Thursday, June 5, 2014

The Economic Role of the State

The government has to provide not only services but also goods, because of market failure.

If the government does not build a hospital or a school in a very poor area where people cannot afford to pay the costs, who will build and provide services that are essential and indispensable for people. The private businesses will not build it because there is no prospect for profit or return of their investment. The same is for a post-office, library, road and transportation, and many other services that are necessities for society but not economically or financially profitable. Businesses and companies and private enterprises will not do any businesses if there is no profit for them, no matter who necessary and important these services and goods are for people there.
 
Even according to Adam Smith (1937), who is regarded as a founder of modern economics or classical economics, there are three duties that the government has to attend to: first, to protect the society from the society from the violence and invasion of other independent societies; second, to establish an exact administration of justice; and lastly, to establish and manage certain public works that are necessary for society but no private sector is interested in to engage. Smith’s position on these three roles of government is in fact based on the public good concept and private property theory.


Adam Smith statue on the Royal Mile in Edinburgh 
Image from http://www.livingphilosophy.org.uk/News.htm

Adam Smith's The Wealth of Nation (Book cover)
Image from http://www.amazon.com/Wealth-Nations-Modern-Library-Classics/dp/0679783369%3FSubscriptionId%3D0G81C5DAZ03ZR9WH9X82%26tag%3Dzemanta-20%26linkCode%3Dxm2%26camp%3D2025%26creative%3D165953%26creativeASIN%3D0679783369

The first reason for the government to provide services or goods is because of “market failure”. Markets do fail occasionally, more often than the traditional view that market failures are the exception (Stiglitz, 1989). More than that, Stiglitz (1993) argues that competitive markets become inefficient too. Moreover, markets do not always produce goods and services that are important and necessary for consumers (Kell, 2009).
 


Joseph Stiglitz
Image from http://www.ny1.com/content/shows/one_on_1_archives_qz/118024/one-on-1--joseph-stiglitz-stocks-up-on-economic-insight

Here is a little bit introduction on how different schools think about the economic role of the state.

For economic liberalism, “states ought to abstain from intervening in the economy, and instead leave as much as possible up to individuals participating in free and self-regulating markets” (Thorsen & Lie, 2006: 2). Similarly, Austrian economists firmly hold that government is inefficient and should leave most of the economic activities to private hands. Ludwig von Mises (1944) is adamant in his view that government bureaucracy is inherently inefficient precisely because it is not faced with any of the forces which make private business management its opposite.
 
Karl Popper (back row), Ludwig von Mises (front row to the right) and 
other participants during a session at the first meeting of the Mont Pelerin Society 

On the other hand, Keynesian economists such as Paul Samuelson, Paul Krugman just to name two, and the development economists such as Michael Todaro, Amartya Sen, Joseph Stiglitz, Jeffrey Sachs and Ha-Joon Chang to name just a few, believe that market does fails and state or government has roles to play in economy. The task of government is, Borooah (2003: 4) argues, “to take the necessary steps to ensure that all impediments to the proper functioning of markets were removed”. By using better combinations of policy tools, the government can provide effective interventions in market mechanism (Kell, 2009).
Paul Samuelson
 Amartya Sen

Michael Todaro

Paul Krugman with John Nash, winner of the 1994 Nobel Prize in Economics.

Jeffrey Sachs

Ha-Joon Chang

I believe that the government has to provide services and goods primarily—there are many other reasons but I will focus on only three of them—because
 
(1) Social welfare versus economic efficiency: Economically efficient behaviours or actions can sometime be socially welfare-decreasing ones. There are occasions when economic efficiency can only be achieved at the expense of social welfare (Summers & Summers 1989; Stiglitz, 1993). In other words, actions or choices of individual could be personally beneficial to him or her but not necessarily be socially beneficial. Competition that is the fundamental principle where market economics is constructed is not always perfect. Change (2007: 90) argues that “unfettered competition can lead to social waste”. Accordingly, Stiglitz (1993: 22) argue that “[T]here are feasible government interventions that can make all individuals better off. Similarly, Kell (2009) argues that without proper and appropriate regulation, market mechanism affects society as a whole negatively and unjustly.
 
(2) Profits verses social responsibility: Private enterprises that are naturally interested in and focus on profit, are not interested or willing to provide services and goods to people living in remote areas where demand for service and good are low and therefore are not economically profitable. Moreover, profit-seeking firms are not again willing or interested or even refuse to provide basic goods and service for instance, provision of water, electricity, postal services, public transport, to customers who cannot afford for such basic goods and service. Again, private sector investors, which are arguably interested in short-term gains and not favour risky large-scale projects with long gestation periods, are unable or unwilling to finance projects that may have high returns in the long run but carry high risks in the short term (Forfas, 2010).
 
(3) Equity and Justices: Relating to the matter of equity and justice among citizens, when private enterprises do not provide basic and essential services and goods to people because of lack of economic profits and gains for them, the state has to provide these services and goods through public enterprises even if it means losing money in the process, but in order to support equality, regional development and other economic and social goals (Chang, 2007; Forfas, 2010).
 
