Damien Pouzo, "A Framework for Modeling Bounded Rationality: Mis-specified Bayesian-Markov Decision Processes" http://events.berkeley.edu/?event_ID=74254&date=2014-02-18&tab=all_events
Damien Pouzo, "A Framework for Modeling Bounded Rationality: Mis-specified Bayesian-Markov Decision Processes" http://events.berkeley.edu/?event_ID=74254&date=2014-02-18&tab=all_events
Fred M Beshears: The Three Required Tasks of New Berkeley Chancellor Nicholas Dirks:
My take on MOOCs is that they're closer to online textbooks than full courses. However, unlike printed textbooks, online textbooks can be seen as more than just supplements to the traditional course. In particular, online textbooks can perform some functions that have traditionally been provided by the instructor. So, MOOCs could be used as a substitute for commercial textbooks by brick-and-mortar schools; and, if this was as far as it went, you wouldn't see much (or any) resistance from teaching faculty.
So how is new UC Berkeley Chancellor Nicholas Dirks doing, anyway?
As you may or may not remember, I think that the historic tasks of a UC Berkeley Chancellor today are three: two financial (with concomitant implications for the deployment of Berkeley's resources) and the third technological. The financial tasks are:
The technological task is:
And, of course, the chancellor must make progress via the Sisyphean process of bureaucratic persuasion and marginal budget reallocation.
Lance Knobel: So, Brad, one of your areas is economic history. I am curious: as we face this increasing automation, robotization, is this something that’s likely to be something we have seen before in economic history or is this time going to be different?
Brad DeLong: Well, it is always going to be different, because history does not repeat itself--although it does rhyme. The question is: how is it going to be different?
Looking back at all the major transformations in history before--as we have seen entire categories of things we do to add value to our society vanish--we always found new valued things for people to do. Technological unemployment has been a yearly thing, a decade thing, a generational thing perhaps--but never before more than a generational thing.
Brad DeLong : James Scott and Friedrich Hayek: October 24, 2007:
JAMES SCOTT AND FRIEDRICH HAYEK
My review of James Scott (1998), Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed (New Haven: Yale University Press: 0300070160):
There is a lot that is excellent in James Scott's Seeing Like a State:
On one level, it is an extraordinary well-written and well-argued tour through the various forms of damage that have been done in the twentieth century by centrally-planned social-engineering projects--by what James Scott calls "high modernism" and the attempt to use high modernist principles and practices to build utopia. As such, every economist who reads it will see it as marking the final stage in the intellectual struggle that the Austrian tradition has long waged against apostles of central planning. Heaven knows that I am no Austrian--I am a monetarist-Keynesian, a liberal, and a social democrat--but within economics even monetarist-Keynesian liberal social democrats acknowledge that the Austrians won total and decisive victory in their intellectual war with the central planners long, long ago. This book marks the final stage because it shows the spread of what every economist would see as "Austrian ideas" into political science, sociology, and anthropology as well. No one can finish reading Scott without believing--as Austrians have argued for three-quarters of a century--that centrally-planned social-engineering is not an appropriate mechanism for building a better society.
Ashok Rao: Feed the Beast:
Since 1988 education (purple) has increased almost seven fold. Healthcare (red) five fold. Food and beverage prices have only doubled, apparel costs have flatlined, while technology and entertainment prices have plummeted. Basically prices for everything the government is good for have a positive slope and everything it’s bad for have a negative slope. I don’t think any other graph could more clearly explode hopes for a smaller, or even flatlined, government.
Morning session I: Robots, architecture
October 25 @ 11:40 am - 12:40 pm
I, for one, welcome our new robot overlords. Brad DeLong in conversation with Joshua Bloom
What will increasing automation mean for our economy and our society? Will it exacerbate unemployment, or will it spur new industries? Are there some aspects of automation that we’re unlikely to accept?
The bridge to somewhere. Donald MacDonald in conversation with Felix Salmon
The architect of the new East Span of the Bay Bridge discusses the importance of bridges and what they can bring to an urban environment.
Start: October 25, 2013 11:40 am
End: October 25, 2013 12:40 pm
Event Category: Conversation
Four things create value:
And let me know that, as far back as we can tell, your status and standard of living depends on (a) the value you directly add and (b) what you are able to grab (and persuade others that you are right to grab) from our joint-product common store.
