Economics, Literature and Scepticism

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I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.

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Monday, June 30, 2008

Collier and Sachs

Posted by Simon Halliday | Monday, June 30, 2008 | Category: | 1 comments

I had a read of a recent Jeffrey Sachs article from Project Syndicate. This spurred a spate of reading/watching/listening of his and of one of his counterparts Paul Collier.

Have a listen to this interview with Paul Collier from EconTalk, and to this interview with from Radio Economics. I prefer Russ Roberts (EconTalk) mode of interviewing to that of James Reese (Radio Economics), but that could just be me. I prefer Roberts's mode of inquiry, though I often disagree with his opinions.

Then, of course, there's the recent Ted Talk with Paul Collier.

And to top it off a conversation between Charlie Rose and Jeffrey Sachs.

Here's a link to Collier's book, The Bottom Billion. And to Sachs's books, The End of Poverty and Common Wealth.

The main reason that I am blogging about this is because, as always, these guys are in the media. Moreover, people take their opinions as gospel. Personally, I probably feel a greater affinity (ish) for Sachs than I do for someone like Easterly, and I think that a lot of Sachs's ideas coupled with ideas from Collier could result in fantastic improvements (or at least so I hope). In fact Sachs and his wife wrote a really cool and interesting article which I read during my Masters, and I will try to find. Ahh, here it is, I think, if my foggy, course-content filled memory serves.
Bottom Billion Why the Poorest Countries Are Failing and What Can Be Done About It
I will attempt basic summaries of some of their arguments and make some comments.

Collier argues that there are 4 main problems for the bottom billion.
1) Conflict
2) Having natural resources
3) Being landlocked
4) Being really small

He argues that "Change must come from within...", which I think is justified, and moreover that "much more should be done to strengthen the hand of the reformers" in those countries that need assistance. Such as Okanja-Iweala below.
He says that international standards, say for resource revenues, are crucial. Commenting on whether resources are being save, or used for investment in capital in the country of their origin. In order to ensure that this occurs the governments in charge must curb corruption. The money from the resources should not be frittered away on white elephants. Moreover, there should be international standards on conducting elections, backed by enforcement (sanctions) through multilateral agreements. The current state of Zimbabwe comes to mind (this does however beg the question, as always, as to whom is actually hurt by sanctions, the innocent or the big boys, I think the former probably). Collier argues furthermore that trade policy should be improved, which is particularly relevant for countries like Kenya that aren't endowed with crazy amounts of natural resources.
In his Ted Talk, Collier highlight compassion (to get started) and enlightened self-interest (to get serious). He compares what is required today to save the bottom billion is the equivalent of what happened post WWII. I don't know if I agree with his whole Marshall Plan comparison, his argument though was that it was about reversing trade policy (US changed from isolationist to open) and reversing security policy from being isolationist (not sure what he thinks the armed forces should do though). He also argues that national sovereignty is overrated, and that the OECD, and other institutions that came into being post-WWII were crucial for the flourishing of those countries and assisted the operation of governance institutions.

"Aid, trade, security, governance." In the talk Collier highlights the role of governance and that it is 'enormously important' and needs to be upgraded dramatically throughout the governments of the bottom billion. He discusses the role of the commodity boom and how this this assisted and hindered development. This has led to a discussion of the 'resource curse' as a consequence of low levels of initial economic governance. If you have good enough governance then you go up in short term and stay there if you have resources, the converse if you have poor governance. Resource cursed countries do well in the short run, then shut down (military coups, corruption, etc).

Oddly enough, within this framework democracies make even more of a mess. But, there are two distinct aspects of democracy; electoral competition and 'checks and balances'. Electoral competition does damage, whereas checks and balances make resource booms good. African countries have had sudden democracies (post glasnost and perestroika), but they did not have the framework to govern and to use constructively the resources that they have. He argues again for the use of international Standards, for example the Extractive Industries Transparencies Initiative - adopted by reformers in Nigeria (more below). He comments that institutional transparency is crucial and can allow a country to move beyond a system of poor governance to one in which there is far better governance. Maybe this offers hope for poor African countries, commensurate with this are policies in which there CANNOT be corrupt relations, such as through the adoption of verified auctions, witnessed by international observers and subject to said international standards.

Collier argues finally that 'we' need a critical mass of informed society in the developed world, otherwise what politicians (in the developed world) do will just be gestures. Therefore, it is crucial that an informed citizenry is built up by people in the know, which is why Collier believes that he must participate in this process through the work that he has done.

One of the things that I think it is important for us not to do is to try to do is the 'let's place them (Collier & Sachs) on a (left-right?) continuum' thing. What many people do is put Sachs on the end of optimism, Easterly on the end of pessimism and Collier somewhere in the middle. I don't think that Easterly is anywhere is always correct (some insights are valid, others not), but I do think that paternalism can be problematic which is where the discussion with Sachs comes in.

One must emphasise though one strong difference between Sachs and Collier. Sachs focuses to a dramatic extent on subsistence farmers and what they need simply to make enough food to survive and eventually to enable them to go to the market. His argument is that improved fertilisers, improved seeds and and educating farmers such that they are better able to use their skills is important. Moreover, the 'free market reform' that so many promote as a 'solution' to Africa's problem just wouldn't have any impact on these guys. They don't have enough money to buy seeds, to make their own food, let alone access to credit to get more land, more seeds and 'be entrepreneurial'. This is where I think that much of the criticism of Sachs is misplaced they argue that he is anti-market, he isn't anti-market, he is pro-market, but he wants people to understand that a market will not exist in some of these places, ever, unless people stop dying and are able to make enough money to actually create a market system.