As I said, there are still many other reasons that require the state or the government to provide services and goods.

The question is not whether government intervention is necessary or not but how government can effectively involve and manage in the economy. What necessity and important is to establish an enlightened government or state that can discern between pros and cons in having SOEs in the economy and have capability and political will that are essential for establishing and running government departments and public enterprise effectively, competitively and successfully.
 
References

Borooah, V. K. (2003). Market Failure: An economic analysis of its causes and consequences. Retrieved on February 26, 2014 from http://www.borooah.com/ Teaching/Microeconomics/Market_%20Failure.pdf
Chang, H-J (2007b). Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. London: Bloomsbury Press.
Forfas (Ireland’s policy advisory board for enterprise, trade, science, technology and innovation) (2010). The Role of State Owned Enterprises: Providing Infrastructure and Supporting Economic Recovery. Retrieved on February 6, 2014 from http://per.gov.ie/wp-content/uploads/Document-6a-30-7-10.pdf
Kell, P. (2009). Market Failure: When should policy makers act? Retrieved on February 6, 2014 from http://www.percapita.org.au/_dbase_upl/Peter%20Kell.pdf
Mises, L. von (1944) Bureaucracy. New Haven: Yale University Press
Smith, A. (1937). An Inquiry into the Nature and Causes of the Wealth of Nations. New York: Modern Library.
Stiglitz, J. E. (1993). “The role of the state in financial markets.”  World Bank Research Observer, Annual Conference on Development Economics Supplement (1993):19-61.
Summers, L. H. & V. P. (1989). "When Financial Markets Work Too Well: A Cautious Case for a Securities Transaction Tax." In Regulatory Reform of Stock and Futures Markets: A Special Issue of the Journal of Financial Services Research. Boston, Mass.: Kluwer Academic Publishers.
Thorsen, D. E. & Lie, A. (2006). What is Neoliberalism? Retrieved on March 1, 2014 from http://folk.uio.no/daget/neoliberalism.pdf

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Friday, June 14, 2013

On Methodological approach to Assess Research Output

This a short discussion note, very draft and unedited, on the methodological approach related to the assessment of all research outputs within the centre for public enterprises (CPE), University of the Witwatersrand. I hope this small discussion of mine will add at least modicum of value in an attempt and effort of the centre to improve the quality of research outputs.


Concerning bias intellectually, ideologically or politically

As in the domain of social science, researches on public enterprise are generally qualitative studies, which apply numerous approaches, paradigms, schools and movements encompassed in terms of the ontological, epistemological and methodological assumptions on which they are based. The point is that subjectivity is unavoidable and should not try to avoid it, but needs to be justified in logical and convincing ways.

For instance, there are theoretical and ideological bias relating to the existence or necessity of public enterprises or the desirable size and roles of public sectors in an economy of a nation is natural and unavoidable and should not be afraid of it but just to be aware of it when assessing studies and researches.

Then, a question concerning the role of reviewers arises. 


Who review the reviews of reviewers?

Any academic research article or paper or even book-chapter has to be reviewed by anonymous reviewer or a couple of reviewers before they get published. The due consideration should be given to the matter of choosing reviewers. I would like to suggest that there should be at least two or at best three reviewers, so that their reviews and evaluations should be also assessed and checked against one another. 


Then, what are the characteristics of great journal articles?

To be able write or publish great or at least good articles, the very first step is to know what a great or good article is, what their characteristics and strengths that make them outstanding. According to Litman (2012: 3), “research quality is an epistemological issue (related to the study of knowledge)”. To write or produce good research papers and articles, thorough consideration and conceptualisation, careful preparation and planning, credible and reliable data and information, in-depth and systematic data organisation and analysis are required. However, it also seems to me that there are two important ingredients that make an article or paper make outstanding and significant. These are the question that the research asks and tries to answer or understand, and the impacts that has on the knowledge creation and our understanding about the particular subject. The impact of a research or a article or a paper, in my view, stems from questioning the established conventional beliefs and theories is, in my view, one of the essential characteristics of a great research output.



On questions that are simple but important

In my view, a great research or research journal starts with a simple but important question which questions the conventional beliefs or views or even theories. Most of the new discoveries that revolutionise our thinking and understands are started with a simple but overlooked questions, for example, Galileo’s question that asks “why the Moon orbits around the Earth, while other planets, including the Earth, are orbiting around the Sun” (Millican, 2009). Similarly, Newton asks a simple question: “Why an apple but not the Moon falls down to the ground”.


Logically sound but untrue 

Logical analysis and reasoning are bounded by known facts. In the time when there was no telescope and unable to travel around the world, it looked very logically sound and convincing the structure of Aristotle’s Universe. However, when we have more advanced tools, instruments and technologies, then, in turn, acquired more completed information and data, assumptions and theories that are previously sound and logical become illogical and untenable to answers questions that arised together with new data and information, for example look at two systems of Universes, by Aristotle and by Ptolemy.



