"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK
- Brad DeLong points to Milton Friedman's important efforts to make us all more Marshallian and less Walrasian. More could still be done on this front, I think. One of my favorite passages in economics comes from Marshall's Principles: "Nature's action is complex: and nothing is gained in the long run by pretending that it is simple, and trying to describe it in a series of elementary propositions".
- DeLong also asks "where are the speculators?" with respect to the financial crisis and the origins of the Great Recession. This is a very deep question, actually, and similar to the question I had posed earlier to determine whether the market can right itself: "can it be arbitraged?". Some people questioned whether "arbitrage" was exactly the right word for it. Maybe it's not. But the point is, we need an answer to the question "what profit seeking behavior could fix this?" if we're considering whether the market will fix itself on any specific problem.
- Subjective preferences are interesting things. Jonathan talks about how he's put down The General Theory for the time being because the writing is too hard to work through unless he has more time to focus. He's not the first one to say this about Keynes's writing. I and many others hold just the opposite view - I think he's a real pleasure to read. Very witty, and he packs a lot of content and insight in. Now I do agree that while chapters one through three are a great read, once you get into chapter four it gets a lot slower until later in the book. Still - different people look for different things. You hear the same thing about H.P. Lovecraft. Aside from the content of the writing, the style itself is one that people either love or hate.
- Peter Boettke points us to a Boston Globe article discussing the three phases of new ideas: ridicule, outrage, and obviousness. He likes it. I suppose it could work, although I haven't thought about it. An interesting sequence to consider nonetheless. I have a comment in the thread about misdiagnosing the implications of some of the "obvious" conclusions out there.
Comparative advantage: a partial truth
2 hours ago