Intro Eco Textbook
Robert Vienneau
<http://online.bcc.ctc.edu/econ100/ksttext/chaplist.htm>
--
Robert Vienneau
r
v
i
e m
n o Whether strength of body or of mind, or wisdom,
@ c or virtue, are always found...in proportion to
d . the power or wealth of a man [is] a question
r e fit perhaps to be discussed by slaves in the
e p hearing of their masters, but highly unbecoming
a a to reasonable and free men in search of the
m c truth.
s -- Rousseau
SUSUPPLY
>A good introductory textbook is available on the Web:
>
> <http://online.bcc.ctc.edu/econ100/ksttext/chaplist.htm>
A text described by its author as not neoclassical. Indeed, at times it reads
like a Hyman Bloomin-joke post, such as:
<<Neither capitalism nor economics will last forever. While we can only
speculate as to the time frame over which this will occur, the technological
trends become clearer with each new generation of the microchip: society will
at some time in the future (50 years? 100 years? 150 years?) be able to produce
an abundance of goods and services without any need for human labor. Markets
will no longer be relevant. The drive for profit will become a topic of
historical novels and be regarded as a quaint pathological condition that
afflicted people of the pre-abundance past. Society will continue to develop
and change, but the partially-predictable behavior that we associate with
markets and capitalism will fade away and with it economics. >>
SUSUPPLY
Robert is nothing if not persevering:
<< Technology also has a high degree of path dependency. That is, today's
technologies are partially the result of paths that we started down long ago.
Yesterday's technologies may limit the possibilities for tomorrow's
technologies. The classic example of path dependency is the continuing
dominance of the QWERTY typewriter keyboard. This particular layout was
designed to slow the typist on the early mechanical typewriters in order to
keep the keys from jamming. Typing efficiency could be doubled with a different
keyboard layout, but the path taken in the past has left us with millions of
QWERTY keyboards and millions of typists trained to use them, making change
very unlikely. >>
Oh yeah, those kids at Bellevue Community College are going to learn a lot of
economics.
Patrick
mas...@ix.netcom.com
>On Sun, 03 Oct 1999 10:15:48 GMT, in sci.econ rv...@see.sig.com
>(Robert Vienneau) wrote:
>
>> A good introductory textbook is available on the Web:
>>
>> <http://online.bcc.ctc.edu/econ100/ksttext/chaplist.htm>
>
>Yes, confirming Mason's intuition that there are Econ 101 textbooks
>one should try to avoid.
Well, no. Actullly this one looks very good. I'm sure Markku had an
instant turn-off when he saw the Joan Robinson quotation. She is
beloved by our Ayn Randy sci.econ economists. A woman with brains
usually isn't.
Far better to read Taylor's than Mankiv's, to give one example.
I notice some things in K.S. Taylor's book that I disagree with,
but on the whole (which I haven't yet read) it looks *much* better
than the standard, establishment textbooks. His book will exclude
him from the faculty of 98% of the neo-classical economics departments.
But there are still a few good schools that would welcome him. Actually,
I doubt he gives a damn. He's a free soul (remarkable among economists).
After I read it I may post a review -- sheeez: read, then review, how ingenious
Markku sure is a fast reader.
By the way, I noticed this graph regarding the MPC. Someone
claimed the rich have the same consumption appetite as the poor.
http://www.geocities.com/CapitolHill/Senate/7018/Brinexdi.jpg
What's it mean? hey, make an MPC thread if you answer
Mason C
Markku Stenborg ®
(Robert Vienneau) wrote:
> A good introductory textbook is available on the Web:
>
> <http://online.bcc.ctc.edu/econ100/ksttext/chaplist.htm>
Yes, confirming Mason's intuition that there are Econ 101 textbooks
one should try to avoid.
--
© Markku Stenborg
markku döt stenborg ät finofc döt fi
David Cross
> By the way, I noticed this graph regarding the MPC. Someone
> claimed the rich have the same consumption appetite as the poor.
>
> http://www.geocities.com/CapitolHill/Senate/7018/Brinexdi.jpg
>
> What's it mean? hey, make an MPC thread if you answer
Looks like the guy who did the graph of that chart was measuring how much
people spend versus how much income they have, and breaking it down by decile.
Notice that the behavior of that graph, even though it's for Brazil, seems to
astonishingly mirror consumer spending behavior in industrialized countries -
note the extremely high level of "overspending" by poor people, which fits in
with the fact that poor people either skip paying one bill in any given month,
or have a semi-revolving line of debt with someone else [borrowing from
friends, payday loan companies, etc] or simply spending all their money up
front and doing without on something else.
Now the econ textbooks get a little nitpicky and assume the MARGINAL propensity
to consume is fixed, but that the AVERAGE propensity to consume can change.
It sounds like one of those ceteris paribus assumptions economists love to talk
about.
--
"How do you know God didn't spake to Charles Darwin?"
- Henry Drummond to Matthew Harrison Brady, _Inherit_the_Wind_.
Markku Stenborg ®
wrote:
> On Wed, 06 Oct 1999 06:01:37 GMT, real.a...@bottom.of.msg (Markku Stenborg ®) wrote:
[snip]
> >Yes, confirming Mason's intuition that there are Econ 101 textbooks
> >one should try to avoid.
>
> Well, no. Actullly this one looks very good. I'm sure Markku had an
> instant turn-off when he saw the Joan Robinson quotation. She is
Wrong, again.
> beloved by our Ayn Randy sci.econ economists. A woman with brains
Who are those?
> usually isn't.
I am an exeption then?
> Far better to read Taylor's than Mankiv's, to give one example.
Taylor cites Joan Robinson:
"The purpose of studying economics is not to acquire a set of ready-
made answers to economic questions, but to learn how to avoid being
deceived by economists."
Should one use the quote as a standard for an intro textbook, IMHO,
this book fails its own test of purpose.
The book teaches you to put labels such as "neclassical", "post-
Keynesian", etc on some stories. How does this help you, eg, to
separate cream from crap the talking heads pour out of the idiot box?
Taylor's book might be a nice piece of additional reading to some
decent intro textbooks.
[snip]
> Markku sure is a fast reader.
At least you've got one thing right.
[snip]
Markku Stenborg ®
<j.hi...@auckland.ac.nz> wrote:
[snip]
> I've had a look at the book and must admit that
> I'm not impressed, but what exactly don't you like
> about the quoted passage? I think this is the
> standard example for the work of a lot
> of perfectly good neoclassical economists working
> on issues of network externalities and related
> path dependence.
The belief that QWERTY was inferior to Dvorak keyboard (or whatever
the alternatives name) turned out to be a mistake, so prevalence of
QWERTY is _not_ an example of path dependence.
SUSUPPLY
sci.econ:
John,
You can pleasureably spend numerous hours with Deja News and "path dependence"
going back almost two years.
To save you that time here's some of the Palgrave entry (by Liebowitz and
Margolis):
<< The literature of path dependence, both theoretical and empirical, contains
a number of claims that path dependent processes lead us to inefficiencies,
even for products sold in open markets. Brian Arthur cites as examples of this
inefficiency the QWERTY typewriter keyboard (1989), the internal combustion
engine (1989), and the VHS videorecorder (1990). Paul David (1985) tells the
story of the QWERTY keyboard as a clear example of market failure. Paul
Krugman’s Peddling Prosperity contains an entire chapter called "The Economics
of QWERTY, where he concludes, "In QWERTY worlds, markets cannot be trusted."
(1994)
<< Empirical support for the third degree claim for path dependence rests
almost entirely on a handful of cases. Of these, the typewriter keyboard
history is the case that is most often invoked both to illustrate and to
support third-degree path dependence paradigm. (Liebowitz and Margolis (1990)
is a detailed account of this.)
<< This story is so important to this literature that we provide a brief
summary here. Christopher Latham Sholes patented his typewriter in 1868. Sholes
and his collaborators then worked on improving the typewriter. Jamming was one
of the major problems and it was addressed by the arrangement of the keyboard.
(One version of the story has it that Sholes and his colleagues deliberately
chose an arrangement that would slow down touch typists. Unlikely, since
touch-typing came much later). Sholes sold the rights to Remington in 1873, and
Remington made a few minor modifications and began manufacturing and selling
their typewriter, using the QWERTY keyboard.
<< Alternative keyboard arrangements were developed as the market grew. In
1888, Francis McGurrin, who had taught himself touch typing on a Remington, met
Louis Taub in a typing Superbowl, held in Cincinnati. Taub was a very fast
hunt-and-peck typist who used a Caligraph typewriter that had a different
keyboard arrangement. McGurrin won all phases of the contest in what is said to
have been an amazing display. His victory demonstrated the potential of
touch-typing and some believe it also enshrined the QWERTY keyboard arrangement
as the standard.
<< In 1936 Professor August Dvorak patented his Dvorak Simplified Keyboard
(DSK), which he designed according to ergonomic principles. The DSK is alleged
to have been easier to learn and to allow typing at rates that were twenty,
forty, or perhaps even eighty percent faster (depending on the source) than
QWERTY typing. A study done by the US Navy purportedly demonstrated that the
full cost of retraining typists on the DSK was repaid ten days after the
typists returned to their normal duties. Yet DSK never caught on.
<< We have, it appears, the perfect illustration of the path-dependent market
failure. An early start for the QWERTY arrangement led to its adoption as the
standard, and superior rivals have been unable to dislodge this entrenched
incumbent.