The physiocrats saw France as having four kinds of jobs:
Farmers, they thought, produced the net value in the economy--the net product. Their labor combined with water, soil, and sun grew the food they and others ate. Artisans, the physiocrats thought, were best seen not as creators but as transformers of wealth--transformers of wealth in the form of food into wealth in the form of manufactures. Aristocrats collected this net product--agricultural production in excess of farmers' subsistence needs--and spent it buying manufactured goods and, when they got sated with manufactured goods, employing flunkies.
"Hello. My name is Brad DeLong. I'm the parent of two kids at Burton Valley. I'm volunteering tonight to call people to ask for their support for Measure E, the parcel tax measure for local Lafayette schools."
Note the words parent, volunteer, local. I'm not Washington calling: I'm your neighbor. This isn't big government: this is volunteerism. This isn't for some federal construction boondoggle: this is for the school in your neighborhood.
UCB Public Affairs: Festival of ‘uncharted’ ideas coming to downtown Berkeley:
Robots, technology, race, food justice and climate change are just some of the diverse and pressing topics up for discussion at “Uncharted: The Berkeley Festival of Ideas” Oct. 25 and 26. The downtown-Berkeley happening will feature a who’s who of speakers and lots of opportunity for participating “infovores” to interact, converse and imagine new futures.
It is in some part Robert Shiller's fault that I am an economist.
So what do economists have to say when they speak as public intellectuals in the public square? As I see it, economists have five things to teach at the "micro" level--of how individuals act, and of their well-being as they try to make their way in the world. These are: the deep roots of markets in human psychology and society, the extroardinary power of markets as decentralized mechanisms for getting large groups of humans to work broadly together rather than at cross-purposes, the ways in which markets can powerfully reinforce and amplify the harm done by domination and oppression, the manifold other ways in which the market can go wrong because it is somewhat paradoxically so effective, and how the market needs the state to underpin and manage it on the “micro” level.
We are now ready to take the next steps in our successful "digital first" strategy. This is an exciting but also challenging opportunity for all journalists at the Financial Times. It means changes in work practices, a further shift of resources to ft.com and a significant reshaping of the newspaper.
First, thank you. Thank you for being a reader and signing up for Prime one year ago. It's a critical part of what we're trying to build at TPM going forward, and you made it possible by being early adopters a year ago. As I've said before, I'm sending this email to all Prime Launch Members. But this is a real email. This is my address. I really hope you'll ping me back with your thoughts, ideas, concerns, haikus. Whatever. I want to hear from you.
The Hamilton Project--now led by Melissa Kearney--doesn't get nearly as much love as it should. I am not sure why not. There is a lot of very good stuff there. like:
Andrew Delbanco: The Two Faces of American Education:
Diane Ravitch not only sides with Rhee’s critics; she surpasses them in her condemnation, which borders on contempt. Here is her summary of Rhee’s legacy to the Washington schools: “cheating, teaching to bad tests, institutionalized fraud, dumbing down of tests, and a narrowed curriculum.”… During Rhee’s regime, teachers’ pay, their jobs, even the survival of their schools, could depend on a couple of years of test scores. In this respect, her intervention was representative of an approach to education that has been gathering force…. Ravitch describes that approach, aptly, as “testing mania.” Tests, she thinks, can be useful diagnostic instruments, but as a high-stakes method for evaluating teachers and schools, they create more problems than they solve.
Hal Varian: Hal Varian: the economics of the newspaper business:
Printed newspaper circulation has been declining for 50 years…. The internet is a superior way to distribute and read news…. The basic economic problem facing news is increased competition for attention…. Newspapers never made money from news…. Offline news reading is a leisure time activity, online news reading is a labor time activity…. Ad revenue depends on reader engagement…. Tablets give newspapers a way to reclaim some lost audience…. The fundamental challenge facing newspapers is to increase the time people spend on their content…
We invite submissions for “We Robot 2014: Risks & Opportunities”--a conference at the intersection of the law, policy, and technology of robotics, to be held in Coral Gables, Florida on April 4-5, 2014. We Robot is now in its third year, returning to the University of Miami School of Law after being hosted by Stanford Law School last April. The conference web site is at http://robots.law.miami.edu/2014. We Robot 2014 seeks contributions by academics, practitioners, and developers in the form of scholarly papers or presentations of relevant projects…. We are encouraging conversations between the people designing, building, and deploying robots, and the people who design or influence the legal and social structures in which robots will operate.
