Coordination Problem

Full Text of my Georgia State Talk

Earlier this month, I promised I would post a full text version of my talk at Georgia State in Atlanta on the 18th.  I have now done so.  You can find "The 'Great Recession' as the Institutional and Ideological Residue of the Great Depression" here.

Comments welcome as I hope to turn this into a longer paper at some point soon.

The Invisible Hook Love Story Continued

More on my proposal to Ania in The Invisible Hook:

"A Proposal by the Book" in the Chronicle of Higher Education.

"Yo, ho, ho and a Bottle of Love" in the Daily Princetonian.

Editor Sought For The American Journal Of Economics And Sociology

I just received this email.  (Thank you Frederic Lee.):

Owing to the untimely death of Editor Larry Moss, the American J of Economics and Sociology needs a new editor. Larry left the next two issues in order, and a going concern in good shape. Interested parties please contact me, m.gaffney@dslextreme.com, or the Chair of our Board of Directors, Ted Gwartney, tgwartney@aol.com.

Mason Gaffney

Is This Really the State of Economics?

Hat tip to Ed Weick.

Two Wal-Mart/Katrina Items

The latest issue of The Independent Review contains my article "Wal-Mart to the Rescue: Private Enterprise’s Response to Hurricane Katrina".  It won't be available online for six months, but if you're a subscriber (and you should be), you can read it now.

My original Mercatus policy study will be reprinted in a volume titled Readings in Applied Microeconomics: The Power of the Market, edited by Craig Newmark and chock full of great readings including "I, Pencil" and "The Use of Knowledge in Society".  It's suitable as a course supplement, though NOT cheap.

Was Schumpeter an Austrian?

In a recent post I referred to Schumpeter as an Austrian economist.  Why?  Because I wrote that as part of my notes for my undergraduate students in a multidisciplinary course called Capitalism, Socialism & Democracy (notice the title happens to come from Schumpeter's book, coincidentally).  They never heard of "Walrasian," "general equilibrium theory," and the like.  I just wanted to point out to them that he was from Austria.  Note I didn't say he was from the Austrian School.  The students did read my course notes  on Mises and Hayek (were I did explain the Austrian School).

That post launched a really nice debate, in part on whether or not Schump was Austrian.  His theoretical approach is grounded in Walrasian theory -- and we all know that.  Here below is a recent criticism of mine in my final draft of my paper on Minsky (a student of Schumpeter).  I've cut and pasted it, as it would be too lengthy to place in the comments section of my previous post:

Austrians are well aware of Schumpeter’s explanation.  The economy, he assumes, already enjoys complete coordination.  Enamored with Walrasian equilibrium theory, Schumpeter suggests that the economy can be considered to be in a state of general equilibrium.  Production plans repeat themselves; so do the plans of capitalists, workers, consumers. Prices do not change.  Entrepreneurs merely earn standard rates of return.  By the nature of the equilibrium, all economic profit opportunities are dried up, so something must change for the awareness of new economic profit opportunities, the appearance of new entrepreneurial knowledge, and the incentive to act upon that knowledge.

Another Piece of Evidence on Peter Leeson's Growing Influence

The Economst a few issues back provided its list of top young economist. It was indeed an impressive list of fast track economists.  But word came to me today that Peter Leeson just made the top 200 economists under 10 year out (start date begins with first publication which in Pete's case was in his first year, so actually he still would qualify technically in the under 5 years out, in which case I am sure his ranking would be ridiculously high).

Please join me in congratulating Pete for his success.  The reality is that not since Hayek, has the Austrian school of economics had a young scholar who was as successful at engaging the professional journals and generating excitement among his peers and students for his work.

Economic Costs and Benefits Do Matter for Family Planning

This piece on CNN reports on a rise in the number of vasectomies performed over the last six months.  It didn't dawn on the doctors right away that this was the result of men/couples looking at the troubled economy and deciding that the risk of another (expensive) child simply wasn't worth taking.  But indeed, that seems to be what it's all about.  As the article rightly notes, it's about men on the margin:

"It's unlikely that some guy read the Dow Jones numbers that day and said, 'Why don't we have a vasectomy?' " Jones said. "More likely, people have already been considering it and typically a guy and his wife have spoken a year or two about this."

The recognition that family planning decisions are, at least to a significant degree, the result of economic (in the broad sense) considerations is crucial not just to understanding why vasectomies are up, but for larger public policy questions such as why handing out condoms in third-world countries doesn't reduce birthrates (A:  because the benefits of more kids outweighs the cost, at least to a point larger than the average number in the West, in poor, agrarian economies).  Economic considerations also help explain the longer-run secular changes in family size and parent-child relationships that have characterized the West since the Industrial Revolution.

Krugman as European Social Democratic Public Intellectual Not an Academic Researcher Engaged with the Professional Literature

That is from Newsweek. 

Marjorie Grene --- Philosopher (1910-2009)

The philosopher Marjorie Grene passed away last week.

I studied philosophy at the undergraduate and graduate level.  I got turned on to philosophy first in a Philosophy of Education class at Thiel College (which I took PASS/FAIL), and then after I transfered to Grove City College to start my studies all over I was exposed to philosophy in a class by Reed Davis.  Davis still remains in my mind as one of the best professors I ever had and he turned me on to Michael Polanyi.  I read Polanyi along side by side with my first introductions to Austrian school economists such as Mises and Hayek and their critique of formalism and positivism.  I connected the dots in my mind BEFORE I knew that the dots were indeed connected.  Though the way I connected the dots (through a version of Christian presuppositionalism) was probably unique -- but reflected where I was as an innocent student getting into philosophy, politics and economics for the first time.

Anyway, as I was undertaking this course of study the name Marjorie Grene kept popping up.  Not only was she acknowledged in Polanyi's Personal Knowledge, she was the editor on several books I was reading in my philosophy classes on ancient and modern philosophy -- e.g., Philosophers Speak for Themselves series.