"A distressing phenomenon is occurring throughout the industrialized world. Many community services have been deteriorating - fewer postal deliveries, larger classes in public schools, less reliable garbage pickups - even though the public is paying more for them." --Baumol and Blinder, Macroeconomics: Principles and Policy, 5th Ed., 1991 I so hated economics in college that … Continue reading William Baumol (1922-2017)
Some months ago, in a semiserious post, I offered a “Second Law of Strategy” in the form of a dictum that “all profits come from routine innovation.” This second “law”, like the first, was aimed more at consultspeak than economic theory. Inspired by some airplane reading, I lumped Gary Pisano’s quadrant-diagram varieties of innovation into … Continue reading The Tomato was right on Innovation! Is that a Good Thing?
Large among the benefits of my Foreign Affairs subscription are the “Subscriber Exclusives” – downloadable virtual issues that show FA has been attending for years to today’s hot button topics. A “Who Benefits from Trade?” compendium was made available last September. From oldest to newest the contributions range from G.B. Roorbach’s “Foreign Trade or Isolation”, … Continue reading Getting It Right But Still Not Getting It On Trade
Dietrich Vollrath, in a Sgt. Joe Friday throwback, has put up something unusual for the day: a quiet, just-the-research-ma’am post exploring the theorized impact of diversity on economic performance. He provides examples of major studies, summarizes the findings, and points out some ways in which those findings, because of research design, might be suspect. In … Continue reading Playing Smallball on Diversity: Dietrich Vollrath on Fractionalization
In 1993, in “The Making of a Hinterland”, the historian Kenneth Pomeranz described how the government of China, in response to huge pressure from imperialist powers to open China to the global economy, emphasized the development of industrial manufacturing and trade zones (think Shanghai) and essentially left rural China to fend for itself. The positive … Continue reading The Revenge of the Hinterland
The anonymous blogger Pseudoerasmus recently returned to activity after a hiatus (not counting Twitter) of several months. Though he describes himself as a “hopeless positivist”, I think of Pseudo as a sort of empirical volcano; his trademark style is to confront plausible-sounding (but often complacent) economic-historical theories with a veritable ash-storm of contradicting facts. These … Continue reading Branko’s Law: Inequality is eating away at Democracy
If you want to convince yourself you can read a foreign language, try reading business articles. Well, let me clarify that: I’m not saying business English is a foreign language, I’m saying that business articles in another language you more or less know will prove surprisingly transparent. I spent a recent flight back to the … Continue reading A Second Law of Strategy: All Profits come from Routine Innovation