Sunday, October 31, 2010

Notable quotable

"Most people take capitalism for granted, just as they take the solar system for granted. The eventual passing of capitalism, which is often conceded nowadays, is thought of in much the same way as the eventual cooling of the sun, that is to say, its relevance to contemporary events is denied. From this point of view one can understand and criticize what happens within the framework of the system; one can neither understand nor evaluation what happens to the system itself. Great historical events, however, generally concern whole social systems. The result is that to the typical modern mind they assume a catastrophic character, with all that this implies in the way of emotional shock and intellectual confusion." 

Sweezy, Paul M. The Theory of Capitalist Development, 1942. pp.21-22.

Saturday, October 30, 2010

Weekend Reading

Theory of Capitalist Development

Class Analysis of Households Extended: Children, Fathers, and Family Budgets

Classical Thermodynamics and Economic General Equilibrium Theory.... I have a developing idea here about heat physics, economic ideology, and industrial development... I think I will end up using this for a paper for my history of economic thought class somehow.. and luckily I'm already well-versed in all matters regarding heat and steam

Also, later this weekend, I am going to submit my first application to a graduate school...frightening.

Monday, October 25, 2010


It occurred to me today that my frustrations in the past few blog posts lately have to do in part with one irreconcilable nuance between overdeterminism/post-structuralism and institutionalist frameworks, specifically in relation to Fogel and Engerman.

Question: Is it consistent with the overdeterminist framework that institutions are always efficient? Can conditions of existence be created and secured for something that is inefficient? If so, how and why?

I hate efficiency! And I hate that economists are so rubbish in defining what they mean by the term in the first place.

Stumblings and thoughts


Who cares about efficiency? And why?

Why does mainstream micro theory ignore time? For example, I would suspect that marginal utility not only diminishes per unit but also for one particular unit over time as well.

Why do we focus so much on work/non-work tradeoffs? Are there other economic systems and theories from outside of the Euro-centric world that consider things differently?


Some info on GLS Shackle

Foucault-Chomsky Debate

Rich Mom, Poor Mom (this post mentions Melissa Hodges, who is a fellow CRF awardee, and is doing some incredible research on families and self-employment)

Friday, October 22, 2010

Neoclassical v. heterodox economics: the case for plurality

That title actually sounds like it should be for a multi-volume book, not a silly undergrad's blog post. Anyway, as an undergraduate at a distinctly heterodox economics department, I often observe arguments that go something like the following mad-lib:

"This (insert neoclassical theory) is wrong because it relies on (choose either factor endowments, preferences, or technology) and ignores (name some kind of social or political institution from which the previous paradigm is contrived). (Follow up with a historical analysis of some random European country, throw in some anecdotal evidence of a few other countries, and apply this to whatever the major theme of the paper is)."

That is fun, and a good brain exercise, but I really wish there were some more appreciation for neoclassical theory, and all theories in general. Really just an end of "I'm right, you're wrong" economics. One of my favorite blogs, the Real World Economics Review, bugs me at times with this, and there are countless other mainstream blogs that fall into this trap. I do see that this kind of banter is definitely constructive- a critical approach is great for revising and defending whatever your idea is, but at the same time this kind of "academic culture" can also be more conducive to ignorance too.

I really think using multiple frameworks, while totally inconsistent, can be really useful. For example, the  most basic neoclassical model relies on some pretty hefty assumptions. With those in mind, this model makes it fairly easy to point out when those assumptions are violated, like in the case of asymmetric information or something like that. Heterodox theory, like maybe an institutionalist approach, can then take that problem and point out how this asymmetry came to be based on social or government institutions and their history. Yes? Maybe I just don't get economics and should throw away those graduate school applications.

Just a few nonsensical thoughts... so here are some interesting links: Uncertainty is the central fact motivating economic activity (yes!), what makes stuff interesting, and the war on moms.

Tuesday, October 19, 2010

The culture of poverty, let's blame the poor

If the leading paragraph's Harry Potter reference wasn't offputting enough, the content of this recent New York Times article is somewhat disturbing, especially to anyone who knows a thing or two about economics. The article discusses a return by scholars in anthropology and sociology to considering culture as a significant determinant of poverty. In other words, the poor are and remain poor because of their culture. Reading between the lines, it's apparently now okay to be politically incorrect and blame the poor for their own woes in academia.

“We’ve finally reached the stage where people aren’t afraid of being politically incorrect.” Really? As if social scientists were sitting around waiting for a chance to be politically incorrect?

