrote in 2006:

Albert Hirschman deserves a Nobel Prize in economics.  His early work on the unbalanced nature of economic development was pathbreaking.  The Rhetoric of Reaction is a brilliant study in intellectual self-deception.  As a historian of thought he integrates wonderfully, such as in his study of how commerce shapes mores.

But he would win the Prize for focusing the attention of economists and political scientists on the phenomenon of voice: the ability of consumer or voter complaints to induce improvements in supply.  Hirschman was the first modern social scientist to think about this mechanism systematically.

Hirschman first suggested voice gets stronger and more effective when exit is limited.  In his (earlier) vision, if you can leave you won’t complain.  Fidel Castro understood this and let many Cubans go, although of course they complained from Florida.  It is sometimes suggested that in a world of school vouchers fewer parents would show up at the school board meeting.  Don’t yap, just yank your kid.

In reality voice often works best when competitive pressures are strong.  HBO is more responsive than was East Germany.  You are not wasting your time to complain at Wegman’s, or for that matter at this blog.  Competition and voice are more likely complements than substitutes.  Hirschman admitted and indeed emphasized this point in his later writings.

Here is Paul Krugman on Hirschman….Here is Alex on the topic of voice.

Hirschman also led a fascinating life. He became a professor only late in life after fighting in the Spanish Civil War, volunteering in the French Army and working in Marseilles to help refugees escape the Nazis. His work in development economics was based on field work when field work still meant working in fields.

As he once said of his work and perhaps also of his life:

Attempts to confine me to a specific area make me unhappy.

Daniel Drezner at the FP annually gives out an award he affectionately calls the Albie. It’s an award for

…any book, journal article, magazine piece, op-ed, or blog post published in the [last] calendar year that made you rethink how the world works in such a way that you will never be able “unthink” the argument.

It’s a fitting award to be named for Albert Hirschman whose simple but powerful ideas do indeed cause you to rethink the world and never to see it the same again.

These new videos are up, click on “Foreign Aid” to access them, under “Course in Progress” on the right hand side of the page.  For a sample, here is Alex’s video on whether foreign aid increases growth.  Here is my video on the Millennium Villages Project.