The NGSS standards are a nationwide attempt to improve science education in the US, and they have been backed by organizations such as the National Research Council, National Science Teachers Association, and the American Association for the Advancement of Science…. The most surprising is Kansas, which has an awkward past when it comes to science education. The state booted evolution from its science standards at least twice in the last few decades…. The state Republican Party has called for their withdrawal, and now a lawsuit has been filed that claims the standards' focus on natural causes will violate students' religious freedom.
Andrew Leonard: Why we hate the new tech boom:
Why do we hate the new tech boom? The answer has two parts. First, there is unsettling realization that the middle is losing economic ground while Silicon Valley execs babble on about “changing the world” for the better. Income inequality is growing ever worse, and it is increasingly clear that one of the forces fueling this trend is the technological innovation flowing out of the Bay Area.
Note that unless you think the income distribution is "optimal", there are powerful positive externalities to funding more people to go to college even if the marginal individual is making a rational benefit-cost decision.
And the numbers very very strongly suggest that many, many people deciding not to attend college have not been making rational benefit-cost decisions:
Adam Engst: International Verify Your Backups Day:
I humbly submit that Friday the 13th, whenever it rolls around, should be considered International Verify Your Backups Day…. Take a few minutes to identify some critical files and see if you can restore them successfully from your backups. If a bootable backup is part of your backup strategy, make sure you can actually boot from it…. That’s it. No costumes are necessary, there’s no obligatory greeting, and you aren’t expected to make a special meal. If you feel the need to honor your successful verification, well, a little celebratory imbibing of your favorite beverage is never inappropriate.
Tim Harford: Low pay and the rise of the machines:
The Living Wage (with capital letters) is a target set by campaigners for a good solid hourly wage – currently £8.55 an hour in London and £7.45 an hour elsewhere. That’s 20 per cent above the legal minimum wage rate. A lot of people don’t make that much money. Some of them will be doing just fine – £7 an hour isn’t bad if you’re 17 years old, living with mater and pater and saving up for a gap year somewhere sunny – but others will not.
I feel like I’ve heard about all this before. Why are we talking about it now?
It’s the new narrative for the Labour party. Here’s the awkward thing for Labour: the economy is slowly picking up steam. So how to attack George Osborne, the chancellor? Ed Balls, shadow chancellor, could argue that Mr Osborne deserves no credit for the upturn – that government austerity made the depression longer and deeper than necessary. To an economist that’s pretty plausible. To the voting public it doesn’t seem to have much bite. And so the new story – pushed by Mr Balls and his deputy Rachel Reeves this week – is that while it’s welcome that the economy is recovering, the problem is that hard-working families aren’t benefiting.
Andrew Szeri: An alternative funding model to support higher ed excellence:
The Nobel prize-winning economist Milton Friedman… he made the argument that fixed money loans are an inappropriate way to fund a higher education. He argued that an alternative device would be to:
’buy’ a share in an individual’s earning prospects: to advance him the funds needed to finance his training on condition that he agree to pay the lender a specified fraction of his future earnings. In this way, a lender would get back more than his initial investment from relatively successful individuals, which would compensate for the failure to recoup his original investment from the unsuccessful….
Joel Mokyr: Is technological progress a thing of the past?: T
History is always a bad guide to the future and economic historians should avoid making predictions. All the same, the historical records provide some insights into what makes societies technologically creative…. The answer is short and simple: we ain’t seen nothin’ yet, the best is still to come…. Starting with supply, what is it that accounts for sustained technological progress?… The historical record makes clear that science depends on technology in that it depends on the instruments and tools that are needed for science to advance…. If tools and instruments are a key to further scientific progress, it is hard not to be impressed by the possibilities of the 21st century…. To be sure, there is no automatic mechanism that turns better science into improved technology. But there is one reason to believe that in the near future it will do so better and more efficiently than ever before. The reason is access…. Scientists can now find the tiniest needles in data haystacks as large as Montana in a fraction of a second. And if science sometimes still proceeds by ‘trying every bottle on the shelf’ – as in some areas it still does – it can search with blinding speed over many more bottles, perhaps even peta-bottles.
