The Triumph of the City

I've run across some interesting reviews, so today's posts are taking a largely bookish turn. The first review I want draw your attention is this one from The Literary Review (HT to Arts & Letters Daily). The book is Triumph of the City: How Our Greatest Invention Makes us Richer, Smarter, Greener, Healthier and Happier by Edward L. Glaeser.

If the review is accurate reflection, Glaeser's book is reminiscent of some of the work by Jane Jacobs. She was also an advocate of the city - as an economic engine for ideas along with many other reasons.

Many of us choose to denigrate urban living and flee to the countryside. Yet it is often the city that provides us the means for what we envision as a more pastoral life that is sought but frequently not found. Despite the poverty that often arises in the megalopolis, people still head to it to find a chance at a better life. This book may have to go on my list of books to be read - I will have to dig deeper to decide whether it should be borrowed or needs to be acquired to gain a place in my library.

On an Enlightened Life

I recently received a copy of Adam Smith: An Enlightened Life, and while I have not yet started reading, this review in the American Conservative (HT Arts & Letter Daily) may have helped me decide where it belongs in my "to-be-read" pile.

I have often told students that those who choose to stereotype Smith as an advocate unbridled greed and enemy of the state need to read him; just as those who label Keynes as an "undercover socialist need to read him.  The two had more in common than many would believe.

This review discusses Smith's distrust of big business and his belief that government had a role to play in a market system. I encourage you to read this review - even if you have a problem with the source. You may choose to read or not read the book as a result of the review. I know my choice.

Rent-Seeking, Public Choice and Margarine

Mark Perry offers this post on Carpe Diem about butter, margarine and opposing interest groups.

I actually believe I had heard this before, but I must have forgotten it.  It does sound familiar. It's an excellent example of rent-seeking by interest groups; and Mark brings it around to discussion about trade issues and why special interests can do a better job seeking protection and a beneficial position in the marketplace at the expense of consumers.

I recommend you give it a quick look and see if might serve you as an example for your classes.

Trade-offs

While the first two panels are good, I really think the third panel of this comic says it all. It should be useful in any economics or personal finance class.

 

Overuse

Tyler Cowen at Marginal Revolution labels this a "non-tragedy of the commons." 

I understand his point. Nevertheless, it is an interesting example of economic concepts manifesting themselves in a way that many of would not consider.  This might make an interesting alternate example when discussing the “tragedy of the commons.”

For more on economics and piracy, you might want to consider Peter Leeson's book, Invisible Hook.

Consumer Surplus and the Internet: Measuring the Unmeasurable?

For those of you dealing with productivity in micro or growth in macro I have something for you. And if you already passed either or both, file it for next time. Annie Lowrey has a very thought-provoking piece at Slate. (HT to Marginal Revolution.)

She asks why the internet hasn't turned out to be the great technological boost to growth and productivity that we thought it would be. She also puts it another way: if it is, why can't we measure the effect? How would you measure the computer surplus on most internet content. Can we adequately describe "willingness to pay" until there's actually a charge?  I suspect we will find out as more and more content becomes subscriber-access. But the point is there will still remain a good deal that's free.  And what is the value of that content - what is the consumer surplus for the user?

Lowrey points out that a lot of older technology had a much bigger measurable impact on GDP - things like planes, trains and automobiles.  And everyone thought computers were going to create a huge productivity boom and usher in an era of structural change.  (Oddly enough, they seem to have had the most impact in the manufacturing sector - helping us make more stuff at lower cost.) Why did those technological breakthroughs translate into workplace productivity enhancements - saving money and lowering prices?

I'm not sure what the answer is for her question.  Excuse me now…I have to get back to my game of minesweeper.

Housing Prices as a Roller Coaster

Here is the Case-Schiller Home Price Index depicted as a roller-coaster. 

The data is inflation-adjusted and runs from 1890 to 2010. It's a redo of the original one that was developed in 2007. (HT to ChartPorn.)