The empirical evidence suggests that Marx was wrong. There is no tendency for capital to become more concentrated. Studies show that firm growth is independent of size (or anything else!), and so the distribution of firm size doesn’t change much over time. The degree of competition or monopoly is roughly stable. Tesco or Wal-Mart might seem monopolistic, but they are less so than 19th century truck stores.
November 07, 2010
Cable on competition
"Planning is everything, plans are nothing"
If you know me reasonably well, you know I like to plan. Correction: I like the mental clarity that comes when planning. Behaviour gap have a wonderful article on the distinction between the two:
Think of this as the difference between a flight plan and the actual flight. Flight plans are really just the pilot’s best guess about things like the weather. No matter how much time the pilot spend planning, things don’t always go according to the plan.
In fact, I bet they rarely go just the way the pilot planned. There are just too many variables. So while the plan is important, the key to arriving safely is the pilot’s ability to make the small and consistent course corrections. It is about the course corrections, not the plan.
I try to spend as much time planning my financial security as I would spend planning a summer holiday. Do you?
November 01, 2010
My talk on "Contemporary work in Austrian Economics"
Towards the end of September I gave a talk on "Contemporary work in Austrian Economics" for the Adam Smith Institute. It was part of the book launch for Eamon's Primer, which I'm hoping everyone reading this site has now had chance to read. During the talk I made a number of references, and for those who wanted to follow up you can download my notes here.pdf
Indeed just before I spoke I realised that I was sat next to speaker, and managed to make a half decent recording. You can download the audio here: Download Aje_contemporary_1009
In a nutshell:
The message I want to get across – especially to undergraduates considering an academic career exploring Austrian ideas – is this:
- The amount of Austrian research and the number of Austrian researchers is growing exponentially
- Good Austrian economists are not marginalised by the economics profession
- There have been significant advances in our understanding of economics made recently
I do this with two lists - (A) signs that the Austrian-school is a fertile, growing, respectable part of the academic community; (B) specific pieces of work that have been published since 1994 that deepen our understanding of the science of economics.
I should add that Angel Martin emailed me to point out that the Ben Powell article I cite (Powell, Benjamin 2005. “State Development Planning: Did it Create an East Asian Miracle?” Review of Austrian Economics, Vol. 18. No. 3/4) is *not* about the East Asian crisis, but about the East Asian growth. Fair point.
October 20, 2010
The Economics of Seinfeld
It is the simplicity of Seinfeld that makes it so appropriate for use in economics courses. Using these clips (as well as clips from other television shows or movies) makes economic concepts come alive, making them more real for students. Ultimately, students will start seeing economics everywhere – in other TV shows, in popular music, and most importantly, in their own lives.A fantastic resource!
October 16, 2010
Evans' Law
Evans’ Law: “Whenever ‘one of our people’ reaches a position of power where he can do us some good, he ceases to be ‘one of our people'
That's M. Stanton Evans, the conservative American journalist. Apparently he is co-teaching a course on "Economics for Journalists" at Troy University with Scott Beaulier. That sounds like a fascinating course, and I'm in awe of Scott for what he's accomplishing.
October 14, 2010
Quote of the day - Nobel edition
Nothing can be treated as given. Everything must fall out of the analysis of exchange and production. Economic analysis is about economic forces at work, not the analysis of situations after those forces have done their job
The traditional perfect market versus market failure debate is stale --- the perfect market folks don't tell us how the story of the market unfolds, and the imperfect market folks stop the story short right when it is getting interesting
October 13, 2010
Nobel 2010: Diamond, Mortenson and Pissarides
There's plenty of ways to interpret the Nobel - one is to point out that the winners merely stated the obvious, another is to see them as confronting microfoundations. Good articles from Stephanie Flanders and Alex Tabarrok.
October 03, 2010
Quote of the day: Miliband, autonomy & the Left
The question of how far people respond is incentives is a separate one from the question of how much real autonomy they have. A sunflower responds to incentives by turning itself to the sun. But do we call it autonomous?
September 26, 2010
Consultancy firms: Free thinking | The Economist
Producing free research especially helps young consultants prove their worth, both to clients and to others within the firm. Christopher McKenna, a historian of consulting at Oxford University, says clients may balk at paying handsomely for a “young punk” of a consultant. A young punk who has written an impressive paper is a different matter. Spots for year-long stays at the consultancies’ in-house think-tanks such as the McKinsey Global Institute, BCG’s Strategy Institute and the IBM Institute for Business Value are fought over fiercely.
As of next year the course I direct (in London) will require students to write a thesis. One of our main challenges is to switch the mindset away from being a "student" and towards "young professional", so a thesis runs the risk of harking back to undergratuate research. For me the model needs to be consultancy reports.
The state of manufacturing: Captained by industry | The Economist
Although manufacturing has shrunk as a share of GDP—before the recession it made up around 12% of the economy—Britain remains the world’s sixth biggest manufacturer.
There's a conventional story that Britain "lost" it's manufacturing base, opting instead to become over reliant on financial services. So it's worth remembering that all those lorries on the M25 aren't doing nothing. Indeed manufacturing in the UK has responded better to the recession than in Germany.
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