Felix Salmon: Chart of the day, Microsoft edition:
The numbers speak for themselves, really: over the course of Steve Ballmer’s tenure as Microsoft CEO, the company’s stock price has gone nowhere, its market share has plunged — but its headcount has more than trebled. And that’s before adding another 32,000 employees as part of the Nokia acquisition.
Henry David Thoreau (1854): Nothing to Say:
Our inventions are wont to be pretty toys, which distract our attention from serious things…. We are in great haste to construct a magnetic telegraph from Maine to Texas, but Maine and Texas, it may be, have nothing important to communicate. Either is in such a predicament as the man who was earnest to be introduced to a distinguished deaf woman, but when he was presented, and one end of her ear trumpet was put into his hand, had nothing to say. As if the main object were to talk fast and not to talk sensibly. We are eager to tunnel under the Atlantic and bring the Old World some weeks nearer to the new, but perchance the first news that will leak through into the broad, flapping American ear will be that the Princess Adelaide has the whooping cough….
Homer, Iliad, 18:398, Lombardo translation:
Thetis' silver feet took her to Hephaestus' house,
A mansion the lame god had built himself…
She found him at his bellows, glazed with sweat
As he hurried to complete his latest project,
Twenty cauldrons on tripods to line his hall
With golden wheels at the base of each tripod.
…He was getting these ready,
Forging the rivets with inspired artistry…
Felix Salmon: Is Marissa Mayer the right CEO for Yahoo?:
Nicholas Carlson, Joe Weisenthal, and Henry Blodget deserve many congratulations on Carlson’s monster 22,500-word profile of Marissa Mayer. It features the kind of deep reporting one normally only finds in books, and it sheds a lot of light on what is going on at Yahoo — both at the senior executive level and at board level. What’s more, Carlson was fortunate enough to get just the right amount of access to Mayer — enough to be able to fill in the necessary details, get lovely bits of color, and ask her the questions he needed to ask, but not so much that he became captured. (In general, with very few exceptions, the more time that a journalist spends with his subject, the more favorable the resulting profile will be.)
Ryan Avent: Labour markets: On "bullshit jobs":
Productive jobs have, just as predicted, been largely automated away…. But rather than allowing a massive reduction of working hours…. we have seen the ballooning not even so much of the “service” sector as of the administrative sector…. Why in the world would firms spend extraordinary amounts of money employing people to do worthless tasks (especially when they've shown themselves to be exceedingly good at not employing people to do worthless tasks)? Says Mr Graeber: "The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger…."
I am immediately bursting with questions. Such as, should we conclude that protesters… are in fact too happy? How does the ruling class co-ordinate all this hiring, and if much of the economy's employment is useless in the first place why not just keep them on during recessions?
Content economics, part 3: costs: The Washington Post… was sold for less than the value of its pension…. What Bezos paid for the Post was… negative $88 million. To be sure, Bezos is $250 million out of pocket: the $333 million in the pension fund is ring-fenced for the Post‘s pensioners.
The first question is: How thoroughly is the pension money ring-fenced? Could Jeff Bezos take the pension fund and invest it in… junior debentures of the Washington Post for example? Will he? Bezos will personally own 100% of the stock of the Washington Post. But is there anything preventing him from making any cash he commits to the Post senior debt, and thus have an $333 million mezzanine cushion that must be burned through as a firewall in any liquidation before he is out more than his initial $250 million in cash?
Paul Krugman writes:
The Good Web: Jonathan Chait mocks Robert Samuelson for his column lamenting the rise of the Internet. I don’t especially want to pile on…
But even though he does not want to, and resists mightily, in the end he is compelled by an irresistible force to do so:
The effect of the Internet on the quality of reporting… has been overwhelmingly positive…. Economics reporting in the pre-Internet era… was terrible…. Reporters and pundits often knew little economics…. A reporter or pundit could say something that everyone who knew anything about the subject realized was all wrong, but those with better knowledge had no way of getting that knowledge out in real time. Let me give an example. A couple of years ago [Robert] Samuelson dismissed the relevance of Keynes, because conditions have changed; these days we have lots of debt, whereas:
When Keynes wrote “The General Theory of Employment, Interest and Money” in the mid-1930s, governments in most wealthy nations were relatively small and their debts modest….
