Roger Backhouse's Penguin History of Economics

Roger Backhouse's The Penguin History of Economics

I have just finished reading this book, The Penguin History of Economics, and found that it was a very well written and interesting book on economic history. Necessarily brief, the author has convered most of the possible ground and has done it most wonderfully.

In short: Economics started as a nebulous and amorphous subject that spanned moral philosophy and law, and it evolved over time to become political economy, a practical application of economic ideas, and then finally became the mathematical monster that we view with fear and apprehension today. As Krugman once said, as an economist in good standing, he is perfectly capable of writing things that nobody can read.

Backhouse argues that with the increase in numbers of Russian, and some German, mathematicians going to the USA in the late 19th and early 20th centuries, economics slowly became more mathematical. Losing the historical and psychological components came about slowly not just because of the influx of what we Singaporeans would call "foreign talent", but also because of the wish of economists to make their subject more like the natural sciences, like physics.

However, and this isn't just my opinion, there have been arguments against the mathematisation of economics. One is that the mathematics require a vast simplification of economic ideas so that they are amenable to mathematical treatment. Another is the fact that General Equilibrium models, which are deductive and general in nature, are no more than mathematical edifices which have really little to do with empirical reality. In other words, while deductive reasoning aims to show that the conclusions really flow from the premisses, some DGE models are so general as to be useless in the real world. Yet another argument is the fact that institutions are largely ignored in mathematical models, and yet the structure and institutions of society are key features - historical and sociological features, I might add - that affect economies.

Overall, this is a very interesting book that appeals probably to those with plenty of time on their hands, or a MSc of Economic History to study for, or people like me who are boring - I mean, academically inclined. Roger Backhouse writes beautifully and the key examples are short, sharp and to the point. I've learnt that economics is actually a very diverse and colossal subject - and that as my thesis supervisor once said, even the greatest geniuses among you will never be able to learn everything there is to learn.

This is a humbling book which points out future areas of research and reading. A 8/10 for laymen and a 9.5/10 for people in this field, economic history.

Anything that interests me~

Tyler Cowen's Make Him Fight Dragons Applied

Tyler Cowen's Make Him Fight Dragons Applied

OK, I have been meaning to write (I mean "right") this for a long time. I had a talk with an acquaintance - I mean, friend - of mine and she had told me about her dream man. 

I say "dream man" advisedly; after all, a dream isn't real, and the man she was telling me about wasn't real at all.

Now I had put the conversation behind me (it was a fortnight ago!) and was going about my normal, everyday life when I read Tyler Cowen's "Discover Your Inner Economist". Well, of course, I read economics books - I have an Economics degree, remember? 

The thing is that you might wonder what a talk with a friend about her dream man and Tyler Cowen's book have in common. 

The key thing is signalling.

Although some may argue that economists have absolutely no right to go around poking their noses in affairs of the heart and relationships, Cowen rightly points out that it is all a matter of signalling. People are constantly signalling to each other and in the case of dating it is particularly and obviously, well, obvious.

Cowen calls the particular approach of advertising clearly and specifically the qualities that a woman wants in a man the "Make Him Fight Dragons" approach. This is a direct kind of signalling rather than the more indirect and surreptitious kind of signalling that we are used to in daily life. Basically, the woman tells her potential suitors all her requirements and then the men self-select. In other words, the men can see what kind of man she wants, and then they have to decide if they can take such a huge "dose" (I plagiarise here) of her.

Now, what's that got to do with my friend? She goes around telling everybody about her dream guy she wants to marry. I recorded down the qualities because I was flabbergasted - I mean wonderfully amazed - at her specificity. 

This is one girl who appears to know what she wants (although I am pretty sure she doesn't really know what she wants).

MLQH's dream man:

1. He must share her goals and beliefs.

2. He must be of the same religion (she is Pentecostalian/"rabid Protestantish"/ she's from New Creation Church).

3. He must be rich or have the potential to become incredibly wealthy.

4. He cannot have had girlfriends before.

5. He must be a virgin.

6. He cannot be shorter than her (and my friend in question is at least 1.64m)

7. He cannot criticise her.

8. He must be absolutely honest with her.

9. He must drive.

10. He cannot be younger but also cannot be more than 5 years older.

11. He doesn't smoke.

12. He must be self made (i.e. not reliant on parents or inheritance).

13. He isn't insecure or clingy.

14. He must be able to interact with her professors (and she is going to be a PhD holder in the nursing and medical care profession!!!).

15. He must be educated to at least a first degree level.

16. He must be of the same wavelength as her.

17. He must wine and dine her and pay for all dates.

18. Above all, he must pay for their matrimonial home and all their expenses when married.

19. All these he does willingly.

Now, I am a really sporting man and would like to wager on this one. 

The man here doesn't exist - my friend seems to have taken Cowen's idea of Making Him Fight Dragons to the extreme.

Let us assume as a simplifying assumption that in the general world population, each of the above conditions has a 50% probability, or 0.5. You'd agree with me that this is merely a simplifying condition as not half of all men smoke, and certainly less than 50% of the men in the world have at least a first degree, not 50% of all the men on earth are wealthy, and so on and so forth. Also, as a specific case, it is highly unrealistic that half the men in the world are between 0 and 5 years older than my friend. Thus, this simplifying assumption serves as a maximum, upper bound of how many men worldwide are likely to fulfil her conditions.

Let us also further assume that the dream man, the inamorato, the ideal man is willing to marry her with a 50% probability and that he is neither gay, nor bisexual, nor a celibate priest, nor married already, nor someone who does not want to marry. Two more conditions (he "wants her", and he is "eligible"), each with a 0.5 chance as per my earlier assumption.

OK, since these conditions must hold simultaneously, this means that the probability of finding this dream man (upper bound) is: 0.5 to the power of 21, which works out to be 0.000000476. The world population is currently about 6.6 billion, and let's just assume that half of them are men - so that makes 3.3 billion men (but bear in mind that some of them are still children and some of them are geriatrics). This makes her scope 1573 possible men! If the probability drops to 0.4 for each condition, her scope drops to 14 men. If it drops to 0.3 for each condition, there are 0 men. I really don't fancy her chances.

However, Cowen does suggest another method, called the Honey Trap method. Aha, this one seems more promising. The method goes something like this: attract as many men as possible and interview, review and select those that seem nice, fit your qualities, etc, etc. The problem with the Fighting Dragons method is that if the conditions are too stringent, it puts off possible eligible knights who conclude that it is too difficult to rescue the damsel; they'd rather go for the Honey Trap and take their chances against other guys instead. Maybe my friend should try that.

Interesting material. Anyways, finally - I've got it off my chest.

PS If you're interested in dating my friend, do be sure that you fulfil all her criteria and that you are either in palliative care, medicine or some nursing research field. And she is one rough, tough cookie!

Anything that interests me!