Figure 1: Aristotle’s Universe versus Ptolemy’s Universe


  
Aristotle’s Universe
Image from Galileo of Physics department of the University of Virginia,  http://galileo.phys.virginia.edu/classes/109.mf1i.fall03/AristotleToCopernicus_files/image001.gif

Ptolemy’s Universe
Image from From Physics department of the University of Wisconsin (Madison),
http://wisp.physics.wisc.edu/astro104/lecture5/lec5_print.html


Another instance is between Newton and Leibniz on the concept and nature of space, time and motion, and their relationship among each other. While Newton Laws were well-established and accepted, Leibniz argues, against Newton, that space, time and motion are relative, not absolute. In one of his letters to Clarke, Leibniz wrote "As for my own opinion, I have said more than once, that I hold space to be something merely relative, as time is, that I hold it to be an order of coexistences, as time is an order of successions" (Leibniz, 1956: 25-26). Einstein (1905) later proved that Leibniz is damn right in his historic paper that does not have any references to any other publications, although it uses many of the ideas that had already been published by others, however, its substantial contribution is an introducing of a theory of time, distance, mass, and energy.


Portrait of Gottfried Leibniz (1646-1716), German philosopher (oil, circa 
College of Liberal Arts & Social Sciences,  University of Houston
http://www.hfac.uh.edu/gbrown/philosophers/leibniz/BritannicaPages/Leibniz/LeibnizGif.html
Portrait of Isaac Newton (1642-1727) (Oil, 1689)
Image from Isaac Newton Institute for Mathematical Sciences,
Albert Einstein
From National Public Raido (NPR), 
http://www.npr.org/blogs/13.7/2011/09/28/140839445/is-einstein-wrong
Another memorable example includes a case between “Phillips curve”, and then the concept of NAIRU (Natural Rate of Unemployment). While people were so convinced by and comfortable with the theory of “Phillips curve”, there were two persons Friedman (1968) and Phelps (1967) who dared to question the validity of it, and are also capable to test it against the data from different contexts, and finally repudiate it once and for all. The point of Phillips curve is simple: there is a negative relationship between the unemployment rate and the price level. When the unemployment rate declines, the overall price level (i.e., inflation rate) rises (Phillips, 1958).
Important works are simple but very original and different from the majority of the articles and papers.

Some articles and papers could be very convincing logically and analytically but it does not mean that their data or evidence or results or conclusion is right. There are famous fake scientific and research articles that were first accepted as great and later found out their fakeries (Litman, 2012: 12; Scheer, 1988; Nash, 1996). Litman (2012: 2) calls them “manipulating researches”, which are constructed with, in the terms of Frankfort (2005), bullshit or manipulative misrepresentations). Frankfort argues that bullshit (manipulative misrepresentations) is worse than an actual lie because it denies the value of truth. “A bullshitter’s fakery consists not in misrepresenting a state of affairs but in concealing his own indifference to the truth of what he says. The liar, by contrast, is concerned with the truth, in a perverse sort of fashion: he wants to lead us away from it.”

On the other hand, an article or a paper, which seems to be "dull . . . really dull" and language composition could be lower quality and standard, could also be a seminal work based on its ingenious methodological approach, or its important question and findings, or its impacts on future studies and knowledge creation, for example Keynes’s General Theory, that, according to Paul Samuelson (cited in Moggridge, 1992, cited again in Strathern, 2002: 281) is "badly written, poorly organised .... it is arrogant, bad-tempered, polemical and not overly generous in its acknowledgements. It abounds in mare's nests and confusions". However, Samuelson continues, "in short, it is a work of genius" and Strathern (2002: 281) regards it as the best single-volume biography of Keynes’ life, times and ideas.

It is, according to Nash (1996: 67), because of a fact that research journal or paper writing involves two skills: research and writing. The point is that there are two parts in a research journal or paper their qualities need to be assessed. In my view, theoretical and methodological is more important than the language composition because it can easily improved by language editors. In short, my point is that the prime focus should be on the assessment of research problem formulation and theoretical and methodological choices, rather than of language composition or presentation.


Then, what should we do? 

The first step is to understand what outstanding research papers or articles are and then share these knowledge among us. In order to do them, we have to, need to, prepared and are ready to learn from the masters and stand on the shoulders of giants, as Newton did, and then to imitate them and follow their foot-steps. There is no new thing under the Sun. Best practices and lessons of experiences are readily available if we know how to find them. 
Matters concerning data collection

One of the life-blood of a research and a research journal or paper is data collection. Its quality hinges on the quality of data it used and on the soundness of data-analysis. There are a few matters that I am aware about data-collection. 


Validity of data versus confidentiality and anonymity of respondents

A conflict can be arisen from these standard practices of researching. When respondents demand not to be named and also not to be tape-recorded, the researcher, then, has to rely only on his or her note. Then how can reviewers or examiners validate the authenticity, defensibility, rigour and credibility of the data provided by the researcher? 