In the pre-Internet era, an assertion like that would simply have sat there; economists would complain about it in the coffee room, but that would be it. In this case, however, the whole econoblogosphere… point[ed] out that Britain’s debt/GDP ratio in the 30s was actually much higher than it is today…. Real journalists… benefit…. It’s true that there’s a lot of misinformation out there on the web; but is it any worse than the misinformation people used to get from other sources? I don’t think so…
Diane Ravich: The Error That Caused the New York Test Scores to Collapse:
State officials decided that New York test scores should be aligned with the achievement levels of the federally-administered National Assessment of Educational Progress (NAEP)…. Now, leave aside for the moment the odd fact that the mayor is boasting about the appallingly low percentage of students in New York City who met the new proficiency standards after a decade of his control of the schools. The key point here is that the mayor, his Chancellor Dennis Walcott, Regents’ Chancellor Merryl Tisch, and State Commissioner John King all agreed that the state and city scores should be comparable to the NAEP “proficiency” level. That is a huge mistake…. “Proficient” on NAEP is what most people would consider to be the equivalent of an A. When I was a member of the NAEP governing board, we certainly considered proficient to be very high level achievement. New York’s city and state officials… don’t understand that a student who is proficient on NAEP has attained “a very high level of academic achievement.” Any state that expects all or most students to achieve an A on the state tests is setting most students up for failure…. B students and C students will fail…. Some on this blog have asked whether NAEP is a criterion-referenced test, and the answer is no. A criterion-referenced test is one that almost everyone can pass if they master the requisite skills…. NAEP is not a criterion-referenced test. Massachusetts is the only state where as much as 50% of the students (and only in fourth grade) are rated proficient in reading. The NAEP tests are not designed to be criterion-referenced tests…. The NAEP achievement levels were never intended to be measures of grade level, and New York officials are wrong to interpret them as such, especially when they mistakenly use “proficient” as the passing mark.
Steven Kaplan finds that your average large-company CEO has, historically, received a little more money personally than the average household in the top 0.1%. And he finds that, surprisingly, this does not hold true for the past decade and a half. Over the past decade and a half large-company CEOs have received more than double their standard ratio to the rest of the top 0.1%:
So why, then, do Steve Kaplan and Joseph Ruah write that CEOs are riding the tide of:
technological change, particularly in information and communications, [which] can increase the relative productivity of highly talented individuals, or “superstars”… [as they] become able to manage or to perform on a larger scale, applying their talent to greater pools of resources and reaching larger numbers of people…. Other explanations of the rise in inequality have been offered… managerial power has increased… social norms against higher pay levels have broken down… tax policy affects the distribution of surplus…. We believe that the US evidence on income and wealth shares for the top 1 percent is most consistent with a “superstar”-style explanation rooted in the importance of scale and skill-biased technological change… less consistent with an argument that the gains to the top 1 percent are rooted in greater managerial power or changes in social norms about what managers should earn
Yes, there is a superstar economy--of entertainers like Oprah Winfrey and J.K. Rowling, and of entrepreneurial visionaries like Steve Jobs and Sam Walton. But what has this to do with the career ladder-climbing heads of large bureaucracies? The CEO pay fact looks to be broadly separate from the superstar economy fact, which looks to be broadly separate from the education premium fact.
Eric Rauchway: On the buying of the Washington Post:
The last time the Washington Post was suffering financial difficulties and looking for a buyer, the President of the United States took an interest in getting it a politically sympathetic owner. This was back in early 1933, during the last long lame-duck presidency, when Herbert Hoover was in the White House refusing… [to] do anything about the nation’s banks unless he had Franklin Roosevelt’s cooperation--and he wouldn’t have Franklin Roosevelt’s cooperation unless Roosevelt swore he would maintain the gold standard and forswear deficit spending. But Hoover was willing to expend his presidential influence in trying to find the Post a buyer who wasn’t the Democrat and then-Roosevelt-backer William Randolph Hearst….
