Quick Notes - Online portals to great Economic/Financial/Political knowledge

Currently reading Daron Acemoglu's and James Robinson's book: Why Nations Fail.

The book takes on a tricky subject (comparing first world countries and their political/economic institutions to those in second and third world countries) and constructs a powerful premise: what makes a country fail is not necessarily its geography and/or culture as others have pointed out - maybe "fortunate accidents" that led countries to adopt more inclusive economic and political institutions are the main reason some nations are better off than others.

Heard about this book when Denisse Dresser, a Mexican political analyst, pointed out its relevance in a recent conference I attended, where this year's Mexican political scandals and current economic woes were the main focus of her discussion.

"Why Nations Fail" serves as an alternative world history tour guide, linking major world events and their outcomes to their ensuing consequences, its effect on countries (as well as regions and whole continents) and their political/socio-economic status, leading up to the present. 

A great online book review by Economist David Levine can serve as an excellent executive summary for anyone looking to get a quick rundown. 

More on this and reactions to Acemoglu's and Robinson's theories soon...

Also regularly checking out NYU's Stern School of Business' Prof. Aswath Damodaran's website, a haven for any finance autodidact out there who wants to know more about valuation (check out Damodaran taking on Uber), corporate finance and portfolio management (Damodaran says finance can be "divided into these three main areas").

Finally...taking a few moments a week to read some literature. Finally got my hands on an english translation of a Patrick Modiano book (Suspended Sentences: Three Novellas). A powerful and very melancholic literary journey to the darkest part of people's memories, in post world war two France.

Growth through knowledge, into itself and growing.

How to be a prolific writer

Perfectionism. The bane of my existence.

In comes my favorite hobby: Writing. 

These two things clash constantly - thus producing writer's block.

A distressing joke.

As expected, the internet had some answers. I found a couple of articles, posts, and even a video that shares great tips - and great examples of how prolific writers became just that: prolific.

How to be a Prolific Writer from: Goins, Writer

7 Habits from: Write to Done

15 Productivity Secrets from: Mental Floss

Advice on Writing and Productivity from: Nathalie Lussier

Seven Secrets of Prolific Writers by Hillary Rettig - video:

Milton Friedman popularizing Economics.

Milton Friedman is awesome. 

There's loads of videos of him schooling people on economics (the Chicago school of economics mind you) - the world needs more economists speaking to laypeople like this: reaching out through talk shows, "town hall" type meetings and other public/popular venues. 

Sure - economists do that in universities and in conferences...but, in my opinion, they don't do enough to popularize Economics.

People need to understand what's going on in economic terms to really understand the ghost in the economic machine.

Here's Friedman talking about how there's no free lunch (ever):

Pseudoeconomics reading list: What's been read and what's next

I will be sporadically listing my economics/finance/business book recommendations on this website.

I recommend the e-book version.

The last book I read and posted about was Robert J. Shiller's and George Akerlof's book "Animal Spirits: How Human Psychology Drives the Economy and Why it Matters for Global Capitalism".

The authors make a an excellent case for the irrationality that deeply affects the world economy at large, and how this cognitive deviation and its effects leads to the following conclusion: in economics, and all that it touches (markets, banking, finance, trade, etc.), psychology matters.

And while the term "animal spirits" was originally used by John Maynard Keynes in his 1936 book "The General Theory of Employment, Interest and Money", it took more than half a century for these two economists to come along and write this book. Why was there more rational actor based economic theory in the past 50 years, and less behavioral economics related subject matter to countenance the former?

To be fair, decision theory and the psychological basis for decision-making has been taken into account since Adam Smith's time (note his book "The Theory of Moral Sentiments"). Common sense and experience can quickly make anyone discover how the economy, in its essence, is truly human. While the Invisible Hand has been purported to be the self-regulating magister behind every economy, there should be no doubt that this hand is anything but all-knowing.

What's always fun about these reads is how they lead to other interesting sources, and how the same questions posed by the authors become questions that engulf the reader. For example, how is it that some economists stand by their theories, the ones devoid of or that negate the human psychology behind them?

Shiller and Akerlof are great at laying out evidence to prod holes in their fellow economist's arguments, or to bring attention to the exception to the rule in popular and well-accepted economic theories. Sometimes, depending on one's own inclinations, reading about different economic takes on subjects starts to feel like being in a great restaurant the offers a vast number of dishes. There is no perfect way to choose, but some choices are healthier than others.

Some say economist's opinions should come from one-handed economists...that way the person looking for advice can avoid having two choices (on the one hand, and on the other...) for every problem. In other words, opinions and the theories behind most economic and social phenomena abound. There is no economic theory panacea.

Nonetheless, the authors provide sound advice for today's economic problems.

The following LSE (London School of Economics) video was recorded in 2009 and shows Robert J. Shiller discussing his book:

Confidence. Fairness. Corruption. Money Illusion. The persistence of poverty amongst minorities. Tradeoffs. People and how they misunderstand market realities, and their irrational choices about the financial challenges they face.

Fascinating to read about. Pursuing an investigation on the subject and digging deeper leads to further information for a more balanced opinion.