Limited usefulness of company’s reports

It is a concern about the reliability of data used in the study. Companies’ reports are necessary to be studied but not reliable; that should be reviewed them cautiously and critically. It is because “companies report what they did, not what they did not do. So finding errors of omission is inherently harder than finding errors of commission” (Carroll & Mui, 2008: 87). Triangulation in terms of data collection is, therefore, indispensible.


Necessity to be aware of differences among cases that are compared

When providing lessons of experiences or best practise, there are some points that need to be aware of and considered carefully. Constraints and challenges of enterprise could be quite similar but they can be different to one another in terms of, for example, types as well as sizes of industries, cultural, social and even religious backgrounds, political backdrops, and institutional structures. 

The same mechanism, tools and processes, as well as capacity, would not always produce the same results in different organisations that have different organisational cultures, and different attitudes of people in them. Simon (1991) also argues that a successful organization is one that musters organizational loyalty among its members, as otherwise the organization would have to spend enormous amounts of time and resources in bargaining and monitoring their performances. There is one interesting and instructive illustration that supports that argument. It is a remark from a top executive of the famous Japanese company Kobe Steel, which is retold by Chang and Singh (1997: 868): The Japanese executive claimed that because of the diversity and complexity of the company's operations, there was no way board members and management could make an informed decision about most of the projects that their staff present to them. However, it is necessary for them to worry and they are not worried because they believe that their company members were mostly doing their best to advance the interest of the company.  

Another consideration needs to be make is about the nature and practices of management of an enterprise. There are quite well-known theories concerning management nature, called Theory X and Theory Y assumptions of manager or management. Performance of an enterprise or an organisation is largely dictated by the nature, practices and quality its management. Managers have their own assumptions about their staff.


Creating an encouraging environment

Another thing what we should try and succeed is to create an environment that are conducive and supportive to researchers and students and, in turn, empower, enable and assist them to be able to produce, write and publish great research papers and articles.

In history, we can see that great thinkers, writers and persons who creates outstanding works tend to come from a team that is comprise with like-minded, so brilliant, people who motivate, inspire, challenge and push to higher level of standard each other. There are plenty of examples of it, such as the Bloomsbury Group grouped some of the finest and brightest authors, philosophers and economists such as John Maynard Keynes, G. E. Moore, Bertrand Russell. E. M. Forster, Lytton Strachey, Virginia Woolf; the Austrian School of economics that is composed by great Austrian economists such as Ludwig von Mises, Friedrich von Hayek; the Chicago school of economics that are a home of Frank Knight, Aaron Director, George Stigler, Milton Friedman, just to name a few of them, where they met together in frequent intense discussions that helped set a group outlook on economic issues, based on price theory, and that has fielded more Nobel Prize laureates and John Bates Clark medalists in economics than any other university or even a country.  


The house of the Bells, Charleston Farmhouse, 
in Bloomsbury where the group used to get together.
Image from Periwork (English online learning resources & News database portal,
http://www.periwork.com/peri_db/wr_db/2006_February_18_10_21_43/part1.html



The Bloomsburg Group
Image from James Madison University,
http://www.jmu.edu/honorsprog/abroad.shtml



It is important to understand that these groups are first thought on, conceptualised, mobilised, organised, founded, nurtured and sustained by a person or a couple of persons who are visionary and forwarded minded. In the case of Bloomsbury Group, it was G. E. Moore; Paul Samuelson and Robert Solow had transformed the MIT (Massachusetts Institute of Technology) to become a great economic department. Similarly, those were Carl Menger Ludwig von Mises, and Friedrich von Wieser who founded and developed the Austrian School of economists.

Conclusion
To recap, to improve research output as well to groom and mentor researchers and students to become outstanding researchers, so that they can produce remarkable and significant research papers and articles, it is important and indispensible to understand what great research papers and articles are and then to build an environment that are conducive, supportive and encouraging, stimulating to have a vibrant and powerful research society or team.


While writing this note, I tried to remember to ask regularly myself a question “who do you think you are to talk and discuss these issues?” This is just sharing what I think important and just means to provoke a brain-storming or more debates. And I believe that at least one point of my discussion in this note will be of some help for at least one person.



