I'm an economist, not a political scientist...

I'm an economist, not a political scientist, so I find it hard to know what to make of headlines like this one

Mubarak calls on cabinet to resign

which is how AOL's news feed has been playing its coverage of the upheaval in Egypt. I mean, Mubarak is a dictator, right? He appointed that cabinet. They serve entirely at his pleasure. So calling on them to resign seems like a silly thing to do. If a new cabinet would make a difference (which I doubt), fire them.

UPDATE: The headline now reads: Amid massive protests, Egypt leader fires cabinet.

On Say's Law of Markets

Brad DeLong has an extended post about Say's Law, and despite my efforts (and apparently being logged in to TypePad), I can't get this comment to post. So I'll put it here:

All this (DeLong's post) makes me recall a paper I wrote for my grad history of thought class back in 1971 (when history of thought was still required for a PhD). It spun off somewhing Joseph Schumpeter wrote in his History of Economic Analysis (which, as I have a copy on my bookshelf, I can quote, from p. 624-625):

"So it gets down to this. A man by the name of J.B. Say had discovered a theorem of considerable interest from a theoretical point of view, that, though rooted in the tradition of Cantillon and Turgot, was novel in the sense that it had never been stated in so many words. He hardly understood his discovery and not only expressed it faultily but also misused it for the things that really mattered to him..."

So JAS had to explain it for him. Which he did not actually succeed at doing. (An aside. Given Schumpeter's conclusion, in what sense could Say be said to have discovered Say's Law of Markets, or at least the Law as interpreted by Schumpeter?)

In any event, this inspired me back then to read and re-read what Say actually wrote. And my conclusions, back in 1971, were that Say intended his Law of Markets in a long-run equilibrium sense. That the long-run growth of an economy was determined by what we would now call the determinants of aggregate supply. That given appropriate institutional arrangements and policies, a lack of demand could never be a barrier to long-run growth--we could always create the demand. That while all this was true in the long-run (in the long-run, there could be no "general gluts"), it need not be true in the immediate here-and-now, in the short-run.

Made sense to me 40 years ago and still does.

Update: It did post there, with some typos that I missed.

At my age, at this stage of my career, I get to teach a completely new course.

Last year, my business school adopted a new course requirement, a course in American economic/business history. We had two reasons for this. First, in light of the recent business cycle events, we thought that our students could use some historical precedent on things. And second (here's where the inter-program politics comes in), my university now requires a course in "historical or cultural studies" as a part of its general education requirements. I would generally have been willing to leave that to the history department, but, at this point, we have essentially no one who can teach what would be for us a relevant American history course. (The full-time history faculty includes four faculty members, with the following areas of research and teaching interests: China/Japan; medeival Europe; 20th century Europe (especially France), and 20th century American political history. No one who even has any coursework, let alone interest in, economic history.)

So I wound up with it. I do, at least, have a graduate field in US economic history (but that was nearly 40 years ago), and I have always been (and remain) very interested in economic history. I've never taught a course in economic history, and my research interests (urban economic development/policy; labor markets; economics of professional sports) are elsewhere.

The course itself is an entry-level course, aimed at first-year students, and has no prerequisites (not even intro econ...not even having taken high school econ). (When we were talking about doing this, I had assumed that it was going to be a junior/senior level course, with the intro econ sequence as a prerequisite, and drawing mostly students who had completed a fair amount of the business core. Silly me. And I had to miss the faculty meeting at which the course was adopted.)

But I'm having a great deal of fun so far (two weeks worth of classes), and I'm trying to pull in enough economics so that some of the factual material in the text (History of the American Economy, by Gary Walton and Hugh Rockoff) has more theoretical context than the book gives it.

Given that I plan to retire in May 2012, however, my program will have to be very careful when it begins to look at replacing me. Neither of the other two economists we currently have would have a prayer in hell of teaching this course. They don't have the academic background, and neither of them grew up with US history, let alone US economic history, in the foreground of what they did. Fortunately, finding someone who can teach it shouldn't be all that hard. In the meantime, I get to have some late-career fun.

Productivity Quote of the Day

From Karl Smith, in the Modelled Behavior blog:

"Countries aren’t poor because the people don’t have work, they are poor because the work they do is less “productive.”

"I put productive in quotes because I think even many readers of this blog instinctively equate productivity with the work ethic or can-do-it-ness of the worker. Productivity is mostly driven by machines and technology, however.

"Having a lot of can-do spirit and a shovel is no match for being ho-hum and having a bulldozer."

This is something worth remembering, I think, for all of us. Much of our "success" in life depends on where we are, and on where we were born.

The upcoming return of the prodigal

I've been out of commission for a few weeks, having had not-exactly minor surgery and the attendant recovery period. I expect to be back and snarky within the next week or so. If you've missed me, don't give up quite yet.