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Archive for June, 2009

Nate Silver (of election projection fame) has an excellent post demonstrating the shortsightedness of harping on GDP numbers, in this case with regards to climate change. He takes to task Jim Manzi, whose argument is that even pessimistic assumptions point to a 5% reduction in GDP from global warming down the road. Silver endeavors to demonstrate that a 5% reduction in GDP can have extraordinary human costs, by taking low-GDP countries off the map. He manages to wipe out 43% of the Earth’s population.

I think Silver’s point provides a much needed dose of realism in looking at economic data. If someone told you upfront that global warming will kill upwards of 2 billion people, rather than reduce GDP by 5%, they would be much more apt to take action. Or, if we relied on a measure like Green GDP in our national accounts, and learned that GGDP would actually decrease by, say, 30% if we didn’t act on climate change, then again, we would be more ready for action.

GDP seems like a nice idea as an all-encompassing (and seemingly neutral) means of measuring the value of all the goods and services that people buy. However, when it comes to climate change, informal economies, and a host of other issues, GDP comes up woefully short.

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It’s been too long since I’ve been meaning to post this…

A devoted reader of this blog emailed me two articles recently; the first (pdf), by Therese Grijalva and Clifford Nowell, was published last year in the Southern Economic Journal. It endeavors to rank PhD programs in economics overall and by field. They essentially assign a productivity number to each faculty member based on the number of journal articles published and the quality of the journal in which they publish them.

The quality scores are based on two different methodologies, but ulimately boil down to citations. Their results aren’t earth-shattering, with many of the usualy suspects atop the list. A number of more marginal schools earn high marks in various subfields. My alma mater, the University of Notre Dame, is ranked 88th overall and misses the top 20 in all 18 subfields.

The second article, which is still in draft form (and I don’t know if I’m at liberty to publish it on this website), attempts to address the bias towards neoclassical economics in analyses like Grijalva and Nowell’s. They aim towards a “quality-equality” measure of economic programs, while still taking the bibliometric approach seen in other papers. They directly address G & N’s approach and write,

Instead our concerns are with two interrelated issues:  the assumption that in economics, scientific knowledge is homogeneous to which any quality index can be unambiguously applied and the limited coverage and partiality of the SSCI impact factor scores even when restricted to North American, Western European and English language journals.  Economics is about explaining the provisioning process, the real economic activities that connect the individual with goods and services, or more succinctly, economics is defined as the science of the provisioning process. As a field or discipline of scientific study, it consists of two distinctly different theoretical approaches to analyzing and delineating the provisioning process:  neoclassical or mainstream economics and heterodox economics (Lee, 2009a, 2009b).  Although they contest each other’s theoretical analysis, both mainstream and heterodox economics adhere to the discipline’s goal of producing scientific knowledge regarding the provisioning process.  But what constitutes scientific knowledge and its quality is determined by the scientific practices within the two sub-disciplines in economics.  Therefore, a quality index utilized for mainstream economics is not necessarily appropriate for identifying quality research in heterodox economics. Consequently, for a quality index to be used in an even handed way to rank departments in terms of the quality of research, it needs to be a synthesis of the separate ‘indexes’ used in the two sub-disciplines.

Of course, this concern is a direct affront to many neoclassical economists, who don’t consider much of the work of heterodox economists to be as rigorous as their own.

The other concern is that the citation-based quality ranking excludes six of the eleven well known heterodox journals, reducing productivity values for departments with faculty who publish in them. Thus, the authors create a heterodox quality index and combine it with the G & N quality index at parity.

Their approach, not surprisingly, gives the largest boost to heterodox programs like UMass Amherst and UMKC. What is interesting is that the big dogs, like Harvard, Chicago, etc. are still the top departments in their metric. UMass Amherst makes it up to 33.

In discussing the relevance of their findings, however, they choose to bring up Notre Dame and its department split. They observe that the ND department, in their ranking, is 92, while the exiled department, ECOP, is actually 74. Further, when adjusting for size instead of aggregate productivity, the exiled department actually is ranked 25 overall. Thus, they say,

In this case, the claims of the Dean and the chair are not at all supported and their decision to exile the heterodox economists essentially dismantled a better department and replaced it with one of a lesser rank…

The Notre Dame case dramatically illustrates how bibliometric (and peer review) based methods can be misused to silence dissenting voices and to render invisible heterodox ideas and departments in a contested discipline such as economics.  This paper does not disagree with the use of bibliometric methods to rank departments (and journals); but what is objected to is their misuse in the name of science and objectivity….  It is not that doctoral programs with a heterodox presence are better than programs without, but they are also not inferior to them—just different but equal.