This is double-plus-ungood: yesterday the Washington Post's expected lifespan was less than a decade, and there was no way it could burn through more than $250M before being shut down. Today that budget constraint is gone, and Jeff Bezos is willing to pour money into the Post while he experiments. This is cause for great celebration if you work at the Post--there will be more to do, more resources to deploy, and the possibility of something other than a medium-term end.
But, apparently, it was not cause for great celebration on the part of the Post's print staff:
My Reaction: Three Cheers for Jeff Bezos: I’ll say it: let’s celebrate Jeff Bezos purchase of the Washington Post. Before going further let me acknowledge the potential downsides…. We’ll have to watch and wait to see…. That said, for years the Post was effectively subsidized by the parent company’s ownership of Kaplan test prep, which gave the Graham family and the whole paper a huge stake in the rather dubious for-profit education business…. If the Bezos Post doesn’t run pieces on Amazon’s sweat shop-like warehouses or monopolistic practices, the brand will become a joke….
Here are three reasons why I think this is a good thing.
Joseph Cotterill: The WaZos era:
Jeff Bezos knows all about running a business with low margins, where booming profits are merely a distant goal, and where building market share is the reigning, but quite easily forgotten, task. Today he bought a newspaper. The Washington Post…. The memo from Bezos to WaPo staff (“We will need to invent, which means we will need to experiment”)…. The official release. Most immediate observers in America seemed extremely snooty about the price for the Post--$250m, around 1 per cent of Bezos’ wealth--and about the whole enterprise of rich people buying (and subsidising) newspapers…. At some point the US media is going to have to get over that snootiness. And interestingly, when people generally consider newspapers doomed, Bezos chose to spend that $250m on buying one, not building one.
Martin Wolf: A much-maligned engine of innovation:
In this brilliant book, Mariana Mazzucato… argues that… [while] innovation depends on bold entrepreneurship. But the entity that takes the boldest risks and achieves the biggest breakthroughs is not the private sector; it is the much-maligned state. Mazzucato notes that “75 per cent of the new molecular entities [approved by the Food and Drug Administration between 1993 and 2004] trace their research ...to publicly funded National Institutes of Health (NIH) labs in the US”…. A perhaps even more potent example is the information and communications revolution…. “All the technologies which make the iPhone ‘smart’ are also state-funded… the internet, wireless networks, the global positioning system, microelectronics, touchscreen displays and the latest voice-activated SIRI personal assistant.”… Why is the state’s role so important? The answer lies in the huge uncertainties, time spans and costs associated with fundamental, science-based innovation. Private companies cannot and will not bear these costs, partly because they cannot be sure to reap the fruits and partly because these fruits lie so far in the future. Indeed, the more competitive and finance-driven the economy, the less the private sector will be willing to bear such risks…. The days of AT&T’s path-breaking Bell Labs are long gone. In any case, the private sector could not have created the internet or GPS. Only the US military had the resources to do so. Arguably, the most important engines of innovation in the past five decades have been the US Defense Advanced Research Projects Agency and the NIH.
Mazzucato loves puncturing myths about risk-loving venture capital and risk-avoiding bureaucrats. Does it matter that the role of the state has been written out of the story? She argues that it does. First, policy makers increasingly believe the myth that the state is only an obstacle, thereby depriving innovation of support and humanity of its best prospects for prosperity…. Second, government has also increasingly accepted that it funds the risks, while the private sector reaps the rewards. What is emerging, then, is not a truly symbiotic ecosystem of innovation, but a parasitic one…. This book… is basically right. The failure to recognise the role of the government in driving innovation may well be the greatest threat to rising prosperity.
Mark Kleiman: (Un)accountability:
What does a Republican charter-school enthusiast who believes in school-level accountability for educational results do when a charter school run by a big Republican donor gets a lousy evaluation score? Why, he cheats, of course. Tony Bennett, former head education honcho in Indiana and current head education honcho in Florida, to his chief of staff: "Anything less than an A for Christel House compromises all of our accountability work." Bennett to the official in charge of the grading system for schools: "I hope we come to the meeting today with solutions and not excuses and/or explanations for me to wiggle myself out of the repeated lies I have told over the past six months." Somehow, magically, the score for Christel House went from 2.9 (C+) to 3.75 (a solid A).