References 


Einstein, A. (1905) On the Electrodynamics of Moving Bodies. In Annalen der Physik, 17 (1905), pp. 891-921. (English translations by W. Perrett and G.B. Jeffery from the German Das Relativatsprinzip, 4th ed., published by in 1922 by Tuebner). Retrieved on 6 June 2013 from http://www.pitt.edu/~jdnorton/teaching/HPS_0410/ assignments/04_origins/On-the_electrodynamics/index.html
Frankfort, H. G. (2005) On Bullshit. Princeton: Princeton Press.
Friedman, M. (1968) The Role of Monetary Policy. In American Economic Review, 58 (May 1968), pp. 1-17. Retrieved on 6 June 2013 from www.aeaweb.org/aer/top20/58.1.1-17
Litman, T. (2012) Evaluating Research Quality: Guidelines for Scholarship. Retrieved on 5 June 2013 from www.vtpi.org/resqual.pdf
Moggridge, D. (1992) Maynard Keynes: An Economist’s Biography. London: Routledge.
Nash, T. (1996) The Fake Research Paper: A Creative Approach to Modern Language Association Style. In English Education, Vol. 28, No. 1 (Feb., 1996), pp. 67-71. Retrieved on 6 June 2013 from http://www.jstor.org/stable/40172889
Millican, P. (2009) General Philosophy. A series of lectures delivered by Peter Millican to first-year philosophy students at the University of Oxford. The lectures comprise the 8-week General Philosophy course and were delivered in late 2009, which are watchable and downloable at http://www.philosophy.ox.ac.uk/podcasts/general_philosophy
Phelps, E. (1967) Money Wage Dynamics and Labour Market Equilibrium. In Journal of Political Economy, 75 (July-August 1967), pp. 678-711. Retrieved on 6 June 2013 from http://stevereads.com/papers_to_read/money-wage_dynamics_and_labor_market_equilibrium.pdf
Phillips A. W. (1958) The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957. In Economica, New Series, Vol. 25, No. 100 (Nov., 1958), pp. 283-299. Retrieved on March 22, 2013 from  http://www.jstor.org/stable/2550759
Scheer, S. C. (1988). The fictitious term paper. In Journal of Teaching and Writing, 12, 223- 229. Retrieved on 6 June 2013 from http://journals.iupui.edu/index.php/ teachingwriting/article/view/940/907
Strathern, P. (2002) Dr Strangelove’s Game: A Brief History of Economic Genius. London: Penguin.
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Tuesday, March 26, 2013

When I wrote about unemployment

"Unemployment in Myanmar" was the first article that I was writing, in Burmese, for one of Burmese (Myanmar) journal. At the beginning it was my intention to make the article short that discusses about the current unemployment situation of Burma, together with statistics, and a little bit of theories on unemployment, and potential of Burmese economy in general and of job creation in particular, the barriers and challenges in Burma and finally some brief recommendations for solving unemployment problems of Myanmar.

 I have collected, read and understood and written about most of these matters, except theoretical discussion. Initially I though theoretical session would be very brief. At the beginning, I planned to talk about just two theoretical concepts concerning unemployment, i.e., the famous and the most essential “Phillips curve”, and then the concept of NAIRU (NaturalRate of Unemployment). When discussing these two concepts, I chose five important economists; William Phillips, Paul Samuelson, Robert Solow, MiltonFriedman and Edmund Phelps. Phillips is the creator of the very famous concept “Phillips curve” in his historic but a bit short article[i], but it was not he who uses the term “Phillips curve”, but Samuelson and Solow who started naming “Phillips curve” in their influential article[ii]. It was Friedman and Phelps who repudiate “Phillips curve”. And it was Friedman who introduced a term “the Natural rate of unemployment” (Nairu). Hay, it is nothing to do with first Indian Prime Minister—the spellings are different, Prime Minister is spelled “Nehru”. Among these five giants of economics, four of them except Phillips won Nobel prizes. However, Phillips’ name became immortal in economic science and we always have to talk about his curve whenever we discuss or teach or learn economics and economies.
Paul Anthony Samuelson in 1950. LIFE magazine photo (December 1950). Image from http://www.lagunabeachbikini.com/wordpress/wp-content/images/2010/critical-thinking/paul-samuelson-1950.jpg
Robert M. Solow. Image from

Edmund S. Phelps, in 2006. Image from
 
 
Milton Friedman.
Photo Credit: Milton Glaser. Image from TIME Magazine, http://img.timeinc.net/time/magazine/archive/covers/1969/1101691219_400.jpg

 Thus it would be, I thought, a short session of theoretical discussion. However, when I read, study and write about the discussion and argument of Friedman, I discovered that Keynes’ argument and theory should be briefly mentioned, and at the same time Classical theory of unemployment, as well as Say’s Law[iii], will also be necessary, at least very brief, to be discussed because these are the theoretical background on which all series of theoretical debates are based.

 The simple point of Phillips curve is that there is a negative relationship between the unemployment rate and the price level. When the unemployment rate declines, the overall price level (i.e., inflation rate) rises. The fundamental principle of the classical theory is that the economy is self-regulating and is always capable of achieving the natural level of real GDP or output, which is obtained when the economy's resources are fully employed, in other words in a state of full-employment. Any unemployment in the country is assumed to be temporary or abnormal. Classical economists hold that the unemployment cannot be persisted for a long time, and there is always a tendency of full employment in the country.


Phillips curve. Source: Bureau of Labor Statistics.
Note: Inflation based on the Consumer Price Index.

 However, in his immortal book ‘General Theory of Employment, Interest and Money’ Keynes (1936) strongly criticises the classical theory and argues that, opposed to Say’s law, demand creates its own supply and the economy can stabilise at an equilibrium with unemployment, because of demand deficiency, in other words, a lack of aggregate expenditure. Thus it is called demand-side economics.