This sort of argument isn’t what neoclassical crusaders want to hear. Nevertheless, a more open and rigorous debate is needed about what is and is not economics, so valid approaches are not unfairly crowded out.

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Update: While electing not to provide the text of the draft article I discuss, I forgot to provide the title and authors. The title is “Ranking Economics Departments In A Contested Discipline:  A Bibliometric Approach To Quality Equality Among Theoretically Distinct Sub-Disciplines”.

Two of this second paper’s authors wrote the first article, Therese Grijalva and Clifford Nowell. The third author is Frederic Lee. This may clear up some confusion, as I seemed to pit the two against one another. It’s important to keep in mind, though, that the bibliometric style approach is consistent in both.

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From Richard Wolff

The greatest tragedies among many in the collapse and bankruptcy of General Motors concern what is not happening.  There are those solutions to GM’s problems not being considered by Obama’s administration.  There are the solutions not being demanded by the United Auto Workers Union (UAW).  There are all the solutions not even being discussed by most left commentators on the disaster.  Finally there are crucial aspects of GM’s demise not getting the attention they deserve.

Let’s start with an example of the last.  For 50 years, the world market for automobiles has grown spectacularly.  The company best positioned to have ridden that rising tide to success was GM, the global market leader for most of that time.  Instead, GM failed catastrophically.  Those responsible, who planned, adjusted, and competed poorly, have a name.  They are the corporation’s Board of Directors: the handful of individuals chosen by and responsible to the handful of major GM shareholders.  That Board and those shareholders proved across decades that they lacked the understanding, vision, and flexibility to succeed.  A rising tide is supposed to lift all boats, but GM’s captains managed to sink its boat.

Click the link above for the rest…

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Save Our CEOs

“Now, I know what you’re thinking, ‘I already gave at the bailout,’ and I know you did. But even if you’ve given in the past, give some more. It’ll make you feel good.”

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From Wired:

Bill Gates once derided open source advocates with the worst epithet a capitalist can muster. These folks, he said, were a “new modern-day sort of communists,” a malevolent force bent on destroying the monopolistic incentive that helps support the American dream. Gates was wrong: Open source zealots are more likely to be libertarians than commie pinkos. Yet there is some truth to his allegation. The frantic global rush to connect everyone to everyone, all the time, is quietly giving rise to a revised version of socialism. […]

The more we benefit from such collaboration, the more open we become to socialist institutions in government. The coercive, soul-smashing system of North Korea is dead; the future is a hybrid that takes cues from both Wikipedia and the moderate socialism of Sweden. How close to a noncapitalistic, open source, peer-production society can this movement take us? Every time that question has been asked, the answer has been: closer than we thought.

[…]

A similar thing happened with free markets over the past century. Every day, someone asked: What can’t markets do? We took a long list of problems that seemed to require rational planning or paternal government and instead applied marketplace logic. In most cases, the market solution worked significantly better. Much of the prosperity in recent decades was gained by unleashing market forces on social problems.

Now we’re trying the same trick with collaborative social technology, applying digital socialism to a growing list of wishes—and occasionally to problems that the free market couldn’t solve—to see if it works. So far, the results have been startling. At nearly every turn, the power of sharing, cooperation, collaboration, openness, free pricing, and transparency has proven to be more practical than we capitalists thought possible. Each time we try it, we find that the power of the new socialism is bigger than we imagined.

Read the whole thing.

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Poor Still Poor

Op-Ed from Barbara Ehrenreich:

The human side of the recession, in the new media genre that’s been called “recession porn,” is the story of an incremental descent from excess to frugality, from ease to austerity. The super-rich give up their personal jets; the upper middle class cut back on private Pilates classes; the merely middle class forgo vacations and evenings at Applebee’s. In some accounts, the recession is even described as the “great leveler,” smudging the dizzying levels of inequality that characterized the last couple of decades and squeezing everyone into a single great class, the Nouveau Poor, in which we will all drive tiny fuel-efficient cars and grow tomatoes on our porches.

But the outlook is not so cozy when we look at the effects of the recession on a group generally omitted from all the vivid narratives of downward mobility — the already poor, the estimated 20 percent to 30 percent of the population who struggle to get by in the best of times. This demographic, the working poor, have already been living in an economic depression of their own. From their point of view “the economy,” as a shared condition, is a fiction.

frontcover

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Via himself, Mark Thoma has an interview with the Kaufmann Foundation about blogging. Thoma’s blog is the first one I read religiously, and he is still my go-to-guy for links, etc. I think his thoughts on blogging are pretty interesting, so this video is worth a watch.

Edit: having trouble embedding, watch it over at the link. It’s worth the 8 minutes and the trip over, I promise.

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