You need to go read the whole thing below the fold. Then come back.
Apparently, Elena Bulygina and Dmitry Krasnoukhov
From an economist's point of view, the only possible reaction is whiskey-tango-foxtrot-bang-query-bang-query. Charging people money to prevent overloading of resources (in this case, Elena Bulygina and Dmitry Krasnoukhov's time) is what the price system is for. It is its principal virtue.
But rather than charge $5/month for accounts to keep the number of subscribers down to a level they can handle, they prefer to charge $∞/month for accounts--that's right: infinity--as the only alternative to charging $0/month. I can see why they might, ideally, want to charge $0/month. But if you can't charge $0/month, what is the advantage in charging $∞/month rather than $5/month?
Scott Lemieux: Assuming the Distance Learning Can Opener:
While conceding that Johnathan Rees’s argument against MOOC’s focuses too much on the self-interest of faculty members and not enough on the massive problems of distance learning, Jon Chait’s touting of the promise of MOOCs… suffers… [from] the idea that MOOCs have any realistic possibility of meaningfully replacing college education…. There’s rather a lot of hand-waving going on…. Sure, if there’s a way of weeding out cheating without in-class exams or any contact with students and ensuring that most students can learn effectively solely from videotapes, without any meaningful supervision or direction, MOOCs may well be a good idea! And, similarly, if there was a magic pellet we could shoot into the air that would reduce carbon emissions to 1960 levels global warming would be much less of a problem…. As Reihan Salam notes, far more likely is that online education can be cheap, or it can be good, but almost certainly not both:
The intelligent Jonathan Chait writes a "let's Obama and professors fight!" column:
Professors Are About to Get Really Mad at Obama: Probably the most important policy idea in President Obama’s economic speech yesterday was his commitment to control the rising cost of college tuition…. Obama’s college agenda started off as a classic Democratic agenda of increasing access by making student loans more generous. But he’s come to think of college tuition costs as… [a] problem….
Families and taxpayers can't just keep paying more and more and more into an undisciplined system where costs just keep on going up and up and up. We'll never have enough loan money, we'll never have enough grant money…. We've got to get more out of what we pay for. Now, some colleges are testing new approaches…. And some states are testing new ways to fund college based not just on how many students enroll but how many of them graduate, how well do they do…
Reading Paul Krugman this morning reminded me that several years ago Larry Summers was musing about a (more complicated) setup drawing off of Paul Samuelson's 2004 JEP paper: Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization, that was in some ways analogous to the model Paul Krugman says he is now trying to build.
In Larry's setup, IIRC, there was an (a) low-skilled competitive sector with constant returns to scale and undifferentiated products, and (b) a sector with monopolistic competition and increasing returns to scale, half of which (b1) could employ unskilled labor (finance, marketing, brands, etc.) and in which the owners of the intellectual property reaped the surplus, and half of which (b2) needed to employ skilled, unionized labor, which reaped the surplus. The coming of globalization then eliminated the market power of (b2) and shifted that sector of the economy into (a), leaving us with our more unequal, globalized economy of today…
Paul Krugman: How Are These Times Different?:
Ah, Paris! You walk for miles and miles — it’s still, after all these years, a spectacularly beautiful city. Then you have as traditional a meal as possible at an old-fashioned bistro, washed down with lots of wine. And you feel like hell the next morning….
[W]hen it comes to macro issues I am pretty much a curmudgeon, someone who thinks that the similarities between our time and the 90s in Japan or the 30s everywhere are a lot more important than the differences…
Yes, definitely. That is the principal lesson right now!
We were somewhere around Barstow on the edge of the desert when the drugs began to take hold. I remember saying something like "I feel a bit lightheaded; maybe you should drive…." And suddenly there was a terrible roar all around us and the sky was full of what looked like huge bats, all swooping and screeching and diving around the car, which was going about a hundred miles an hour with the top down to Las Vegas. And a voice was screaming: "Holy Jesus! What are these goddamn animals?" Then it was quiet again. My attorney had taken his shirt off and was pouring beer on his chest, to facilitate the tanning process. "What the hell are you yelling about?" he muttered, staring up at the sun with his eyes closed and covered with wraparound Spanish sunglasses. "Never mind," I said. "It's your turn to drive." I hit the brakes and aimed the Great Red Shark toward the shoulder of the highway. No point mentioning those bats, I thought. The poor bastard will see them soon enough.