In comes my small discovery: Caltech's Colin F. Camerer and Carnegie Mellon's George Loewenstein, publication "Behavioral Economics: Past, Present, Future". The article starts off with a few headings that contribute to a general overview:

• What Behavioral Economics Tries to Do
• Evaluating Behavioral Economics
• The Historical Context of Behavioral Economics
• The Methods of Behavioral Economics

The references listed at the end of the article take up a total of 13 pages. The degrees of separation from the authors to their contemporaries are two degrees away or less. The opportunity to further investigate and find out more about the subject is practically infinite.There's even a reading guide from a Harvard.edu website that's pretty useful to follow.These sources explain the subject fully and put everything neatly into context. 

Camerer and Loewenstein are leaders in the behavioral economics field. Their work structures the experimented underpinnings that make the case for the psychology behind economics at large. And much like Shiller and Akerlof in their own work, they do so with the utmost conviction.

A video where George Loewenstein talks about behavioral economics, and the role emotions play in decision-making:

What's next on the reading list?

Martin Wolf's "The Shifts and the Shocks: What We've Learned - and Have Still to Learn - from the Financial Crisis."

This choice was based other's recommendations, in this case leaders in the field.

Commentary on the book will soon follow.

Pseudoeconomics.com and it's purpose

I am constantly amazed by bloggers who regularly churn out quality material every week. 

Quality posts take time, as well as a considerable amount of effort. 

Every post represents its author's motivation to express an opinion on a specific subject, or a piece of breaking news, as is the case with the articles found in most magazines and newspapers. Blogs also have regular readers who expect consistent content. And captivating an audience is key - reader's expectations must and should be met.

In the blog universe, periodicity can also vary.  

Paul Krugman posts almost every day. He contributes his opinions regularly to the New York Times blogosphere. Greg Mankiw isn't as prolific, but his bio clearly mentions that his reason for blogging is to "keep in touch with his current and former students".

And then there are cases where the blog meets its final purpose, and thus end, as happened with the Becker-Posner blog, a fascinating source for economic opinion and theory that was terminated after economist Gary Becker passed away earlier this year.

In the case of this blog - it has functioned as an independent entity which focuses on opinion pieces. The blog clearly lacks an audience. This means that no pre-defined expectations have to be met. While this can seem liberating, in practice, it usually lends itself to an unorganized pursuit. When no one expects a weekly post, it's hard to keep an editorial schedule.

So, what is the goal here?

It is not to have an audience. That lofty goal will hopefully have to be reckoned with in the future.

The goal here is to learn, and to share a thoughtful exchange in doing so.

Barry Ritholtz summarizes this line of thinking perfectly in his recent blog post "What I learned after 30,000 blog posts".

So, here's to learning. 

Who knows? Maybe an interested economics buff or curious reader will drop by one day and share a thought or idea.

What makes a genius

From Farnam Street - "What makes a genius":

Catchy titles/Mediocre Content - Correlation?

Start your sunday morning scrolling through headlines, when you suddenly read the following title:

"Why Apple employees never wanted to have lunch with Steve Jobs."

Bodacious title.

Summary: The article explains how Apple employees were always frightened about being "put on the spot" by Steve Jobs. 

Surprising? 

And there it is - again with the proliferation of big names, reduced to adorning junk information: time and time again, the reader gets to experience big names like Steve Jobs and the famous personality that comes with them. Superficial journalism lending itself to character exploitation, like the flea market barons selling Che Guevara's likeness...will those t-shirts, mugs and touristy items with his face plastered all over them ever stop being alluring? 

People seem to be rediscovering big personalities continuously. Even big characters that are long gone and that many don't want to remember slither in surreptitiously into conversations (ever heard someone equate someone they deem authoritarian and strongly dislike to Hitler? Unfortunately this is too common).

If I could equate this Business Insider article to a beer, I'd equate it to a Coors light - a pleasant drink that does the job, but lacks the originality and distinct taste of select craft beer. If I wanted to drink in the morning, I would not drink such a beverage. If I wanted to drink in the morning. No - I do not drink in the morning. Freud would probably have a field day psychoanalyzing this short paragraph. But Freud is passé, so.

Anyways.

I've often found that Business Insider has a knack for creating catchy headlines...mixing pop culture with shreds of serious content. It sometimes seems that they value the headline above all else.

A couple of the headlines from today's Business Insider front page:

• "The Fabulous Life Of Bill Gates, The Richest Man In The World"
• "Student Leaders Ask Hillary To Return 'Outrageous' $225,000 School Speaking Fee"
• "A Perfectly Timed Photo Shows How Close Brazil Was To Getting Knocked Out Of The World Cup"

To be fair, let's see what the headlines are in other news sources:

The Huffington Post

• In huge capital letters: "Supremes saving worst for last?"
• Working for Our Working Families
• Women Believe Sexual Assault Is Part of the Female Experience
• Can You Spell P-R-O-D-I-G-Y? Kindergartner Kazim Ali, 6, Wins Spelling Bee

The Economist

• Confounding the pessimists
• Better late than never?
• Don't hold your breath

I won't go into detail - I think the different titles speak for themselves. 

