Jonathan B. Wight

A 5.8-magnitude earthquake hit the East Coast, centered just a few miles from Richmond, Virginia.

Although there hasn't been such a large earthquake here since 1897, it was amazing how fast students in my class dove for cover under the tables. You would of thought they all grew up in San Francisco.

Source: http://www2.timesdispatch.com/

This seismograph chart shows a pretty picture of the shakedown, which lasted 30-40 seconds. In "real time"—by my eyewitness account—it seemed to last for minutes. That shows the unreliability of personal testimony in such matters.

The epicenter of the earthquake was just a few miles from two nuclear reactors at North Anna, which were taken off line and reported no damage.

Moments of natural crises (hurricanes, floods, earthquakes) and manmade crises (wars) make people inclined to revert to instinctual ethical behaviors. These typically include calls for sharing and common sacrifice. Hence, one of the limits to markets is the perception that market allocations are inappropriate in certain circumstances—such as when supply is limited due to these abnormal events.

Jonathan B. Wight

Frans de Waal, in “Morals without God,” argues against the view of some people of the cloth that without God there would be no morality.  Rather, morality arose for evolutionary purposes and is thus more ingrained in the human psyche than cultural and religious conceptions of right and wrong.  The evidence for this is in fellow primates.  De Waal states:

I interact on a daily basis with monkeys and apes, which just like us strive for power, enjoy sex, want security and affection, kill over territory, and value trust and cooperation. Yes, we use cell phones and fly airplanes, but our psychological make-up remains that of a social primate. Even the posturing and deal-making among the alpha males in Washington is nothing out of the ordinary….

Chimpanzees and bonobos will voluntarily open a door to offer a companion access to food, even if they lose part of it in the process. And capuchin monkeys are prepared to seek rewards for others….  A dog will repeatedly perform a trick without rewards, but refuse as soon as another dog gets pieces of sausage for the same trick.

While God isn’t needed for morality, according to de Waal, religions serve important purposes in society that should not be dismissed.  Hence, de Waal is sympathetic to religions and their morals, which provide a framework for social advances over the centuries:

And more pertinently, what alternative does science have to offer? Science is not in the business of spelling out the meaning of life and even less in telling us how to live our lives. We, scientists, are good at finding out why things are the way they are, or how things work, and I do believe that biology can help us understand what kind of animals we are and why our morality looks the way it does. But to go from there to offering moral guidance seems a stretch….

Even the staunchest atheist growing up in Western society cannot avoid having absorbed the basic tenets of Christian morality….It is impossible to know what morality would look like without religion.

Hence, this leads to the conclusion:

[W]hat would happen if we were able to excise religion from society? I doubt that science and the naturalistic worldview could fill the void and become an inspiration for the good. Any framework we develop to advocate a certain moral outlook is bound to produce its own list of principles, its own prophets, and attract its own devoted followers, so that it will soon look like any old religion.

De Waal thus provides a defense of religion as a foundation for justice, which it certainly is.  But there are other defenses that rely on the pleasure created by religious practice itself—as in mysticism.  That is a topic for another day.

Jonathan B. Wight

Hans Rosling, one of the founders of Gap Minder -- the source for brilliant visual data analysis -- asks: "What was the greatest invention of the industrial revolution?"

Rosling makes the case for the mundane washing machine. With newly designed graphics, Rosling shows the magic of economic growth for improving womens' lives, and for turning a boring wash day into an "intellectual day of reading" for enhancing human capital.

Click the photo to watch the presentation:

Mark D. White

It's that time of year again: it is my pleasure to invite you to submit abstracts and/or session proposals for the Association for Social Economics sessions at the 2012 Eastern Economic Association meetings, to be held at the Boston Park Plaza Hotel in Boston, MA, March 9-11, 2012. 
 
I welcome any proposals dealing with the concerns of social economics, whether theoretical or practical, methodological or policy-oriented, or anything in between. As always, I am particularly interested in papers exploring the intersection of economics and ethics (which fits under the social economics umbrella), as well as economics and philosophy in general. 

You do not have to be a member of ASE to participate in the EEA sessions, though if you are not a member, I do encourage you to visit the website and consider joining. (In fact, even if you choose not to participate in the meetings, it's a good idea to visit the website and consider joining!)
 
Please send me your abstracts or session ideas by Monday, October 17, at [email protected]. Also, feel free to ask me about possible topics or themes, or about the meetings in general. The Eastern Economic Association meetings have always been very open to alternative approaches and viewpoints, as well as a wonderful forum for innovative ideas.

Mark D. White

The latest blow to the Affordable Care Act came yesterday from a U.S. appeals cout in Atlanta--let me merely repeat what The Wall Street Journal quoted from the opinion today, which makes the case exceptionally well:

[The individual mandate] is "breathtaking in its expansive scope," the court wrote. "The government's position amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress's enumerated power."

In other words, if the government can impose this kind of "economic mandate"—if it can force individuals to enter contracts with private companies "from birth to death"—there are no longer limits on what it cannot do. "These types of purchasing decisions are legion," Judges Hall and Dubina write.

"Every day," they continue, "Americans decide what products to buy, where to invest or save, and how to pay for future contingencies such as their retirement, their children's education, and their health care. The government contends that embedded in the Commerce Clause is the power to override these ordinary decisions and redirect those funds to other purposes."