<< The story, however, is a myth. In 1956 Earl Strong, a professor of
industrial engineering at Pennsylvania State University, conducted a study for
the General Services Administration which showed that the investment in
retraining on the DSK could never be recovered. More recent ergonomic studies
indicate that the advantage for the DSK over QWERTY is either small or non
existent. And there is fairly strong evidence that the Navy study, which was
never released as an official Navy report, was conducted by, or under the
supervision of, one Lieutenant Commander August Dvorak, the Navy’s chief expert
in time and motion studies during the war. Additionally, the report is riddled
with error and seeming bias.
<< Other aspects of the fable are also untrue. There were many touch-typists,
on both QWERTY and rival keyboards. There were other typing contests right
around the time of the Cincinnati contest, some of which were won by non-QWERTY
typists. So it was not the single happenstance of McGurrin’s choice that
established QWERTY as the keyboard standard. It is unlikely, therefore, that
QWERTY could have survived if it were as poor as it is sometimes alleged to be.
If, in fact, some typewriter keyboard really did offer advantages such that the
retraining investment would be repaid over every ten days, is it reasonable to
think that companies would not make such an investment? >>
Patrick
mas...@ix.netcom.com
>On Thu, 7 Oct 1999 00:49:52 +1300, in sci.econ "John Hillas"
><j.hi...@auckland.ac.nz> wrote:
>
>[snip]
>
>> I've had a look at the book and must admit that
>> I'm not impressed, but what exactly don't you like
>> about the quoted passage? I think this is the
>> standard example for the work of a lot
>> of perfectly good neoclassical economists working
>> on issues of network externalities and related
>> path dependence.
>
>The belief that QWERTY was inferior to Dvorak keyboard (or whatever
>the alternatives name) turned out to be a mistake, so prevalence of
>QWERTY is _not_ an example of path dependence.
Come now. QWERTY may have been superior on it's type-bar
machines that had a speed limit. Let's suppose it is later shown
to be as fast as Dvorak on new machines -- this wasn't known
at the time machines became faster. Dvorak seemed superior,
but Dvorak could not "catch on" because of the imbedded QWERTY.
It is a valid example of path dependence.
( And is it true that QWERTY is not inferior on new machines? )
Mason
mas...@ix.netcom.com
>On Tue, 05 Oct 1999 23:50:29 -0700, in sci.econ mas...@ix.netcom.com
>wrote:
>
>> On Wed, 06 Oct 1999 06:01:37 GMT, real.a...@bottom.of.msg (Markku Stenborg Ž) wrote:
>
>[snip]
>
>> >Yes, confirming Mason's intuition that there are Econ 101 textbooks
>> >one should try to avoid.
>>
>> Well, no. Actullly this one looks very good. I'm sure Markku had an
>> instant turn-off when he saw the Joan Robinson quotation. She is
>
>Wrong, again.
>
says Markku, who later reverses field (US football jargon) and explains
why he's turned off by Joan Robinson:
>
>Taylor cites Joan Robinson:
>
>"The purpose of studying economics is not to acquire a set of ready-
>made answers to economic questions, but to learn how to avoid being
>deceived by economists."
>
>Should one use the quote as a standard for an intro textbook, IMHO,
>this book fails its own test of purpose.
Now, me, I'm a nice guy. I never would have posted that quotation
on sci.econ.
>
>The book teaches you to put labels such as "neclassical", "post-
>Keynesian", etc on some stories. How does this help you, eg, to
>separate cream from crap the talking heads pour out of the idiot box?
>
But are there or are there not, importantly different ways of thinking
about economics? If there are, is this not important?
And by the way, who is primarily responsible for the crap, the
neoclassicals or the post-Keynesians? ( If you claim to have no
influence, I've a good Keynes quote ready.)
>Taylor's book might be a nice piece of additional reading to some
>decent intro textbooks.
Now here we agree. Please name a "decent intor textbook" so
we can read it along with Taylor's.
Mason
Brent Buckner
> On Wed, 06 Oct 1999 12:22:22 GMT, real.a...@bottom.of.msg (Markku Stenborg Ž) wrote:
> >The belief that QWERTY was inferior to Dvorak keyboard (or whatever
> >the alternatives name) turned out to be a mistake, so prevalence of
> >QWERTY is _not_ an example of path dependence.
> It is a valid example of path dependence.
I'll see your assertion ("It is _not_ a valid example of path
dependence.") and raise you a citation ("The Fable of the Keys",
Liebowitz and Margolis; included in their book _Winners, Losers and
Microsoft_).
--
There is no "yz" in my e-address.
Robert Vienneau
> <j.hi...@auckland.ac.nz> wrote:
> [snip]
>> I've had a look at the book and must admit that
>> I'm not impressed, but what exactly don't you like
>> about the quoted passage? I think this is the
>> standard example for the work of a lot
>> of perfectly good neoclassical economists working
>> on issues of network externalities and related
>> path dependence.
> The belief that QWERTY was inferior to Dvorak keyboard (or whatever
> the alternatives name) turned out to be a mistake, so prevalence of
> QWERTY is _not_ an example of path dependence.
I was not impressed with Kit Taylor's claim about how much faster typing
could be.
However, path dependence does _not_ imply that the technology that is
finally adopted is less "efficient" than other technologies that might
have been selected. So Markku's response is a complete non-sequitur.
See:
<http://cs.muohio.edu/ehnet/Clio/Publications/pathdepend.html>
Thank you for playing. Try again.
John Hillas
SUSUPPLY
rope to hang himself:
>I was not impressed with Kit Taylor's claim about how much faster typing
>could be.
>
>However, path dependence does _not_ imply that the technology that is
>finally adopted is less "efficient" than other technologies that might
>have been selected. So Markku's response is a complete non-sequitur.
Right, now that all their examples of path dependence have been demonstrated to
be baloney, Arthur and David, are telling everyone that it was all just a big
misunderstanding; it’s SUPERIOR technologies that get locked in.
Which means that Krugman should have said: "Even in QWERTY worlds, markets can
be trusted.". Welcome to the Vast Right-Wing Conspiracy, boys.
>See:
> <http://cs.muohio.edu/ehnet/Clio/Publications/pathdepend.html>
By all means, do read Paul David's quadruple-talk attempt to get out of the
caught-with-his-path-dependence-down embarrassment his earlier writings got him
into.
Be sure to budget plenty of time for rolling in the aisle over this:
<< Whatever other interests may be awakened by the revelations that are to
follow in this section, they should communicate my view that there is an
amazing irony of rhetorical success in the inordinate attention that was
captured by one specific illustration of the workings of path dependence, and
the consequent significance with which debates over its factual details
continues to be endowed. QWERTY, the now-popular emblem of path dependence, has
acquired associations in the literature that threaten to obscure the very ideas
that it was enlisted to impart to the economics profession. It would be
implausible for me to avow very great regret in having contributed to that
state of affairs. But, I would accept some blame -- for offering an
illustration that in the han ds of others could turn into a proverbial
red-herring, ready for dragging across the trail of path dependence. The
proviso is that I am allowed to enter a plea of 'mitigating historical
circumstances.'
[Translated: I was an idiot, I didn't even read the study I was citing--and
Krugman is probably really pissed at me.]
<< In the Fall of 1984 I was confronted by a rhetorical challenge. I had
involved myself in the plans of Professor William Parker (then of the Yale
Department of Economics) to stage a session of the upcoming American Economic
Association Meetings -- on the need for economists to study (some, more)
economic history. I duly had been allotted 20 minutes to have a go at this
issue myself. What message, compressed into so brief a timespan, would persuade
the economist in the street to turn his or her mind to the possibility that
history might matter in what they were doing professionally? Getting attention
was a first requirement, and so my talk would start out with references to
Sex....Seizing the audience's attention was one thing, but how to keep it? One
generally reliable tactic of reinforcement suggested itself: the application of
a stimulating shock. What is the subject that jolts economists even more than
mention of Sex? Inefficiency! So, I would have to produce a story involving an
economic process that could not shake loose from the influence of past events,
and one in which rational autonomous agents were led to a shared, collective
outcome that would judged to be no better for some, and for others definitely
worse than a feasible alternative. And if that didn't suffice, more "shock"
would have to be applied: show that although all the players individually might
wish to choose otherwise were they only able to wipe away the past and start
again, it was more than likely that they would go on living with their
unsatisfactory (Pareto inferior) situation -- because of the difficulties or
expense of coordinating the actions that would be needed for them to
collectively achieve an escape. I do freely admit to having seized upon the
history of typewriter (and computer) keyboard layouts as providing me with just
such a rhetorical device.
[Translation: I really blew it. Guilty as charged. In the original paper I
wrote:
"In place of a moral, I want to leave you with a message of faith and qualified
hope. The story of QWERTY is a rather intriguing one for economists. Despite
the presence of the sort of externalities that standard static analysis tells
us would interfere with the achievement of the socially optimal degree of
system compatibility, competition in the absence of perfect futures markets
drove the industry prematurely into standardization ON THE WRONG SYSTEM -where
decentralized decision making subsequently has sufficed to hold it. Outcomes of
this kind are not so exotic. For such things to happen seems only too possible
in the presence of strong' technical interrelatedness, scale economies, and
irreversibilities due to learning and habituation. They come as no surprise to
readers prepared by Thorstein Veblen's classic passages in Germany ...."
and for good measure I even italicized ‘on the wrong system’ to show what a big
deal this all was. God, I must look like a fool.]