Collier wants to focus on greater reforms, to natural resources, trade and to political systems in general. He also makes strong arguments for specific institutions, such as the existence of ruleNgozi Okonjo-Iweala of law and of methods to assist countries that are resource rich to get the institutions that they did not have prior to finding the resources. He argues further for interventions, such as voluntary charters to which governments can sign and which pressure groups can try to get them to sign, such as transparency agreements for use of natural resources. He comments on an interesting attempt at publishing data in Nigeria, which resulted in death threats to the minister (Okonjo-Iweala - Right) who insisted on it, which probably means it was a good thing (she has since resigned her position in the Nigerian government and is back working with the World Bank where she held a position prior to working with the Nigerian government).

Ok. This has already become longer than intended and I haven't commented anywhere near as much on Sachs as I would have liked to. I think that he makes some good points, such as those about research and development in alternative sources of energy, to the possibilities of new technologies in the developing world by assisting through provision of credit. All of this is particularly valuable. One of the things though which it is also important to emphasise is that he almost always wants to get money to the people who need it directly, either through NGOs or possibly through government systems. He doesn't want a system (does anyone really?) in which corrupt relationships take away the money. He is concerned with the dying and the abjectly poor.

Anyway, here's a recent (HPR) comment on Sachs's End of Poverty.

Jagdish Bhagwati commented on some of these problems late last year. Offering a "plague on both your houses" to William Easterly and to Jeffrey Sachs. He thinks that Easterly is wrong in thinking that foreign aid is entirely ineffectual, but he also thinks that the paternalism of Sachs is somewhat nauseating. lol.

Images from BBC, wikipedia, Amazon and farmers helping farmers.

Sunday, June 29, 2008

Vavi vs. Ghandi

Posted by Simon Halliday | Sunday, June 29, 2008 | Category: | 0 comments

As many of you will know there has been a fair amount of coverage of Zwelinzima Vavi's (the head of COSATU) statements relating to Zuma, specifically the statement "kill for Zuma", which the Human Rights Commission has asked him to retract, or to face subpoena and investigation. Similar statements have been made by Julius Malema (Motsoko Pheko has a comment on both here).

In this piece in the M&G he is quoted stating that "We are prepared to die in defence of one another and for our revolution." Maybe I'm a bit odd, but I see these as being qualitatively different things. Dying for a cause and killing for a cause are two substantively different moral positions (about which I think maybe Ghandi had a word or two to say).

What amazes me is that he doesn't seem to realize the difference. He doesn't seem to understand that killing for a cause and dying for a cause have such different meanings and imply very different moral propositions as to the the willingness to sacrifice your own right to life versus the taking of someone else's right to life. If I said "I am going to die for my belief in the non-racialist ethic"
(for example) relative to "I am going to kill racists", the one does
not follow from the other.

Moreover, he does not seem to understand the difference between dying for a cause and dying for a member of a cause who has been shown to be morally flawed. The two are, once again, substantively different propositions with substantially different repercussions. Personally, I think that there is a difference, once again in saying, "I am going to die for the non-racialism." vs. "I am going to die for Jacob Zuma" the two don't mean the same thing, they have substantively different connotations. Again, maybe I am confused, but every time that Vavi tries to 'clarify' his statements, he seems to dig himself deeper into this quagmire of confused moral propositions. Maybe someone can inform me as to why I should understand what Vavi is saying in a better manner?

Why, oh why, can't we have a better unionist movement?


Chris Anderson

Posted by Simon Halliday | | Category: | 1 comments

is both interesting and crazy...

Here and

commented on here.

(Hat TIP: Mike).

Wednesday, June 25, 2008

Quality of Education

Posted by Simon Halliday | Wednesday, June 25, 2008 | Category: | 2 comments

Quality of education is essential to the achievement of students. This is the central thesis of two Picture of Eric A. HanushekPodCasts with Eric Hanushek (left) offered on EconTalk (I am catching up on the archive, forgive me). Hanushek has written extensively on this topic and I read a number of his papers for my Honours Economics thesis back in 2004 when I was trying to comment on the South African adoption of Outcomes Based Education and the problem of resources, school and teacher quality.

Roberts and Hanushek discuss everything from the PISA tests (which for some reason South Africa hasn't participated in), differences in test scores worldwide and the impacts of education on growth, to the impact of individual teacher quality on the achievement of individual learners. One of the fantastic points was that if kids in Mexico were brought up to the level of math and reading capability of US students, then Mexico should experience an increase in growth of approximately 2%. This is phenomenal. Which obviously makes me wonder, what would happen if we had a similar increase in the quality of education in South Africa?

First off, I don't believe that simply altering the system of instruction from one to another (such as with the OBE transition) is going to do it. Hanushek and others have shown that there are all kinds of things that affect educational outcomes (here have a look at the work of Esther Duflo, Chris Udry and Pranab Bardhan).
South African student.
One of the problems that I often found with Hanushek's work is that he discusses US work in the reduction of class size for to decrease learner:educator ratios (which is PC for student:teacher ratios the phrase they use in the US, but SA uses L:E ratios as far as I recall). Anyway, his research indicated that there aren't significant gains from a reduction in class size (not T-S ratios, but that was also a topic elsewhere) from say 23 to 16 or 17. This is all well and good, but I don't see how this is going to be in any way informative in terms of the effects of reducing a class size of 50 to a class size of 30 or even 24 (Hanushek's high range above). I think that for this research, some valuable input has been provided by the paper by Angrist and Lavy on Maimonides Rule, which is a particularly important paper on the Economics of Education in the past decade. Anyway, they made a more important comment that a class size over 40 is detrimental to educational outcomes using a regression discontinuity design and instrumental variable estimation.

Combine the above with weird phenomena in South African education regressions and you begin to wonder about South African education and what kinds of inputs could be used. Moreover, there are continued disparities across income levels. Could SA run randomized evaluations in order to improve the data accessible to those trying to understand education policy? Yes! Could the department of education make data more accessible to researchers? YES! (My word have you ever tried to get hold of the School Register of Needs Data?). One of the things I wish we had is better data on teachers, schools and individual students (family background, detailed demographics, etc), then we could better measure the impact of teacher quality on student achievement and try to isolate what teacher quality is (it seems to be independent of experience and education level of the teacher by the way).

