Book Review: Economic Calculation in the Socialist Commonwealth

<a href="https://www.goodreads.com/book/show/28234031-economic-calculation-in-the-socialist-commonwealth" style="float: left; padding-right: 20px"><img border="0" alt="Economic Calculation in the Socialist Commonwealth" src="https://i.gr-assets.com/images/S/compressed.photo.goodreads.com/books/1450381039l/28234031._SX98_.jpg" /></a><a href="https://www.goodreads.com/book/show/28234031-economic-calculation-in-the-socialist-commonwealth">Economic Calculation in the Socialist Commonwealth</a> by <a href="https://www.goodreads.com/author/show/46766.Ludwig_von_Mises">Ludwig von Mises</a><br/>
My rating: <a href="https://www.goodreads.com/review/show/4208120208">5 of 5 stars</a><br /><br />

This extended essay is a brilliant refutation of the "logic and practises" of socialist economics. It is especially valuable not only because there is a new fad in new socialism (my phrase) but because one sees very poorly uninformed critiques of economic freedom and capitalism even in countries with decently run economies. I don't intend to write a summary of the main arguments but my view is that this is an excellent piece for students of political economy and other people with opinions about the failures of existing systems of economic and social organization. <br /><br />But the reason it merits a five-star rating in my world is that the arguments are cogent and the author was prescient. he boldly predicted the internal contradictions of socialist organization and he was borne right, fifty years later. <br /><br />

It requires patience to read because this is a translation from the German language and the sentence structure requires keenness. That stated, this isn't a fine piece of literature because of the facility with language but mostly for its plain logic and rigour in reasoning.
 

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Book Review " The Firm, The Market and the Law

The Firm, the Market, and the Law by Ronald H. Coase

My rating: 5 of 5 stars


This book is written so well by a thinker who has clarity of thought and understands the principles of economics extremely well. Within its seven chapters, the author takes the reader through a very detailed explanation of the nature of the firm, discusses the limitations of the approach to Industrial Organization, the controversy of marginal costs in relation to utilities and tackles the locus classics, which is the "Problem of Social Cost", from which the Coase Theorem derives its name. The concluding chapter is an admonition of classical and Neo-classical economists for taking by faith that lighthouse services can only be provided by public institutions when his historical review shows that up to the mid-nineteenth century, there were private firms providing that service.

No need for spoilers but I find it useful to highlight that the book doesn't necessarily have to be read in the sequence in which the chapters are laid out. If one wanted to know the mind of Coase, then three chapters to read in a sequence are 3, 5 and seven. While the book was published much later, the claim that the study of industrial organization is "stunted" by the focus on firm concentration and monopoly analysis still stands true today. My view is that professional economists, despite having extremely powerful tools, have not developed theories that explain the distribution of market functions and resource allocations between governments and private firms.

In chapter 5, Coase demonstrates that despite its broad citation, some economists and laypeople do not understand the claims and implications of the reciprocal problem presented by externalities. The reciprocal nature of externalities is not self-evident and its counterintuitive implications trouble many people who are fixated with determining liability. It is the longest chapter in the book and fascinating because of the patience that the author shows by going through one claim and alternatives market arrangements to demonstrate the idea that pre-determination of liability is not the sound approach.

To my mind, Chapter 7 is a call for humility and caution by economists. In it, the author goes through a historical analysis to show the genesis of lighthouses in the United Kingdom and how a single firm came to have the exclusive rights to run. He ends the chapter, and the book, with the memorable statement' " In the meantime, economists wishing tom point to a service which is best provided by government should use an example which has a more solid backing".



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Book Review: We Were Eight Years in Power

This book is an amalgamation of the articles written by the author for The Atlantic Magazine. Its eight thematic articles covering an overarching argument of race and political leadership in the United States during the presidency of Barrack Obama. I considered myself a student of the history of democratic governments that included the United States but the eloquence and clarity of the author's arguments profoundly affected me. The author traces the rise of the various flavors black nationalism and what motivated their leaders, some of whom advised preposterously that "Negro" development was dependent on the acceptance of subservience.

I do not subscribe to the most aggressive interpretations about the deliberate design of the United States as a racial country but still, concede that the enduring effects of slavery subsist. But the most important lesson for me is that these approaches and assumptions about race capabilities and proclivities are embedded in discourse and state operations even today. I

In general, the author concludes that Obama was a special individual, undeniably capable and an outstandingly clean governor but had to consciously calibrate his utterances and screen against those that would offend racial groups, while being particularly stern in adressing black youth and men.

By far, the best chapter is when this writer makes a very detailed case for reparations in Chapter 6. I read the magazine version of the article but the reiteration here has impressed me even as a student of economics. The level of systematic predation against black families after the civil war extended to the second half of the new century and had devastating effects on black ability to build and transfer physical capital across generations. While the author doesn't resolve the question of the quantum but fairly records the discussion with President Obama who quickly and sensibly responded by highlighting difficulties in estimating quantum in addition to government distribution of that "entitlement" (my words).