<< Whatever novelty may be associated with my paper 'Clio and the Economics of
QWERTY' resides largely in the surprising audience response, rather than in
either the story's ingredients or its challenging message. >>
Prof. David is asking if we can't all just change the subject, and here goes
his acolyte bringing it up again. With friends like Robert....
>Thank you for playing. Try again.
I don't know about Markku, but you can count on me to keep rubbing your nose in
it every time you think the coast is clear, Robert.
And, btw, David’s original article that was at:
http://iml.umkc.edu/econ/sturgeon/econ451/Articles/QWerty.htm
is no longer available. Surprise, surprise.
Patrick
Markku Stenborg ®
(Robert Vienneau) wrote:
> Markku Stenborg wrote:
[snip]
> However, path dependence does _not_ imply that the technology that is
> finally adopted is less "efficient" than other technologies that might
> have been selected. So Markku's response is a complete non-sequitur.
Umm, I had the feeling that the economic problem with path dependence
was that one could get locked in to a less than efficient technology.
Now you are saying that the economic problem with path dependence is
that one could get locked in to a efficient technology.
Brent Buckner
> And, btw, David’s original article that was at:
>
> http://iml.umkc.edu/econ/sturgeon/econ451/Articles/QWerty.htm
>
> is no longer available. Surprise, surprise.
It is a bit of surprise, in that it could mean that someone actually
updated the readings list for econ451. I toured the site, and found that
the site had been reorganized; the paper is available at:
http://cei.haag.umkc.edu/institutional/
(follow the Readings link in the menu frame, then the Paul David link to
the "Clio and the Economics of QWERTY" link).
Robert Vienneau
> (Robert Vienneau) wrote:
> > Markku Stenborg wrote:
[>>> The belief that QWERTY was inferior to Dvorak keyboard (or whatever ]
[>>> the alternatives name) turned out to be a mistake, so prevalence of ]
[>>> QWERTY is _not_ an example of path dependence. ]
> > However, path dependence does _not_ imply that the technology that is
> > finally adopted is less "efficient" than other technologies that might
> > have been selected. So Markku's response is a complete non-sequitur.
> Umm, I had the feeling that the economic problem with path dependence
> was that one could get locked in to a less than efficient technology.
> Now you are saying that the economic problem with path dependence is
> that one could get locked in to a efficient technology.
That's an odd way of acknowledging that the text Markku snipped is a
non sequitur.
Does Markku have any definition in mind at all for path dependence?
Markku's later comment is no less a non sequitur. I said that path
dependence does not imply that the end state, if there is
an end state to such a process, is necessarily Pareto suboptimal.
This is not the same as saying that the end state of a path-dependent
process, if there is such an end state, is necessarily Pareto "efficient."
In symbols,
Let a = not ( p implies not q )
Let b = p implies q
a implies b is not a tautology
where p is something like "X is a path dependent process"
q is something like "the end state of X is Pareto optimal"
I find Pareto "efficiency" of little interest. After all, one may
have the normative opinion that it would be nice if the economy
moved away from certain Pareto optima to certain other states
where income is more evenly distributed, whether those other states
are Pareto "efficient" or not.
To me, the point of path dependence is the development of models
in which equilibria are non-teological and acausal. "Why is
economics not an evolutionary science?" is still a good question.
These models may be a step in a good direction.
As an example of an economist that had a similar reaction as Paul
David's to Fogel's 1960s studies of railroads, see:
Alfred S. Eichner, _The Emergence of Oligopoly: Sugar Refining
as a Case Study_, John Hopkins Press, 1969.
I find it of little interest, except for the sociology of knowledge,
whether certain economists are aware of the ideas of the most original
American economist ever, Thorstein Veblen.
Markku Stenborg ®
wrote:
> On Wed, 06 Oct 1999 08:30:59 GMT, real.a...@bottom.of.msg (Markku Stenborg ®) wrote:
[snip]
> >> Well, no. Actullly this one looks very good. I'm sure Markku had an
> >> instant turn-off when he saw the Joan Robinson quotation. She is
> >
> >Wrong, again.
> >
> says Markku, who later reverses field (US football jargon) and explains
> why he's turned off by Joan Robinson:
> >
> >Taylor cites Joan Robinson:
> >
> >"The purpose of studying economics is not to acquire a set of ready-
> >made answers to economic questions, but to learn how to avoid being
> >deceived by economists."
No, I am not turned off by Joan Robinson quote. This is an excellent
purpose for studying economics. What I was complaining was that the
book does not deliver.
> >Should one use the quote as a standard for an intro textbook, IMHO,
> >this book fails its own test of purpose.
>
> Now, me, I'm a nice guy. I never would have posted that quotation
> on sci.econ.
I'll take your word regarding the nice guy part.
I think it is more important to learn to think about economics than to
fill your mind with ready made pseudo-answers. It is better to
understand how to think about (rational) choices, firms, (imperfect)
competition, price mechanism, organizations, etc, than to learn to
recitate some pre-fixed maxims.
> >The book teaches you to put labels such as "neclassical", "post-
> >Keynesian", etc on some stories. How does this help you, eg, to
> >separate cream from crap the talking heads pour out of the idiot box?
> >
> But are there or are there not, importantly different ways of thinking
> about economics? If there are, is this not important?
Maybe there are. But if do not learn to think about economics at least
in one way, how could you learn to think about economics in several
different ways?
[snip]
SUSUPPLY
>Patrick,
>
>I'm sure that you won't believe me, but why don't you get
>one of your economist friends to explain to you why David
>and Arthur are fine economists and you are a rude ignorant
>little boy who doesn't know what he's talking about.
Actually some economists have told me that I am right on the money about both
Arthur and David, and so is Paul Krugman (who has said some similar things
about Arthur publicly).
However, I am always ready to learn from my betters, so why don't YOU explain
it to me?
Patrick
SUSUPPLY
[Markku had asked]
>> Umm, I had the feeling that the economic problem with path dependence
>> was that one could get locked in to a less than efficient technology.
>> Now you are saying that the economic problem with path dependence is
>> that one could get locked in to a efficient technology.
>
>That's an odd way of acknowledging that the text Markku snipped is a
>non sequitur.
Actually I took Markku to be having some fun with you. BTW, your above is a
non-sequitur, so you still owe him an answer. If you can. I asked essentially
the same question of you, and you weren't able to answer me either.
>Does Markku have any definition in mind at all for path dependence?
Sounds like Markku is operating on Brian Arthur and Paul David's original
definition; Increasing returns due to network effects can lock in inferior
technologies.
I'm surprised you don't remember it, given the prolonged humiliations you've
gone through. Perhaps you should lie down until you recover from Woodstock,
and it will all come back to you.
>Markku's later comment is no less a non sequitur. I said that path
>dependence does not imply that the end state, if there is
>an end state to such a process, is necessarily Pareto suboptimal.
>This is not the same as saying that the end state of a path-dependent
>process, if there is such an end state, is necessarily Pareto "efficient."
That is not what you said, which was:
>> > However, path dependence does _not_ imply that the technology that is
>> > finally adopted is less "efficient" than other technologies that might
>> > have been selected.
As I said above, Markku's question is valid, even if you don't like it (and who
can blame you!).
I snip the Davidian quadruple-talk that you are using to weasel out of
answering Markku. You didn't even offer us a sex joke.
Patrick
Markku Stenborg ®
(Robert Vienneau) wrote:
> real.a...@bottom.of.msg (Markku Stenborg ®) wrote:
[snip]
> > Umm, I had the feeling that the economic problem with path dependence
> > was that one could get locked in to a less than efficient technology.
> > Now you are saying that the economic problem with path dependence is
> > that one could get locked in to a efficient technology.
>
> That's an odd way of acknowledging that the text Markku snipped is a
> non sequitur.
>
> Does Markku have any definition in mind at all for path dependence?
Nope, I am not an expert on path dependence. I thought we were
discussing the alledged economic consequences of path dependence, not
the details of the concept of path dependence.
> Markku's later comment is no less a non sequitur. I said that path
> dependence does not imply that the end state, if there is
> an end state to such a process, is necessarily Pareto suboptimal.
> This is not the same as saying that the end state of a path-dependent
> process, if there is such an end state, is necessarily Pareto "efficient."
I thought I was posting a story about economics to sci.econ, not a
claim about rules of inference to simple.1st.order.logic.
I made the mistake in assuming that the readers would understand the
point I was trying to make, but lemme try again. Suppose several
technologies are being introduced to the marketplace (or to some
society, regardless how production, trading, etc. are organized).
Suppose we aren't really intrested in the process of how some
technologies are chosen but in the allocative and cost efficiency of
the technology that emerges.
[snip]
> I find Pareto "efficiency" of little interest. After all, one may
> have the normative opinion that it would be nice if the economy
> moved away from certain Pareto optima to certain other states
> where income is more evenly distributed, whether those other states
> are Pareto "efficient" or not.
Yes, quite a few fellers seem to have that types of opinions. How is
this relevant to your claim that the process of technology selection,
path dependent or not, chooses an efficient technology?
> To me, the point of path dependence is the development of models
> in which equilibria are non-teological and acausal. "Why is
> economics not an evolutionary science?" is still a good question.
