What I’ve been reading (relatively) recently

Here’s short list of what I've been reading over break, with some comments:
“Central Banks as Sources of Financial Instability”; George Selgin. This is a very light rehash of the argument for free banking, along with an overview of central banking.

“Self-Governance in San Pedro Prison”; David Skarbeck.
This study, if accurate, is even more amazing than Peter Leeson’s study of pirate societies. According to Skarbeck, the prison in question spontaneously turned, thanks to the benign neglect of corrupt guards, into a flourishing, self-contained society. Not only does it have the equivalent of homeowners’ associations and restaurants, children and wives of the criminals often live there, and prefer it to their home communities. This article really is a must read, although it does not address possible effects of culture on this story of emergent order.

“From “Porous” to “Ruthless” Conscription, 1776–1917”; David Henderson.
A light, somewhat polemical retelling of how the conscription of the civil war, combined with the ideology of progressivism, led to a people willing to accept mass, inescapable conscription during WWI, and an intellectual elite who favored this policy.

“An Analysis of the Concordance Among 13 U.S. Wine Competitions”; Robert Hodgson.
According to this study, winning a gold medal at a wine competition is solely the result of chance. They try to make the case by arguing that winning a medal at a competition is statistically independent of winning one at another completion. However, I’m not entirely convinced. The correlation coefficients between the competitions are all positive, which I think might signify some sort of correlation, although they don’t provide confidence intervals.

“The ‘Justice’ That Overrules the Rules of Justice”; Anthony de Jasay.
This is part of a festschrift for a philosopher I had never heard of before: Hartmut Kliemt. It was a rather bland, if well-written commentary social justice, although it did include a nice anecdote from James Buchanan.

“The Effect of Prayer on God's Attitude Toward Mankind”; James Heckman.
The fun part of this paper is discovering the logical flaw in Heckman’s reasoning (of which I assume he is aware). From what I understand, there are two problems: the random variables are not from the same population, and he assumes a distribution for the conditional expectation that we are expected to take “on faith.” In addition, since he assumes he is using normalized data, his data do not fit the proposed model.

I am also working through some of “Mr. Sraffa on Joint Production and Other Essays,” by Bertram Schefold. This is a comprehensive look at joint production in the Sraffian system. I have found that it also functions well as a textbook in the approach, since the first few chapters take the time to lay out definitions and methodically formalize them. I recommend this work to anyone who wants to get better acquainted with the neo-Ricardian approach, since the more difficult middle section, which contains the author’s dissertation on joint production, can easily be skipped. I had previously read somewhat extensively in the methodological underpinnings of the Sraffian system, but had not grappled with formalizations of this system. Most of the math is rather basic matrix algebra, so I have had little trouble with it other than learning the many layers of notation.

Second Thoughts on Classical Economics

Looking back on a previous blog post on Marxism, I realize how my views on the classical have changed. Over the past few months, I have tried to rigorously study various interpretations of the classical economists, with an emphasis on Ricardo and the Sraffian interpretation of him. With this study, I have come to realize that my previous criticisms were ill-founded or, at least, questionable.

The classical system is based on entirely different methodological foundations than the marginalist system of analysis. In fact, it’s plausible to interpret the classical as having an entirely different aim and purpose for economics. They rejected methodological individualism. They treated population as an endogenous variable. They only cared about natural values, as opposed to market prices. Suffice to say, given their foundational concerns and methodology, the system they built was surprisingly elegant. Even the labor theory of value can be seen as useful and semi-plausible (although perhaps unnecessary) when examined as part of this paradigm.

With that said, we can still criticize the classical economists by critiquing their foundations. Austrian economics gives an explanation of the real world. Classical economics has a much harder time making that claim.