tag:blogger.com,1999:blog-582368152716771238.post5049913873107351565..comments2024-03-28T05:14:02.071-05:00Comments on The Grumpy Economist: Subsidies for economists?John H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-582368152716771238.post-10707239873707315652012-08-15T16:29:37.061-05:002012-08-15T16:29:37.061-05:00What about the missed opportunity costs of not fee...What about the missed opportunity costs of not feeding all the people of the world with taxpayer money? What about the missed opportunity cost of not mandating that every citizen must adopt one third world child and raise them as their own? <br /><br />You throw the term greed around freely, but is there no greed among academics who are constantly advocating for a cushy public grant?<br /><br /><br />KyleNhttps://www.blogger.com/profile/15766641765942339253noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-67735333447831349192012-08-14T10:32:32.070-05:002012-08-14T10:32:32.070-05:00To the Anonymous poster,
Information in general m...To the Anonymous poster,<br /><br />Information in general may be valuable, but even now access to academic papers is only free if the professor posts it on his personal website. Then of course there is the very high cost of actually understanding what is in a very technical paper...usually it requires graduate level training in the discipline.<br /><br />So this information is not free even if funded and when you spend some time reading a lot of these papers ... on the margin I think plenty of subjects in economics are well past the diminishing returns mark for society. Tenure and other institutional factors (like a lack of originality among graduate students and young professors) exacerbate this.<br /><br />I do not feel that any of your examples focus enough on the Academic Economics papers. In reality much of the funding given out in such grants is for papers already written (because why fund a shot in the dark versus a result that they already know they will get) and widely distributed through conferences and manuscripts.<br /><br />In sum, the information is already distributed amongst its capable readership, is not necessarily value added, and funding "research" does little to foster economic understanding among more people.LALhttps://www.blogger.com/profile/08196675112184615614noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-52946581473861261632012-08-14T07:32:42.024-05:002012-08-14T07:32:42.024-05:00Accountants are wonderful people. Each one of them...Accountants are wonderful people. Each one of them takes his oath of honesty very seriously. Especially those who work between Wall Street and Washington av. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-54447800944442070352012-08-14T02:09:48.664-05:002012-08-14T02:09:48.664-05:00I am confused by the announcement of Obama to purc...I am confused by the announcement of Obama to purchase agricultural products...is it implicit that this will be at an above market price?<br /><br />If not I don't see how it will help, but I just didn't see that detail mentioned anywhere so could someone help me out with a link or an explanation how it will help without that feature?LALhttps://www.blogger.com/profile/08196675112184615614noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-54776756724752461512012-08-13T22:11:08.539-05:002012-08-13T22:11:08.539-05:00The fundamental error in your argument is that you...The fundamental error in your argument is that you implicitly assign or assume a very low value to the public good of having information widely available, at little or no cost. And, you give no thought to even attempting to estimate the missed opportunity cost.<br /><br />The paper not written or published or (more importantly, perhaps) read may just be the paper that tips the scale.<br /><br />To the contrary, wide dissemination of information at little or low cost has been our salvation, repeatedly. Consider just three examples.<br /><br />Harry Truman self taught himself by reading every book in his local free public library when he was growing up. How many tens of thousands of times did his leadership repay all the investment in all public libraries for all time.<br /><br />Remember, Truman was the architect of the policies that kept the United States in Europe after WWII and contained Soviet Russia (read Kissinger on how Truman policies differ from what FDR intended), keeping Europe both free and free from War for now 60 years. What was that worth? <br /><br />Andy Grove, who received a free colleged education in New York from City College of New York and a PhD from Cal. Berkeley. How much value has Intel alone, created, resting on his public good education.<br /><br />Steve Jobs, who audited classes, instead of paying tuition.<br /><br />The problem with you POV is that you think like an accountant. The error in your thinking is that you have no way to measure the missed opportunity costs. You can tell us how many loafs of bread are on the shelf Monday, after a weekend sale. But, if there are no loafs, you cannot tell us how many sales we missed.<br /><br />It is very interesting that those with the POV of greedy narsicists agree with you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-59367690797581252952012-08-13T19:45:22.888-05:002012-08-13T19:45:22.888-05:00We need a new model for economics. The current st...We need a new model for economics. The current state of research failed the country miserably in the run up to the financial collapse and we get allegedly leading economists signing off on the puff piece being touted as a "White Paper" on Romney's election platform.<br /><br />Maybe funding for economics research should be handed over to DARPA to seek out and fund useful research. DARPA seems to have had a good record of cost effective research.Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-23100429702605085682012-08-13T19:21:39.121-05:002012-08-13T19:21:39.121-05:00You ALL Must watch this interview.
