In the Shadow of the Banyan

In the Shadow of the Banyan by Vaddey Ratner is a great novel. A girl and her family witness and go through the Cambodian genocide, at the end of the 1970s. The book reads as if riding a roller-coaster. It describes horrible atrocities followed by lovely family scenes of poetry and hope. The story is quite touching and the accounts of Cambodian culture and myths are riveting.

Análisis de Redes y libros de desarrollo económico

Sigo leyendo el libro Aid on the Edge of Chaos, específicamente la parte donde habla sobre análisis de redes y desarrollo económico. Un ejemplo que da el autor es el de una ONG en Ghana que trabajaba en temas de salud. La ONG obtuvo buenos resultados, pero cuando dejó Ghana esos resultados desaparecieron. Se perdió el buen trabajo. ¿Por qué paso esto? 

La ONG había construido una red muy activa de personas y organizaciones y era el centro de conectividad. Cuando se fué dejo un vacío que no se pudo llenar y el sistema, por decirlo de alguna manera, colapsó. Esto no se supo hasta que se hizo un análisis de redes. 

Me interesó el tema e hice un análisis simple de redes con datos que tengo al alcance: libros de desarrollo económico en amazon.com. 

Supongamos que alguien desea leer sobre desarrollo económico y busca "economic development" en Amazon. El primer libro que Amazon presenta es el texto de Todaro y Smith, Economic Development, y las personas que compran este libro también compran: Poor Economics, The End of Poverty, Development as Freedom, The Tyranny of Experts, Into de Mud, y Community Development. Estos libros representaran "el corazón" de mi red. 

Para cada uno de estos libros Amazon sugiere otros (lo que sería ya el "tercer nivel", por llamarlo de alguna manera), y así sucesivamente. Yo incluí los libros hasta el "cuarto nivel" de recomendación. En la red cada nodo representa un libro y está vinculado a otros si los consumidores que el primero compraron también el segundo. Esta es la red: 

Hay varias cosas que vale la pena notar:

• Los libros con la mayor cantidad de conexiones son el 16, 4, 12, 2, 3, y 7, es decir: Edge at the Age of Chaos, Development as Freedom, Death Aid, Poor Economics, End of Poverty, and Community Development. 
• Es interesante que después de dos sugerencias los libros cambian de tema hacia temas espirituales (el cluster del 56 al 61 y del 62 al 66) . . . [el desarrollo es algo complejo]. 
• Después de dos niveles (desde la búsqueda inicial) se encuentran libros desde la perspectiva de la sociología del autor Zygmunt Bauman (el cluster del 50 al 55), quien resalta temas de desigualad, incertidumbre, felicidad, y muchos otros.
• Otro cluster interesante está  formado por los libros del 74 al 78. Alli tenemos a autores como Harvey, Polanyi, y Chomsky. 
• Development as Feedom es el libro que mas conecta a los demas. 
• Es posible que buena parte de la manera en que vemos el mundo, en este caso el desarrollo económico, esté marcado por el path dependence de los primeros libros que leímos sobre el tema. 

Hay que aclarar que solo he visto a una minúscula parte de la red. Esta red es enorme y ni puedo imaginar lo que Amazon puede hacer con sus datos. 

Por otro lado, estos resultados son dependientes de la búsqueda inicial que partió del libro de Todaro y Smith, que es un texto clásico en el campo del desarrollo económico. Es posible también que los resultados que yo obtuve de las búsquedas sean diferentes a las que otras personas pueden obtener. 

My reading

I finished recently:
1- Between Shades of Gray. 
It is a novel that relates the story of a family that, among countless others, was taken from Lithuania during the Russian invasion of 1939. Although it is fiction, the author, Ruta Sepetys, researched the historical events. Thousands, if not more, Lithuanians went  through the horrors of forced-work in concentration camps in Siberia. The main character, Lina, a talented artist, is a girl who leaves a trace of drawings for his father to follow with the expectation that he rescues them. 

2- Living with Water Scarcity. 

Using examples and micro-economic concepts, David Zetland, argues that we now live in times of water scarcity but have the rules of the past, when water was abundant. A change is necessary: prices are the best way to deal with water scarcity and prevent shortage. 

3- Mastermind: How to Think Like Sherlock Holmes. 

Maria Konnikova takes the reader on a journey of rationality and emotions contrasting the ways in which Holmes and Watson think. Careful reflection characterizes Holmes while cuasi-emotional impulses characterize Watson. Using the stories of the quintessential investigator the author applies concepts from psychology and neuroscience to illustrate how we think and why we can do better-or worse.