Book: Keynes (1965) The General Theory of Employment Interest and Money.

 While talking about arguments of Friedman and Phelps, there was discussion about effects of wages on unemployment. Then I have to talk about, just a little bit again, wages, and then roles of unions, and labour market rigidity. If I am going to discuss about unions and its effects on unemployment, I cannot help but talk about, at least briefly again, Friedrich von Hayek who wrote, in 1981, a very influential book “1980s Unemployment and the Union”[iv].
  
 Book: Hayek, F. A. (1981) 1980s Unemployment and the Unions.


Friedrich von Hayek.

 It is Hayek who holds that unions have a much better reputation than they deserve, and “it is probably… impossible in our time for a student to be a true friend of labour and to have the reputation of being one” (Hayek, 1967: 294). By the way, Hayek is also a winner of Noble prize for economics. Hayek (1981) argues that unions benefit some workers but it was always at the expense of other workers and that as a whole, unions have made workers significantly worse off than they would otherwise have been. When discussing about the affects of union on unemployment, it is necessary to discuss nature and practices of Japanese unions, which are in constructive and productive relationships with employers, i.e., companies and their management (Fujimura, 2012). Ohhh, I also want to talk about Schumpeter's view on unemployment (Schumpeter, 1942). But I will discuss about it in later longer articles.

Joseph Alois Schumpeter. Image from

 Ohh, no. Now my theoretical session become its own article. And I have been wondering about the unemployment situation of SouthAfrica where I have been staying, unplanned and unexpectedly, and studying and then gradually falling in love not only with the country but also with a certain special daughter of it.

 Unemployment in Myanmar was an article I was writing, at the beginning, but now I am start drafting an article on sources of high unemployment in South Africa.
Darling, now you know why I am so quiet and do not communicate or meet with you.
REFERENCES

Fujimura, H. (2012) In Japan’s Labor Unions: Past, Present, Future. In Japan Labor Review, vol. 9, no. 1, Winter 2012.
Hayek, F. A. (1959) Unions, Inflation and Profits. In Studies in Philosophy, Politics and Economics. Chicago: University of Chicago Press, 1967. pp. 280–294.
Keynes, J. M. (1936) The General Theory of Employment Interest and Money. London: Macmillan.
Schumpeter, J. A. (1942) Capitalism, socialism and democracy (5th Edition). London: Unwin.
Thweatt, W. O. (1978) Early formulators of Say’s law. In Quarterly Review of Economics and Business 19 (Winter 1978). pp. 79–96.
 
 
 ENDNOTES

 [i] Phillips A. W. (1958) The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957. In Economica, New Series, Vol. 25, No. 100 (Nov., 1958), pp. 283-299. Retrieved on March 22, 2013 from http://www.jstor.org/stable/2550759

[ii] Samuelson, P. A. & Robert M. Solow, R. M. (1960) Analytical Aspects of Anti-Inflation Policy. In The American Economic Review, Vol. 50, No. 2, Papers and Proceedings of the Seventy-second Annual Meeting of the American Economic Association (May, 1960), pp. 177-194. Retrieved on March 16, 2013 from http://www.jstor.org/stable/1815021

 [iii] In fact, its full name is Say’s law of markets, which is the foundation of classical economics, and argues that general overproduction is impossible and supply creates its own demand. Thus it is called supply-side economics. This idea was already discussed by Adam Smith and later John Stuart Mill. It was because of Keynes who attributes this law to Say, instead of to Smith and Mill. It is not by Keynes, it will be the Smith-Mill law (Thweatt, 1978).

 [iv] Hayek, F. A. (1981) 1980s Unemployment and the Unions: Essays on the Impotent Rice Structure of Britain and Monopoly in the Labor Market (Hobart Paper No. 87). London: Institute of Economic Affairs.
NOTE

It is about reasons for talking too long to write an article; I just cannot write anything without discussing theoretical background. What a great academic I am!!! I hope I will be able to stop writing on unemployment until it became big enough to be an academic tome, which covers comprehensive theoretical debates, history of unemployment, and current situations and problems of unemployment in countries around the world. It will be my academic project for this year or next couple of years.

 (25 March 2013, Monday, 10:12 pm)
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Friday, August 24, 2012

A Tribute to Alan Saunders

 "To study philosophy is nothing but to prepare one's self to die."
Cicero (cited in Michel de Montaigne, 1575: Book 1, Chapter 19)

I am rarely impressed by entertainers, journalists, media personals. But Alan Saunders impressed me greatly. For me, he was not merely a journalist, or a radio presenter, but a philosopher, a teacher, an artist. We never met, but he is one of my great teachers.

I cherish, treasure, and collect his programme (Philosopher’s Zone podcast). I love and adore his discussions. I study and listen regularly repeatedly reverently.

