Monthly Archives: August 2017

Write no matter what

Posted on by

Joli Jensen says,

I recommend spending at least 15 minutes a day in contact with your writing project. This offers frequent, brief, low-stress daily contact with your writing project which helps keep the project “write-sized.” It can include “ventilation,” which is spending 15 minutes writing about how you don’t want to work on your project at all.

Pointer from Tyler Cowen.

I don’t ventilate. Instead, sometimes I change the subject. If I have a project that is stalled, I might write about something else completely, like folk dancing. A few times I’ve even started to write short stories. Interesting characters and situations, weak plots. I seem to stop writing before I get to any action scenes.

I need long walks and bicycle rides to get writing done. I put ideas together in my head, and then I transcribe them when I get home. That way, I have built up momentum before I sit down at the computer.

Blogging is a form of “write no matter what.” A significant proportion of my longer projects began as blog posts.

Thoughts on Sociology

Posted on by

1. What we call social science ought to be called the study of human conflict and cooperation.

2. Sociology ought to be the study of human conflict and cooperation in the larger society, in the realm of informal authority, its sources and uses. Social norms and hierarchies are important components of informal authority.

3. When we study human conflict and cooperation in close personal relationships, we are mostly in the realm of psychology.

4. When we study human conflict and cooperation in the larger society in the realm of specialization and trade, we are mostly in the realm of economics.

5. When we study human conflict and cooperation in the larger society in the realm of formal authority, we are mostly in the realm of political science.

I use the phrase “mostly in the realm” because I doubt that any of the four disciplines can be totally isolated from the others.

6. When we study human conflict and cooperation in a specific time and place, we are mostly in the realm of anthropology. Anthropologists might study the psychology, economics, politics, and sociology of the unit under observation.

7. A business manager needs to handle conflict and cooperation within a firm, which also requires all four basic disciplines. There are aspects of political science (think of corporate governance). Business strategy deals with specialization and trade. Understanding “office politics” requires knowledge of psychology. And managers have to understand the informal sources and uses of authority within the firm, also known as “corporate culture.”

8. Informal authority is complex because there are many intangible factors involved. Sociologists do a disservice when they try to reduce their discipline to the study of tangible factors, such as race, gender, or Marx’s dichotomy of labor and capital.

I also believe that economists and political scientists are guilty of shying away from intangible factors. In Invisible Wealth (first appeared as From Poverty to Prosperity, Nick Schulz and I tried to point out how much you miss when you ignore the intangibles in economics.

9. One can do sociological analysis of particular groups within society. One can do sociological analyis of economists. Or of sociologists. The book I am reading about Pierre Bourdieu has him doing exactly the latter.

10. One of Bourdieu’s themes is that people who are discontented with their social status are prone to make trouble.

11. Without using the term “status-income disconnect,” he suggests that a source of discontent for those in academia is that their economic capital does not match their cultural capital.

Americans are super-rich

Posted on by

Tyler Cowen writes,

Consumption in the U.S., per capita, measures about 50 percent higher than in the European Union. American individuals command more resources than people in countries such as Norway or Luxembourg, which have higher per capita GDP. The same American consumption advantage is evident if you look at dwelling space per person or the number of appliances in a typical home.

He says to look at total U.S. health care spending relative to the size of our economy in this context. If you put GDP in the denominator, we look like an outlier. But if you put consumer spending in the denominator, it looks fairly normal.

And yes, I too have cited the Random Critical Analysis piece.

Changes in the corporate landscape

Posted on by

Kathleen M. Kahle and René M. Stulz write (link now fixed),

US public firms are very different now compared to 1975 or 1995: fewer, larger, older, less-profitable, with more intangible capital, less investment, and other changes. The US firms that remain public are mostly survivors. Few firms want to join their club. A small number of firms account for most of the market capitalization, most of the earnings, most of the cash, and most of the payouts of public firms. At the industry level, revenues are more concentrated, so fewer public firms are competing for customers. A large fraction of firms do not earn profits every year and that fraction is especially large in recent years, which helps to explain the high level of delists. Accounting standards do not reflect the importance of intangible assets for listed firms, which may make it harder for executives to invest for the long run.

The authors discuss various explanations for this, but my inclination is to tell the story as follows:

Think of any investment project as going through two phases. First, there is the start-up phase, which may or may not produce profitable results. Then, for successful projects, there is the cashing-in phase, where the profitable enterprise gets sold to a wider set of investors.

Forty years ago, a lot of investment projects were started within large public firms. With the firm already public, there was no need for an additional cash-in phase. The stock already was widely held. Meanwhile, if a not-yet-public firm launched a successful enterprise, the best deal it could get in the cash-in phase was often to go public.

Today, large public firms are doing less of the first-phase risky investment. Instead, they are letting private firms take the risks and then handling the successful start-ups’ cash-in phase for them by buying them.

So that’s a story. A leading example of that model would be pharma. A lot of the speculative research gets done at small start-ups. Once a start-up is successful, its best option is to be acquired by big pharma. The legacy firms have a comparative advantage in handling the second phase. The start-ups have a comparative advantage in the first phase.