It is very good to be here, among a bunch of economists, sociologists, historians, operations researchers and others who understand what the point of the game is.
Social science having to do with the economy is about trying to track the emergent property that arise from the fact that we as a world have decided to organize our extraordinarily productive and diverse 7.3-billion human global division of labour largely through decentralized market exchange, mediated by firms that are islands of hierarchy and bureaucracy swimming in a larger market-oriented albeit government-regulated sea.
It is clear to everyone who tries to do this seriously that figuring out what the emergent properties of this complicated decentralized systems are hinges on the details of the institutions: productive, organizational, and regulatory details matter and matter a lot. There is a very narrow limit to what you can do that is useful by following in the hyper-abstract footprints of David Ricardo. To say anything real, you have to say what’s going on in the industry.
The 2013 Conference will be held at the Ewing Marion Kauffman Foundation Conference Center in Kansas City, Missouri, May 28 - May 31, 2013. The address for the Kauffman Foundation is:
4801 Rockhill Road, Kansas City, Missouri 64110
“America’s Innovation Future” at ISA 2013:
Date: Wednesday, May 29, 2013 :: Time: 8:45am – 10:15am :: Location: Kauffman Foundation Conference Center – Kansas City, MO
Why oh why can't we have a better press corps?
For at least half a generation, liberals--at least liberals that I know--have been hammering on the fact that the stepping-away from the commitment to universal free or nearly-free education has been a long-run disaster for America. With Claudia Goldin and Larry Katz's The Race Between Education and Technology serving as its analytical spearhead, the liberals I know spend lots of time talking about how the pace of technological progress requires a more-educated and thus more-skilled workforce, and about how the rise in college costs starting around 1970 stopped the normal American pattern by which each generation gets much more education in its tracks--with rising income inequality between the 80th and the 20th percentile being a big consequences:
Solutions proposed vary from having your college costs be an income-contingent grant recaptured from those who earn much in life by a surcharge on your form 1040 to a mammoth federal commitment to universal access to broadband and to free provision of the highest-quality education online.
Some liberals (e.g., Larry Mishel of EPI) go further, and say that rising 80/20 inequality is the result not just of our losing the race between education and technology but also the collapse of labor unions. The Goldin-Katz alliance (or which I am a part) tends to see the collapse of the union movement as a consequence of the loss of the race.
Now comes Timothy Noah to tell me that none of this focus that I see among the liberals I talk to ever happened:
The 1 Percent Are Only Half the Problem: Most recent discussion about economic inequality in the United States has focused on the top 1 percent… that if we would just put a tight enough choke chain on the 1 percent, then we’d solve the problem of income inequality. But alas, that isn’t true, because it wouldn’t address the other half of the story: the rise of the educated class. Since 1979 the income gap between people with college or graduate degrees and people whose education ended in high school has grown….
Conservatives don’t typically like to talk about income inequality. It stirs up uncomfortable questions about economic fairness….
Liberals resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough. Liberals prefer to focus on the 1 percent-based gap. Conceiving of inequality as something caused by the very richest people has obvious political appeal…
And it is at this point that I say: "WTF?!?!"
Now let me say that Timothy Noah is one of the very best of mainstream American journalists--he isn't an opinions-of-shape-of-earth-differ-both-liberals-and-conservatives-have-a-point clown uninterested in policy substance who covers our nation from a celebrity-gossip perspective.
But here we have, I think, another example of the Michael Kinsley-Clive Crook disorder: Noah provides no links to and no quotes from "liberals" who "resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough". So he winds up just making stuff up--and the New York Times editorial process is sufficiently jelly-like that nobody asks him "who are you talking about?". This produces bad thought.
Indeed, read further down in the article and you find, near the end, links to Larry Mishel definitely not being resistant to talking about the decline of unions, to Josh Bivens not being resistant to talking about workers' reduced bargaining power and the 80/20 wage gap, Barack Obama and his staff worrying about the rising costs of college--in a story reported by Timothy Noah himself.
Are these people not liberals?