January 24th, 2016

Dead Dog Cat

#10

This morning I finished reading Osprey Warrior #172: Apache Warrior 1860 - 86. I particularly liked the amount of time they spent describing the tribal warrior culture. A very nice read for anyone interested in the history of American expansion into the West.
pacificparlour

COMPETITIVE MARKETS ALLOCATE RESOURCES EFFICIENTLY.

And yet, not all markets operate competitively.  The purist can suggest that, as real firms are not infinitesimal, and no agent is fully informed, there are no competitive markets.  The pragmatist can note that economies of large scale relative to demand and irreversibilities lead to markets served by relatively few firms that can conspire to take advantage of consumers, or to a monopolist that can do so without any messy conspiracies.

Allocative efficiency, however, is a useful starting point for the study of economics, in that it provides a basis for evaluating observed outcomes.  We thus contrast situations in which there are no mutually beneficial rearrangements of resources (allocative efficiency) with situations in which such rearrangements remain (allocative inefficiency) as a prelude to thinking about how the rearrangements might be realized.  In the vulgar version of the Welfare Economics Paradigm, these are the market failures that warrant government intervention.

There are more subtle ways to think about inefficiency, and there is no shortage of efforts by scholars and polemicists to provide a framework within which people might study economics without being led into fantasylands.  But to do so well takes a lot of work, and perhaps the vulgar version of the Welfare Economics Paradigm exists to alert the intelligent layman to the possibility that not everything is easy.

On the other hand, to propose to dispose of the logic of competition completely can lead to errors of a different kind.  That's the message of Book Review No. 2, featuring Michael Perelman's Railroading Economics:  The Creation of the Free Market Mythology.  Professor Perelman is a disaffected economist.  He opens by explaining that "railroading" functions both as a noun (a metaphor for a low-marginal-cost business with large and long-lived sunk costs and economies of large scale relative to total demand) and as a verb, "the ideological straitjacket of modern economics, which teaches that the market is the solution for all social and economic problems."

But the reader will learn little about cartel problems or empty cores or the wide variety of situations in which economies of scale are achieved at levels of output small relative to total demand, which is to say either about the very careful analysis generations of economists, working under the rubric of industrial organization, have brought to bear on the major departures from competition, or about the practical reason that teaching competition is useful both as positive economics and as intellectual ammunition in debating normative positions when the student, professor, or policymaker ventures into political economy.

Perhaps that is Professor Perlman's intent.  Here's his conclusion.

I do not pretend to have a road map that can guide you to the future.  I can say that our present economy is inadequate and that changes are afoot that will make it more so.  I do know that our present economic thinking precludes us from commencing on the hard and joyous work of building a better world in which the economy will not continue to produce for the narrow interests of those who control capital.  In that spirit, I call for the end of economics and the beginning of something better.

I'll give Cafe Hayek's Don Boudreaux the final word. "What is required of anyone wishing to cast doubt on the efficacy of private-property markets guided by real-world market prices is a believable explanation of how the economy might be operated better by an alternative system."

Critique is simple.  Praxis is hard.

(Cross-posted to Cold Spring Shops.)
Pocahontas

Book #3: Red Dragon by Thomas Harris

I just finished Red Dragon by Thomas Harris. My reading goal this year is to a read a book set in each US state. This book is primarily set in Missouri.


Well . . . that was interesting. And when I say that, I really mean, this book is going to stick with me for awhile.

This book is about Hannibal Lecter (think Silence of the Lambs), Will Graham, and a serial killer known by the police as the Tooth Fairy. Will Graham was an FBI profiler who helped catch Lecter. He has retired since due to his experiences with Lecter, but comes back to the force to help catch this new deranged murderer.

Super creepy! Very well written!

Book 6

Title: Side Jobs
Author: Jim Butcher
Series: set before "Ghost Story"
Pages: 403
Summary: Harry Dresden is the best at what he does, despite tending to stumble from crisis to drama in his dealings with the supernatural world. Somehow he unfailingly manages to get on the wrong side of werewolf, fae and vampire alike. But that's where his own rather special powers come into play.

As well as ten short stories, this collection includes an all-new Dresden Files novella. These bite-sized tales are tremendously entertaining an will infect you with the need to explore more of Harry Dresden's world.

My thoughts:
Collapse )