► 29:02► 29:02...You ALL Must watch this interview.<br /><br />► 29:02► 29:02<br />www.youtube.com/watch?v=15idnfuyqXs<br />Oct 25, 2011 - 29 min - Uploaded by PenguinProseMedia<br />Milton Friedman on Hayek's "Road to Serfdom" 1994 Interview 1 of 2 ... Uploaded by ...<br /><br />► 29:20► 29:20<br />www.youtube.com/watch?v=UNYBIcrBQWY<br />Oct 26, 2011 - 29 min - Uploaded by PenguinProseMedia<br />Milton Friedman on Hayek's "Road to Serfdom" 1994 Interview 2 of 2. PenguinProseMedia ...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-44888807935330632232012-08-13T17:49:45.526-05:002012-08-13T17:49:45.526-05:00Chris
Need I say more.
Whenever government gets i...Chris <br />Need I say more.<br />Whenever government gets involved in anything this is what we get. <br />Classic.<br />When Alexander the great was asked why he sent soldiers to capture and punish Aristotle (his teacher) he said. How dare he teach these secrets to common people, there will certainly be an insurrection. This cannot be allowed.<br /><br />Thank you for that. You made my day. <br />Keep it coming.<br />Sincerely<br />OAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-19777181193465371152012-08-13T13:22:21.288-05:002012-08-13T13:22:21.288-05:00"...the main subsidy coming from our gov is f..."...the main subsidy coming from our gov is for war."<br /><br />?????????????????<br /><br />"When you see someone advocating peace it just makes you feel a little more secure at home."<br /><br />Advocating for peace? He is talking about govt grants for economic research. Did you read the same piece I did? <br /><br />Did someone spike your granola this morning? <br />Chrisnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51955749539923095502012-08-13T12:22:30.572-05:002012-08-13T12:22:30.572-05:00The "hive mind" of Modeled Behavior sugg...The "hive mind" of Modeled Behavior suggests that game theory is a prime example of economic research that does not need subsidy. It can be done very cheaply by researchers, unlike gathering data.<br /><br />Lawrence White has a <a href="http://econjwatch.org/articles/the-federal-reserve-system-s-influence-on-research-in-monetary-economics" rel="nofollow">paper</a> on the Federal Reserve's influence on monetary research. He is an advocate of "free banking" who thinks that there should not be a central bank.Wonks Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-18231946218802709762012-08-12T19:28:44.891-05:002012-08-12T19:28:44.891-05:00Excellent thought-provoking post.
As a high energ...Excellent thought-provoking post.<br /><br />As a high energy theorist turned operational research scientist, I have a few thoughts and a couple of questions.<br /><br />Like economics, in theoretical physics all we need is a computer, an office, and some free time, and like economics, it's the data collection that's the expensive part - high energy colliders don't come cheap! Unfortunately, your criticism about the plethora of "bad" research in economics applies equally to theoretical physics. Most theoretical physicists have some form of government grant (although there are some excellent private foundations and institutions), and some of those grants do explicitly buy out teaching. However, a significant number of annually produced papers are not particularly innovative, interesting, or useful. Honestly, many, many papers, and at times entire research fads, can be classified under wash, rinse, and, repeat. In fairness, truly innovative research is very hard and, of course, there are many excellent papers. Knowledge generation about the physical world does present an externality, but your comments on incentives seem well founded to me, even in theoretical physics. I am not sure how much less quickly theoretical physics would have advanced in the absence of direct government grants. <br /><br />How well do your observations apply to such disciplines as theoretical physics or even pure mathematics? Perhaps the signal-to-noise ratio is better in these fields than in economics, I don't know, (after all, there are not too many outside rent seekers or political groups who have a strong interest in top quark production rates) but it seems that your arguments hit home concerning incentives that lead to the overproduction of papers of limited use. How strongly does your argument on government supported research depend on the possibility of capture?<br /><br />BTW, your book, Asset Pricing, is wonderful. It's one of the best books I have read on any subject, a thoroughly enjoyble read.Just a local martingalenoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-28639664111297613602012-08-11T19:54:02.576-05:002012-08-11T19:54:02.576-05:00Excellent arguments in the post!