All of this has led me to believe that there is still a phenomenal amount that can be done in SA education. I still don't think that OBE is 'the answer'. I sincerely wish that there were more randomized evaluations and more research into possible other strategies for impact evaluation of programs. Maybe I just don't know about them, maybe they're out there and I haven't been told. I just wish that this kind of stuff was more readily available and promoted better for us to have a more rounded and scientific understanding of what we can do in SA in order to improve educational outcomes. This is one of the most crucial ways for us to attempt to correct for inequality (more on which in later posts soon).

People who deserve a LOL

Posted by Simon Halliday | | Category: | 0 comments

Andy Shlafly - have a look here and here

Larray Fafarman - have a look here (in the comments) and here

These two humans are on some kind of war against Dr. Richard Lenski and his co-researchers. It really is rather entertaining. What will random humans battling against evolutionary theory do next?

Saturday, June 21, 2008

Internet Writing - my comment

Posted by Simon Halliday | Saturday, June 21, 2008 | Category: , , | 1 comments

I just read the article How is the Internet Changing Literary Style? (hat tip Marginal Revolution) I think that the author has some decent comments, but fails to address the question of the differences in the kind of writing and the incidence of the reading of such writing. For example, I enjoy reading the long magazine articles from the New Yorker magazine (caught out), or from various other decent publications. However, doing this means that I focus my attention on one subject for a fairly long period of time, normally on a subject in which I am quite interested.

Blogging, on the other hand, allows me to dip in and out of subjects along a continuum from very familiar to unfamiliar and just get a taste of what they are about, if I read a long magazine article I don't get a taste, I get a 5 course Italian meal. As I am mainly interest in content and grab-factor when getting these tastes, I am not, personally, as concerned as I customarily am with stylistic indicators. I am, and I think always will be, concerned with basic grammar, I don't mean that I want someone to have grammar that is optimal every time I read their blog, or to have flawless spelling, but if you regularly have poor spelling and poor grammar then I am less likely to read your blog. I don't read blogs that use text-speak. The piece mentions the difference in kind, but without as much strength as I would like.
One of the major difference I have also found with blog reading versus normal magazine reading or article reading is the use of hypertext links. Tyler Cowen (right) and Russ Roberts (left) discuss this phenomenon in one of Roberts's PodCasts at EconTalk, they discussed how links have already begun to affect, and will continue to affect how research is done. They don't officially predict the 'end' of the journal article, but they comment on how a prediction was made (and I have trawled those darn podcasts and can't find it) saying that this was the future of Economics as a discipline, and possible of most sciences. I have begun using links in some of my academic note-writing (which LaTex, which is 'FREE', is good for), but I haven't done it at all with actual academic articles. Personally I think that it is a fantastic idea. Instead of only having the article and what you have written, the electronic (pdf) version of the article should contain links, should allow the reader to be able to see some of the academic and non-academic texts and and other influences that have informed your thinking. For example, though I often disagree philosophically with Russ Roberts's commentary on EconTalk, the ways that he educates and informs people give me a path to understanding how to be a better economist. This is especially the case with being able to hear such a (semi)diverse group of interviewees like those that he interviews and to get their opinions, their methods of arguing and to use them in refining my own. If I could, in an academic paper link somehow, not only to academic research, but to podcasts on topics, wikipedia entries, blog entries and so forth, the really interested reader could map the path to my final conclusions in way that an experiential way and not just an academic way (à la Hayek and experiential learning, maybe? a bit dubious possibly). I think that this would require non-highlighted link entries, but the actual implementation of such a concept is best left for later I think. This could be madness...

Anyway, my main point is that I don't understand why the author (Caleb Cain) of the article, which was actually a transcript of a speech, didn't give much weight to the incredible phenomenon that is hyperlinking. Cain admitted to their utility in his comment on quietness (which he says is required for longer piece and I agree), and asks "Where are the links?" I think that the question warrants deeper assessment.

Hyperlinks are, I believe, one of the major strengths of internet writing and also the mark of a responsible blog. Link to what you've read, try not to be sloppy. I am doing my best to pursue this in the expectation that at some point some interested employer will think to themselves, "What does this candidate do? What does he think? Let me see if he blogs..." and be able to see that I am a coherent individual in situations other than my academic writing. I also like to think that we will end up in a world where data is mostly open source and that we will be able to link to all kinds of data from our blogs and other people will be able to replicate whatever our results are by themselves with ease. Who knows? I also hope that people out there simply enjoy reading blogs and if they happen across mine, might happen to enjoy my
2 cents.

Wednesday, June 18, 2008

Free! + Roberts dismissing altruism (sigh)

Posted by Simon Halliday | Wednesday, June 18, 2008 | Category: | 4 comments

If you haven't yet read it, I strongly advise having a look at Chris Anderson's article Free! Why $0.00 is the Future of Business, it is the lead-up to his new book on Free. I was listening to the PodCast from Russ Roberts at EconTalk where he interviews Anderson on the concept of 'free'. This is a fantastic concept and the rapport between the two of them is brilliant. Anderson is a superb interviewee. You can have a look at Anderson's blog on the interview. I've also tracked a couple of other points on the same topic, one blog (don't bother), an op-ed by Paul Krugman (do bother) and some other commentary here and there.

I Want Your Free Schwag

One of the areas that I think the economics of Free (sorry, hence the silly schwag image above) is going to have problems is the perception that people have the price = quality (summarized in some articles at Bad Science). Roberts also tries to promote, implicitly, the Chicago idea of '2 is enough for competition' (but he was thankfully knocked off that pedestal by Anderson). It's going to be interesting to see how Anderson overcomes this problem in his book as I think it is going to be a crucial element of the Free Revolution, i.e. getting people to get rid of their price prejudices. Something can still be a worthwhile product if you aren't paying for it. Linux is my favourite example of this (I'm an Ubuntu user), Wikipedia is another good example of value free of charge.