I thought economics is also an evolutionary science. Pick almost any
issue of Journal of Games and Economic Behavior, say, and you'll see
models on evolution. Or see Fudenberg's and Levine's book on learning.
Here's a link to a general interest type of an essay
http://levine.sscnet.ucla.edu/Papers/Essay/ESSAY7.htm
Grinch
>"John Hillas" writes:
>
>>Patrick,
>>
>>I'm sure that you won't believe me, but why don't you get
>>one of your economist friends to explain to you why David
>>and Arthur are fine economists and you are a rude ignorant
>>little boy who doesn't know what he's talking about.
>
>Actually some economists have told me that I am right on the money about both
>Arthur and David, and so is Paul Krugman (who has said some similar things
>about Arthur publicly).
A Krugman tribute to Arthur:
http://web.mit.edu/krugman/www/legend.html
Jim Blair
http://www.geocities.com/CapitolHill/Senate/7018/Brinexdi.jpg
What's it mean?
David Cross wrote:
> Looks like the guy who did the graph of that chart was measuring how much
> people spend versus how much income they have, and breaking it down by decile.
> Notice that the behavior of that graph, even though it's for Brazil, seems to
> astonishingly mirror consumer spending behavior in industrialized countries -
> note the extremely high level of "overspending" by poor people,
Hi,
With you so far.
>....which fits in
> with the fact that poor people either skip paying one bill in any given month,.....etc...
???? Remember this is for the population of cities. Your explanation
would apply only to an individual for a given month. For a large
population, the effect of skiping one month to pay more the next would
average out.
Looks like in Brazil as in the US the low income people spend more than
they earn. How can they continue to do this? Many with low income (in
a given year) are not "poor", and have savings and assets to draw on.
Many retired people spend more than their income.
Also, the incentive is to minimize "reported income" for many poor in
the US to avoid the various penalities we have for earnimg "too much".
See "Effective Marginal Rates on Low-Income Households" at:
http://www.geocities.com/capitolhill/4834/poor.htm
As a result, the "underground economy" in the US (and Brazil as well?)
is extensive, providing lots of spending money to people with little
official "income".
PS Have you found any OTHER examples of strikes against the US
government before PATCO?
And do you yet understand that a country can have a high gini index even
if everyone has exactly the same average wealth and income during their
lifetime?
--
,,,,,,,
_______________ooo___(_O O_)___ooo_______________
(_)
jim blair (jeb...@facstaff.wisc.edu) For a good time call
http://www.geocities.com/capitolhill/4834
Brent Buckner
> On Fri, 08 Oct 1999 00:54:18 GMT, in sci.econ rv...@see.sig.com
> (Robert Vienneau) wrote:
> > Does Markku have any definition in mind at all for path dependence?
>
> Nope, I am not an expert on path dependence. I thought we were
> discussing the alledged economic consequences of path dependence, not
> the details of the concept of path dependence.
From "Clio and the Economics of QWERTY" by Paul A. David:
"A _pathdependent_ sequence of economic changes is
one of which important influences upon the eventual outcome can be
exerted by temporally remote events, including happenings
dominated by chance elements rather than systematic
forces."
QWERTY may be illustrative of a path-dependent sequence of technical
changes, but not of economic changes. From an economic point of view, if
the outcome is an "economically efficient" result, the sequence of
economic changes may show no evidence of important influence by
temporally remote events.
Key phrases for quibbling:
"economic changes"
"important influences"
"eventual outcome"
mas...@ix.netcom.com
>> But are there or are there not, importantly different ways of thinking
>> about economics? If there are, is this not important?
>
>Maybe there are. But if do not learn to think about economics at least
>in one way, how could you learn to think about economics in several
>different ways?
And here we see the problem made explicit.
"Learning one way" in economics is a frightful danger -- one from which
we are suffering. If there are differing ways, which is right? The policy
decisions coming from the various schools of economics differ seriously.
Find an introductory book that does *not* indoctrinate you in one school but
lets you see the alternatives and their implications.
Think of those who learned only Marx and what that led to. And Marx is not
the only Pied Piper in economics.
Mason
Robert Vienneau
> A Krugman tribute to Arthur:
> http://web.mit.edu/krugman/www/legend.html
A better URL:
<http://www.slate.com/Features/Krugman/Krugman.asp>
SUSUPPLY
>> However, I am always ready to learn from my betters, so why don't YOU
>explain
>> it to me?
>>
>> Patrick
>>
>Because, on the basis of your past performance you wouldn't listen.
With a Kiwi twist:
>You seem to listen to Mark Witte. Get him to explain to you…
The judges give uniformly low marks, sorry. If it’s any consolation it didn’t
work for Lauchlan either.
As to my listening to Professor Witte, I certainly did the time he compared me
to David Ricardo. I could probably find it in Deja News for you if you’d like.
I’m sure you didn’t read it originally, since you betray an ignorance of a
great deal that has gone on the newsgroup, such as all the QWERTY threads.
However, the good professor and I have disagreed over several things, but I
can’t remember him ever trying to evade an issue the way you are. Certainly if
he’d tried to substitute a personal insult such as; "you are a rude ignorant
little boy who doesn't know what he's talking about.", for a substantive reply,
I’d have remembered it.
Especially if he’d asked me a question, as you did, about Mr. Taylor’s
statement about QWERTY, and had received an informative answer, perhaps in the
form of an excerpt from the Palgrave. I would be quite amazed if he would next
respond as you did. Perhaps the Yanks have to take a charm school course
before they get their PhD’s?
>…why
>Krugman's claim the Arthur's view of his own role in the development
>of the economics of increasing returns does not support your attack
>on the ideas.
And, pray tell, how have you supported your defense of Arthur’s ideas?
>I repeat: Arthur and David are both fine economists.
>I see nothing in Krugman to indicate that he thinks otherwise. He certainly
>is a bit annoyed with Arthur for what he sees as an unwarrented claim to
>originality. And he might be right. Why you think Krugman, claim that
>"I thought of it first" supports you dislike for the ideas is beyond me.
There does seem to be a great deal that is beyond you, including an ability to
read either what I or Krugman have written.
For instance where did Krugman say anything like "I thought of it first"?
Quite the contrary, he seems to be—in his own words—PISSED, that he ever heard
of "The Economics of QWERTY". I don’t blame him, given the (continuing)
embarrassment it has caused him (how many copies of "Peddling Prosperity" do
you suppose there are circulating, all with that now disavowed famous
chapter?).
Right now, I’m more interested in what kind of an economist you are. Here’s
Brian Arthur responding to an interviewer who brings up his Waterloo:
<< [Interviewer]: That same Wall Street Journal article concluded that there is
"an emerging consensus . . . that the path dependence school has yet to come up
with the smoking gun it needs to show the market-place locked into a manifestly
inferior technology."
<< Do you have a smoking gun for increasing returns?
<< Arthur: I find I'm puzzled by all of this because it's a bit like debating
evolution with creationists: "But if you believe in evolution, the inference is
that angels must have evolved their wings, and that would upset all of
theology." For me it's moot. The onus isn't on me or anyone else, to show that
we're locked in to any inferior thing. The onus is on the opinion page of the
Wall Street Journal and the libertarians to show that all things that we're
using in the economy are not just the best they could have been at the time,
but are the best that could possibly have emerged. Nobody in computer science
believes that about DOS. As for the QWERTY keyboard, if Margolis and Liebowitz
can prove it's the best, my hat is off to them. >>
What do you think about that John, is that how a "fine economist" works?
Later in the same interview:
<< [Interviewer]: Let me throw at you some more of these free enterprise think
tank critiques of your theories. Clyde Wayne Crews went beyond saying that
lock-in to inferior goods was a myth; he claims that lock-in is a myth. The
examples he cited were: color TVs did supersede black and white; CDs did
replace vinyl records. In another piece, Robert Levy of the Cato Institute,
added a couple more examples: Word Perfect once looked unassailable as a word
processing product; Lotus 123 once had no competition in spreadsheets. All of
those actually failed to lock in and exclude the competition.
<< Arthur: Not at all. They all locked in, but then the next wave of technology
took over. We were indeed locked in.
[My note: John, can you tell me with a straight face, that Arthur really
believes the above?]
<< The fact is, technology comes in waves. No one I know who talks of
increasing returns says that lock-in is forever. We are locked in to English,
temporarily. In 500 years time it'll be a different language. Three-hundred
years ago people were locked into Latin as the international means of
discourse. No one said a lock-in is forever. In fact, it's taken for granted in
high tech that lock-ins typically last anywhere between a year or two and five
years.
[my note: Who thinks the Justice Dept would be in court with Microsoft if
"Lock-in" was for no more than 5 years?]
<< Let me give you a very specific example here again. Netscape, as you know,
had a heavy lock-in in the browser market. And it wasn't dislodged by means of
a new wave of technology: no new software product came along to supplant the
browser; instead it was steamrollered aside by the Microsoft juggernaut,
Internet Explorer.
[my note: I call this "Arthur's Law": Technology comes in waves....Unless it
doesn't]
<< [Interviewer]: But it hasn't exactly been steamrollered out of the way. It
still actually has a bigger share of the market than Internet Explorer.
<< Arthur: Well, you can certainly claim that its lock in isn't as heavy as it
was two years ago. I'm just saying that a lock-in is only good until the next
wave of technology, until the game changes. And even if the game doesn't change
-- it didn't with the browser market -- if you have enough guns, you can
dislodge the lock-in."