I am never scared of death. And I am rarely moved by death of anyone. But his unexpected sudden death made me felt sad, lost, unhappy, a bit angry. He could easily produced many great, valuable works on philosophers and philsophy.

Dr Alan Saunders fell ill, while working on his program The Philosopher's Zone on Thursday afternoon (14th June 2012), and was taken to hospital where his condition deteriorated overnight. He died of pneumonia in hospital on Friday morning (15th June 2012) surrounded by colleagues and friends (ABC Radio, 2012). He was only 58.

There is a tribute program (Tribute to the Philosophical Alan Saunders) made for him. At this programme, philosopher Martha Nussbaum, from the University of Chicago, who was interviewed by Alan a number of times for the program said

"Alan Saunders was a prince among broadcasters. Of all the journalists I've ever met, he had the deepest love of, and also understanding of, philosophy, and his passion for ideas made doing a program with him a highlight of one's year -- even long distance by phone, and even more in person in the studio. What he brought to public discussion was priceless."



Alan Saunders attending the Food for Thought forum, National Portrait Gallery,
Canberra, 5 March 2005 (Loui Seselja; courtesy).


In A picture of Alan Saunders (in memoriam), W H Chong wrote
I can’t recall that he was ever pompous, or self-regarding — how rare! In that way he was a kind of bodhisattva, an already enlightened being who elected to stay on this plane to help others find their way. To make a weekly offering of possible meanings in our shattering, uncentred and materialistic time seems to me an act of faith, a work of unusual generosity of energy.

In In memoriam: Dr Alan Saunders, Amanda Armstrong, an acting station manager of ABC Radio National program, says Dr Saunders had an extraordinary mind.
“He was equally at home talking about Plato, the role of vampires in popular culture or the history of the restaurant. He wrote like an angel, and had a deep knowledge of music, among many other areas, including philosophy, gastronomy, architecture, design and film."

Andrewk, Inexhaustibly Curious, beautifully wrote "Death of Alan Saunders" at Philosopher Forums
"He had an open mind, a calm, genial demeanour, a pleasant voice and a keen curiosity about all things philosophical and scientific, as well as a number of other topics - he also broadcast shows on architecture, design and food. He was very good at explaining complex concepts in simple terms and he had an endearing habit of always interjecting when one of his guest philosophers mentioned a name in passing, such as "Ayer disagreed with this", to say "you mean the 20th century British philosopher AJ Ayer", for the benefit of his listeners. He was always focused on keeping the discussion intelligbile to his listeners."

I will take time and make efforts to write a proper blog about him.


Reference

ABC Radio (2012) ABC Radio philosopher Alan Saunders dies. ABC Radio online, Jun 16, 2012. Retrieved on August 24, 2012 from http://www.abc.net.au/news/2012-06-15/abc-radio-philosopher-alan-saunders-dies/4073618

Montaigne, M. D. (1575) Essays (translated by Charles Cotton, 1877). Retrieved on August 27, 2012 http://oregonstate.edu/instruct/phl302/texts/montaigne/montaigne-essays--5.html#XVII.


Links on Alan Saunders

Alan Saunders's Keynote Speech "Dare to Know"

His keynote address “Dare to Think” delivered at the VAPS (Victorian Association for Philosophy in Schools) Conference in June 2011.

ABC Radio philosopher Alan Saunders dies
In memoriam: Dr Alan Saunders, FAPSA 
Alan Saunders (broadcaster) (Wikipedia)
A picture of Alan Saunders (in memoriam)
A tale of two journalists: of Alan Saunders, Andrew Bolt and the contempt News Ltd publications has for people “like me”
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Wednesday, June 13, 2012

Chicago School, JDR and Sultan of Rousseau

One of my beneficial habits is to wake up at about 3am every morning.  Ironically,it also makes difficult for me to be on time at early morning meetings or appointments. As usual, this morning I was awake at about 3:15 am. As usual, I do some thinking, a positive one, an inspiring one, a visionary one. Then, I took a book at hand, I place several books around my beds, it used to be even on my bed when I slept on a big bed. The book I read this early morning is Dale Carnegie’s very famous, informative, practical, well-researched and beautifully-written book How To Stop Worrying And Start Living (1958). The chapter I read was about John D. Rockefeller, one of the richest persons in the whole world (p.196 -199). I was so amused to know how stingy JDR was.

Among the books around my bed is a book about Rousseau. Reading, or even thinking, about Rousseau always makes me great laugh, amused throughout the whole day. Rousseau who was regards by many as a pain of the earth; a very, extermely, difficult person whose life was so colourful, but still very brilliant, a real genius at least in my view.

In another post, I will take about Rousseau and his beloved little dog named Sultan for whom we cancelled his appointment with the King (George III, who offered him a pension, which he badly needed, but refused), the appointment was arranged by our great Philosopher, David Hume. The reason for not going to the King was that there was no one to be with Sultan. It is important to note here is the point made by Rousseau, i.e., meeting with a king is no more important than staying with his beloved little dog, Sultan (remember 'Sultan' is an Arabic word that alsomeans ''strength,' 'authority,' 'rulership,' and 'dictatorship'.). 

