Walker

Walker joined Difficult Run as an editor in August 2013. He graduated from the University of North Texas with an MBA in Strategic Management and a BBA in Organizational Behavior and Human Resource Management. He's currently a grad student in Government at Johns Hopkins University. He has been published in SquareTwo, BYU Studies Quarterly, Dialogue, Graziadio Business Review, and Economic Affairs. He also contributed to Julie Smith's (ed.) 'As Iron Sharpens Iron: Listening to the Various Voices of Scripture'. His other online writing can be found at Worlds Without End and Times & Seasons. He lives in Denton, Texas, with his wife.

The Co-Opting of Austrians by Classicals

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Image result for mises
Ludwig von Mises

Economist Noah Smith has an interesting piece in The Week explaining how mainstream macroeconomics (“New Classicals”) “shares just enough similarities with the Austrian school to basically steal all their thunder.” Smith lists a couple similarities and differences:

Similarities

  • Human Action Axiom vs. rational expectations and the Lucas Critique
  • Praxeology vs. “Theory ahead of measurement”
  • Deep suspicion of government intervention

Differences

  • Formal mathematical modeling
  • Causes of the business cycle

As Smith concludes,

So it basically seems to me that the New Classicals captured and improved on the basic ideas of the Austrians in almost all of the ways that matter, while vastly improving on the presentation. New Classical concepts of rationality, distrust of empiricism, and distrust of government intervention are more moderate and nuanced than those of the Austrians, and their mathematical style is simply much more appealing to modern academics than the dense, turgid prose of von Mises or Hayek. Thus, if you were a smart young macroeconomist in 1980 who believed that people were both rational and smart, that government intervention was a bad idea, and that theory was the best way to investigate human behavior, you did not become an Austrian; you became a New Classical.

In other words, the New Classicals drank the Austrians’ milkshake.[ref]Reminds me of the Sept. 2012 issue of Cato Unbound.[/ref]

The Slow Hunch: Reorienting the Purpose of Business

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Michael E. Porter
Michael E. Porter

Competitive strategy expert Michael Porter gave a TED talk arguing for the ability of business to solve social problems. The talk is quite good and the idea is important. I connect it back to the United Firm, one of the earliest communal projects in Mormonism (which also happens to be a business organization), over at The Slow Hunch. Check it out.

LSE Report: “Ending the War on Drugs”

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The failure of the UN to achieve its goal of ‘a drug free world’ and the continuation of enormous collateral damage from excessively militarised and enforcement-led drug policies, has led to growing calls for an end to the ‘war on  drugs’. For decades the UN-centred drug control system has sought to enforce a uniform set of prohibitionist  oriented policies often at the expense of other, arguably more effective policies that incorporate broad  frameworks of public health and illicit market management. Now the consensus that underpinned this  system is breaking apart and there is a new trajectory towards accepting global policy pluralism and that  different policies will work for different countries and regions.

So begins a brand new report from the London School of Economics examining the War on Drugs. Its findings suggest

  • A “drug-free world” is not plausible
  • Prohibition isn’t necessarily the problem, yet isn’t the answer
  • Stop sacrificing human rights
  • End mass imprisonment of drug offenders
  • Learn from mistakes

It should also be pointed out that legalization could run drug cartels out of business. Check it out.

Gary Becker, 1930-2014

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Nobel economist Gary Becker died this last weekend at the age of 83. Plenty of articles from various sources–The Washington Post, The New York Times, Forbes, The Wall Street Journal, Quartz, and many others–have been written praising the impact of Becker’s work. For our readers who may have an interest in the man himself, I recommend the video below. The world has perhaps lost the “greatest living economist.”

No Safe Level of Alcohol

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“Responsible drinking” has become a 21st-century mantra for how most people view alcohol consumption. But when it comes to cancer, no amount of alcohol is safe. That is the conclusion of the 2014 World Cancer Report (WCR), issued by the World Health Organization’s International Agency for Research on Cancer (IARC).

