Wednesday, April 14, 2010

Weird Strategy

Suppose you were one of those unfortunate souls with an absolutely bizarre first name, like my old friend Hrothflarr or Buttertenkin or B'drak'nar or what-have-ye. Let's also suppose you're in the job market trying to get work as an office assistant or dental hygienist. Let's further suppose that the people reviewing your resume and cover letter are otherwise inundated with pleas for their attention and they have limited resources for reviewing the material you send them. Let's make one more heroic assumption and say that there is a less than trivial chance that they will see your stupid, hard-to-pronounce, offensive, or trashy name and just pitch your otherwise quite informative personal information straight into the bin.

Now, you don't have to be a game theorist to understand that you have no control over the actions of other people. Sure, if you were inclined, you might lobby for regulations forcing HR personnel to stop discriminating on the basis of having a stupid name, but I think that even the notoriously economically ignorant Congress would smell something amiss with that kind of proposal (though, don't count them out just yet; they've surprised me in the past). Enforcement of this sort of regulation would be pretty close to unenforceable, not to mention preposterously costly and rather pointless. Point is, HR folks are people like the rest of us, and people do as people do, and names are a signal. Yes, they are an impressively noisy signal, and it would be cool to have Battleaxe V. Scarwound III working in Accounts Receivable, hiring that person might be a bit risky, all other things equal (the V stands for Victoria).

So what should you do with your idiotic name? For most of us, the answer seems obvious: get it legally changed. You can do this without telling your friends or relatives, thereby preserving the sense of kinship you have with all your other buddies named Grothnar the Vicious and Punky Brewstarr. It's like the mullet of appellations: business on the tax forms, party on the wedding invitations. It's a very low-cost strategy and it should have a wide range of returns (the quilt of conformity casts a wide shadow). I find it surprising that it's not a more common transaction. Looking for work is tough enough already; why burden yourself with the handicap of a buffoon's name?

Maybe the returns to identity are powerful enough to overcome incentives. I'm sure that any one of you could come up with a thumbnail mathematical model to illustrate the flow of value associated with changing or retaining your name under various conditions (minimum wage, labor regulations, transfer payments, etc). It might be the case that the parameters in this model are such that people are sufficiently compensated for holding their dumbass names.

There's a lot to think about here; the history of immigrants changing surnames upon arrival to the States strikes me as one particularly interesting historical example. There's also the matter of the near/far split between the distant reception of the name signal and the close retention of cultural or personal identity. I might have a whole line of thinking to do on this.

Sunday, April 11, 2010

The Big Questions

What questions define Economics? To me, the most important problems that we have to tackle are: Why did the Industrial Revolution happen where it did, when it did, and why not elsewhere? and What caused the Great Depression? If Economics is the study of social behavior, especially in the marketplace, it would be hard to think of any event of comparable impact. These questions can be distilled to the more universally applicable "What are the causes of wealth?" and "What causes the economy to fall off the tracks?"

Macroeconomics has a lot to say about both of these, but its contributions to the first one seem unsatisfactory; the business cycle literature seems much more compelling than the growth literature. While the bumps that happen in modern economies is probably a much more poignant area of study right now, given the current state of the world, I find the first question much more interesting. Most of the non-class related economics reading has been about the Industrial Revolution, and why it happened.

I came into graduate school thinking that the change that enabled the IR was the growth of humanism - the belief of an individual that he or she can do something to improve his or her lot in life. Once that becomes the norm people are more willing to do little things differently; apply new technologies and methods to their work, come up with new ideas themselves, etc. The major inventions certainly helped, but as I mentioned last post a steam engine is useless if it is only a curiosity or a mental exercise on the part of its creator. I justified my belief by looking at how philosophy and theology had changed to some extent post-Aquinas. Obviously I can think of a hundred problems with this as the cause of the IR, one of which would be showing that a lot of people, rather than the select few clerisy thought this way; another would be showing that economic growth didn't encourage humanism rather than the other way around.

My primary source this year (as I'm sure no one will be surprised to learn) has been Deirdre McCloskey. I loved The Bourgeois Virtues (even though, I admit, she was long winded), though this seems like it lays some foundation rather than looking at the cause of economic growth. Her next book in the series, Bourgeois Dignity: Why Economics Can't Explain the Modern World, explicitly looks at and criticizes some current explanations, including Gregory Clark's work and Douglass North's. Her next-next book The Bourgeois Revaluation: How Innovation Became Virtuous is available in rough parts on her main page.

Right now I'm going through Douglass North's "The Rise of the Western World." We'll see what he convinces me of.

Tuesday, April 6, 2010

Art and Science

I went to the Smithsonian Museum of American History the other week to enjoy the spoils of imperialism. Wandering through one of the random exhibits on something like "what do we use coal for?!" I ran across a display that featured an imagined conversation between two chemists; the gist of it was them arguing over what they should do as chemists - one was talking about how he wanted to be able to use what they had discovered in order to make things people can use; the other responded 'we just need to learn more stuff, who cares how it can be used. That's the art of chemistry, we're scientists!' Or something like that.

I think this dichotomy between 'art' and 'science' is important. Science for the sake of science is important, yes, but economically insignificant. If we're wanting to explain the Industrial Revolution we can't look at science as the spur of it; we have to look at the 'art' of the sciences. The steam engine was invented in something like the 2nd century B.C., and several times again over the next couple hundred years. It wasn't for a long time before anything like it was used productively. It's not like they didn't have coal in the ancient times. I would wager that science was much more advanced in the past than we commonly credit it, but that for some reason there was a disconnect between science and its application.

It also led me to think about the distinction between the science of Economics and the art of Economics. I feel like advising policy or action based on Economic science is tricky, since unintended consequences are more probable and have more drastic effects.

It will be something I will be thinking about the next couple days, instead of the Macro test...