This reminds me of one important point, when Anderson talks about 'Free' he means that something has no price attached to it, he is not going on about the concept of opportunity costs as we can never really get rid of those and, as a consequence, nothing is free. But don't get all stupid on poor Chris Anderson because he can't overcome the opportunity cost problem.

Ernst FehrThe image “” cannot be displayed, because it contains errors.
Ok, so I am not going to talk about the economics of free now, I just wanted to include that as a little trick to get you to read this. I wanted to mention how Roberts dismisses the research into altruism in Economics. This wasn't a crucial point in the discussion, but this fact (coupled with the Chicago 2 = competition mantra) reminds me of the fact that I have to be continuously skeptical of some Professors understanding of Economics. Altruism is an incredibly well-researched topic in economics, going everywhere from the Henrich, Boyd, Bowles & Camerer (2004) in their Foundations of Human Sociality, to the modeling by Rabin, Levine, Falk-Fischbacher to that by Fehr (right) and Schimdt. Rabin has won the JBC Prize, so I don't see why one would dismiss his work, and Ernst Fehr is an absolute god of experimental econ. Moreover, for theory on strong reciprocity in the economic world a good starting point is the book by Gintis, Bowles, Boyd and Fehr (eds.) Moral Sentiments and Material Interests. Bowles also covers social preferences and other-regarding preferences in his Microeconomics: Behavior, Institutions and Evolution. Is being somewhat heterodox that anathema people?

The rest of the PodCast is pretty cool though.

Edit: Have a look at this post by Dave Spurret on the wine-value rating referred to above.

Tuesday, June 17, 2008

Obama's Chinese um... 'support'

Posted by Simon Halliday | Tuesday, June 17, 2008 | Category: | 0 comments

Chinese opinion on Obama.

Monday, June 16, 2008

Random Links

Posted by Simon Halliday | Monday, June 16, 2008 | Category: | 2 comments

Plants Recognising their Relatives - Loyal to Its Roots (NYT)

Cooperation of humans as a function of being a prey species - will have to read the book to comment rigorously on this.

Wake up and Smell the Coffee - is the effect of smelling coffee as good as drinking it?

Blinder on Bubbles - fairly sensible look at financial bubbles

Responsibility of the media in the Property Bubble - Brad DL

Dumb people and sinning - Spurret

Cool ancient link between South American and Australia

Sunday, June 15, 2008

McCain vs. McCain

Posted by Simon Halliday | Sunday, June 15, 2008 | Category: | 0 comments

This is brilliant.

Hat tip to Brad De Long (can I hat tip Brad De Long?).

Saturday, June 14, 2008

Russ Roberts and Unions

Posted by Simon Halliday | Saturday, June 14, 2008 | Category: , , , | 0 comments

I was listening to this podcast (April 2008) from EconTalk where Russ Roberts (he and Don Bordreux blog at Cafe Hayek) provides his theories about jobs, unionization, inequality and the stratification of the economy. I will comment solely on his argument about unionization.

He argues that unionization rates in the United States dropped on account of the movement away from labour intense work, such as manufacturing and agriculture. He argues that they had moved from this into industries in which there wasn't as much of a need for unionization (lack of harsh conditions, etc), such as the service industry.

So that, in and of itself, isn't an unconvincing argument. So I went and
looked at one of my textbooks to see if I could find anything about
unionization rates. Lo and behold (and quite serendipitously), one of
the problem sets that I was doing as part of my prep for an exam includes a graph about unionization in OECD countries. Shown adjacent (courtesy Bowles, 2006 from Luxembourg Income Survey Data). (aside: Roberts also argued that the change began in the 50s, I don't have data on that period).

Now if the assertion that a shift to services, which Roberts asserts drove the change, and which has occurred in most of the OECD countries is 'the reason' behind the de-unionization of the US then this de-unionization should occur throughout the OECD. If not, then not. (Note I am struggling to find a paper/data on this change cross country, looked at some data from the OECD factbook).

Which begs the question, what are the real reasons? Were I a better labour economist than I am, I could probably tell you in detail. What I can talk about is one of the models that we looked at in the course was a behavioural updating model in which you would expect a priori for there to be local homogeneity and global heterogeneity in the distribution of some trait in which there are certain empirically observable characteristics and which the model can replicate (depending on parameter values), in the case of this study the trait union density. What does this mean? With certain starting conditions, and certain random perturbations, or alterations in institutional setting (acceptability of being in a union say, or lack of union-breaker politicians such as Thatcher and Reagan) you would expect there to be differences in the distribution of unionization, even if countries started at relatively similar starting points, i.e. the divergence we observe in the graph above. Things like culture, politics and historical contingency (path dependence) enter as a factors into these models, which, for me, gives them more flavour, but which for others could be problematic.

I will give a technical analysis of it in a couple of days time if anyone is interested. If so, get ready for some LaTex2html...

Please note that the model is not meant to 'explain' unions and unionization, but is intended instead as a description of what could be a reason (given institutional setup and other factors) and to which Roberts' point could be a contributor. I just don't believe that his argument holds water as the sole explanation in the face of the data.

Edit: I found another graph that could be interesting in the context of the above.

Supposedly Obama sweeps Egypt and Japan too

Posted by Simon Halliday | | Category: | 0 comments

You might have seen a recent post of mine commenting on the fact that polls show that Obama has substantially more support amongst most countries in Europe than Mr McCain does (quelle surprise?). Anyway, I wish to refer you to an Op-Ed piece by Thom Friedman on him, indicating that Obama seems to have fairly good support in Egypt too.

