What Book Are You Currently Reading?

[Foucaulf]

Finished with Camus's La Peste. Parts 3 and 4 are astounding, and so is the rest of the novel if you don't mind its plodding bits.

Two books lined up this week: Parfit's Reasons and Persons and Faulkner's Light in August.

[Foucaulf]

Straying away from my research project, I'm almost done with a book on economic philosophy: Alex Rosenberg's Economics - Mathematical Politics or Science of Diminishing Returns? The easiest way to explain it is that Rosenberg, as a philosopher of science, notices that many economists believe that their study will lead to understanding about what really holds true in our economy. Progress on this criteria ought to be judged, following empiricist standards, by constant improvements in economics's quantitative predictive power. His main thesis is that we should not hope that this will ever happen in economics; i.e. economics has and cannot be a science.

There are a lot of arguments in the book. Chief ones are that the fact that economics has a formalized methodological core doesn't mean much about its status as science; the nature of preferential statements putting a stop to any reasonable idea of "improvement" in economics; faulty metaphors in evolutionary economics; the confounding effects of information and uncertainty; and the uselessness of general equilibrium theory. I think the last three has become accepted, while the first two remains opposed in looser forms.

Rosenberg tends to see economics as "applied math" - deductive reasoning in support of some institutional setup. This is a pretty pessimistic view and I hope Austrians don't get all up in my grill about it. I think his view has softened in recent years as behavioural economics has identified some psychological trends in human behaviour. It is not impossible for economics to predict what will actually happen - but circumstances for doing so are very hard to arrange.

This is not to mention the big debate over prediction of the future versus identification of causal effects going on within economics. If the discipline is split up into two camps, each of which prizing prediction or identification over the other, that will only stoke complaints that economics isn't only getting its deep variables wrong, but is also totally biased a certain way when selecting them.

[Foucaulf]

I'm taking my obscurity to the next level: I'm flipping through a Chinese book called On Modern Chinese Thought by Li Zehou. The author is a prominent Chinese philosopher, who still ended up being arrested several times in Mainland China for his moments of political critique. By "modern" he means China from the late Qing period to the Republic of China period, or nineteenth to mid-twentieth centuries.

At its heart it is a collection of essays, focused on that period's major thinkers and critiquing their thought. It's less a work of history as it is a reevaluation of thought, with the end goal of understanding where China must go after a century of social upheaval. But I'm only getting started.

[Foucaulf]

Fall quarter is approaching and I'm taking a full graduate course load in economics, in pursuit of a beefed up grad school application. To each class I can assign a relevant textbook:

Mas-Colell, Whinston and Green's Microeconomic Theory. The "bible" of graduate micro, a thousand-page reference on most micro ideas of interest. Probably continues to be used because no one has written anything as comprehensive in the 20 years since its publication. Not totally rigorous, but has quite a bit of notational quirks and complementary graphs. A lot of people say reading it requires a lot of mathematical preparation, but I'd like to think it's just badly written, peppered with the language of mathematical exposition.

Stokey, Lucas and Prescott's Recursive Methods in Economic Dynamics. A math reference for the microfounded macro models which have become the norm. It will certainly be useful, but my lack of training in optimization makes it hard reading. Probably a worse offender in abusing jargon than MWG above.

Manski's Identification for Prediction and Decision. The author is the class instructor, a very prestigious econometrician and possible future Nobel Laureate. Apparently the class follows the book very closely and is not intensive at all, so maybe I'll enjoy reading this... Roughly, the book is about how useful statistical analysis of data are in providing conclusions and confidence for policy effectiveness.

[Foucaulf]

Before I came back to school, I finally looked through Jacobs's The Death and Life of Great American Cities. Good book, too literary/long-winded, and in IRC I made the following points:

1) It turns out Robert Lucas, famous economist, took her idea of growth through diversity and formalized it, and the way she keeps referring to this idea of "people have their own preferences" is the most econ thing of all.

2) I thought it was amusing how she throws out discrimination against Blacks in mortgages and housing casually, and in fifty years' time that's lost, rediscovered and lights up the internet. This is news to the people on my private college, awed at long-form essays by Ta-Nehisi Coates et al., many of which, of course, grew up in homogeneous suburbs.

3) The "unslumming procedure" described by Jacobs, focused on strategic placement of services to increase diversity in depopulated poor neighbourhoods, has rarely been seen in real life. Instead, we have gentrification. Gentrification is all about entry of certain types of people, and it's too bad if urban planning bet too much of its agenda on classifying those types.


On the side I flipped through an introductory guide to Saul Kripke's philosophy, which is a trip! The organizing principles of what I read were the formalization of modal logic through possible worlds, and the existence of rigid designators across them. The results are strikingly beautiful, and I wish I had time to read on his theory of reference.

[Foucaulf]

Two small books worth reading:

Alan Blinder's Central Banking in Theory and Practice. Blinder is a renowned economist and former Federal Reserve vice chair during part of the Greenspan tenure. This book is astonishingly clear - it basically lays out all the heuristics and procedures a top central banker considers in maintaining the bank's objectives. And it quite literally can be read in an hour. Since so much of monetary policy post-crisis is unconventional, Blinder's framework is worth a second look.

Albert Hirschman's National Power and the Structure of Foreign Trade. Book is out of print, but a scanned copy may be available on a university press website. Read the first 40-50 pages; it is an astonishingly clear explanation of how trade between nations can lead to coercion and compellence. It's unclear to me why political economists like Hirschman are less recognised against pap like Polanyi or Graeber.

[Foucaulf]

How "US-centric" is it?

I may as well say "very." Blinder talks exclusively about his experience at the Fed, and he's very evidently working in what some will call a "neoclassical framework." It's not a book about the central bank as an institutional feature of global capitalism by any means.

I'd recommend it more to the forum libertarians than the leftists as a way to change their minds about central banking (especially lecture 3).