Anyway, culture is an important dynamic to study, however culture itself cannot be blamed for persistent poverty. Persistent poverty likely means there are persistent underlying structural problems, like inadequate education or job discrimination, not just cultural trends or "being a victim of the market."

Culture does shape the way people act, behave, work, consume, abide by laws, respect public goods, raise their families, and so on, but the scholars mentioned in the article are missing the major link between culture and poverty: it's not culture that directly determines poverty, it's the poverty and underlying social and economic institutions (let's say capitalism and societal acceptances of vast inequality) that too determines the culture and social norms of a group. They are missing the broader elements, and the ways in which institutions are actually determining the smaller group cultures.

For example, would the growing social acceptance of single parent households have occurred had their not been other social, economic, and political strains that had first determined the deterioration of the family unit? There are plenty of arguments contributing the changes in modern family structures to the underlying spheres of alienation and exploitation (both class and gender) present in capitalism.

Had the scholars interviewed in the article acknowledged the overdetermination of culture present in their analyses of the "culture of poverty", I think I would have been okay with the general idea of examining culture's influence on poverty traps. But it is imperative that these scholars also examine the broader structures that are simultaneously determining that culture. Blaming the "culture of poverty" will likely not help to solve the greater problems of inequality. 

Sunday, October 17, 2010

Mind the gap: information asymmetry in care

Recently, the Archives of Internal Medicine published a study demonstrating the persistence of communications discrepancies between physicians and hospitalized patients. For anyone who has ever been hospitalized, or known someone who has, this evidence is not really that surprising.

One good example- only 17% of inpatients can correctly name their main physician. That actually does not surprise me. Being hospitalized is usually a high-anxiety kind of situation. Remembering your doctor's name is probably not a priority, as much as remembering to take in all of your fluids might be. With that in mind, it is interesting to note that only 57% of patients were actually aware of their diagnosis, while 73% of the respective doctors studies believed their patients were in the know of their medical condition. The same kind of aforementioned anxiety and fear may have played a role in this discrepency, so maybe this accounts for the fact that 98% of doctors claim to have discussed anxiety and fear with patients while only 54% of patients actually report that happening. Having not yet read through the entire study, I am unsure of the statistical significance of these numbers, and of the merit of sampling methodology, yet the numbers do seem to point to something work taking a look at.

So why is this important? For one, patients and doctors should be on the same page about information, especially since so many medical situations require outpatient attention and lifestyle changes (to some degree) by a patient. But these finding are likely just the tip of the iceberg when it comes to information assymetries in care, including other areas like nursing home, child care, outpatient services, etc. Without proper information, can patients and families really judge the quality of care? Do patients, families, and even insurance companies (...sadly) share these same miscommunications, resulting in real economic symptoms like adverse selection? How many extra costs do these discrepancies present?

This gap likely presents many costs, on all participants in medical care creating an imperfect market. In childcare, economist David Blau presented a robust model of the child care market, described as generally well-functions with a few valuation gaps. He does acknowledge the information asymmetries present in the market, especially in the gap between perceived and actual quality of care for children. Something similar likely occurs with adult care, like hospitalization, where the communication gap between doctors alters what the hospital believes to be quality care and what the patient feels they are actually receiving. Someone, like an insurance company, can likely find creative ways to capitalize on this discrepancy. As more similar studies to the one done by Olson and Windish emerge, the question is how these communication gaps can be ameliorated, at what cost, and at what savings.

The London Tube is famous for its "Mind the gap" caution signs. Those involved in care markets, especially patients and family members, should follow a similar motto to avoid stumbling into an information and quality gaps. Hospital and care center administrators, as well as policy makers and regulators too, may want to watch their feet. I am not knowledgable to make any suggestions on how to do this, but to me it seems like communication discrepancies may be somewhat solvable through technology, like accessible and transparent medical documentation that can be reviewed by doctors, patients, families, and insurers. This small study is a part of a much broader problem in care, with complex transactions and costs (both monetary and health), so solutions will likely never be that simple.

Music stumbling

"Talking NPR Blues"

Sunday, October 3, 2010

Video stumbling

Here's a talk on "Morality and the free market". This channel on Hulu also has a few other good economics related lectures. With commercials of course!

Friday, October 1, 2010

Random observation on bank atm's

Why do bank atm's on college campuses allow you to choose withdrawal amounts in $10's, while regular one's only allow for $20's?

I've noticed that $10's are available not only on this campus, but also others that I frequent. Then I get disappointed when I can't withdraw $30 back in town. Are banks expecting poor college students to only be able to withdraw $10? Or is there some higher marginal availability of $10 bills in circulation on campuses with many central retail outlets making it easier to stock those Hamiltons?