Oh, and if you haven't seen this piece (or this one) on how Japanese residents of Obama support Obama then have a look just for the laugh value, it's a bit old but I only saw it recently.

Friday, June 13, 2008

Malthus Misunderstood?

Posted by Simon Halliday | Friday, June 13, 2008 | Category: | 0 comments

Global Food Crisis vs. Pop Growth

Another person doesn't seem to understand Malthus properly, or modern development economics. The capabilities of hybrid seeds and fertilizer (NYT) in Sub-Saharan Africa (read this comment on the NYT article for a critique, Jeffrey Sachs and other support this, De Long and others are more skeptical, Rodrik gives some good commentary.) are completely avoided by the article.

Mashimbye comments:
I know that economists, sociologists, psychologists, anthropologists,
historians, and philosophers might disagree with this hypothesis and
probably have theories of their own.
Um... yes. What about demographers? Do they know nothing about population? Have you forgotten that Malthus was an economist? That probably slipped your mind. Economists needing to comment on the work of other economists? Perish the thought...

I particularly don't like Mashimbye's idea of 'situations resonating', does this mean that there is evidence to support your theory? What, specifically, is this evidence? Have you looked at demographic models that indicate that we are at the disaster stage that Malthus predicted (though models predict this should happen later)? Maybe the concern for M&G bloggers to have evidence is just my issue, oh well.

Yes, overpopulation is (potentially?) a problem, but be more knowledgeable about what development economists (Rodrik, Sachs, Collier...) are saying please. Also, look at the evidence on the food crisis as assessed by them and others (even Paul Krugman has commented and Mark Thoma too over at Economist's View).

Also the claim that:
Increased production of food is long-term suicide. Our environment can take no more.
Is just plain inaccurate. Please look at the comments previously on how there can be dramatically increase food production in Africa without harming the environment. I refer you to Jeffrey Sachs's book The End of Poverty, moreover if you're skeptical about Sachs's commitment to the problem of the environment, think again and look at his more recent book, Common Wealth.

If you're interested in a note on Malthus, look at Bryan Caplan's commentary and another item of his here also commenting on Malthus and Clark's book A Farewell to Alms. Not directly relevant, but at least brings some of the ideas of Malthus directly to the table with some models, graphs and decent critique.


Thursday, June 12, 2008

When will Mbeki Act?

Posted by Simon Halliday | Thursday, June 12, 2008 | Category: | 0 comments

Biti Arrested & Charged with Treason

MDC Leaders Arrested

Mbeki Firm on Zim Stance

DA: Mbeki must rebuke Zim villains

Vote for MDC is a vote for war

Mugabe deploys war vets

Mbeki says that "We will also continue to argue that the people of Zimbabwe will have to unite to extricate their country from the economic crisis in which it is immersed, and that we will contribute everything we can to support the realisation of this objective."

Firstly, the crisis is not only ECONOMIC! It is HUMANITARIAN! Maybe I'm a crazy person in the woods with this kind of ranting, but seriously.

And "We will contribute everything we can?" except of course if you read 'contribute' as contributing to the dislodging of a human rights abusing dictator. That would never do. What I don't get is that he (Mbeki) doesn't come down hard on the crazy abuses of power going on in Zim. It makes no sense to me. None whatsoever.

It's not like during apartheid people outside of South Africa were saying, "oh yes, it's somewhat bad there, we'll assist them, we'll contribute to in any way we can, except of course by doing anything, such as actually indicting the actions. Ho ho ho, we'd NEVER do that, bad form, bad form to indict another country's internal affairs."

Wednesday, June 11, 2008

Kaushik Basu on Child Labour

Posted by Simon Halliday | Wednesday, June 11, 2008 | Category: | 0 comments

Kaushik Basu is giving a series of lectures here at UniSi as a chair of Economics and Ethics for Collegio St. Chiara.

He gave his first lecture today, which was a theory-based seminar on a paper, which includes a model that he and a student of his have constructed on child labour in which consumer boycotting can result in negative outcomes for the household. The main counterintuitive result that they present is the fact that increased boycotts can result in a lowered wage to child labour, which results in households having to provide increased amounts of child labour in order to maintain a tolerable (subsistence) level of consumption.

This means that potential protesters should do research into the market that they plan to boycott before they go about boycotting it and possibly result in worse outcomes for the households whose interests they are nominally trying to defend. He argues, moreover, that some of the current international best practices have done all kinds of damages to small businesses. He offered evidence on companies such as Reebok, in the market of soccer balls in Pakistan, which came under immense pressure to disallow any form of child labour. The problem is that many individuals worked in a decentralized manner in their homes, or sheds close to their homes stitching these soccer balls. The fact that children could have been in the presence of these sheds or these (almost certainly female) labourers, or at least the fact that it is impossible to verify whether any child labour at all would have gone into the production of these balls has resulted in a complete centralization of the production in factories, and a shutting down of all the outsourcing to these women. This is an instance in which boycotting, combined with the informational problem of unverifiability has probably resulted in a reduction in welfare to those involved. Very interesting.

He does argue though that a lot more work and consumer objections/protesting could be done about industries in which children are at great risk, mining or certain dangerous factories and so forth, rather than those less malign industries, such as sewing or carpet weaving. I don't quite know what position to hold as of yet, except to say that it has made me think about this in a way that I might not have prior to reading the paper.

I'll see if I can find the paper, it was online earlier... darn.

Bacterial Evolution

Posted by Simon Halliday | | Category: | 0 comments

Something which has been hot in the science news of late. If you haven't read it, the please do it is one of the most important pieces of work to have been undertaken in some time and provides incredible evidence for evolution at play.

Also, read Mike's commentary on this he gives some cool insights and it makes it easier for me not to have to worry about convincing you of the relevance of this study.

