The phrase isn't as easy to define as one might have hoped.... There is an intuitive division of types of history in which a lot of us engage without questioning it much. If you tell me, " I'm writing a political history of the United States in the late 19th century" I expect you are working on Boss Tweed, Grover Cleveland, Ida B. Wells. "I'm writing a cultural history of the United States in the late 19th century." Ah, then I would love the chance to quiz you about the Centennial Exposition in Philadelphia, Thomas Nast's cartoons and the music of Victor Herbert. I've posted a photo of Victor Herbert here. To get a bit closer to what I want -- suppose you are tell me you are writing a history of economics, as a field of study, in the US during this period . Delightful! Nothing like a good discussion of Henry George, Herbert Spencer, John Bates Clark and Thorstein Veblen. But then we get back to where we began. What does an economic histor...
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Trump's tariffs are imbecilic. If they ever go into effect as designed they stand to do the whole world economy an enormous amount of harm. Even if they are reversed quickly by one route or another, -- not just put off for 90 day intervals but reversed -- they stand to do harm, because these things are not simply a switch easy to turn on and off and on again. But let us think about a simple bilateral example of this stupidity for a moment. Trump proposes to create a "reciprocal" tariff of 47% on imports from Madagascar, to go into effect when the latest "pause" comes to an end. Why? On some level (the one that justifies the word "reciprocal") he seems to want us to believe that Madagascar at present has a 47% tariff, or greater, on the US, so it is the least we can do on behalf of fairness. You will likely not be surprised to learn that that is not the case. About 40% of imports to Madagascar require payment of a 20% customs duty. Not 47%. Not ev...
The US and Colombia nearly began a trade war on January 26-27. Colombia refused to take in planeloads of migrants that the Trump administration has decided belong there. Trump announced ginormous tariffs on Colombian exports to the US [the legal traffic -- chiefly this means coffee and cut flowers] and after some mutual posturing Colombia backed down. The migrants will go 'back' to Colombia. [I am not at all confident that is where they came from -- no vestige of due process or diligent inquiry seems to have been involved. But I'll ignore that right now.] What about those cut flowers? There has been a fair amount of commentary about how US florists and their customers have dodged a bullet. Prices will not skyrocket just before Valentines Day, after all. Whew. EXCEPT. That isn't how it works. Prices at the retail level tend to react to risks of supply chain obstruction. They don't wait for the reality of the obstruction to show up. Tr...
Perhaps the real golden age of philosophy is quite recent.Perhaps it is a mere "bag of shells" into our living past. My thesis is that the real golden age in (western) philosophy occurred between the years 1880 and 1920. Between two Dayton brothers' receipt of a patent on the cash register in the former year and consolidation of power by the Bolsheviks in Russia with their Civil War victories of the latter year. ["Western" above very much includes Russian. It does not include Japanese, though, so the works of Kitaro Nishida, though written within this period, and discussed on this blog not long ago, will not be highlighted on the list below.] Here are some of the outstanding works of philosophy and of philosophy-adjacent intellectual and creative fields, published in this forty-one year period 1880 - 1920 within the West. Most are books, some are poems, articles or lectures. I have not made any typographical distinction among them. Each seminal work is named i...
In a television commercial for an insurance company, a child (9 ish?) causes some consternation. After the adults around him start bemoaning "the economy," the child asks, "what's the economy?" They can't answer, and he ends up deciding to 'Google it.' Let's try to answer. It is a question from a child [actor], but not a childish question. Even a 9 year old is probably familiar with the catch-all term "society". How about telling him that "the economy" and "society" are the same fact, looked at from two different points of view. Or, if he doesn't know either word so this doesn't help, speak to him in single-syllable bits, and tell him they are "two names for the fact that folks all have to find ways to work and live with folks." When we refer to society as "the economy," we're thinking about this living-together thing in terms of limits, and choices made in awareness of limits. ...
