Keynes vs Hayek Rap, Part 2

The second installment of the Keynes vs. Hayek rap video is here courtesy of Russ Roberts and John Papola at George Mason University. For more information, visit Econstories.

Atlas Shrugged, Some Critics Shrugged, I Didn't

First, let me begin by saying it has been a number of years since I read Atlas Shrugged by Ayn Rand. Consequently, my memory of the details is faded, but I remember the story line.

With that in mind, my wife and I went to see Atlas Shrugged: Part 1 last night. I was aware of the reviews. Many main-stream film-critics have panned it. A few others have given it favorable reviews. But by quantity, the bad exceed the good.  (Quality of review seems to be another issue. I am shocked but not surprised by the vitriol and dismissive attitude that seems to run through many of the negative reviews.)

I would have to say I liked the film. I had no problem with the acting (although the dialogue seemed a bit stiff), and given the nature of the production, I thought the cinematography was up to the story.

I have two criticisms. The first is that the film is not as good as the book. (What film ever is?) My second is the development of the story. Given that this is one of three proposed segments of a film based on a large novel, I walked out feeling glad that I had read the book. I felt too much had been left out. I am hard-pressed to give examples due to amount of time between reading and viewing. But the feeling I had was similar to that when I saw the wide-screen adaptation of the novel Dune. I'm glad I read the book before seeing the film.

My recommendation is the film is worth seeing. If you are true Rand fan or your memory regarding the book is clear you will enjoy it.  If this is your first exposure to Rand, prepare to walk out asking a lot of questions.  But that may be the way Rand would have preferred it. 

I would welcome your comments, particularly if you read the book and saw the film.

Conservation as Conspicuous Consumption

Yesterday, I heard a very interesting interview on Marketplace, the public radio program. The interview was with Stephen Dubner, coauthor of Freakonomics and host of Freakonomics Radio. Dubner talked about the idea of conspicuous conservation. 

Now you probably know about conspicuous consumption. The phrase was coined by Thorstein Veblen who stated that one reason we spend money can be to show off our wealth. Basically what we buy can signal our wealth to others and can, presumably, have an effect on our status or how others view us.

I often ask my students why they buy certain brands of clothes, etc. when other cheaper brands would provide the same function. This leads to a discussion of utility and an understanding that many people place a high value on the perceived ability of certain products to impress other people.

This brings us back to the interview. As I said, Dubner was talking about conspicuous conservation - how certain people will buy certain things to show how "green" they are, and he cites some research by a pair of economists that indicates the payoff for making these choices can be quite high in certain communities.  In essence, the purchasers may be willing to pay a higher price in order to secure higher prestige in a given community.  This offers a great opportunity to discuss value and utility. Because certain choices may not necessarily be the best in terms of actual effect, but may have a higher value as "conspicuous conservation/consumption." Let me know what you think of the interview.

Biology and the Invisible Hand?

There is an article in The Boston Globe about the scientific basis of altruism. (HT to Arts & Letters Daily) Evidently there is a controversy brewing in the field of biology about the reasons members of a species will help other members, often at their own expense.  One group argues for something called “kin selection” (helping other members of a genetically-related group) as a method of guaranteeing survival of genes. The other group argues for “group selection” (helping a more diverse group survive).

I am no biologist and I wouldn’t dream of saying there is or isn’t a connection between the biological and economic behaviors. But I see a parallel in the behavior of group selection and if there is a genetic pre-disposition to altruistic behavior in nature, then I would say the “invisible hand” would possibly be a stronger explanation of market behavior than it already is.

I would welcome any comments on this. I’d like to know if you see what I see or if I’m still recovering from fever and pharmaceuticals.

I'm Back

And before you say "were you gone?", a combination of a family funeral, a round of the flu, a secondary respiratory infection and end of term for one of my on-line courses have made things a bit busy here.  I'm still recovering but I'm feeling better.  Nevertheless, I thought I would start out slow...

Here are a couple cartoons (HT to Economics and Ethics) to use in your class.  The first is a classic example of how constantly chasing efficiency can create its own trade-offs.


And this link will take to you an illustration from The Washington Post that could prove very useful when explaining the risk/return concept.

I'll try to get back in the swing of things during this week.