Archive for the ‘Philosophy of Economics’ Category

Denning on Porter’s Monitor and the future of strategy consulting

Monday, November 26th, 2012

Does strategy consulting have a future? When rightly conceived as the art of thinking through how companies can add value to customers–and ultimately society–through continuous innovation, strategy consulting has a bright future. The market is vast because most large firms are still 20th Century hierarchical bureaucracies that are focused on “the dumbest idea in the world”: shareholder value. They are very weak at innovation.

Consultancies that can guide large firms to move into the world of continuous innovation in the 21st Century have a bright future. To succeed in this field, however, consultants need to know something both about innovation and about the sectors in which they operate and the customers who populate them. Merely rejiggering the financials or flattering the CEO as the master strategist is not going to get the job done. Managers and consultants are going to have to get their hands dirty understanding what happens on the front lines where work gets done and where customers experience the firm’s products and services. To prosper, everyone has to become both more creative and more down-to-earth.

What has no future is strategy conceived as defeating rivals by finding a sustainable comparative advantage simply through studying the structure of the industry and juggling the numbers.

Since Monitor had no other arrow in its strategy quiver, it was doomed from the outset. Its embarrassing debacle marked the beginning of the end of the era of business metaphysics and the exposure of the most over-valued idea on the planet: sustainable competitive advantage.

Forbes article



Walter Williams on the morality of free markets

Tuesday, November 13th, 2012

From Cafe Hayek

Auditing a microeconomics course at GWU, GMU, and U of P

Monday, June 18th, 2012

No matter the college, a class in the principles of microeconomics is likely to cover the discipline’s greatest hits.

Opportunity cost? Check. Supply and demand? Ditto. The same goes for such topics as comparative advantage, elasticity, and market structures.

But these touchstones of the curriculum may only modestly influence what a student actually learns. What matters more are a course’s unspoken attributes that colleges rarely make plain and about which students almost never ask: For what sort of student is the course ­really meant? How does the professor teach and assess the material? And what does he or she think the discipline is all about?

Chronicle article


Don Boudreaux


Ron Paul and Paul Krugman on the economy

Tuesday, May 1st, 2012

Sen on the importance of the history of economic thought

Friday, April 27th, 2012

You make a lot of references to old economic thinkers like Smith, Keynes and so on. However, if you look at the current economic research that is published in the journals and taught at universities, the history of economic thought does not play a big role anymore…

Yes, absolutely. The history of economic thought has been woefully neglected by the profession in the last decades. This has been one of the major mistakes of the profession. One of the earliest reminders that we are going in the wrong direction has come from Kenneth Arrow about 30 years ago when he said: These days, I get surprised when I find the students don’t seem to know any economics that was written 25 or 30 years ago.

Is there any hope that this trend can be reversed?

Yes, I’m quite optimistic in this regard. I get the impression that this seems to be getting corrected right now. I’m particularly delighted that the corrective has come to a great extent from student interest. I’m very struck by the fact that at the university where I teach – Harvard – the demand for more history of economic thought has mostly come from students. As a result there is a lot more attempt by the department of economics as well as history and government to look for the history of political economy. Last year, along with my wife Emma Rothschild, I offered a course on Adam Smith’s philosophy and political economy. It drew a lot of interest and we got some of the finest students at Harvard.

Economics Intelligence interview

Amartya_Sen, Indian economist and Nobel prize ...