As I mentioned a couple of weeks ago now, in the course of "Money Week," one of Keynes' signature ideas is the liquidity trap: business slows to a crawl when everyone becomes a hoarder. No one wants to lend, or keep their money in the care of institutions that lend, and the interest rates cannot get low enough to correct this situation in supply/demand terms. Do we believe in this idea, dear reader? The standard free-marketer's response to talk of a liquidity trap is that it is nonsense. It is based on the idea that there can be a sharp increase in demand for money that is NOT an increase in the demand for goods. Everybody becomes a hoarder. But why? Because everybody becomes attached to the medium of exchange, at the expense of the actual exchange? That sounds like a personal pathology, unlikely to be common enough to have macroeconomic effects. Most people realize that money is a medium of exchange. It is valuable BECAUSE it buys goods and services. It is not v...
If you had to name ONE defining characteristic of the revolution in economics scholarship known as Keynesianism: what would it be? Probably this: Keynes offered a distinctive explanation of sharp economic downturns within capitalist systems -- call them crises, depressions, recessions, or whathaveyous. Keynes explained them in a way that suggested a toolbox of remedies. His book, The General Theory, was published in 1936, so you would expect it to have something to say about that subject. What is distinctive about his theory is that although it involves the price of borrowing money (i.e. interest rates) it does NOT directly entail monetary policy. His tool box does not include things like "mint silver." Indeed, this may be considered odd because his is the first significant book in the history of economics to appear AFTER the overthrow of the long dominant role of gold either as money or as a backer of money. Yet he put that issue on the shelf. Instead, Keynes p...
My view of Spencer as a philosopher has largely been shaped by William James' comments on Spencer,which were consistently negative. This negativity was later confirmed as I came to understand the criticisms of Spencer offered by G.E. Moore and Emile Durkheim. Nonetheless, Murray Rothbard has said good things about Spencer, and there has been a bit of a Spencer revival in recent years, The online Stanford Encyclopedia of Philosophy says that Spencer has been the victim of "interpretive caricatures," and that it is fortunate he is enjoying some "restoring and repairing" scholarship. So: I decided to go back to the source. In Spencer' FIRST PRINCIPLES (1862), he wrote as follows about economic markets: The production and distribution of a commodity imply a certain aggregate of forces causing special kinds and amounts of motion. The price of this commodity is the measure of a certain other aggregate of forces expended in other kinds and amounts of motion by ...
There has been a good deal of talk about the "re-opening of the US economy." I have to say: I despise that expression and anything like it. The term "the economy" is a high-level and for many purposes a quite confusing expression. What is the economy, that it could be closed and re-opened, turned off and then back on by some act of political will, so flicking of a finger? "The economy" is a high-level and confusing expression. Consider this answer: the economy is what an economist studies. As opposed to what? the society, which is what a sociologist studies? the body politic, which is what a political scientist studies? Surely they are all studying the same sort of facts, but with somewhat different emphases and methods. Anyway, we have seen of late a lot of orders from a lot of different authorities dictating a lot of particular actions, prohibiting some others. We have seen no flick of a particular switch. We have seen no closing of a given...
There has been a lot of social media chatter about the sale of seeds in recent days.... https://twitter.com/jamie2181/status/1249516143502450691 As that tweet illustrates, a lot of people believe that either the federal government or a lot of state governments have made the sale of seeds illegal. That is not accurate, though it isn't entirely false. Agriculture is an essential business, and of course farms buy seeds. In a more urban/suburban setting, hardware stores are generally considered essential businesses, and they are allowed to sell seeds too, along with other gardening equipment. And Amazon will mail you seeds if you like. https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3Daps&field-keywords=seeds+gardening So: what is the controversy? Stand alone greenhouses are NOT considered essential businesses in many states. They have been closed down. If that had been your avenue for buying the seeds for your backyard (or balcony) garden, you may well be ti...
I wrote yesterday's discussion of OSVs not for its own sake (it is not likely that I managed to warn off anyone who was genuinely considering an investment in this loser of an asset) -- but to make a point about supply. The supply of X in general is not "the amount of X that is present on the face of the earth at a particular time." It is "the amount of X that will be brought to market and sold to a buyer at any given price along a range of possible prices." This is what is expressed as the Supply line on a S-D graph. You see a supply curve on the graph above. The quantity of such vessels (in terms of hours in use -- because the vessels are generally chartered by the oil companies working the rigs from the ship owners by the hour) that would be made available to a buyer (charterer) is the X axis. The price AT WHICH that quantity would be supplied is the Y axis. The line curves upward to the right -- that is, the higher the price/charter rate oil companie...