My readings

Average is Over. Fascinating for many reasons. One of them is the use of chess and its evolution as a template of analysis for the way in which technology is, and will be, transforming our economies. 

After reading the Triumph of the City I think a have a pretty good understanding of where urban development should go. 

This is How You Lose her is funny and deep. A collection of stories of immigrants in the US. I can read this book over and over. 

Not done with How China Became Capitalist. But so far the book is very informative and has a lot of interesting details. 

I just started We Need New Names, looks promising, it is NoViolet Bulawayo's debut  novel.

Complications

This is one of the best books I've read in the last few months. It is "electrifying," especially the last chapter. It is a fantastic look at medicine by an insider, who is also a great writer. He portrays medicine as an imperfect and challenging science, which reminded me so much of economics. 

A TED talk by the author is here. He also writes for the The New Yorker. 

I would like to read everything he has written, and this will probably be the next one. 

My readings

Ethics and economic progress.
The strategy of conflict.
Home.
Better than plowing (HT: AA).
The Armchair Economist: Economics and Everyday Life. 

my readings

1) Strong Medicine: Creating incentives for Pharmaceutical Research on Neglected diseases.
2) Seen Like a State (I know . . .).
3) What the Best College Teachers Do.

They are all great.

The Gift of Books

Merry Christmas to all! 

You probably have received books as gifts in the past and some of them are forgotten in the bookshelf. If you give them a chance you might be pleasantly surprised with their stories, as I have been. 

Last week I went back to some of my own forgotten books. This one has been pure joy:

Commerce and Government Considered in Their Mutual Relationship, by Étienne Bonnot, Abbe de Candillac (2008).

This book is about the French philosopher Abbe de Candillac (1715 -1780) and his economic analysis. It describes his ideas on economics in general, including topics such as the factors that promote prosperity. He was writing in the 1770s and he even anticipated Adams Smith in certain topics such as the importance of free trade for economic prosperity. He also talked about what determines the value of things (the importance of utility and scarcity) approximately a century before the marginalist revolution. There are many other topics. For Candillac it was important to find a proper language of economics, the consistency of which would determine its success as a science.   

Thanks to Gis who gave me that book. 

What books are waiting for you in the shelf?

My reading

1) Miron's Drug War Crimes: The Consequences of Prohibition. Safety and security are the main problems in countries such as Guatemala, Mexico, Colombia, Brazil, and The Dominican Republic (see here). Violence is prevalent in this countries and probably a large part of this is due to drug trafficking. Miron looks at the effects of drug prohibition. Broadly speaking he argues that the world would be a better place if drugs were legal. He presents a candid and detailed analysis. His discussion of the alcohol prohibition in the early twentieth century in The US is particularly good. It is a very short book that you can read in a few hours.

2) If you follow this blog you notice that typos are not few. I apologize for that. My native language is Spanish but I love English. Null excuses aside, I finished Prose's book Reading Like a Writer, in an attempt to improve my English. The book is on fiction writing, but useful for non-fiction writers as well. 

3) Jules Verne's The Mysterious Island is a very entertaining novel. I find similarities between Verne's writing style and Hemingway's (they both use very short words, or that is my impression) although Hemingway did not have a special consideration for Verne's books [to be clear, I did not find that Hemingway like or dislike Verne]. 

Willingness to pay . . . to read certain books

In a 1935 piece for Esquire magazine entitled Remembering Shooting-Flying: A Key West Letter, Ernest Hemingway listed seventeen books that were among his favorites. They were so dear to him that he would rather read any of them for the first time again than have a yearly income of a million dollars. (That's about $16.5 million/year in today's dollars.)

Read the list here.  

Looking for a good read on economics and more?