John, do you see a certain (shall we say) flexibility here: "its lock in isn't
as heavy as it was two years ago"?
Eagerly waiting to be enlightened,
Patrick
SUSUPPLY
>oldn...@mindspring.com wrote:
>
>> A Krugman tribute to Arthur:
>> http://web.mit.edu/krugman/www/legend.html
>
>A better URL:
>
> <http://www.slate.com/Features/Krugman/Krugman.asp>
>
Oh yes, read both. In Robert's url we can read this:
<< Letter from John Cassidy:
<< Paul Krugman loves to berate journalists for their ignorance of
economics, particularly his economics, but on this occasion, I fear, his logic
is more addled than usual. I am reluctant to dignify his hatchet job with a
lengthy reply, but some of his claims are so defamatory that they should be
addressed, if only for the record.
<< 1) Krugman claims that my opening sentence--"In a way, Bill Gates's
current troubles with the Justice Department grew out of an economics seminar
that took place thirteen years ago, at Harvard's John F. Kennedy School of
Government"--is "pure fiction." Perhaps so, but in that case somebody should
tell this to Joel Klein, the assistant attorney general in charge of the
antitrust division. When I interviewed Klein for my piece about the Microsoft
case, he singled out Brian Arthur as the economist who has most influenced his
thinking about the way in which high-technology markets operate.>>
Which is just what I have been telling everyone lo these two years. Microsoft
is being sued over a theory that even Brian Arthur now admits is bunk. As I
just demonstrated to John Hillas with Arthur's own words.
Patrick
John Hillas
I'm sure that you won't believe me, but why don't you get
one of your economist friends to explain to you why David
and Arthur are fine economists and you are a rude ignorant
little boy who doesn't know what he's talking about.
SUSUPPLY <susu...@aol.com> wrote in message
news:19991007104325...@ng-fr1.aol.com...
John Hillas
> "John Hillas" writes:
>
> >Patrick,
> >
> >I'm sure that you won't believe me, but why don't you get
> >one of your economist friends to explain to you why David
> >and Arthur are fine economists and you are a rude ignorant
> >little boy who doesn't know what he's talking about.
>
both
> Arthur and David, and so is Paul Krugman (who has said some similar things
> about Arthur publicly).
>
explain
> it to me?
>
> Patrick
>
>
Because, on the basis of your past performance you wouldn't listen.
Krugman's claim the Arthur's view of his own role in the development
of the economics of increasing returns does not support your attack
Mark Patrick Witte
John Hillas <j.hi...@auckland.ac.nz> wrote:
>
>>
>Because, on the basis of your past performance you wouldn't listen.
>You seem to listen to Mark Witte.
What, SUSUPPLY listen to someone? Oh, you must be referring to
how I converted him not only into becoming a Democrat but even into being
the head of his local chapter of "Sloppy Thirds: Clinton in 2000!"
>Get him to explain to you why
>Krugman's claim the Arthur's view of his own role in the development
>of the economics of increasing returns does not support your attack
>on the ideas. I repeat: Arthur and David are both fine economists.
Paul David has done a lot of good stuff, Arthur's contributions are
more modest.
>I see nothing in Krugman to indicate that he thinks otherwise. He certainly
>is a bit annoyed with Arthur for what he sees as an unwarrented claim to
>originality. And he might be right. Why you think Krugman, claim that
>"I thought of it first" supports you dislike for the ideas is beyond me.
Krugman's claim is not that he thought of it first, but that his
main contributions are elements of a wave of such work that certainly
preceded Arthur. Furthermore, Arthur's work fails to match the rigor and
applicability of what had become standard in the field by then.
David Cross
>>....which fits in
>> with the fact that poor people either skip paying one bill in any given
month,.....etc..
>.
>
>???? Remember this is for the population of cities. Your explanation
>would apply only to an individual for a given month. For a large
>population, the effect of skiping one month to pay more the next would
>average out.
Only if they manage to get all their bills paid on time every month - otherwise
they've got this overhang of bills they have to pay and short-term borrowing
they've probably done which tends to stay relatively constant.
>Looks like in Brazil as in the US the low income people spend more than
>they earn. How can they continue to do this? Many with low income (in
>a given year) are not "poor", and have savings and assets to draw on.
>Many retired people spend more than their income.
I highly doubt Brazil has the infamous Subchapter S corporation (read: Screw
the working class by registering all your income as corporate so YOU don't pay
any taxes and THEY have to take up the slack), so claiming that people with
assets deliberately generate a low income isn't going to work in a
semi-industrialized nation where a sign of wealth is how bulletproof your glass
is and how many private security guards you can get. These guys have to get
paid and the glass with craze marks has to get replaced, ya know.
>PS Have you found any OTHER examples of strikes against the US
>government before PATCO?
Still working on it. Get back to you in a bit on that though.
>And do you yet understand that a country can have a high gini index even
>if everyone has exactly the same average wealth and income during their
>lifetime?
That only works if there's no inflation and if there is, that the bottom wage
keeps pace or slightly exceeds. (as it did in the 1950s and 1960s, as the Gini
continued to fall all through those years)
--
"How do you know God didn't spake to Charles Darwin?"
- Henry Drummond to Matthew Harrison Brady, _Inherit_the_Wind_.
Grinch
Cross) wrote:
>I highly doubt Brazil has the infamous Subchapter S corporation (read: Screw
>the working class by registering all your income as corporate so YOU don't pay
>any taxes and THEY have to take up the slack),
What the heck is this supposed to mean, "register income as
corporate"?
What do you imagine you are talking about here? Vis-a-vis the
"infamous" S corporation, used by owner of pizza parlors and taxi
cabs across America?
dav...@my-deja.com
>I'm sure that you won't believe me, but why don't you get
>one of your economist friends to explain to you why David
>and Arthur are fine economists and you are a rude ignorant
>little boy who doesn't know what he's talking about.
I won't comment on Arthur, but David's record is certainly more mixed
than many. His QWERTY article isn't the only one that misrepresents the
facts; he wrote an article about wheat threshers that depended on
incorrect assumptions about the ability of farmers to share this
machinery. I believe the article's assumptions were refuted by a
graduate student who spent one afternoon in the university's library
looking through the company's archives. The analysis hinged crucially
on these assumptions, too; they weren't merely for convenience.
His writing is also turgid and long-winded. The QWERTY piece is an
exception. I think it was part of the annual AEA issue of AER where the
pieces tend to be very brief.
That said, if you make it all the way through a David piece, you will
certainly have some interesting issues to think about. He's certainly
contributed to or started a number of interesting debates.
--Dave
dav...@my-deja.com
Sent via Deja.com http://www.deja.com/
Before you buy.
John Hillas
Mark Patrick Witte <mwi...@merle.acns.nwu.edu> wrote in message
news:7tm81l$6...@news.acns.nwu.edu...
Of course, I thought a bit about this but decided to write it this way
anyway.
Krugman, I think, more or less explicitly says that he's a bit annoyed
because
it's something that he has made contributions to that Arthur is claiming
credit
for. The more substantial point is that an argument about priority says
nothing
negative about the content of the ideas. In fact, implicit in the fact that
it's worth
fighting for the credit is that the credit is positive.
I too think that Paul David's work is more substantial, but I think very hig
hly
of David. In the set of economists at the 30 - 40 North American top 20
schools, Arthur would not, in my opinion, be anywhere near the bottom.
John Hillas
>
> Eagerly waiting to be enlightened,
> Patrick
>
The standard arguments of economics underlying
the first and second theorems of welfare economics
depend on certain assumptions. One of those assumptions
is that lack of externalities. The kind of things that David,
Arthur, and others both before them and since are talking
about are a kind of externality that seems to be quite important
in many situations. Whether or not the QWERTY keyboard is
the best possible layout or not is not very relevant. If it was
substantially inferior, but the externalities were not present
in other situations then it wouldn't be very important. It was just
a story. I don't know anyone who studies the telecommunications
industry, for example, that doesn't think that network externalities
are important in that industry.
As to the story. Neither Arthur nor David made it up. They took
an example of a story that was widely believed and repeated
among those involved in the computer industry and computer
science departments and used it to illustrate some of the things
they were thinking about.
You're right that I'm ignorant about much of what goes on on this
forum. I look at it occasionally and usually see you saying something
silly. Occasionally, such as when you say insulting things about fine
economists that I know, I react. You seem to think that this is an
important forum for economic debate. It's not.
Now, that's really it from me. You're simply not worth it. If you don't
want
people to call you a rude little boy you shouldn't say rude things about
your
betters.
John Hillas
I suppose you're free to make whatever comments you want,
dave955, but it's a bit gutless to make this kind of comment
without identifying yourself. Taking a leaf out of SUSUPPLY's
book, I guess.
<dav...@my-deja.com> wrote in message news:7tmo7j$su6$1...@nnrp1.deja.com...
>
> >I'm sure that you won't believe me, but why don't you get
> >one of your economist friends to explain to you why David
> >and Arthur are fine economists and you are a rude ignorant
> >little boy who doesn't know what he's talking about.
>
dav...@my-deja.com
> Most would be very happy to have Paul David's mixed record.