I wrote something recently for one of my content customers about the economics of offshore support vessels (OSVs). These are the specialized ships that provide a range of support services to offshore oil and gas drill platforms. The bottom line is that OSVs are a lousy investment idea. If given an opportunity to invest in such a vessel or in any corporate entity whose main line of business involves owning or operation such vessels: run the other way! There are too many of these darned things and (though I wasn't allowed to put it this bluntly for the commercial cite I was writing for), the oil majors take advantage of the fact that there are so many of them. They pocket the savings. Understanding the oversupply problem requires taking into consideration both cold stacked and warm stacked OSVs. To review: a warm stacked vessel is left at port, but continues in operating condition. It can readily be reactivated. Indeed, a warm stacked vessel continues to have a ...
I've recently encountered a working paper on the subject of "oil price shocks" prepared by economists affiliated with China's Shanghai Tech University. There is something in it that surprised me a bit. Specifically: the authors do not believe that a sudden increase in the mean price of petroleum (that is, averaging across different local markets within a nation etc.) hampers economic growth. Nor do they believe that a sudden decrease in the mean assists growth. They claim to have solid empirical evidence for this negative conclusion, though their data is confusing to me and I offer no assessment here. But if it is valid, the conclusion means that "oil price shocks" as generally understood do not exist. That strikes me as very odd. It would seem intuitively plausible that a sudden increase in the value of any commodity integral to the system of production would ... well ... hamper production. More expensive input, less total output. Why is that i...
I wrote something here not long ago about the practice of tipping a barber -- at least, my barber. I didn't mean much by it except as a filler anecdote for a day when nothing very profound occurred to me. But the wonderful blog Marginal Revolution has got me thinking that there IS something important to consider about the practice of tipping people in service businesses with low barriers to entry. Consider, with MR, the Uber driver who typically has a tip jar. Through the app you are paying Uber, which is paying him, and through the tip jar you can pay him directly. Now: does the practice of the tip jar affect his income? In the traditional model, assuming perfect competition, etc., the answer is clearly "no." After all, assume it did. Assume, then, that the drivers started making more money per trip by making tip jars available. Word would get out, the business of becoming an Uber driver would be more appealing, and more people would do it. That would mean more ...
On Tuesday, October 10 (yes, I know, that's a while back -- this is a philosophy blog, not your daily news, bro) The Secretary General of the Organization of Petroleum Exporting Countries asked for help from US based shale producers. The SG in question is Mohammed Barkindo, and he is about 1 year into a 3 year term in that post. He's a western educated fellow , with a degree from Southwestern University in Washington DC who did PhD work at Oxford. On petroleum economics, natch. I'd love to see a copy of his doctoral dissertation. It may be available on line, but I'm too indolent to go searching for it right now. But: what about shale producers? These are the infamous "frackers," folks.Here's what Reuters has to say: http://www.reuters.com/article/us-india-energy/opec-secretary-general-urges-u-s-shale-oil-producers-to-help-cap-global-supply-idUSKBN1CF0C4 He wants the frackers to cut back production because OPEC is doing so, and all producers of...
On a recent visit to a neighborhood barbershop -- one of those places that don't accept credit cards because they don't want to create records that'll make things too easy for the tax authorities -- I learned that the price of a haircut had gone up from $15 to $16. That fact has no impact for me as a consumer. And I suspect many of the other patrons will find the news similarly un-newsworthy. After all, I simply sat for the cut as usual, and handed the barber a $20 bill, telling him to keep the change. That is exactly what I would have done if the price of the service has still been $15. At $15, I feel a bit generous giving him a $5 tip, but that is balanced by the fact that I would feel like a tightwad asking for any change back. At $16, I don't feel generous, but $4 is still a perfectly good tip, 25% of the listed value of the service. So: generalizing from my own case to the customer base in general, I doubt the total revenue rises much with thi...