Take a look at this list of recently published titles - the order does not mean anything:

1. The Price of Inequality: How Today's Divided Society Endangers Our Future. Joseph E. Stiglitz.

2. End This Depression Now! by Paul Krugman.

3. How Much is Enough?: Money and the Good Life. Robert Skidelsky.

4. Finance and the Good Society. Robert J. Shiller.

5. Why Capitalism? Allan H. Meltzer.

6. A Capitalism for the People: Recapturing the Lost Genius of American Prosperity. Luigi Zingales.

7. The Clash of Economic Ideas: The Great Policy Debates and Experiments of the Last Hundred Years. Lawrence H. White.

8. Living Economics: Yesterday, Today, and Tomorrow. Peter J. Boettke.

9. The Quest for Prosperity: How Developing Economies Can Take Off. Justin Yifu Lin.

10. Free Lunch: Easily Digestible Economics. David Smith.

11. The Undercover Economist. Tim Harford.

12. The Soulful Science: What Economists Really Do and Why It Matters (Revised Edition). Diane Coyle.

13. Going South: Why Britain will have a Third World Economy by 2014. Larry Elliott, Dan Atkinson.

14. What's the Use of Economics?: Teaching the Dismal Science After the Crisis. Diane Coyle.

15. What Money Can't Buy: The Moral Limits of Markets. Michael Sandel.

16. Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition. Charles P. Kindleberger, Robert Z. Aliber.

17. An Economist Gets Lunch: New Rules for Everyday Foodies. Tyler Cowen.

18. The Armchair Economist: Economics and Everyday Life. Steven E Landsburg – 2012 edition.

19. Keynes Hayek: The Clash that Defined Modern Economics. Nicholas Wapshott.

20. Grand Pursuit: The Story of Economic Genius. Sylvia Nasar.

21. The Assumptions Economists Make. Jonathan Schlefer.

22. The Honest Truth About Dishonesty: How We Lie to Everyone---Especially Ourselves. Dan Ariely.

23. The Economists' Voice 2.0: The Financial Crisis, Health Care Reform, and More. Aaron S. Edlin, Joseph E. Stiglitz.

24. The Economists' Voice: Top Economists Take On Today's Problems. Joseph E. Stiglitz, Aaron S. Edlin, J. Bradford DeLong.

25. Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street. Tomas Sedlacek.

26. Paper Promises: Money, Debt and the New World Order. Philip Coggan.

27. This Time Is Different: Eight Centuries of Financial Folly. Carmen M. Reinhart, Kenneth Rogoff.

28. Lords of Finance: 1929, The Great Depression, and the Bankers who Broke the World. Liaquat Ahamed.

29. 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. Simon Johnson, James Kwak.

30. Fault Lines: How Hidden Fractures Still Threaten the World Economy. Raghuram G. Rajan.

31. Deng Xiaoping and the Transformation of China. Ezra F. Vogel.

32. Winner Take All: China's Race For Resources and What It Means For Us. Dambisa Moyo.

33. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Daron Acemoglu, James Robinson.

34. The Hour Between Dog and Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust. John Coates.

Experiments with Truth

Haiti has given me some time to read. Lack of electricity is the main reason. I just finished two books on the lives of influential persons who have characteristics in common. 

Gandhi An Autobiography was refreshing. Some of his actions were bizarre to say the least. But Gandhi was extremely smart. He was wise to pick his battles. By the end of the book he argues that Truth is God. Gandhi was influenced by the thinking of another great man, Henry David Thoreau. I read a little book on Thoreau (now out of print). It was probably written for kids but it gives a good portrait of Thoreau's life and search for truth and authenticity.

"Why Nations Fail" and "The Calculus of Consent'

The Calculus, Institutional Economics and Development Economics

The economic analysis of politics as elaborated by Buchanan and Tullock in The Calculus has had ample influence on different fields (political economy, institutional economics, constitutional economics, law and economics, etc.). It was the origin of Public Choice. In one way or another these fields are linked to development economics. In fact, one can argue that most economics is development economics. Since the inception of systematic economic analysis by Adam Smith, economics has dealt with wealth creation to escape poverty. In this section we limit our discussion to the field of institutional economics as it relates to economic development, and how these two fields are linked to some ideas in Calculus. 

The fundamental question in institutional economics has to do with why institutions work in some countries but fail in others. In other words, why in some countries the existing formal and informal institutions lead to prosperity, but in other countries perpetuate poverty. In their new book Why Nations Fail, Acemoglu and Robinson argue that nations fail because they are incapable of generating inclusive institutions. In many developing countries institutions favor the minority and exclude the majority. To be clear, some powerful individuals (the minority) find it in their best interests to stick to the status quo, which is characterized by policies that benefit their political and economic interests. From Buchanan and Tullock we know that when few individuals in a group define the rules of the game, the rest of the society pays high external costs. In fact, Why Nations Fail and The Calculus seem to propose a similar argument, although through different methods: the importance of inclusion. Why Nations Fail is an empirical analysis, and it contains case studies of several countries. The authors show that less institutional inclusion leads to economic and political failure. Take the case of Botswana, for example. Acemoglu and Robinson argue that there were key features in the history of Botswana where institu- tional inclusion took place. One was the institution called kgotla. The kgotla was a local forum of discussion where participants directly deliberated on public matters. Botswana was a British protectorate (as opposed to a colonial territory). The British allowed local institutions like the kgotla to continue to exist. In other African countries these kinds of institutions did not survive the colonial period. The kgotla is inclusive; almost everybody in the village, town, or city is allowed to participate. In terms of Calculus, the kgotla has low external costs. We know also that it has high costs to reach agreements. 