> I suppose you're free to make whatever comments you want,
> dave955, but it's a bit gutless to make this kind of comment
> without identifying yourself. Taking a leaf out of SUSUPPLY's
> book, I guess.
I'm not quite sure what my identity has to do with the merit of my
contents. The merits of the QWERTY issue have already been covered in
this forum. Since my "gutless" comments apparently don't carry weight
with you, let me offer some quotations from others. But first, let's
examine your defense of the QWERTY issue.
> As to the story. Neither Arthur nor David made it up. They took an
> example of a story that was widely believed and repeated among those
> involved in the computer industry and computer science departments
> and used it to illustrate some of the things they were thinking about.
With this in mind, let's consider David's analysis of the adoption of
McCormick reapers in the U.S. during the 1850s.
First I quote from David's "Transport Innovation and Economic Growth:
Professor Fogel On and Off the Rails" in Economic History Review (1969).
"In 1890, in excess of 76 billion ton-miles of freight were handled by
U.S. railroads. That canals could have carried a major portion of this
additional traffic is a vital assumption in Fogel's argument. Yet only
one page is devoted to supporting this assertion by examining the cost
characteristics of canal transportation in the U.S., and not a very
satisfactory page at that." (511)
"Only a reckless man would refuse to admit the shakiness of the
statistical basis for the preceding exercise, or the crudity of the
edifice of social rate of return calculations erected upon those
foundations." (525)
I intend to apply these very criticisms to David himself. Let's turn to
the adoption of reapers. The key question is why reapers were adopted
in the 1850s when the original reaper was introduced in 1833. David's
analysis contains three maintained assumptions:
- the machines lasted ten years and could be bought at an
interest rate of 6% (well below market rates)
- the reaper could not be shared among a group of farmers
- technological progress in reapers was not significant
David's analysis appears in "The Mechanization of Reaping in the
Ante-Bellum Midwest" in Rosovsky (ed.), Industrialization in Two
Systems: Essays in Honor of Alexander Gerschenkron (1966). The
following quotations appear in Alan Olmstead, "The Mechanization of
Reaping and Mowing in American Agriculture, 1833-1870," Journal of
Economic History (1975).
"Before turning to these twin themes of sharing and technological
change, it is worth considering a narrower question. Within the
comparative static framework how sensitive are the threshold
calculations to changes in parameter values?" (329)
Olmstead argues that a lifespan of 5 years and an interest rate of 19
percent are more reasonable based on a number of sources. See the
article if you want to see the many citations to justify these figures.
He concludes
"The findings presented above also suggest that precise threshold
calculations are fraught with uncertainty. Reservations similar to
those raised in this section could be stated of every variable and
parameter in the threshold equation except one (the price of the reaper
is fairly well agreed upon)." (333)
Sounds like someone forgot to "admit the shakiness of the statistical
basis for the preceding exercise". It's somewhat suspicious that David
is uncharacteristically terse regarding his specific choice of parameter
values, but I'm willing to give him the benefit of the doubt.
"These issues, although of conceptual interest, take a back seat to the
more important question of whether or not there was widespread sharing
and renting. David argues that 'In the apparent absence of feasible
cooperative arrangements for sharing the use of harvesting arrangements
for sharing the harvesting machinery among farms, at this time the
reaping machine itself constituted an indivisible input to the farmer.'
This argument is particularly interesting because it runs counter to the
economist's usual proclivity to assume that side markets will arise
unless faced by well-specified institutional or technological
constraints which cause market power. It is thus necessary to show such
that such barriers exist." (334)
"A number of scholars have recognized that if machines could be shared,
thereby making their services divisible, the threshold model would lose
much of its appeal. Lance Davis and Alan Bogue have made this point
quite forcefully, but they only offered hints of actual evidence. Davis
cites Bogue: 'I gave this problem to a graduate student one morning at
eight o'clock and he was back in my office by ten with a long list of
cooperative purchases.'" (336)
"An indication of the pervasiveness of legal joint-ownership can be
gleaned from the records of the McCormick Company. Random samples of
all McCormick sales in 1854 and 1959 show that in both years
approximately one out of every four reapers sold was purchased jointly
by two or more individuals. In the overwhelming majority of cases the
individuals did not have the same last name. An in-depth investigation
indicates that the above figure underestimates the importance of sharing
in the Midwest because the frequency of joint purchases varied sharply
between regions." (337)
"A search of farmers' diaries, letters, and autobiographies uncovered
twenty-three documents that mentioned reapers and/or mowers. In many
instances the references were brief, comprising only one or two
sentences. In thirteen there is explicit mention of sharing or
contracting, in three case it is uncertain whether or not the machines
were shared, and in seven cases there was no mention of cooperative
use." (338)
"Company advertisements offer substantial support for Loehr's conclusion
[printed in a 1937 study of reaping behavior] that reapers and mowers
were frequently shared and rented." (340)
So, it appears David told a story using an assumption many sources would
have told him was wrong. This is hardly an assumption "that was widely
believed and repeated" among historians.
Olmstead finally questions David's assumption that no significant
technological progress in reaping can explain the adoption of the reaper
in the 1850s when it was invented in the 1830s. "If we want to hold
technology constant in order to identify the importance of changing
market forces, is it reasonable, especially in light of the emphasis of
the traditional historians [on technological progress], to consider the
reaper a homogeneous product during the period 1849-1857, let alone over
two or three decades? ...A study of the reports of the various mower and
reaper trials offers and indication of the rapid improvement in
performance." (349)
I again leave the details to the interested reader. Of note is that
David somehow managed to ignore the implication that trials alone
suggest products are changing in important ways. Unless, of course, he
was simply unaware of such trials.
"Finally, we would be remiss not to raise some important methodological
issues. On this subject we can do no better than to heed Professor
David's own warning "that the econometric historian - especially if he
should keep regular company with theorists - lives in perpetual danger
of never pausing to ask whether there is perhaps some direct evidence to
suggest he should favor a different, and possibly less mathematically
tractable set of priors." (352)
David has done good work. He's also done some terrible work. His own
criticism of Fogel's work on railroads applies much more forcefully to
his own work on reapers. In his body of work, there are several
instances of gross factual inaccuracy that blemish his record and
legacy. That is why I stated "David's record is certainly more mixed
than many." He managed to have three highly suspect assumptions in the
same piece, and all three were necessary to make his case. His
article tells a nice story, but it's fiction, not history. Anyone who
thinks I've distorted the David and Olmstead articles should take a look
at them.
I'm sorry you feel that somehow my criticism is diminished because I
have not attached my identity to it. In this case, I am honored to be
in SUSUPPLY's company.
SUSUPPLY
>The standard arguments of economics underlying
>the first and second theorems of welfare economics
>depend on certain assumptions. One of those assumptions
>is that lack of externalities. The kind of things that David,
>Arthur, and others both before them and since are talking
>about are a kind of externality that seems to be quite important
>in many situations. Whether or not the QWERTY keyboard is
>the best possible layout or not is not very relevant.
[I interrupt here to once again point out that both Arthur and David thought it
of the utmost importance. It supposedly had revolutionary implications—and
that is why Microsoft is involved in federal court, as we write. Now that
QWERTY has been debunked, it suddenly "is not very relevant".]
>If it was
>substantially inferior, but the externalities were not present
>in other situations then it wouldn't be very important. It was just
>a story. I don't know anyone who studies the telecommunications
>industry, for example, that doesn't think that network externalities
>are important in that industry.
Which is of course, beside the point. But what else can you do but divert
attention (and snip embarrassing questions that have been put to you), when
someone calls your bluff, John? You really haven’t read anything much on this,
have you?
>As to the story. Neither Arthur nor David made it up. They took
>an example of a story that was widely believed and repeated
>among those involved in the computer industry and computer
>science departments and used it to illustrate some of the things
>they were thinking about.
So this IS how "fine economists" work? I do have to admit that I hope it is
only so in New Zealand.
>You're right that I'm ignorant about much of what goes on on this
>forum. I look at it occasionally and usually see you saying something
>silly. Occasionally, such as when you say insulting things about fine
>economists that I know, I react. You seem to think that this is an
>important forum for economic debate. It's not.
More changing of the subject. But, please provide me with a quote
demonstrating that I think sci.econ, "is an important forum for economic
debate". However, I do—apparently unlike you—think that in any forum, one
should be able to back up what one says.
Given your apparent ignorance of the issues involved in the "path dependence"
debate, I note in passing that I think fora such as the Journal of Law and
Economics, the Journal of Law, Economics, and Organization, the Journal of
Economic Perspectives, and others are more important than sci.econ. And, of
course, should you ever develop a serious interest in the subject I would be
happy to direct you to the articles in those publications from which I have
been largely drawing my arguments.
I also note your failure to provide me with any examples of my, "saying
something silly". Another example of the difference in approach between us.
You seem to operate on the premise that your assertions are enough, with no
need to provide any evidence for them, and to completely ignore counter
arguments and the evidence accompanying them. Witness your wholesale inability
to respond substantively to ANY points I’ve made.
>Now, that's really it from me. You're simply not worth it. If you don't
>want
>people to call you a rude little boy you shouldn't say rude things about
>your
>betters.
Yes, as I said earlier, the finely developed, Down Under, "Could if I Wanted"
Gambit. All it demonstrates is that you have at least enough sense to realize
that when you have nothing behind your bluster, discretion is the better of
valor. However, it also goes a long way toward showing who it is that doesn’t
know what he is talking about.
