Monday, April 30, 2007

Sex or econ?

I've been a big fan of Steven Landsburg -- even way before the Freakonomics frenzy (by the way, I don't think Levitt is ruining economics). So when I heard Landsburg's third pop-econ book was out, I asked Anna to buy one for me.

Of course Anna knew that the book was about economics (she had read my Landsburg's Armchair Economist and Fair Play). Apparently so did the Borders guys in London, only they didn't have it. But not the bookshop-keeper in Changi airport. Anna was in a hurry so she didn't have time to look herself. She instead asked the guy at the info desk. And the guy said, "I don't think we have it anew, but just in case, if we do have it, it should be there" -- he was pointing to a label board read "Sex and Marriage", or something like that.

When Anna told me this, I remembered my own experience with Undercover Economist.

So I thought, this Landsburg's third pop-econ book would not be a big success like Armchair. Because even the shopkeepers didn't know where to put it correctly.

But on the second thought, maybe it's just the opposite. Because after all, sex books are more selling than econ books, don't you think?

Friday, April 20, 2007

On Being Socialist

This is from touching yet hilariously funny Lewycka's novel A Short History of Tractors in Ukrainian, a dialog between Nadhezda and her big sister Vera on becoming socialist --or its opposite side
Of course she remembers. She hasn't forgotten the smell of diesel, the swish of the windscreen wipers, the unsteady sway of the bus as it churned newly fallen snow into slush; coloured lights outside the windows; Christmas Eve 1952. Vera and I, muffled against the cold, snuggling up against Mother on the backseat. And a kind woman in a fur coat who leaned across the aisle and pressed sixpence into Mother's hand: 'For the kiddies at Christmas.'
'The woman who gave Mother sixpence.'
Mother, our mother, did not dash the coin in her face; she mumbled, 'Thank you, lady,' and slipped it into her pocket. The shame of it!
'Oh, that. I think she was a bit drunk. You mentioned it once before. I don't know why you go on about it.'
'It was that moment -more than anything that happened to me afterwards- that turned me into lifelong socialist.'
There is silence on the other end of the telephone and for a moment I think she has hung up on me. Then: Maybe it was what turned me into the woman in the fur coat.'
If you come to think of it, for one to be a socialist or capitalist can come from similar trauma, or event, you may want to call it --and they share quite similar imagined ending. But in between, the process, the method, is extremely different. And it is what matters, I guess.

Oh, and the book. It is a very recommended weekend reading by the way --an English wit poking on technology, immigration, European future, politics and class consciousness.

Tuesday, April 10, 2007

The Last King of Africa

In a lunch interview with FT in Central London, this is rock star economist Jeff Sachs' take on Africa and policy replicability:
We move on to talk about a specific project Sachs is currently involved in, Millennium Villages, where his ideas on fertilisers, malarial bed-nets and the like are tried on the ground. My less- than-ecstatic reaction to his reports of their success is clearly the same as that of many aid agencies. It instantly raises his hackles. I suggest there are many examples where success in pilots does not translate into something that can be replicated on a large scale, and that you don't necessarily need to try something to know it won't work. "I'm sorry," he is almost shouting now. "That, I disagree with completely. That's preposterous."

I realise I have exaggerated for effect, and counter that it is equally preposterous to insist they will work. "I know," he says, "but how do you actually do something in life? Do you list all the things that may go wrong and then decide we won't do it, or do you actually try?"

Then I remember a thrilling scene of The Last King of Scotland. Oscar winner Forest Whitaker playing Idi Amin scolded his Scottish private physician, Nicholas Harrigan, in his masterful African accent:
Africa is not a game. It is real
Cool, eh?

Friday, April 06, 2007

Market? What market?

There are those who completely in denial of market existence and there are those who dismiss any non-market solution. Even the most ardent supporters of market sometimes slip: they think market is so powerful you don't need to do anything. On the other extreme, the market deniers think people are all too stupid, there is a call for government in virtually everything.

We are not in either group. (Despite the accusation that we are free market diehards).

Letting a problem in the hand of market has its own cost. If that cost is greater than the cost of managing it under a controlling command, you want an organization. Or, in business lexicon: firm. In a firm you have a manager who assign you and others, tasks. Think about a small firm with one manager and three workers. It is less likely that the manager knows all of you too well, she pays each of you wage exactly worth your contribution to the firm. Furthermore, it is less likely that he knows you perfectly, that he can assign you a work that really exploit all your potential to the limit (and pay you accordingly). Why not and not? Because the cost of getting the right information for those questions is too much.

Yet, firm exists. It should then be true that the cost of letting the market handle it (the matching of your pay and your do and your being) is even higher. Just imagine you go around telling everybody on the street that you can do this and that. And somebody else goes around asking people if one happens to match exactly what she needs to work for her. And imagine this is not just you and her. But everybody, all people. Why this is not happening? Because it's too expensive.

So it leaves us with firm or market. Or more accurately: a particular firm, other firms, and the market. If the particular firm happens to be able to manage things most efficiently (that is, with the least cost), then it will prevail. The others, gone.

You should now understand why some firms are big, some small. Or, why that thing called government still exists today.