Tuesday, June 10, 2008

2 Books I didn't finished

Posted by Simon Halliday | Tuesday, June 10, 2008 | Category: | 0 comments

Here are a couple novels of late (past few months), which I enjoyed a fair amount, but didn't managed to finish.
Lunar ParkChristine Falls: A Novel
The one is Bret Easton Ellis's Lunar Park. I enjoyed some of it, but it just didn't seem to have the energy of his earlier books, it seemed more self indulgent and a bit staid, as if he were trying to do the whole drugs and sex thing he'd done in other novels, but with a depressed, middle aged, I don't know, mien? I read and read, and then I just really couldn't get around to finishing it.

The second book is Benjamin Black's (aka John Banville) Christine Falls. Again, I have enjoyed Banville's other writing, but this I just couldn't sustain. Maybe I wasn't in the right 'space' as people say, for these books, or maybe they just aren't as good as I was hoping they'd be. Either way, I didn't finish them.

In general though, I am trying to take Tyler Cowen's advice and if I don't feel like it, don't finish a book. This way I will try more books (and discard more books), but in so trying will hopefully find more books I would like than if I hadn't tried them at all.

Some Links

Posted by Simon Halliday | | Category: | 0 comments

Hints of structure beyond the known universe

Why the brain follows rules

'Logical Proof' of the Existence of a Divine Creator (Sorry but I had to put that in quotes, hat tip to Mike, central argument of this piece is that 10 000 buildings can't build themselves, a variant on the 'spontaneous Boeing 747 argument, the author seemingly hasn't read enough science, evolutionary biology or chemistry).

Anticipating the Future to 'See' the Present, more on visual perception, might interest Richard.

Brainpower May Lie in Complexity of Synapses

And... the Martin Luther King Jr. I have a Dream Speech, because, for some reason I had never watched it up to today and found it on YouTube, obviously.

Monday, June 09, 2008

Obama wins (Europe) by a Landslide

Posted by Simon Halliday | Monday, June 09, 2008 | Category: | 0 comments

Have a look at this. Absolutely fantastic.

Sunday, June 08, 2008

Haruki Murakami on Running

Posted by Simon Halliday | Sunday, June 08, 2008 | Category: | 0 comments

Haruki Murakami is one of my favourite contemporary fiction writers. From Dance, Dance, Dance to Norwegian Wood to Kafka on the Shore his writing is sublime.

This article from The Guardian is an extract from his essay on running What I talk about when I talk about running, which itself is a play on the title of Raymond Carver's legendary collection of short stories, What we talk about when we talk about love, which, if you haven't read it, you should!

Hayek's Nobel Speech

Posted by Simon Halliday | | Category: | 0 comments

Ok, so one of the topics in the course for which I have an exam soon has some references to Hayek. I have thoroughly enjoyed the articles of his that I read, The Use of Knowledge in Society and The Pretence of Knowledge. The latter was his Nobel address.

Probably my favourite quote in the Nobel address was "I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false." He is commenting here on the problems, in 1974 and probably still now, of the obsession that economists have with finding the exact magnitudes of the effects of specific variables. He argues, quite convincingly, that even when economists think that they have 'data' they actually are being faux-scientific.

He asserts that "We know, in other words, the general conditions in which what we call, somewhat misleadingly, an equilibriumwill establish itself: but we never know what the particular prices or wages are which would exist if the market were to bring about such an equilibrium. We can merely say what the conditions are in which we can expect the market to establish prices and wages at which demand will equal supply. But we can never produce statistical information which would show how much the prevailing
prices and wages deviate from those which would secure a continuous sale of the current supply of labour."

This is in reference to the data that economists were gathering and attempting to use for prediction in the 70s with respect to the problems of stagflation. Though I believe strongly that statistics and computing capabilities have improved dramatically since 1974 when he gave delivered this address, I think that a number of his arguments are still relevant and definitely worthy of our inspection and assessment.

Give both of these a read when you have the time. I would put them up, but I think I'd be infringing copyright laws.


Posted by Simon Halliday | | Category: | 0 comments

I learned today of a friend's father's passing away. I sometimes wish I knew more to say. When things like this happen to me, when deep emotional occurrences sweep me into their embrace I often feel it is necessary to go to poetry, or to music. But poetry especially.

The poem below is by one of my favourite poets, Galway Kinnell. He wrote it for his sister. It can be my condolence. We are with you my friend. Our love and affection are with you, even from distant Italy.


Bending over her bed, I saw the smile

I must have seen when gaping up from the crib.

Knowing death will come, sensing its onset,

may be a fair price for consciousness.

But looking at my sister, I wished

she could have died by surprise,

without ever knowing about death.

Too late. Wendy said, “I am in three parts.

Here on the left is red. That is pain.

On the right is yellow. That is exhaustion.

The rest is white. I don't know yet what white is.”

For most people, one day everything is all right.

The next, the limbic node catches fire. The day after,

the malleus in one ear starts missing the incus.

Then the arthritic opposable thumb no longer opposes

whoever last screwed the top of the jam jar.

Then the coraco-humeral ligament frizzles apart,

the liver speckles, the kidneys dent,

two toes lose their souls. Of course,

before things get worse, a person could run for it.

I could take off right now, climb the pure forms

that surmount time and death, follow a line

down Avenue D, make a 90° turn right on 8th Street,

90° left on C, right on 7th, left on B, then cross

to Sixth Avenue, catch the A train,

to Nassau, where the A pulls up beside the Z,

get off, hop on the Z, hurtle under the river

and rise on Euclid under the stars and taste,

with my sweetheart, in perfectly circular kisses,

the actual saliva of paradise.

Then, as if Wendy suddenly understood

this flaw in me, that I could die

still wanting what is not to be had here, drink

and drink and yet have most of my thirst

intact for the water table, she opened her eyes.

“I want you to know, I'm not afraid of dying,”

she said, “I just wish it didn't take so long.”

