Assault of Thoughts - 6/21/2012

"Words ought to be a little wild, for they are the assault of thoughts on the unthinking" - JMK

- Building off of the exchange over "The Night They Drove Old Dixie Down", Gene Callahan argues that the Star Spangled Banner is also a song with a "lousy cause". However, in citing something from 1772 to discuss the point, Gene is off on this particular "lousy cause" by over four decades. The actual "lousy cause" of the Star Spangled Banner is much less romantic... the song's message is basically "HA! You didn't burn down all of Baltimore!" (very intimidating taunt, Mr. Key - very intimidating). In related news, there is plenty going on for the War of 1812 bicentennial, if you're looking for something to do this summer.

- Andrew Sullivan links to a discussion of how novelists can't imagine how business works. If you follow through the links you also get to a discussion of the question from Nozick that borders on psychoanalysis. I'm not sure what I think of the argument, but it's interesting. There are a lot of left-leaning intellectuals that really do seem divorced from daily life in capitalist society, and their rendition of it really does come across as childish. But sometimes I think the right-leaning intellectual playing Freud to the left-leaning intellectual can be equally childish and divorced from reality. When you read people like Sowell or Nozick they seem to really fail to understand the real life hardships that real people deal with, and just like the left-leaning intellectuals, I imagine their position in the ivory tower has something to do with this. I guess I'm just saying we're all only touching part of the elephant, which hopefully isn't all that controversial a thing to say.

- New evidence for comparative advantage in trade flows. One of the things that always struck me about the way my undergraduates talk about trade after a class or two is how they overemphasize comparative advantage (relative to the way the economics profession thinks about trade). For the last several decades the profession has been more Smithian and less Ricardian, thanks to the work of Paul Krugman and others. I'm not sure undergraduates always realize there is a difference between Smith and Ricardo. Granted, as Krugman noted in his Nobel lecture, in recent years the world has been looking less Smithian and more Ricardian so that even as his work was being recognized it was becoming less relevant. Whether it's "right" or "wrong" empirically at a particular point in time, I still think it's important to run students through comparative advantage exercises. Just getting in their head that exchange is not zero sum is very important.

- A depressing thought on higher education from Tyler Cowen.

- Eric Falkenstein has an interesting (if somewhat condescending) post about "fawning Keynesians". I've always liked Economic Possibilities for Our Grandchildren, which he talks about a lot - although I've never had any hesitation in saying I disagree with the part of it that Falkenstein criticizes. In other words, I think you can be a fan of Keynes without spouting nonsense. I don't think what Keynes said at the time was nonsense. It was a plausible possibility at the time, and an interesting thought experience. That Skidelsky is still moralizing about greed is a little more embarrassing, of course. What I've always liked about Economic Possibilities is it's optimistic view of the long-run. In the midst of the widespread stagnationism, Keynes offered both optimism and realism. So what if he thought we'd be living more leisurely than we actually ended up living!