Might I add that...Excellent arguments in the post!<br /><br />Might I add that no one knows where the next step in progress will come, in any science or art? The public good argument only justifies an across-the-board subsidy scheme.<br /><br />Individual government agencies, in doing what they have to do, will happily buy whatever they need and whatever they want. Nothing much wrong with this in principle, it's just not a subsidy for research.Frank https://www.blogger.com/profile/00272351675231621678noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-29589331455610903552012-08-11T16:43:52.809-05:002012-08-11T16:43:52.809-05:00I think a crucial issue here is _how_ the governme...I think a crucial issue here is _how_ the government funds economics. Paying "summer salary" to a tenured (and eminent) professor might not produce more or better papers. But what about funding grad students? <br /><br />From my brief experience as a PhD student, it seems like it's extremely hard to evaluate a PhD student by his/her application. They have to study and work full-time for a few years before the student's quality can even be glimpsed. And this requires funding. I'm pretty sure I'd be working for an insurance company rather than writing papers if I were not paid my meager stipend. Of course I'm biased in thinking my papers are a public good, but there certainly are _some_ actuaries out there whose talents might be better re-directed by the government.<br /><br />This reminds me of your post about Summers's stimulus/capital budgeting argument. There are, um, institutional frictions, which make giving up ours optimal.A Yeh-Chi Chenhttps://www.blogger.com/profile/18390308642112339218noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-30424857060660080722012-08-10T21:18:52.701-05:002012-08-10T21:18:52.701-05:00Seeing Mr. Becker's name on that op-ed made me...Seeing Mr. Becker's name on that op-ed made me very sad.Fat Manhttps://www.blogger.com/profile/09554029467445000453noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-38846029618388204322012-08-10T21:17:47.905-05:002012-08-10T21:17:47.905-05:00Moral economists are very rare. Our society does ...Moral economists are very rare. Our society does not reward virtue, because the main subsidy coming from our gov is for war. When you see someone advocating peace it just makes you feel a little more secure at home.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-84478666290407182032012-08-10T20:53:34.866-05:002012-08-10T20:53:34.866-05:00I'm not so sure about your "grand bargain...I'm not so sure about your "grand bargain" argument. I think it boils down to a false equivalence -- you're saying that even though subsidies for public goods are efficient but those for private goods are inefficient, in the name of political credibility we must get government out of the externalities business entirely. That may be good politics, but it is bad governance and economics: Are we to end all publicly-financed medical research on epidemics, perhaps the clearest case of public-interest R&D, because otherwise we doubt our capacity to make rational civic arguments against private rent-seeking interests? I would also ask if it is not a little naive to think that the private interests which secure the problematic subsidies -- agriculture, energy, etc. -- are waiting for the comparatively tiny public-interest research financing, as if it is a question of "fairness" to the rent-seekers and not merely about the rents.<br /><br />Also, I think your definition of a "public good" is off. My understanding is that public goods can be supplied by the market, but that they are undersupplied because marginal social benefits remain positive past the quantity at which marginal private benefit equals marginal private cost. Your point about the heterogenous nature of research as a good in a market is well taken.Evan Soltashttps://www.blogger.com/profile/06212305798151301158noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-823916313312143712012-08-10T19:01:36.385-05:002012-08-10T19:01:36.385-05:00Ok, it was a great piece, I understand that, but w...Ok, it was a great piece, I understand that, but why on earth does it make you "super happy"?Jefftopiahttps://www.blogger.com/profile/05005211633248766565noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-64475033290088221192012-08-10T18:08:49.141-05:002012-08-10T18:08:49.141-05:00That was awesome. Thank you. I am super happy
Sinc...That was awesome. Thank you. I am super happy<br />Sincerely<br />OAnonymousnoreply@blogger.com