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    Maxine's Essays

    • 21st Century Regress
      Sometimes it seems like the world is going to hell and there's absolutely nothing a girl economist can do about it.
    • What Exactly Are We Crowding Out?
      The current economic downturn isn't a random draw of a black ball from an urn containing white balls and black balls. There's no sampling distribution. Very specific policies and actions landed us here. Now we must decide not only what policies need to be put in place to prevent it happening again, but also what policies would best drive us out of the ditch faster and sustainably.
    • I Wish It Were Only Butter
      We should be giving up some butter if we must. We should not give up education or health investment (or infrastructure or the environment (hello, BP). They may be the only legacies of any value that we pass on to our children and grandchildren.
    • Rational Health Investment?
      The obvious "market solution" is to improve the long run return on investments in health among the disadvantaged through meaningful and effective publicly funded education. The obvious short run "market solution" is to reduce the costs of investment and the shadow price of health for the disadvantaged by providing health insurance cover and reduced out-of-pocket costs.
    • The Socrates Parameter
      To the extent that our limbic systems respond to such engineering by over-riding the judgment of our frontal lobe and to the extent that our frontal lobe is deprived of the information it requires to make a rationally self-interested judgment, we are not only pigs and fools, we are slaves.
    • The Economic Rewards of Virtue
      If individual virtue tempers our "piggy" desires and conditions our choices to something that is both individually and socially better, then the economic rewards of virtue as embodied in and promoted by societal norms and institutions are far greater than we have ever suspected. As economists, we would do well to recognize this when we teach U max.
    • The Market for Morals
      Markets then are places where more is exchanged than goods and services, labor and product, credit, and interest. They are places where we also develop the personal virtues of temperance and prudence and the social virtues of benevolence and justice. When they function well, they produce trust, loyalty, and sympathy among those who trade there.
    • Post-Modern Applied Economics: It’s the Error Term, Stupid
      Maxine believes it’s time to refocus attention and discussion on the error term. It is often where much of the action is in our models. It is where unexpectedly catastrophic events dwell resulting in fat tails. It is where our animal spirits manifest and cause us to do the right thing or the wrong thing or the thing everyone else is doing rather than the self-interested, fully-informed rational thing. It is where God and miracles and chance dwell.
    • Intergenerational Win-Win: Health Insurance, Education, Environment, Infrastructure
      So when we’re talking about fiscal stimulus packages and we’re borrowing from our grandchildren to finance them, we should be thinking about how to use stimulus monies to create value for those grandchildren AND stimulate our economy.
    • Short-term Private Payoffs, Long-term Social Costs
      The real health reform discussion, the one we should be having, is “What must we do to create a health system that is both efficient and fair?” The answer will almost certainly include relegating the private sector to markets where market forces or regulation are effective at aligning short-term private incentives and goals with long-term societal interests. If such markets are scarce or non-existent in health, then the private health sector will be of limited value.
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    My Political Science (Intro) professor described himself in class as someone who would be a Randian except that he didn't believe in God and an anti-abortion Libertarian. As I'm a godless commie and as feminist as I can be with an "outie", he's pretty much as completely opposite from me as an educated person can be. (Not only that, but his preferred textbook contained some serious factual errors.) I'm not one to hide my light under a bushel, and he and I had some... interesting... discussions during class.

    I considered dropping the class or switching to another section, but I didn't. I finished the class... with an A, of course.

    (My most serious objection to the class was that it was far too easy. No writing, minimal studying; show up to class and actually spend an hour reading the textbook before each exam and you were assured of an A.)

    College is turning out to be... not at all what I expected.

    I think, Maxine, that if you looked at most (not all) business relationships, you would find a lot more than "just business". People are built like that. And toleration is not confined to the market - I was always amazed in India how tolerant people were of a very much wider range of behaviours than would be found even on a New York street.

    reminds me of something from 1968, during the race riots in cleveland:

    "McDonalds has done more for integration
    than the Federal Govt… someone should give
    them a grant. negroes caucasions mongolians
    hippies (a different race) economic integration
    cultural integration, everyone after those
    16 ¢ent hamburgers & 20¢ milkshakes"

    - "Suburban Monastery Death Poem - PART FOUR - Forest Hills Park", d.a.levy

    your post describes a situation we frequently encounter in business, social and even family contexts

    dialogue is avoided because it risks anger and conflict

    Of course business isn't always just business. How do you think they choose CEOs? It's obviously not about business acumen, managerial expertise or grasp of market conditions. It has much more to do with in-group identification and their manner at the country club.

    I think the social context really matters. Not that you need to deeply investigate the opinions of everyone you deal with, but that if their opinions make you uncomfortable part of a civil society is "voting with your wallet". To do otherwise is both to say that the opinions don't really matter to you, and not to signal your own opinions to others.


    you might want to think about the reasoning here:

    1. We had a market relationship with this person
    2. This person's political opinions made us uncomfortable; but
    3. His opinions did not affect his performance as a market supplier, so we ignored them

    - conclusion: markets promote tolerance

    Note that you can reasonably substitute "colleague", "subordinate", "professional associate" and similar for "market supplier" - only then you get a different conclusion.

    Just because economics is very largely about markets does not mean that people are largely about them too.

    I'm not sure what conclusion I'm supposed to draw that is different, PT. I tend not to choose my colleagues, my employees, or my professional associates based on their political opinions either. I choose them based on productivity, ease of getting high quality (I hope) work done and out, and the pleasure of dealing with them even when stress levels are high. I do not want to live in a world where having a job or colleagues depends on a litmus test of political views any more than I want to live in a world where my suppliers are chosen based on their political views.

    But I agree that there are some (extreme) transgressions of ideas or actions that should not be tolerated in anyone (if that is your point). It was certainly mine when I wrote the blog. :-)

    Thanks for the thought provoking comments, PT (and everyone else, too).

    The comments to this entry are closed.

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