Seeing her appear so young and yet begin to die

all on her won, I wanted to whisk her off.

Quickly she said, “Let's go home.” From outside

in the driveway came the gargling noise

of a starter motor, and a low steady rumbling, as if

my car had turned itself on and was warming up the engine.

She closed her eyes. She was entirely white,

as if freshly powdered with twice-bleached flour.

Color flashed only when she opened her eyes.

Snow will come down next winter, in the woods;

the fallen trees will have that flesh on their bones.

When the eye of the woods opens, a bluejay shuttles.

Outside, suddenly, all was quiet,

I realized my car had shut off its engine.

Now a spot of rosiness showed in each cheek;

blushes, perhaps, at a joy she had kept from us,

from somewhere in her life, perhaps two mouths,

her and a beloved's, near each other, like roses

sticking out of a bottle of invisible water.

She was losing the half-given, half-learned

art of speech, and it became for her a struggle

to find words, form them, position them,

quickly say them. After much effort she said,

“Now is when the point of the story changes.”

After that, one eye at a time, the left listened,

and drifted, the right focused, gleamed

meanings at me, drifted. Stalwart

the halves of the brain, especially the right.

Now, as they ratchet the box that holds

her body into the earth, a voice calls

back across the region she passes through,

a far landscape I seem to see from above,

in prolonged, even notes that swell and diminish.

Now it sounds from beneath the farthest horizon,

and now it grows faint, and now I cannot hear it.

Galway Kinnell

Saturday, June 07, 2008

Sexism in the US Media

Posted by Simon Halliday | Saturday, June 07, 2008 | Category: | 2 comments

So I am not a Hillary supporter. Personally, I support Barack Obama. Not that this is particularly relevant for a South African, but nevertheless. The video below though is particularly disturbing in terms of how people in the media in the US have and, in all likelihood, will continue to contribute to the oppression of women in power. It really is despicable.

Sexism Sells -- But We're Not Buying It

Sam Bowles vs. Milton Friedman

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For all those fans of the academy out there, take a look at this debate between Sam and Milton in 1990. It was a part of Friedman's revamp of his 1980 series 'Free to Choose'. Download it and then fast forward to around the 30th minute.

Friday, June 06, 2008

Lunch with Erik

Posted by Simon Halliday | Friday, June 06, 2008 | Category: , , , | 0 comments

In the picture above you have (L to R): Sebastian, Burak, Ana, Erik, Me and Sladjana. Erik took us out for lunch, the lucky ones who decided to 'indulge' him. He was indulging us more like it! In discussions of theories of (distributive) justice, what constitutes exploitation (Roemerian,or Marxist, or whatever) and a host of other things from a discussionof his trip to South Africa last year, spending time in Soweto andother stuff (e.g. inheritance laws). Anyway, I don't have much time to write just now, but I will try to consider my thoughts ontheories of distributive justice. I am going to be writing an essay onthis later for my History of Economic Thought course and may blog aboutit for a bit. My plan is to write on 'equality of opportunity'. Watch this space.

Thursday, June 05, 2008

Seminars today

Posted by Simon Halliday | Thursday, June 05, 2008 | Category: , , , , , | 0 comments

Today we had a feast of seminars. Wait, of course I wrote my macro exam first and it went ok I think. The course was mostly to do with the theory of economics and its applications in Western Europe, focusing predominantly on fiscal policy, monetary policy and on social insurance. Some of it was interesting, some of it about as exciting as cold fish and chips.

Our first seminar today was a discussion by one of the grad students here, Edgar Sanchez Carrera, about his research proposal for his PhD. He has all kinds of ideas about poverty traps and growth, linking inequality to low growth, multiple equilibria problems and many other issues. His one approach is that he would like to be able to define a situation in which imitative learning results in a situation where there are multiple equilibria in an economy of agents and a one time shift in public policy could result in a movement from one low equilibrium to another. Now, this isn't a new idea in economics (in fact it goes back as far as Leontief, but anyway). But so many people are still skeptical about the phenomenon of multiple equilibria. This still astounds me. Especially when you have, as Arthur argues, situations with increasing returns that are prevalent in everyday life. The evidence is yet to be convincing when it comes to individual countries though, some argue. I don't know enough, except to say that people who know more than I do have endorsed the idea.

Our second seminar was the second in the series to be presented by Arthur Robson the current chair in Bioeconomics here. There is much debate going on in my class about whether it is worthwhile or not for us to attend the seminars that he is giving, mainly because a number of people are not sure that they know enough biology in order to be able to credibly critique or argue for/against some of the points he makes and for some because they dislike his style of presenting. My general opinion though, despite the fact that he is occasionally verbose, is that the topics are fascinating, he knows a fantastic amount of stuff and his ability to comment rigorously on things about which I have minimal knowledge constitute sufficient reasons for me to continue to attend. Today's discussion was particularly intriguing: a discussion of the neolithic revolution and about the reasons why there could have been valid bioeconomic reasons as to why individuals would have adopted agricultural practices. His model gave valuable insight into the phenomenon of individuals choosing to adopt agriculture despite the fact that it resulted in decreased longevity, lower quality of life, higher exposure to disease and malnutrition. Hence, worthwhile and interesting for me.

The third seminar is based on a forthcoming book by Erik Olin Wright of the University of Wisconsin. He is a much acclaimed sociologist, part of the September Group and has written prolifically on all kinds of topics. The discussion today was part of a lead up to his concluding writing his book on alternatives to capitalism. No, he is not one of those arb people who claim that markets shouldn't exist. He was discussing instead that different types of power exist, that these types of power correlate to different economic systems and that understanding these types of power could constitute a method for understanding ways in which society could be altered so that individuals could live more flourishing lives. I know that I am not being particularly specific here, but that's because I think that I need to read the book before I can comment relevantly. I asked him a question about Michael Albert's idea of Participatory Economics, which I think is interesting, a bit of an artefact, and completely impracticable. Erik's commentary though was quite interesting and I look forward to reading the book. I sincerely believe that any kind of reform requires an understanding of markets and their capabilities, moreover as he argues the different kinds of ways that we approach them and attempt to understand them could give us insight into ways in which individuals, those who have otherwise been 'left behind', could be given the opportunity to live more 'flourishing' lives.