I found this paragraph on page 200 profoundly provocative
    "To celebrate freedom and democracy while forgetting America's origins in a slavery economy is patriotism à la carte." Ta- Nehisi Coates
  

My Experience with a Physical Amazon Bookstore

While I have not been a trumpeter of the view that online stores will completely replace physical stores, this idea has been closest to reality in the case of bookshops. And it is understandable since Amazon has done a fantastic job in creating a store that makes it immensely easy to purchase books. As a client of the corporation and one who has purchased both the paper and Kindle version of books, I made the trip to an Amazon bookstore in Georgetown for the first time a couple of days ago.

I am aware that Amazon tactics are driven by lots of data and their responsiveness to client needs is legendary. Thus as a client who lives in a country that does not have the physical stores, I was very alert to see what a physical store for the giant retailer looks like. I write my assessment below.

Perhaps it was my high expectation or because I stayed in the store for just half an hour but I found that there is a start stark difference in the experience between shopping online and visiting the store even if both are run by a great retailing firm. In short, the experience in that particular bookstore was not overwhelming. I attribute this assessment despite that fact that the store was well laid out, had vast volumes of books and I found all the stuff I was searching for. My main thinking is that I expected an Amazon store to be much better than others in the same way that its website is far better. 

The Amazon store that I visited did not stand out and I know a couple of independent bookstores in many parts of the world that are memorable. The one in Georgetown was not. 

Book Review: Chronicles: On Our Political and Economic Crisis by Thomas Piketty


I have read the most famous book
 
Capital in the Twenty First Century by Thomas Piketty and a good number of his academic entries but this compendium of essays is a revelation into his mind. I think, it is difficult to disagree with the subject of the essays especially as these articles were published after the great recession of 2008. Understandably, most of the essays are about the failure of European bureaucrats to assess the situation correctly and apply the right policy responses. No doubt, Thomas Piketty is a very perceptive and the complex nexus of the politics and economic choices of the European Union.

The two main themes of the book relate to his argument for the mutualization of the debts of countries in the Eurozone on the one side, and the need for higher taxes on wealth to support the existing social safety nets in France and most of Europe. debt Debt mutualization is an imperative for Eurozone countries because a single currency means the interest rates on public debt should converge. the absence of this convergence leads to the dd situation where Greece and Spain face different rates than France and Germany.

The more controversial proposal is that which proposes that taxation of endowments and wealth should be raised because the existing fiscal policy favours passage of wealth to people who do not have to work, unlike those who are employed. Piketty argues that higher taxes on wealth would be ensured if countries collaborated on disclosures of wealth held by their citizens across borders. While the argument that society faces a trade off between taxation of labour and capital is real, I am less convinced by the implicit assumption that a large state is inherently preferable.

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Thoughts on The Fight of The Century

The domain of professional sports is most interesting because these athletes make the job look so easy that their supporters sometimes forget to be objective. In the next couple of days, the city of Las vegas will host a major boxing event pitting Floyd Mayweather Jr. and Manny Pacquiao. Both have fans and critics in large numbers but this fight has its own underlying story. It may make sense for the promoters to refer to this upcoming match as the "fight of the century" but thats hyperbole because the century is still too young.

Because this fight has been so long in coming, the punditry claims that Floyd Mayweather Jr. has ducked the his opponent for fear of losing. Despite the firm belief by Floyd Mayweather's detractors, I find this claim unconvincing because the same pundits claim that he is too interested in making money. So why would he have avoided a big payday like this for so long?

About the fight, I wager that Floyd Mayweather Jr. will prevail over Manny Pacquiao. My reason is just because I trust the analysis by real boxing analysts and thinkers and not people whose commentary starts with the deserved criticism of Mr. Mayweather's unsavoury behaviour. But the fundamental error of these analysts is to assume that floyd's  Floyd's indiscipline in personal relations translates into his behaviour in the ring. This analysis by fivethirtyeight.com goes through the data and comes to the conclusion that the odds favour Mayweather Jr.

I will update this post soon after the match is over and provide my impressions of what was the difference between the boxers would be.

Visit to The Smithsonian Zoological Park

Earlier today, I made a quick trip to the Smithsonian National Zoological Park in Washington DC. As readers may have guessed already, my purpose was to catch sight of the giant pandas that are the main attraction at this fine zoo.

The photo to the right of this blog post shows the phone camera image of one of the giant pandas resting outside the shelter.  Granted, the picture is a manifestation of my lack of skills in photography together with use of a phone without an attached zooming lens but I am still proud of it because it was my first sight of this highly regarded mammal from China.

If as stated, the government of the People's Republic of China cautiously gives the panda partly to strengthen diplomatic skills links, then my cursory assessment is that it is an unqualified success.

First, while I am not an American citizen, it became clear to me that the families and groups visiting the zoo considered sighting of the panda as the highlight of the visit. In addition, the children who were here were excited at encountering animals generally but the AsiaTrail, that culminates with a sighting of the giant pandas was the busiest of them all. Panda diplomacy is very smart politics. oOne hopes that this will help these animals to survive for many more generations.

The curious thing was that entry to the the Smithsonian National Zoological Park does not require payment. Instead, there are notices all around stating that the park is maintained through private donations and coupled with evidence of bequests from corporations and families. A second source of funding is the sale of the map of the park and items in the shops. This presents an interesting model because one would consider that the rarity of the panda would almost make it very lucrative to charge for entry. The economics of pricing for entry to this zoo is helped by the panda and the bequest that supported the establishment of the park to begin with.