Patrick
SUSUPPLY
>I won't comment on Arthur, but David's record is certainly more mixed
>than many. His QWERTY article isn't the only one that misrepresents the
>facts....
David Kirsch of UCLA (PhD from Stanford, and apparent admirer or Paul David)
writes:
<< First, as Margolis suggests, prior treatments of the
competition between steam, gas and electric cars have
indeed been deeply flawed. [Brian] Arthur's well-known claim
that an outbreak of hoof-and-mouth disease in New
England in the spring of 1914 led to the closing of
watering troughs for the Stanley Steamers and thereby
tipped the scales towards internal combustion is well
wide of the mark. By 1914, gasoline engines already
dominated the vehicle market; the standard had already
been set. The entire national production of steam cars
(produced at that time by only two manufacturers) was
around 1,000 vehicles, less than 0.2% of the national
total and around one day's run of the Ford assembly
line. I do not know why "referees and others" have
told Margolis not to discuss this case. Even if it
was just an illustration, it happens to be an
inaccurate one. >>
That is available at:
http://www.eh.net/lists/eh.res/forum3/nov/0002.html
BTW, those who would like the actual story of railroad guages might check out
what Douglas Puffert has to say at that same url.
Patrick
SUSUPPLY
>Most would be very happy to have Paul David's mixed record.
>I suppose you're free to make whatever comments you want,
>dave955, but it's a bit gutless to make this kind of comment
>without identifying yourself. Taking a leaf out of SUSUPPLY's
>book, I guess.
Given the quality of dave955's posts, I thank you for the compliment.
However, I must ask, how do you rate the gutlessness of your; first, claiming
that I didn't know what I was talking about. And then refusing to respond
substantively to the points I made in reply?
Patrick
Mark Patrick Witte
However, Arthur is not part of an economics department.
Robert Vienneau
> [ An actual argument ]
Take a look at the numeric keypad to the right on your keyboard. It
looks like so:
7 8 9
4 5 6
1 2 3
And the keys on your touchtone phone look like:
1 2 3
4 5 6
7 8 9
What does the keypad on your ATM machine look like?
I know of no reason to suppose one arrangement is more efficient than
the other. Yet, I assume, these arrangements show the influence of
path dependent processes. (I don't know much about the evolution of
either arrangement.)
So it would seem that an "economically efficient" outcome may show
the influence of temporally remote events, after all. I think this
example may be generalizable to models in which many agents
coordinate choices.
I don't understand Brent's distinction between "technical" and
"economic" changes.
SUSUPPLY
>Take a look at the numeric keypad to the right on your keyboard. It
>looks like so:
>
> 7 8 9
> 4 5 6
> 1 2 3
>
>And the keys on your touchtone phone look like:
>
> 1 2 3
> 4 5 6
> 7 8 9
>
>What does the keypad on your ATM machine look like?
>
>I know of no reason to suppose one arrangement is more efficient than
>the other. Yet, I assume, these arrangements show the influence of
>path dependent processes. (I don't know much about the evolution of
>either arrangement.)
>
>So it would seem that an "economically efficient" outcome may show
>the influence of temporally remote events, after all. I think this
>example may be generalizable to models in which many agents
>coordinate choices.
Yes, Robert, very very good. Numbers had to be invented before we could have
keypads. Have you shared this with Joel Klein at the Justice Dept? I'm sure
it would be the final nail in Microsoft's coffin.
Not to mention the end of neo-classical economics.
Patrick
mas...@ix.netcom.com
>In article <37fe28bf...@news.redconnect.com>, oldn...@mindspring.com
>says...
>>
>>On Sat, 09 Oct 1999 04:21:31 GMT, dcr...@nospam.home.com (David
>>Cross) wrote:
>>
>>>I highly doubt Brazil has the infamous Subchapter S corporation (read: Screw
>>>the working class by registering all your income as corporate so YOU don't pay
>>>any taxes and THEY have to take up the slack),
>>
>>What the heck is this supposed to mean, "register income as
>>corporate"?
>
>Corporation tax even in the top bracket is lower than the equivalent income
>tax. Plus there's all sorts of goodies in the form of deductions you can take
>which no individual can get. One example is expensing the gas you put in your
>car as a "business expense" and getting a writeoff.
>
>Well how the hell come a working stiff like me can't get a writeoff for all the
>gas I need to buy to get to my job on time?
Chapter S corporation is usually not recommended and incorporation is
not necessary to get lower taxes. (by the way, corporation tax is low but
the owner(s) get taxed again on income they take out)
My book, although a little out of date on this, has some ideas about the
tax advantages of being an "unemployed" company owner:
http://masonc.home.netcom.com/money/chap8.html
And, David, you can deduct the cost of your gas if you are a
legitimate independent working on contract at the same job.
Better yet, just be independent.
Mason
David Cross
says...
>
>On Sat, 09 Oct 1999 04:21:31 GMT, dcr...@nospam.home.com (David
>Cross) wrote:
>
>
>>I highly doubt Brazil has the infamous Subchapter S corporation (read: Screw
>>the working class by registering all your income as corporate so YOU don't
pay
>>any taxes and THEY have to take up the slack),
>
>What the heck is this supposed to mean, "register income as
>corporate"?
Corporation tax even in the top bracket is lower than the equivalent income
tax. Plus there's all sorts of goodies in the form of deductions you can take
which no individual can get. One example is expensing the gas you put in your
car as a "business expense" and getting a writeoff.
Well how the hell come a working stiff like me can't get a writeoff for all the
gas I need to buy to get to my job on time?
--
Grinch
> oldn...@mindspring.com says...
>> dcr...@nospam.home.com (David Cross) wrote:
>>>I highly doubt Brazil has the infamous Subchapter S corporation (read: Screw
>>>the working class by registering all your income as corporate so YOU don't
>>>pay any taxes and THEY have to take up the slack),
>>
>>What the heck is this supposed to mean, "register income as
>>corporate"?
>
>Corporation tax even in the top bracket is lower than the equivalent income
>tax.
Congratulations, you got one fact correct. But only one.
As for the rest, does the term "ass backwards" have the same meaning
in Canada as in the Lower 48?
Individuals do not use S Corporations to "register income as
corporate" and have it taxed at corporate rates.
Exactly the OPPOSITE, in fact (why am I not surprised?):
An S coporation is a legally existing corporation that elects to have
its income taxed at *personal* tax rates, on a *personal* tax return.
As you note, corporate tax rates are *lower* -- never exceeding 35%
and not getting there until $10 million of income. S corporations pay
*higher* tax rates than regular corporations.
> Plus there's all sorts of goodies in the form of deductions you can take
>which no individual can get.
But not for S corporations, because their income is taxed under the
"individual" tax rules. S corporation owners *forfeit* the right to
use the fancy deductible benefit plans that regular corporations use,
as the corporate income is taxed on a pesonal return.
S corporations are used by small mom-and-pop businesses across
America. Grocery stores, pizza parlor owners, one-person taxi cab
companies.
Why do they do so, and pay the higher tax rate while forfeiting
deductible benefits?
Because taxes are much *simpler*. They avoid having to work
through the multi-layers of tax that apply to corpoate income and the
10,000 pages of Tax Code and Regulations designed for General Motors
and Exxon that will apply to them too if they file a regular corporate
return.
Instead, they forfeit the fancy benefits their corpoations
legally could provide them, and pay *higher* tax rates, by reporting
their business income directly on their personal tax returns.
Now, would you like to slowly and carefully explain how this
translates into:
>>>....the infamous Subchapter S corporation (read: Screw
>>>the working class by registering all your income as corporate so YOU don't
>>>pay any taxes and THEY have to take up the slack),
As for...
>One example is expensing the gas you put in your
>car as a "business expense" and getting a writeoff.
>Well how the hell come a working stiff like me can't get a writeoff for all the
>gas I need to buy to get to my job on time?
I don't know. But you certainly couldn't do it in the US with an S
corporation either (or with a regular corproation for that matter --
commuting costs aren't deductible for anybody).
Tweek
David Cross <dcr...@nospam.home.com> wrote in message
news:6swM3.2882$K5.3...@news1.rdc1.bc.home.com...> >On Sat, 09 Oct 1999 04:21:31 GMT, dcr...@nospam.home.com (David
> >Cross) wrote:
> >
> >
> >>I highly doubt Brazil has the infamous Subchapter S corporation (read:
Screw
> >>the working class by registering all your income as corporate so YOU
don't
> pay
> >>any taxes and THEY have to take up the slack),
> >
> >What the heck is this supposed to mean, "register income as
> >corporate"?
>
> Corporation tax even in the top bracket is lower than the equivalent
income
take
> which no individual can get. One example is expensing the gas you put in
your
> car as a "business expense" and getting a writeoff.
>
> Well how the hell come a working stiff like me can't get a writeoff for
all the
> gas I need to buy to get to my job on time?
>
Keep in mind that gas as a business expense would only be valid if used for
a business purpose. Such as a salesman traveling to a customer. In the US,
if you have a company car, the IRS wants you to keep a log for personal vs
business usage. Personal usage becomes taxable income at year end. This
would include part of the lease payment and the insurance. Salesmen
typically have a very high percentage of business to personal usage. A VP
who got a company car as part of his compensation would probably have a very
low percentage and the car and its costs would be taxable income at year
end.
