Last week was the 34th Annual Conference of the Association of Private Enterprise Education (APEE), held in Guatemala. I found it a unique experience both in terms of the material presented (including applied research, attention to pedagogy, and topical commentary) and the personnel in attendance (plenty of junior faculty and graduate students, think tankers, investors, and big name economists). Some highlights:
- "Making Economics Cool in School" - Tawni Farrarini, Scott Niederjohn and Dirk Mateer introduced methods to incorporate podcasting and youtube in class, under the banner of "Common Sense Economics". Aside from recommending EconTalk they argued that the ideal length for a video is 4-5 minutes and students respond creatively to a video assignment. Their playlist features the "best of" their student submissions, split into topics. They also linked to other pieces, including this video on the pace of technological innovation. They recommended Audacity as free software for recording MP3 files.
- Most entertaining presenter was Alexei Marcoux, who argued that a "market for values" is anti-commerical, restricts the size of trading partners, and thus reduces prosperity. In his view they are a form of tribalism that go against the pluralism and diversity that characterise the roots of liberalism. I buy a lot of this view, although his claim that BB&T's eminant domain policy falls under this banner does not convince me (here's partly why). I do accept the basic point that CSR that imposes value judgmentss on the prior conditions for trade are fundamentally illiberal and reduce social prosperity. He quoted US Basketball star Charles Barkley: "I can be bought. If they paid me enough, I'd work for the Klan."
- My favourite panel was "Monetary Policy and the Financial Crisis" featuring Jeff Hummel, Larry White and Gerald Dwyer. It picked up on the controversy surrounding Hummel (and David Henderson's) utilisation of "the savings glut" (see their Cato Briefing, George Selgin's response, Henderson's response). There's a lot of important points to think over, but things that stand out immediately:
- From 1973 - 1997 there have been around 100 banking crises across 100 countries. Rather than view these as exceptions to the norm, they are the inevtiable outcome of fiat currency and free exchange rates. The question to ask is not why East Asia had a currency crisis, but why - up until now - the US did not.
- After the Gold standard Milton Friedman thought exchange rates would equal PPP and we'd live happily ever after. Murray Rothbard warned that the fiat system would be a mess. Another example of the intellectual dishonesty and ignorance when critics present Friedman as the voice of the "free market".
- The US is heading for a soveriegn debt default - the current financial crisis is minor compared to the general fiscal crisis that has underpinned it
- The Fed has switched from being a liquid money market fund to a leveraged hedge fund, with very few people questioning this (see Sanders questioning Bernanke here)
- Critics say that Austrians are claiming that entrepreneurs are stupid. Austrians are claiming that others assume they are omniscient. I think the Austrian view does provide a theory of agency somewhere between stupidity and omniscience - a theory of rational error.
- A real highlight of the trip was a hike up Volcano Pacaya. Photos here.