Economics Loses Two of Its Best

I just removed Greg Mankiw's and Paul Krugman's blogs from my feed reader's "Economics" section. While both of them are trained as economists and incredibly accomplished in the field, neither of them writes anything I find educational these days. They've both become shrill, hyper-partisan talking heads. Which is a shame.

The Ever-Increasing Productivity of Machines

I have a lot to say about this but not enough time right now to say it. So this post is a placeholder for a future discussion.

But here's the short version: you need to get on the correct side of this curve. If you're competing with computers instead of benefiting from them, you're toast.



Also: Seth Godin nails it.

Bummer! I wasn't selected to attend the Startup-Onomics conference.

I just got the email from the organizers of Startup-Onomics: The Behavioral Economics Summit for Startups:

At this time we have sent out the first round of invites. We had an overwhelming amount of startups apply to come and we were only able to invite 20% based on our space limitations. There will be a second round of invitations sent on a rolling basis. This will be limited. But don't worry. If you have not received an invite at this time, you can still participate. We will be live streaming the event for our friends abroad and those who cannot attend. We will send an update about this as the event comes closer.

Thanks for your interest in the StartupOnomics Summit and we hope to catch you next time around!

I'm totally bummed.

I was really looking forward to it, and thought I would be an ideal candidate to attend. I'm the founder of a startup in a space that is rife with behavioral economics issues, I'm an economics student with a specific interest in behavioral economics, and I'm already planning to be in San Francisco for a week immediately after the conference.

If anyone has an "in" with the organizers (Hal cough Varian cough Google cough cough) I'm certainly not above having strings pulled in my favor.

Economics I Can Believe In

Son 1 has fixed my blog problem. I'm going to make him a carrot cake. Comparative and absolute advantage....Sun Jul 17 08:54:28 via Twitter for MacDiane Coyle
diane1859

Jeremy Grantham Goes Malthusian

From Business Insider, JEREMY GRANTHAM: We're Headed For A Disaster Of Biblical Proportions

Specifically, Grantham says, the phenomenon of ever-more humans using a finite supply of natural resources cannot continue forever--and the prices of metals, hydrocarbons (oil), and food are now beginning to reflect that.

Now, I'm not as learned as Mr. Grantham, but I disagree. There are substitutes for metals and hydrocarbons, and anyone who has driven across the United States can tell you that we're nowhere near running out of capacity to grow more food.

Then again, the switch to substitutes takes time, as does bringing online new food production capacity. In the mean time, if demand significantly outstrips supply, things could get ugly.

Homo economicus?

From How, and When, to Make a Decision in The Economist's More Intelligent Life magazine:

If all our decisions are so influenced by external factors, that raises an inevitable question: to what extent are we involved in our own decision-making? Professor Ackerman believes the answer is very little: “All of these subtle influences suggest that most of what is causing our behaviour we are really not aware of. People are just very good at post-hoc reasons for their behaviour.

Tastes and preferences, mentioned and then immediately set aside in most microeconomics courses, seem to me to be the overriding inputs in almost all personal decisions. Marketers figured this out a long time ago. What's taking economists so long?

ZMP's Revisited

Tyler Cowan, following up on last summer's discussion of Zero Marginal Product workers (ZMP's, as he calls them), offers a proof point:

People unemployed over 6 months rose by a whopping 361k, 44% of all unemployed.

But again, unless each worker's productivity remains constant over time (it doesn't) it doesn't follow that the currently unemployed weren't productive when they were working. It could just be that the currently employed are working harder, which stands to reason.

ZMP's indeed. ZMV econ bloggers maybe.

Startup-Onomics: The Behavioral Economics Summit for Startups

Has it really been more than seven months since I last posted to this blog? Yikes! Well, at least I have a good excuse: I've spun a new company out of Spanning Sync, raised a round of venture funding, hired an incredible team of engineers, salespeople, and marketers, and entered full startup mode.

My formal economics studies have been put on hold for the moment, but my extra-curricular studies continue unabated. Keynes, Varian, Harford, Ariely, Ahamed, Levy, Benioff, Hazlitt, Thaler, Cowan, Rosen, Carr. My Kindle runneth over.

And then this morning comes the uncannily-timed news of a summit on behavioral economics. For startups. Spooky. And it's in San Francisco just before Dreamforce, which is already on my calendar. Extra-spooky.

I've submitted my application and hope to be accepted to attend. If so, I'll document the whole thing extensively here. Our business, after all, is one that is greatly affected by our prospective customers' ability to gauge risk, a classic problem in behavioral economics. Fingers crossed.