A key moment in the history of Botswana happened when diamonds were discovered in the 1960s. After negotiating the end of the protectorate, the first president of the country, Seretse Khama, convinced the leaders of the different tribes that diamonds would have to be used to benefit the country as a whole and not a particular region. To sum up, the argument that Acemoglu and Robinson make is that the development of pluralistic, inclusive institutions allowed Botswana to prosper and become a middle-income country in Africa, in spite of being land- locked, being very poor before independence, and having a territory almost half of which is covered by desert. 

In our description of Part III of The Calculus we showed the importance of unanimity for Buchanan and Tullock. The Calculus of Consent is an abstract book. Its call for unanimity as the constitutional rule is a call for absolute inclusion. 

Broadly speaking, one can see that the book Why Nations Fail echoes an abstract proposition that Buchanan and Tullock developed 50 years ago.

Source.

From "Room to Read" to "The Innovative University"

I finished the book Leaving Microsoft to Change the World, by John Wood . . . a fantastic book!  I moved into The Innovative University by Clayton Christensen and Henry Eyring. See a review and Q&As with the authors here. Tomorrow will be blogging from this location. 

Patents facts of the day.

Patents are like fertilizer. Applied wisely and sparingly, they can increase growth. But if you apply too many chemicals, or make patents too strong, then you can leach the land, making growth more difficult. We definitely need some serious patent reform to prune back the thicket and make more growth possible. Let’s consider one of the most important and innovative firms today. This company has revolutionized its industry and done more than any other for the American consumer. No, it’s not Apple. The iPad is cool but over the last several decades the most important and productive firm has been Walmart. In fact, Walmart alone was responsible for a large share of the productivity improvements in the late 1990s. Walmart is a very innovative firm but it holds almost no patents—only about 60 in total, including one for a convertible shoe box. In fact, most innovations in most industries are not patented, and many industries are innovative with few or no patents; fashion and jazz for example. So patents aren’t necessary for innovation.

That is Alex Tabarrok who has a new book.

Paper books and e-Books might be in somewhat different markets

. . . 60% of best-selling electronic books have never entered the monthly top 100 list of best-selling paper books.

. . . 10% of best-selling electronic books correspond to titles that do not exist in paper format . . . electronic books create an opportunity for emerging niche or independent authors to reach their audience as well as to test new markets and price elastiticies. 

That is from the new paper Superstars and Outsiders in Online Markets: An Empirical Analysis of Electronic Books by Bounie et al.  

What are the FP top 100 Global Thinkers Reading?

That Used to Be Us, by Thomas Friedman and Michael Mandelbaum; Redefining Health Care, by Michael E. Porter and Elizabeth Olmsted Teisberg; Change.edu, by Andrew Rosen.

That is Bill Gates. 

To End All Wars, by Adam Hochschild; Deep China, by Arthur Kleinman, et al.; A Song of Ice and Fire, by George R.R. Martin.

That is Paul Farmer.

See the whole list. HT: Marginal Revolution. 

Books I've been reading

Coffee and power

This book narrates spectacularly the history of the link between coffee production and the political and social systems in Nicaragua, El Salvador, and Costa Rica -- although there is also a discussion on Guatemala as a comparative case. The author argues, among many other things, that the structure of the agrarian fractions and the agroindustrial fractions in these countries had a strong influence on the way the political and social system developed by the end of the twentieth century. One can agree or disagree with some interpretations, but this careful research can not be ignored. This book must be a required reading for any class on social/economic/political history on Central America. 

How to write a sentence: And how to read one

This wonderful little book wisely argues that the secret for good writing is to focus on "the sentence." The sentence should be the unit of analysis, not "the word." A must for those who care about good writing. 

