It is hard to imagine that the biased reactions we find in our study only emerge in a low-stakes environment, such as our experiment, without spilling over to other areas of academic life. After all, as we discussed at the beginning, there already exists growing evidence which suggests that the political leanings and the personal values of economists influence different aspects of their academic lives. It is also not a long stretch to imagine that such ideological biases impede economists’ engagement with alternative views, narrow the pedagogy, and delineate biased research parameters. We believe that recognizing their own biases, especially when there exists evidence suggesting that they could operate through implicit or unconscious modes, is the first step for economists who strive to be objective and ideology-free. This is also consistent with the standard to which most economists in our study hold themselves. To echo the words of Alice Rivlin in her 1987 American Economic Association presidential address, “economists need to be more careful to sort out, for ourselves and others, what we really know from our ideological biases.”
Our profession’s lack of understanding of gender and diversity is not innocuous. Presumably, it is one reason the climate in our profession is so poor. But it also affects what gets published (or not) and our influence on policy (or lack thereof). While economics is always concerned about causal identification, the bar is higher for papers about gender because, in the words of one of my recent journal reviewers at the American Economic Review (the flagship publication of the American Economic Association): “Unfortunately, papers like this face the uphill battle of having to rule out all unobservables that could possible [sic] be correlated with gender…” [emphasis added].
Do we have more leisure compared to our ancestors? Are we happier at our workplaces compared to hunter-gatherers?
The most compelling thing about this research was that it suggested that “economic problem” was not, as Keyne’s believed “the primary problem of the human race from the beginnings of time”. For where the economic problem holds that we have unlimited wants and limited means, Ju/’hoansi hunter-gatherers had few wants that were easily satisfied. It was for this reason that Marshall Sahlins, arguably the most influential American social anthropologist of the 20th century, redubbed hunter-gatherers “the original affluent society”.
Unsurprisingly, this simple idea briefly captured the popular imagination: “Imagine a society in which the work week seldom exceeds 19 hours, material wealth is considered a burden, and no one is much richer than anyone else”, gushed Time Magazine in an editorial about the Bushmen in November 1969, “The people are comfortable, peaceable, happy and secure…This Elysian community actually exists.”
The rich always find loopholes. As a percentage of income, it is the poor who pay the most taxes.
Because stock-market investors are always going to be thinking: “They could always turn the dial from market share to profits. Just raise prices a skootch, and reap the harvest. In spades.”
But: they never do. It’s like a perpetual-motion machine, or holding yourself up by your own bootstraps. All that rising valuation is eternally based on the fact that they could raise prices and deliver profit (and yes: they could). In the meantime the business both generates and has massive value. It employs 270,000 people, delivers zillions in employee compensation, pays zillions more to suppliers, receives hundreds of billions in revenues, and dominates whole segments of multiple industries. Are there really no “profits”? Nobody’s being irrational here.
Interest rates are inherently boring. But, they are very very important in the modern economy. Today’s needull explains interest rate in the best way possible. The writer not only looks at interest rates in standard ways like its effect on GDP growth etc., he also tries to look at rates philosophically. A very interesting read.
Now I’m going to get a tad metaphysical. Interest rates define the relationship between the present and the future. If interest rates are high, then we “discount” the future more heavily. That is to say, if interest rates are high, money next year is worth much less than money today. Conversely, when rates are low, money in a year’ s time is almost as valuable as money is right now. When rates are high, we live for the moment. When they are low, the future matters more.
Phishing & phooling. This one talks about the not so good side of the free market. We all buy stuff we don’t need, eat junk even when we know it is unhealthy. Today’s needull discusses that all this might just be a necessary outcome of free market which rewards deception and manipulation.
Financial and Macroeconomic Instability. Phishing for phools in financial markets is the leading cause of the financial crises that lead to the deepest recessions. Regarding financial crises, the now-famous phrase “This time is different” is simultaneously both true and false. In the boom that precedes the crash, phishers convince buyers of the assets they have to sell that “this time is different.” It is, for example: Swedish matches in the 1920s (Ivar Kreuger of Kreuger and Toll); the dot-coms in the 1990s; subprime mortgages in the 2000s (Angelo Mozilo of Countrywide). Yes, every time it is different: the stories are different; the entrepreneurs are different; their offerings are different. But, also, every time it is the same.