Some Highlights

I tend not to listen to Russ Roberts’ Econtalk interviews, not because I don’t like them–I’ve liked every one of the 25 or so I’ve listened to and usually like them a lot–but because I have a 12-minute commute. But now that the web site has not only the extensive highlights of the interviews but also the speakers identified, it’s become pretty easy to get the gist by spending 5 to 10 minutes reading. I enjoyed the latest Econtalk interview, the one with Peter Boettke. They’re discussing Boettke’s latest book, Living Economics.

Here are some highlights, along with my comments:

1. “But Smith’s title of his book was called An Inquiry into the Nature and Causes of the Wealth of Nations. Acemoglu and Robinson’s book, so many centuries later, is called Why Nations Fail–which is really a modern inquiry into the nature and causes of the wealth of nations.”
I noticed that same thing. I finished my book review of Acemoglu and Robinson and in the first few paragraphs of my review (not published yet), I noted some similarities.

2. “But it’s [the concept of rent-seeking and the public choice of which this is a part] not in their DNA. It’s like a footnote.”
That made me think of a conversation about another important part of economics that is not in many economists’ DNA. About 10 economists, of whom I was one, were at a small conference in Tokyo in June 1998. Jagdish Bhagwati was another. One of the economists was lamenting the fact that so many young graduate Ph.D. economists don’t know Friedrich Hayek’s “The Use of Knowledge in Society.” Jagdish said they should know it because it’s an important article. At UCLA my first year of graduate school, it was on Alchian’s Micro syllabus, Ben Klein’s Monetary Theory syllabus, and Sam Peltzman’s Industrial Organization syllabus. [I’m hazy about the Peltzman syllabus, but I think it was.] “Do you put it on your syllabus?,” I asked. “No,” he said, “we expect our students to read it in their spare time.” “Do you tell them they should read it in their spare time?” I asked. “No,” he said.

3. “Let’s just use rent controls, because one of his [Stigler’s] classic essays, you know, with Milton Friedman was on “Roofs or Ceilings”, 1946, that everyone should read. At an ideological level it’s a fantastic analysis of the effect of government controls on the housing market. On a methodological level it’s outstanding because it’s a perfect example of an event study before we had techniques of doing event studies. Friedman and Stigler just do this fantastic thing: Compare San Francisco in 1906 and 1946, where you have a demand shock on the one hand and a supply shock on the other hand, and vice versa.”
I’ve always liked that piece but I had never used the term “event study” to describe it. But Pete is right.

4. “So, Paul Heyne, who I had the good fortune to be close with and ended up jumping on as the co-author of his book after Paul died too early in life. But one of his mottos is: Teach economics as if it’s the last class a student will ever have, and it will be the first of many that they will take. We Ph.D.-ize our principles of economics. And instead what we should be doing is teaching the principles of economics with love and excitement and intellectual curiosity . . . .”
Pete basically captures my philosophy of teaching, which, I think is why, even at age 62, I still love teaching. I remember teaching an intermediate micro class at Santa Clara University in early 1981 and having a lot of students who were not econ majors but were taking it because they were pumped up on economics from having taken my basic micro class in the fall of 1980. I had made a promise the first day: “I will not teach you any concept without applying it to something important.” A few weeks into the course, I was doing cost curves and showing them short run, long run, tangencies, blah, blah. One of my star students from my earlier course looked bored. I asked her what the problem was, although I was pretty sure I knew the answer. She said, “Professor, remember your promise? How will you apply this?” I turned and looked at the board, thinking through everything I planned to do the rest of the quarter. I realized that I wasn’t going to use this at all. I turned back to her and said, “We won’t. Forget what we’ve been doing for the last 10 minutes on cost curves and let’s move on to something interesting.” Her attitude, and the attitudes and attention of many of other people in class, picked up and we had a great quarter.