International Economics Round Up

Dani Rodrik's been on a roll recently, writing several good posts about economics and trade, which I've compiled here. In total, they offer a critical look at trade economics; not the theory so much as the presentation.

First up, a paper by Dean Baker on 'Trade and Inequality: the Role of Economists'.

Second, Rodrik reviews Robert Driskill's Deconstructing the Argument for Free Trade.

Finally, Dani Rodrik offers his own answer to the question: Why Did Financial Globalization Disappoint?

Both Rodrik and Driskill's papers are decently long - 20-30 pages compared to Baker's 10, and they're written in more advanced economic language, but all three are worth the read. Actually, if you only have time for one, read Baker's. It's shorter, but I think he raises some important questions about the role economists play in selling models, rather than challenging and improving them.

Experts in any field are important (since we can't all do everything really well), but their value lies less in their specific expertise than in their ability to ask the right questions. When economists spend more time 'proselytizing free trade rather than communicated what economics really teaches on trade', the gap between the expert and the layperson grows, and everyone is worse off.

Rodrik also provides further proof for the American Scene's and my argument that expertise in one field doesn't necessarily imply expertise in another in his post from Wednesday discussing economists and governance.

Two Book Reviews

Not by me, although hopefully I'll get back to my reading soon.

First, Dani Rodrik's book One Economics, Many Recipes, reviewed by Prospect Magazine's John Kay. The review requires a subscription to view, but Rodrik kindly provides excerpts.

The second is Tyler Cowen's take on Common Wealth: Economics for a Crowded Planet, by every singer's favorite economist, Jeff Sachs. I, personally, can't stand to read Sachs, and feel that William Easterly rightly took him to task in his book, White Man's Burden, but it sounds as if Tyler cautiously recommends it.

Anthropology in Everything: Space Economics

This article by ABC News: 'What You Don't Know About Living in Space' is pretty fascinating in-and-of-itself, but what makes it stand out, at least for Marginal Revolution, where I found it (and I'm surprised this wasn't tagged as 'Markets in Everything'), is the trading in space section(second page):

Money has no value in space. When seven astronauts are living together in a cramped atmosphere the psychology of small isolated groups kicks in. Whoever has squirreled away the most M&Ms, tortillas or coffee has the most bargaining power. Those are items that are most prized at the end of a mission if someone runs short in their own stash. Astronauts' meals are color coded on shuttle missions -- and reliable sources tell ABC News some astronauts aren't above switching the colored dots on their dehydrated meals if they have run out of say, lasagna, on day six and have way too much creamed spinach left.

The question that makes this anthropologically interesting is: why create a barter system; why not share everything equally? Is it simply due to acculturation (these seem to be American astronauts, so they've grown up in a capitalist market economy), or does this provide some deeper insight in to the human mind?

Tyler and his readers ask some good questions as well, although I can only hope that Peter was kidding about the creamed spinach.

WTO Presentation

Continuing the trade theme:

Streaming presentation on trade from the WTO's Economic Research and Statistics Division.

Books on Trade

Recommended by Marginal Revolution readers.

Anthropology in Everything, Pathogen Edition

Tyler Cowen, of Marginal Revolution (such a clever name! the blog's, not his) has an occasional series entitled Markets in Everything. It's a feature I love because it's so true, and it really makes me stop to think about incentives, disincentives, and rationality of behaviors, and all that other stuff from microeconomics that still makes me cringe.

The same can be said for anthropology. Anthropology is the study of human beings, and more specifically, our cultures. So not surprisingly, anthropology has insights into everything, or at least everything we care about. However, just like economics, most people don't bother to think about it. So I'm starting my own series: Anthropology in Everything (no, I will not bother being more original).

Starting off this glorious initiative: The germs made us do it! (form societies, that is).

A new study in the Proceedings of the Royal Society B finds that:

Pathogenic diseases impose selection pressures on the social behaviour of host populations. In humans (Homo sapiens), many psychological phenomena appear to serve an antipathogen defence function. One broad implication is the existence of cross-cultural differences in human cognition and behaviour contingent upon the relative presence of pathogens in the local ecology. We focus specifically on one fundamental cultural variable: differences in individualistic versus collectivist values. We suggest that specific behavioural manifestations of collectivism (e.g. ethnocentrism, conformity) can inhibit the transmission of pathogens; and so we hypothesize that collectivism (compared with individualism) will more often characterize cultures in regions that have historically had higher prevalence of pathogens. Drawing on epidemiological data and the findings of worldwide cross national surveys of individualism/collectivism, our results support this hypothesis: the regional prevalence of pathogens has a strong positive correlation with cultural indicators of collectivism and a strong negative correlation with individualism. The correlations remain significant even when controlling for potential confounding variables. These results help to explain the origin of a paradigmatic cross-cultural difference, and reveal previously undocumented consequences of pathogenic diseases on the variable nature of human societies.

Basically, the more prevalent pathogens are, the more likely a society is to practice collectivism, in order to 'provide defence against the dangers posed by pathogens.'

Ronald Bailey at Reason has more of the story.