I, Robot

What a great book. You learn to love the robots, and to hate them. And you laugh out laud. Asimov genius is impressive. Humans start to question their own origins . . . and a robot claims: "I myself exist, because I think." I am using this book for my institutional economics class, and the laws of robotics have worked great to generate discussion. Brilliantly Asimov shows that even with a well define hierarchical set of rules chaos can happen if clear information does exist. We can indeed learn a lot about institutional economics from Asimov!!! 

Most Highlighted Kindle Passages of All Time

You can see them here. These are the ones I like the most from their top 25 list:

Wasn’t that the definition of home? Not where you are from, but where you are wanted? Cutting for Stone

Those three things—autonomy, complexity, and a connection between effort and reward—are, most people agree, the three qualities that work has to have if it is to be satisfying. Outliers

It is the opposite of ignorance—it is intellectual honesty: to be willing to accept reality and to call things what they are even when it is hard. Heaven is for Real

Criticism is futile because it puts a person on the defensive and usually makes him strive to justify himself. Criticism is dangerous, because it wounds a person’s precious pride, hurts his sense of importance, and arouses resentment. How to Win Friends and Influence People

Rule #1: Avoid “white” carbohydrates (or anything that can be white). Rule #2: Eat the same few meals over and over again. Rule #3: Don’t drink calories. Rule #4: Don’t eat fruit. Rule #5: Take one day off per week and go nuts. The 4-Hour Body

“Panem et Circenses translates into ‘Bread and Circuses.’ The writer was saying that in return for full bellies and entertainment, his people had given up their political responsibilities and therefore their power.” Mockingjay

When dealing with people, let us remember we are not dealing with creatures of logic. We are dealing with creatures of emotion, creatures bristling with prejudices and motivated by pride and vanity. How to Win Friends and Influence People

“I have no data yet. It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts." The Adventures of Sherlock Holmes

So the only way on earth to influence other people is to talk about what they want and show them how to get it. How to Win Friends and Influence People. 

The source, wich is also a great reflection on e-books and highlighted passages says:

The feel, weight and smell of my own paper books in my hand, some of them old friends I haven’t seen for years, is a joy. As physical books I can not only keep them and reread them but give them away, lend them to people, take them to second-hand booksellers. But there are lines I would rather not cross: walls of books on more than two sides, for instance, or a sound from the floorboards like the imminent fall of a sawn-out Redwood pine when I slot the last volume of Remembrance of Things Past into its place. The rise of the ebook offers the chance to be ruthless in the personal paper library without losing the ability to keep text. On the urban bookshelves of the crowded future world only the loved and the beautiful will survive.

HT Carrie Smith

My readings

Stories of Your life and Others by Ted Chiang.

Brilliant! This is the book one wishes everybody should be reading. It is a collection of science fiction and what one could wrongly call "theological fiction" stories -- Wikipedia calls his genre "speculative fiction," which sounds like a tautology to me. The truth is that Chiang's imagination surprised me every time. I am using this book for my institutional economics class and has worked really well.

Getting Better: Why Global Development is Succeeding - And How We Can Improve the World Even More by Charles Kenny.

This book is a really good summary of the recent theories of economic development with a positive outlook of what humanity has managed to achieve. Specifically, it shows the impressive improvements in living standards the world has witnessed that are not necessarily reflected in income per capita. If you are familiar with recent theories and thinkers in economic development (Daron Acemoglu, Amartya Sen, etc.) the book will be repetitive. Having said that, the book points out to some research I was unfamiliar with, like this one. It is an easy read, something you can read in a few hours. 

More than Good Intentions: How a New Economics is Helping to Solve Global Poverty by Dean Karlan and Jacob Appel.

Cutting edge research in economic development using Randomized Control Trials. Along with Poor Economics, this is one of the most important books in the field in the past twenty years. I posted a review of this book before. Very well written. 

Protestantism in Guatemala: Living in the New Jerusalem by Virginia Garrand-Burnett.

I am still working on this one. It is a historical view of the reasons why many Guatemalans have converted to Protestantism. Although the thesis is more complex, the causal factors of conversion have to do with social uncertainty in a environment plagued with crime and other social problems, especially in the past thirty years -- although the author does not discard spiritual explanations. In some sections the author argues that people have converted because of economic benefits, or because Protestant churches provide a social network. In some parts the author claims that Weber's theories apply but in other parts the author explicitly rejects his theories. The history is certainly complex and multi causal. Probably the most important part of the book is the analysis of the link between political leaders and Protestantism in the country.