The final sentence--emphasis mine--says it all.

See also Ilya Shapiro's commentary on this latest development here.

Jonathan B. Wight

The Dow Jones Industrial Average plunged 600 points today and more than 1300 points since the debt deal was announced last week (about an 11 percent drop in value).

What is the cause of this collapse? One theory is that the debt deal did not go far enough in cutting spending. If this view is correct, the markets are reacting to the debt downgrade by S&P and the fear that further insolvency looms.

Source: http://money.cnn.com/data/markets/dow/

But if this theory were true, this scenario should be accompanied by a rise in Treasury interest rates. Instead, the ten-year interest rate remains exceedingly low.

The alternative theory is that the markets are suffering from an eye-popping wake-up call—that another recession lies ahead because government is retrenching and the private sector is unable to pick up the spending slack. This would be a classic demand-side downturn. In addition to the United States, Europe is also facing a huge slump.

The ethics of fiscal expansion versus fiscal austerity is admittedly complex. But ethical discourse should be guided by a consensus on the facts, and by theories that can explain the facts. Rising unemployment—and long term unemployment—is of great concern for human capital formation, even if one is unconvinced by any moral obligation to help the less fortunate. With interest rates so low, one can make a strong case for badly needed infrastructure investments that would also boost labor demand. While austerity is a good thing in thinking about one's childrens' long term future, many of our children need jobs and training more than they need Medicare guarantees.

Meanwhile, the outrageous rioting in London (click on video) does little to warm the hearts of those who would seek to aid the less fortunate.

Jonathan B. Wight

America's economic future depends upon attracting and promoting the best and the brightest.

In this video, New Jersey Gov. Chris Christie (R) defends his appointment of Muslim lawyer Sohail Mohammed as a judge to the state bench:

Jonathan B. Wight

I'm not talking about getting whacked by an assassin who disagrees with you—although that's always possible, and even likely in a dangerous, autocratic society.

For example, perhaps as many as 300 journalists have been slain in Russia since 1993.

In Guatemala, a much smaller country, at least six journalists have been assassinated in the last five years. On a per capita basis, that Guatemala figure would equate to 132 journalists murdered in the U.S.A. So blogging can be dangerous when people "speak truth to power" and the people with power have no fear of the law.

But this post is about a quieter local threat. Yossi Vardi provides entertaining proof that blogging is physically risky, especially for young male bloggers in America. Be careful, Mark!

Jonathan B. Wight

I've recently stumbled upon two interesting articles that explore the question of the motivation of economists.

1. Richard T. Ely, "The Founding and Early History of the American Economic Association," The American Economic Review 26 (1), Supplement (Mar., 1936), pp. 141-150.

Richard T. Ely was one of the self-described "rebels" who founded the American Economic Association in 1885. In 1936 he looked back and wrote this article for its 50^th anniversary. 

Ely was a renegade German Historical School member, who placed emphasis upon historical, statistical, and inductive research in economics. By contrast, the orthodox view of the mid 1880s was of laissez faire and free trade, and the orthodox methodology was deductive reasoning. According to the orthodoxy, virtually all questions in economics had pretty much been solved!

The rebels, by contrast, thought that our understanding of truth evolved; and in particular, public policies had to be adapted to conditions of time and place (143). Accordingly, "economics was not a dead thing of the past, but a live thing of the present, inviting young men to put the best they had into this field." (146)

Ely's father tried to warm him off a career in economics, particularly as an underdog fighting the orthodoxy: "Richard, you are a young man. Some day you will want to get married and have a family. How can you expect that economics will support you?" (142)

Ely notes that he and his co-conspirators were "humanitarians" who "wanted to help bring about a better world in which to live." (145) Moreover, motivated in terms of agency, he says, "We wanted the right to exist scientifically and to express ourselves in writing and in teaching." (145) He recounts several cases of people trying to get him fired, so his fear here was not manufactured.

2. Brent A. Evans, Paul W. Grimes, and William E. Becker, "What Led Eminent Economists to Become Economists?" found here.

This interesting paper was presented at the AEA National Conference on Teaching Economics, held at Stanford University in June 2011.

The authors obtained data for 89 prominent economists, 62 of whom are Nobel Laureates. Based on a variety of sources, the results show that about a third of the sample became economists out of a humanitarian desire to "make the world a better place" or from an agent motive to "make a difference" in the world. Only 2 of the candidates directly cited monetary incentives as motivators, but this likely underestimates the case for employment and remuneration considerations. Other important factors were exciting coursework and peer influences.

More than half (53%) of the sample enrolled in college without any interest in economics. One reason to be excited about teaching is the idea that one of your student's careers will be permanently changed for the better by the introduction to the discipline of economics.

What's interesting about both these articles is the nuanced account of the motives of economists in an area of great interest—one's careers. Economists, like most people I suspect, are driven to some important degree by a desire to create meaning in their lives. Meaning comes from seeing and valuing one's place in the wider social and moral universe. As Adam Smith noted, it is wonderful to be viewed by others as being a great person; but true meaning comes when we see ourselves as being worthy of approbation. In short, moral accounting often matters in personal choice.