Why am I talking about Rousseau while talking about JDR is their interesting personalities and their great contributions to us. JDR had done great contribution for us with his money (some called “tainted money”, for me it is still an honorable and appreciative active to do such things because it is better to be rich and do something goods for fellow humans than to be poor and therefore unable to do anything for fellow living beings. Moreover we all are liable to error but there are only very few of us who are able to learn from error and better themself), whilst Rousseau did through his philosophy (althogh I do not always agree with his philosophy especially 'social contract, general will, real will, actual will'). Let’s start with JDR.


JDR (John D. Rockefeller)

One of the most critical facts that caught my interest in JDR is about his way of life especially when he was young and mad for money, just money, only money. But in my case, I am mad with an accomplishments, academic accomplishments or intellectual break-through in particular. Like me, JDR did not had time for play or recreation, never went to the theatre, never played cards, never went to a party. But there are two differences between JDR and me, i.e., I still have very special recreation, which is meditation and visualisation exercise, and while JDR was mad about money, only money, just money (no doubt that he become the richest person on the whole earth-planet, I am mad about academic break-through (very much like René Descartes while he was so obsessive with philosophical discovery. I will talk about Descartes soon; he is also one of the most important persons we ever have in our whole civilisation). It is also one of the most powerful testaments for law of attraction: you are what you are always thinking, or you get what you madly want, or you become what you madly want to become).

JDR was so stingy and so crazy about money. Let’s read a story narrated by Dale Carnegie (1958: 196 -199) (most of the following are direct-quoted, I know I should have paraphrased but I think the original are so perfect. I did paraphrase some of them and put direct-quotation marks around the original sentences).

One day he shipped grain by way of the Great Lakes. Although the total worth of the grain was $40,000, JDR did not insured because it was too much for him; S150. On that night, a vicious storm raged over Lake Erie. Rockefeller was so mad with worries about losing his cargo. When his partner, George Gardner, arrived to the office in the morning, he found JDR pacing the floor.

George said "Let's see if we can take out insurance now, if it isn't too late!" and then rushed uptown and got the insurance.

“When George returned to the office, he found John D. in an even worse state of nerves because a telegram had arrived in the meantime: the cargo had landed, safe from the storm.  JDR was sicker than ever now because they had "wasted" the $150! In fact, he was so sick about it that he had to go home and take to his bed.”

Here another instance retold by Carnegie (1958: 196 -199). When George Gardner, JDR partner, “purchased a second-hand yacht, with three other men, for $2,000, John D. was aghast, refused to go out in it.

When Gardner found JDR working at the office one Saturday afternoon, he pleaded:
"Come on, John, let's go for a sail. It will do you good. Forget about business. Have a little fun."

Rockefeller glared. "George Gardner," he warned, "you are the most extravagant man I ever knew. You are injuring your credit at the banks-and my credit too. First thing you know, you'll be wrecking our business. No, I won't go on your yacht-I don't ever want to see it!" And he stayed plugging in the office all Saturday afternoon.

Although JDR was so mad and so crazy about money, he indeed changed and had done a lot of great contributions for the benefits of humanity. There are many souls who never change and still bad, selfish, cruel and cause great damages to humanity but there are also some great persons who once are greedy, cruel and selfish, but change later and become the best sons and daughters of the world.
JDR was one of them. “When he learned of a starving little college on the shores of Lake Michigan that was being foreclosed because of its mortgage” (Carnegie, 1958: 198). He came to its rescue and poured 80 millions of dollars into that college and turned a small Baptist college into the now world-famous University of Chicago (Byron, 1985: 457).


Chicago School

Why am I saying these things about JDR? It is mainly because of Chicago School, which is considered one of the world's foremost economics departments, has fielded more Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel laureates and John Bates Clark medalists in economics than any other university. But we should remember that the process of selecting candidate for Noble awards is a peer-reviewd process, candidates are proposed, shortlisted and selected mostly by Nobel laurates. There is, therefore, an effect of a virtuous circle or a vicious circle in the case of having more Nobel laurates for economics in Chicago School.  

When we talk about Chicago School, it is also necessary to look at Shock Doctrine of  Naomi Klein. I will talk more about Chicago School, Milton Friedman (the most important person of Chicago School and one of the greatest antagonists of Keynescianism. But we should remember that Milton was Keynesian when he was young, as the same way like Haykes was socialist when he was young too), Keynesianism (which is rejected and opposed fervently by Chicago School) (I have already talked a little bit about Keynes and Hayeks), Noami Klein, Shock Doctrine later.

(I will talk about Rousseau and his beloved Sultan, who is, for Rousseau, as important as a King soon).


References:

Byron, D. (1985). A Sense of history: the best writing from the pages of American heritage. New York: American Heritage Press.
Carnegie, D. (1958) How To Stop Worrying And Start Living. Retrieved on June 13, 2011 on www.trans4mind.com/Carnagie.pdf


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