Wednesday, June 04, 2008

Brain Scans

Posted by Simon Halliday | Wednesday, June 04, 2008 | Category: , , | 0 comments

I just read this blog post from Cognitive Daily. I was really unimpressed with the level of criticism involved in it. They discuss how images of brain scans increase the likelihood of people believing the content of an article, or at least rating it in terms of scientific worth. Personally I think it's all down to the sample. They give no indication of the level of proficiency of the individuals sampled. The problem with neuroimagery is that they require expertise in order to understand them properly. Do I think that people who see a picture of a brain with areas of it lighting up are possibly going to be more convinced than reading just an article without said picture. Yes, why not? The picture gives evidence in another medium. Moreover, the picture of the brain is a frame that makes them believe the thing that they see and it allows them to relate to the image, whereas if it just contained a bar graph with indications of the data (which actually also requires data to understand) it wasn't rated as highly. Does this mean something substantive? In my mind, no. Pictures of brain scans are WAY COOLER than bar graphs. Assuming I had to read an article about neuroscience, or neuroeconomics, or whatever and I got to see pictures of a brain scan, I would think it was better than an article that didn't have said pictures, simply because I thought it was cooler and possibly more convincing as a consequence of its coolness. The studies that they cite don't do that. See the picture taken from the blog below.

Barring the random statement above about coolness, I think that there is a lacking in the blog post (or study, I don't know) because they do not describe the different disciplines of the individual subjects. There could feasibly be systematic differences in the different interpretations as a consequence of the discipline or the study area of the individuals. How many of the students were actually studying neuroscience? Did they systematically favour articles with brain scan images? How many of the individuals were familiar with the anatomy of the brain? How many of them were well-trained in critically assessing articles? Were they freshmen? In which case I don't think they've probably been properly trained yet in critical thinking. Then again I could be wrong, but these are valid criticisms in my mind.

And also, don't get me started on the fact that they used fake articles. A part from the Sokal hoax where I think it was justifiable, I am not convinced that we should use fake things, or lie to experimental subjects, i.e. if the paper contained a fake study that lied about correlations to people they could leave the experiment with false beliefs about some state of the world, even if they were told afterwards that what they were reading was fake. Bad experiments in my mind, bad experiments.

Change to the Right, or 'Right Change' McCain

Posted by Simon Halliday | | Category: | 0 comments

Sorry, I found this very funny. I assume that he and his party have realised the double entendre, but I just can't help but know that if he took the reins as the US President, he would be taking the US even further to the right, hence yes he would bring 'right' change. I know that debates about his conservatism have ranged around the block. Only time will tell. I just hope he doesn't get the presidency.

The Value of Getting Things Wrong: Rodrik & Others on African growth

Posted by Simon Halliday | | Category: , , , , , | 0 comments

Have a look at Dani Rodrik's blog where he discusses some opinions on the recent growth phenomenon of several African Economies, specifically linking it to an article by Ted Miguel. He links his discussion to Randomized (Impact) Evaluation, something which I believe is a very useful tool for development economists and should be used more for understanding what could work in SA specifically in terms of development policy.

As he emphasizes, what is becoming clearer and clearer is that:
1) finding out what DOESN'T work is very, very useful. This is something for which RE is particularly good (and which stops random politicians trying stupid policies that have been shown not to work)
2) what is often required for development is adherence to a set of ideas about how to attempt to implement policy rather than necessarily what the policy should be

Rodrik is somewhat sceptical about RE and has written an article about it. I will report back after exams on his academic article and on the Miguel Article. On Miguel he has done some really good work, and some really arb work. I saw a working paper of his recently, which was presented by a co-author from EUI at a UniSi seminar and I wasn't particularly impressed, but hey everyone has their ups and downs.

Obama, Italian Immigration and Memes

Posted by Simon Halliday | | Category: , , , , , | 0 comments

So, I am fully behind the win of Barack Obama. Interesting comments, from Time, the NYT and other places.

Here is a link to the video of his victory speech.

Otherwise, Silvio Berlusconi is troubling people with his doublespeak on immigrants. What's that you say Silvio? They aren't illegal, even though you passed a law that they are? Are you realizing that illegal immigrants are necessary for Italian growth? Ohhh... the cheap labour of it all...

And otherwise, hat tip to Mike for recommending another interesting TedTalk to me. Here it is for those of you who are interested: fun discussion by Susan Blackmore.

As Mike himself comments, it's really difficult to assess universal Darwinism and some of the assertions that she makes could be quite easily disputed. Have a look at Mike's blog to see some good comments.

Tuesday, June 03, 2008

Busy Week

Posted by Simon Halliday | Tuesday, June 03, 2008 | Category: , , , | 0 comments

So this week is going to be crazy busy. Arthur Robson, of Simon Fraser University, is coming to visit as the new Bioeconomics Chair at St. Chiara College, of UniSi.

I am also meeting up with Bob Rowthorn, from Cambridge, to discuss some of his interesting recent work on slow learners and possible paths for my PhD. He is a really interesting and bright guy, and I enjoyed meeting him previously in Barcelona. You may recall that I blogged about some of his work previously.

Erik Olin Wrigh
t, from Wisconsin, is also coming to present some work here on Thursday. Luckily that's after my Macro exam, so I'll be a bit tired, but looking forward to it nevertheless.

Yes, I write Macro 3 this week. Joy. Such great seminars and fantastic people to meet, who arrive while we write exams. Oh well... less study time then.