Sallie James discusses the economics of trading with China

Thursday, February 16th, 2012

Sallie James

Gregory on the very poor and a government safety net

Tuesday, February 7th, 2012

Now, there is plenty the government can do to help the very poor, and it all involves getting out of the way. Government at all levels can and should: (1) stop taxing the poor-they are hit especially by sales taxes, payroll taxes, and sin taxes-and recognize that all taxes destroy wealth and that the poor ultimately suffer from them all, (2) stop regulating the poor out of work with business codes and fees that almost invariably protect established interests by erecting anti-competitve barriers to entry, (3) repeal minimum wage laws that prohibit those at the bottom of the economic ladder from being able to take that first important step, (4) repeal licensing laws on occupations like taxi-driving, construction, hair-dressing, and indeed every other industry that poor Americans are often quite qualified to be entrepreneurial in, but are only prevented from entering by the state’s absurd impositions that often amount to hundreds of thousands of dollars, (5) pursue fundamental criminal justice reform to bring safety and liberty back to the city streets, eliminating gang violence by ending the drug war, repealing all gun laws that disadvantage the poor, vastly reining in the police who are so often a threat to normal poor Americans, and completely revamping a correctional system that robs hundreds of thousands of peaceful poor Americans of their freedom and economic opportunities, (6) deregulate all industry-health care, especially; the poor have better access all the time to the very products whose producers are least regulated (computers, electronics, clothing) and are the most alienated from those with the most government involvement (medicine), (6) eliminate welfare programs that inculcate complacency and dependence rather than encourage independence and responsibility.

Anthony Gregory

Higgs on the continuance of the welfare state

Tuesday, December 13th, 2011

It would be a mistake, of course, to lump all of these dependents into the ruling (exploiting) class. The elderly recipients of old-age pensions, the recipients of unemployment insurance benefits, and the beneficiaries of temporary assistance for needy families are, as a rule, as far from the ruling class as one can get. However, to the extent that those who depend on government programs for substantial parts of their income enter the calculus of ruling and being ruled, they are likely to become, in effect, cyphers. They have approximately zero influence on the real rulers, yet they exert virtually no weight in opposition to those rulers, either. Fear of losing their government benefits effectively neutralizes them in regard to opposing the regime on whose seeming beneficence they rely for significant elements of their real income. Of course, for whatever voting may be worth, they vote directly or indirectly in overwhelming proportion for the continuation and budgetary enlargement of the government programs on which they depend. Hence, they help to produce seeming legitimacy for those at the top of the ruling hierarchy-a token of their appreciation for the crumbs their political masters drop on them.

As the ranks of those dependent on the welfare state continue to grow, the need for the rulers to pay attention to the ruled population diminishes. The masters know full well that the sheep will not bolt the enclosure in which the shepherds are making it possible for them to survive. Every person who becomes dependent on the state simultaneously becomes one less person who might act in some way to oppose the existing regime. Thus have modern governments gone greatly beyond the bread and circuses with which the Roman Caesars purchased the common people’s allegiance. In these circumstances, it is hardly surprising that the only changes that occur in the makeup of the ruling elite resemble a shuffling of the occupants in the first-class cabins of a luxury liner. Never mind that this liner is the economic and moral equivalent of the Titanic and that its ultimate fate is no more propitious than was that of the “unsinkable” ship that went to the bottom a century ago.

Picture of Robert Higgs

McCloskey on economic ideology

Thursday, December 8th, 2011

Innovation backed by ideology, then, promises in time to give pretty good lives to us all. Left and right tend to dismiss the other’s ideology as “faith.” The usage devalues faith, a noble virtue required for physics as much as for philosophy, and not necessarily irrational. But maybe both sides are correct. A socialist maintains her faith in governmental planning despite the evidence that it doesn’t work to the benefit of the poor. A conservative maintains his faith that what’s good for the military-industrial complex is good for the country despite the evidence that it impoverishes and coarsens the people.

Picture of Deirdre McCloskey

Rockwell on the State as the real 1 percent

Monday, October 24th, 2011

The State Is the 1 Percent – Llewellyn H. Rockwell Jr. – Mises Daily

The state is the institution that essentially redefines criminal wrongdoing to make itself exempt from the law that governs everyone else.

It is the same with every tax, every regulation, every mandate, and every single word of the federal code. It all represents coercion. Even in the area of money and banking, it is the state that created and sustains the Fed and the dollar, because it forcibly limits competition in money and banking, preventing people from making gold or silver money, or innovating in other ways. And in some ways, this is the most dreadful intervention of all, because it allows the state to destroy our money on a whim.

The state is everybody’s enemy. Why don’t the protesters get this? Because they are victims of propaganda by the state, doled out in public schools, that attempts to blame all human suffering on private parties and free enterprise. They do not comprehend that the real enemy is the institution that brainwashes them to think the way they do.

Henry C Alphin Jr
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