Jim Blair
http://www.geocities.com/CapitolHill/Senate/7018/Brinexdi.jpg
What's it mean?
David Cross wrote:
> Looks like the guy who did the graph of that chart was measuring how much
> people spend versus how much income they have, and breaking it down by decile.
> Notice that the behavior of that graph, even though it's for Brazil, seems to
> astonishingly mirror consumer spending behavior in industrialized countries -
> note the extremely high level of "overspending" by poor people,
jim blair:
With you so far.
>....which fits in
> with the fact that poor people either skip paying one bill in any given month,.....etc...
???? Remember this is for the population of cities. Your explanation
would apply only to an individual for a given month. For a large
population, the effect of skiping one month to pay more the next would
average out.
>Only if they manage to get all their bills paid on time every month - >otherwise
>they've got this overhang of bills they have to pay and short-term >borrowing
>they've probably done which tends to stay relatively constant.
Hi,
I still don't understand. Any particular individual need not pay off
their debt during any particular time interval. Your explanation that a
debt/payback cycle by individuals can explain the graph of OVERALL CITY
WIDE extra spending by the low income population just does not make any
sense. During any given month, some individuals would be in the
'borrowing' phase but others would be in the 'payback' phase.
But my explanation of people spending less than they earn while in their
relatively high income working years (and saving the difference for
retirement), and then spending more than they earn during their
relatively lower income retirement years. would offer at least a partial
explanation for the graph.
......
And do you yet understand that a country can have a high gini index even
if everyone has exactly the same average wealth and income during their
lifetime?
>That only works if there's no inflation and if there is, that the >bottom wage
>keeps pace or slightly exceeds. (as it did in the 1950s and 1960s, as >the Gini
>continued to fall all through those years)
???? Again, inflation is not the issue since the claim was made for
"constant dollars". If the initial wage remains "constant" in constant
dollars and everyone gets a "big wage increase" every year, the gini
index will be large, the wage (and wealth) gap between rich and poor
will be large, and everyone will be equal in average wage and in wealth
over their lifetime (if they all live to the same age).
(The point of the example being that gini index and income/wealth gap
mean little unless income mobility is also considered).
--
,,,,,,,
_______________ooo___(_O O_)___ooo_______________
(_)
jim blair (jeb...@facstaff.wisc.edu) For a good time call
http://www.geocities.com/capitolhill/4834
Harold
Cross) wrote:
>In article <37fe28bf...@news.redconnect.com>, oldn...@mindspring.com
>says...
>>
>>On Sat, 09 Oct 1999 04:21:31 GMT, dcr...@nospam.home.com (David
>>Cross) wrote:
>>
>>>I highly doubt Brazil has the infamous Subchapter S corporation (read: Screw
>>>the working class by registering all your income as corporate so YOU don't
>>>pay
>>>any taxes and THEY have to take up the slack),
>>
>>What the heck is this supposed to mean, "register income as
>>corporate"?
>
>Corporation tax even in the top bracket is lower than the equivalent income
>tax. Plus there's all sorts of goodies in the form of deductions you can take
>which no individual can get. One example is expensing the gas you put in your
>car as a "business expense" and getting a writeoff.
Sorry David. You have it backwards (why am I unsurprised?). An owner
or owners (there may be up to 35) of an S corporation pays individual
income tax rates, not corporate rates.
Let me quote from an IRS guide, "...S corporations... are known as
pass-through entities because they are not separate taxpayers and all
of their income and losses generally are passed through and taxed to
their owners."
Not surprising that you do not know this. You live, after all, in
Canada, and admit you do not even know the price of milk in the US,
why expect you to know what an S corporation does?
However, I suggest that these things are easily checked prior to
posting such ignorance.
Regards, Harold (Capitalist Pig)
----
""At the heart of the socialist vision is the notion that a
compassionate society can create more humane living conditions for all
through government 'planning' and control of the economy....
Idealistic socialists create systems in which idealists are almost
certain to lose and be superseded by those whose drive for power, and
ruthlessness in achieving it, make them the 'fittest' to survive under
a system where government power is the ultimate prize.... The issue is
not what anyone intends but what consequences are in fact likely to
follow."
--- Thomas Sowell
mas...@ix.netcom.com
>
>Keep in mind that gas as a business expense would only be valid if used for
>a business purpose. Such as a salesman traveling to a customer. In the US,
>if you have a company car, the IRS wants you to keep a log for personal vs
>business usage. Personal usage becomes taxable income at year end. This
>would include part of the lease payment and the insurance. Salesmen
>typically have a very high percentage of business to personal usage. A VP
>who got a company car as part of his compensation would probably have a very
>low percentage and the car and its costs would be taxable income at year
>end.
>
Everything in that paragraph is correct, BUT:
The purpose of giving certain employees a "company car" is to reward
them over and above their wages. The same reward as added wages
would not be equivalent. Why? Answer: because of the income tax.
Corporation treasurers are not stupid. VP's are not stupid.
People who are not "in on the know" are naive about tax avoidance.
Mason as they say in the old country: "read my book"
Tweek
<mas...@ix.netcom.com> wrote in message
news:p5sDOBR4stJSpLsVSzEd0kF=gC...@4ax.com...
I'm not sure I'm following your point. If you get a company car, you will
pay income taxes on the personal usage portion of the vehicle. Where is the
tax avoidance? If it costs the company $20,000 per year for the car and you
use it 80% of the time for personal usage, you'll have $16,000 added to your
wages at year end. Maybe you'll escape FICA taxes, I'm not sure on that.
Derek Pyne
Tweek wrote in message <7u085k$6bg$1...@nntp6.atl.mindspring.net>...
I think the point is that it is possible to inflate the personnel usage part
and difficult for either the IRS or Revenue Canada to prove it is inflated.
Indeed I have had self employed friends take me out for dinner and save the
receipts while jokingly say something about the subject matter of their
business so it could be a "business dinner"
Tweek
Derek Pyne <py...@yorku.ca> wrote in message
news:7u0app$ck8$1...@sunburst.ccs.yorku.ca...
Of course, one can always cheat. I realize that. The poster alluded to tax
avoidance. In this case it would be tax evasion.
Andrew Campbell
import and export issues, and what they do is allow write offs of expenses
that normal wage slaves do not have, that is the problem with them.....
Harold <hbras...@remove-this.earthlink.net> wrote in message
news:QV8DOOeMVkFshS...@4ax.com...
Harold
<aca...@direct.ca> wrote:
>well i am a canadian and i do now a bit about s corps as i am dealing with
>import and export issues, and what they do is allow write offs of expenses
>that normal wage slaves do not have, that is the problem with them.....
You are an ignorant idiot, to paraphrase a famous quote. Incorrect.
Subchapter S corporations are "pass through entities" with regard to
taxes, see the IRS code. This means that all income and losses must
pass through to the owners, and be reported on their tax liabilities.
The purpose of a subchapter S corporation is to confer limited
liability on small time business owners, not tax advantages.
[edited]
Regards, Harold (Capitalist Pig)
----
"Society in every state is a blessing, but government, even in its
best stage, is but a necessary evil; in its worst state an
intolerable one."
-----Thomas Paine, Common Sense (1776)
Harold
>
>Harold wrote in message <38093277....@news.earthlink.net>...
>>On Sat, 16 Oct 1999 19:50:43 -0400, "JMH" <n...@home.org> wrote:
>
>. . .
>>>But can't an s-corp own a car that the person uses everyday for both
>>>business and personal use? If so then the car is an expense for the business
>>>and a tax-shelter for the owner.
>>
>>I really think you should ask some one who has had more than one
>>course in business law.
>>
>>As I understand your question, however, I don't see how the car' use
>>is a tax shelter, since it would not decrease his taxes to use it,
>>unless he deducted operating costs, like gas, as a business expense
>>when it was for private use. That would probably be illegal, by the
>>way, and would not be tax avoidance (which is legal), but tax evasion
>>(which is not legal).
>>
>>The purchase would be a business expense, and would be deducted from
>>the owner's income, I believe.
>
>Sure, it would be decuted from his income but at a pre-tax point. If the
>person in question has to receive the income then buy the car the purchase
>of that car has a greater impact on his budget constraint as the effective
>price is the cost of the car plus the tax liability of the income.
You are talking nonsense.
The portion of the purchase price and the upkeep which is for personal
use is taxable.
Period. It does not matter if is S corp or not.
Regards, Harold
-------
"A good cause can become bad if we fight for it with means that
are indiscriminatingly murderous."
---Freeman Dyson, "Distrubing the Universe, pt. 1, ch. 4 (1979).
Jim Blair
> As I understand your question, however, I don't see how the car' use
> is a tax shelter, since it would not decrease his taxes to use it,
> unless he deducted operating costs, like gas, as a business expense
> when it was for private use. That would probably be illegal, by the
> way, and would not be tax avoidance (which is legal), but tax evasion
> (which is not legal).
Hi,
Unfortunately the tax laws have lots of loopholes of this kind. In
principle, private use of a company car is taxable--just like buying
things with those LETS.
Ya, sure.
But I see that now even the charge for parking in our lab lot is
deductable from federal income tax if you fill out the proper forms in
advance and itemize. Crazy. Makes the Forbes flat tax idea look better
all the time.
If the LETS comment is unclear, see "LETS Print Funny Money" at:
http://www.geocities.com/capitolhill/4834/cpi.htm