So begins a new medical report on alcohol consumption. A few years ago, psychiatrist David Nutt had an article in The Guardian claiming “there is no such thing as a safe level of alcohol consumption.” His views now seem to have even more backing.

Check it out.

World Bank: World Is More Equal

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The World Bank released a summary of the findings of the 2011 International Comparison Program (ICP), which analyzes PPP and real expenditures worldwide. The report describes

the interaction between the real sizes of GDP for 177 economies with the relative price levels for major aggregates and per capita expenditures based on their population sizes. The results indi­cate that only a small number of economies have the greatest shares of world GDP. However, the shares of large economies such as China and India have more than doubled relative to that of the United States. The spread of per capita actual individual consumption as a percentage of that of the United States has been greatly reduced, suggesting that the world has become more equal (pg. 89; bold mine).

The report explains that this should be “interpreted with caution” due to “changes in the ICP methodology and country coverage…” Nonetheless, this is fantastic news. Pope Francis and the rest of us should be rejoicing.

This is just one more source lending support to what Nathaniel and I argued in SquareTwo: global poverty and inequality are declining largely thanks to globalization.

C.S. Lewis: “You Don’t Want to be Lectured . . . on Dinosaurs by a Dinosaur.”

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C.S. Lewis
C.S. Lewis

Christianity Today has an interesting article on C.S Lewis and his suspicion of so-called “progress.” In “his inaugural address to his professorship in medieval and Renaissance literature at Cambridge, Lewis claimed to be more a part of the old Western order than the present post-Christian one. He admitted, “You don’t want to be lectured . . . on dinosaurs by a dinosaur.”” The article focuses largely on Lewis’ 1958 Observer article “Willing Slaves of the Welfare State,” in which he said, “I believe a man is happier, and happy in a richer way, if he has ‘the freeborn mind.’ But I doubt whether he can have this without economic independence, which the new society is abolishing.” Lewis believed that the modern welfare state “entrusts power over many to a few, “none perfect; some greedy, cruel, and dishonest.” The more that people in government control our lives, the more we have to ask “why, this time power should not corrupt as it always has done before?””

Check it out.

Character Gaps & Social Mobility

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James Heckman
James Heckman

The Character and Opportunity Project at the Brookings Institution has a wonderful series on character traits and their relation to social mobility. So far there are five in the series. Whether more are to come will have to be seen. I think this is an important project, which features the work of Nobel economist James Heckman. As researcher Richard Reeves says in one of the posts, “If character and opportunity are inescapably intertwined, we need to open a new front in the war for opportunity, one that treats the inaptly labeled “soft” skills as vital ingredients in the creation of a more equal, more mobile, and more prosperous society.”

The Slow Hunch: 2014 Mormon Transhumanist Association Conference

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Fellow DR editor Allen Hansen presented a paper we wrote together at the 2014 Conference of the Mormon Transhumanist Association this April. Its title is “Worship Through Corporeality: Mormonism, Hasidism, and Management.” In it we look the Hasidic concept of “worship through corporeality” through the lens of Judaism, Mormonism, and business management. I have the video, paper summary, and additional information posted at The Slow Hunch.

Check it out.

Rags to Riches to Rags

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Mark Rank, professor of social welfare at Washington University, has an excellent piece in The New York Times on income inequality and mobility that further supports the video above:

But is it the case that the top 1 percent of the income distribution are the same people year in and year out? Or, for that matter, what about the top 5, 10 and 20 percent? To what extent do everyday Americans experience these levels of affluence, at least some of the time? …It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.

This demonstrates that

most American households go through a wide range of economic experiences, both positive and negative…Ultimately, this information casts serious doubt on the notion of a rigid class structure in the United States based upon income…Rather than talking about the 1 percent and the 99 percent as if they were forever fixed, it would make much more sense to talk about the fact that Americans are likely to be exposed to both prosperity and poverty during their lives, and to shape our policies accordingly. As such, we have much more in common with one another than we dare to realize.

Check it out.