Interestingly enough, Business Insider follows the 5 easy tricks needed to write catchy headlines that this article outlines. 

To the letter.

Are catchy titles correlated to mediocre content?

This could make for an interesting Bayesian analysis.

Natural logarithms made easy (and fun)

If I were a Secondary School Math teacher, I'd force feed my students this sort of fun, entertaining and thought-provoking video.

I'd also invite the people that made the video to come and meet with me and the rest of the faculty to have them suggest the best way to make this sort of approach work.

This is great.

Decision-making: It's only easy if you think so.

It's a good thing I know where the starting point is.

It happens often: inspiration strikes and an idea for an article starts to conspicuously manifest itself in my head.

Pen to paper. Or fingers to keyboard, as it were.

Then - more data comes in, spurring additional thoughts that cause tangential subjects to gain relevance, which, in turn, alters the soon-to-be-written article's original premise. Mental version 1 of the article becomes a fuzzy backdrop once mental version 26 comes round. 

A busy Monday to Friday schedule, coupled with family time on weekends, makes the focus required to write a coherent article seem like an unreachable concept; spare time has become a privilege.

The absence of a distraction-free environment and the continuing onslaught of everyday commitments unfailingly gets in the way. 

Something else also happens: the mind wanders between primordial tasks (i.e., work related activities, family-raising tasks and select social engagements) and has little, if any, willpower left for activities that require special focus and attention.

The brain's default mode network eats up the day's free hours - reactions to external stimuli brought on by the environment dithers away any chance of producing quality material. 

Writing is put away for another day.

To me - this all sounds like an excuse.

No one, after all, is exempt from everyday life and the trials set forth by the human condition. 

To get time, once must then make time.

Stiil - time will not be enough. Depending solely on time will result in suboptimal results, mostly because time cannot always be assured.

I'm sure we can figure out something.

To solve this problem, a system can be put in place -  a logical, mental algorithm can be considered as a possible repeatable method to make time for writing whenever it should suit the writer, in spite of externalities. 

Mental maps and processes help the organized mind execute everyday activities, taking both the short term and long term consequences into account. Decisions as to which sequence of activities to execute, i.e., which processes or systems to employ, depends on both the data that is available, and the heuristically inspired intuitive reasoning all human beings possess.

Decision-making as a cognitive process is present in all human beings, and it is a trait that signifies general intelligence. Notwithstanding those whom consider themselves infallible, the rest of us have come to understand, that not all decisions deliver the best outcomes. Whether the decision-maker blames himself or others for a good or bad outcome is besides the point: trying to understand how and why a decision is made is a truly necessary, yet hopelessly labyrinthine pursuit. Thankfully, much research has been done on how to make better decisions, and significant progress has been made through the past and ongoing contributions scientists, psychologists, economists, businessmen and other gifted minds have shared with the world.

Choosing which decision-making model, inspiring scientific insight or approach to study and apply becomes an impossible task - the amount of scrutinous analysis produced on the subject is overwhelming. Optimal decision-making students fall prey to analysis paralysis through information overload. 

Edward Tufte, a Statistician and Professor at Yale University, argues that information overload is usually a symptom of organizational underload. Tufte is an infographics pioneer, and has proven his thorough understanding of sound decision-making through his data analysis work. He has disproved the neat freak-led belief that messy desks equal disorganized minds, instead attributing chaotic office environments to minds who have yet to file and organize the ideas in their heads. I empathize completely with my fellow messy-desk disorder sufferers and will choose to now abuse  use that rationalization forever more.

Where did I leave that donut?

Daeyol Lee, a Professor of Neurobiology and of Psychology, also from Yale, directs the Cognition and Decision-Making Lab at the university and is working to understand how biological science can help us understand the "secrets" behind better decision-making. Yale is obviously on a roll when it comes to the study of decision-making - let's not forget 2013 Nobel Prize in Economics winner Robert Shiller, a Yale man himself, whose work on behavioral economics has helped both public/private organizations and institutions better understand how economic decisions affect...well, economies.

Norbert Wiener,  a Professor of Mathematics who taught at MIT, derived his own take on decision-making (or on steering decisions, as a Cybernetician might say) through Cybernetics, a unique systems-led approach that manages complexity, through control and communication, a theory he first stated in his book: "Cybernetics: Or Control and Communication in the Animal and in the Machine".  Stafford Beer, a Cybernetician who also taught at the Manchester Business School, applied Cybernetics to management and subsequently developed the Viable System Model, a system made up of subsystems that functions as an autonomous entity that responds to a changing environment through information-fed feedback loops. 

All in all, institutions, governments, businesses and other types of entities, whether individual, group-led, large or small, have benefited to some degree thanks to these men's contributions. 

Yet, having referenced these academics is akin to barely skimming the surface when it comes to the work done on matters that directly and indirectly affect the science of decision-making. 

Therein, it is possible to face a roadblock - even though society at large has benefited from the aforementioned work, there is still a gap that has yet to be filled, primarily between those that can successfully implement and execute processes and systems that can deal with complexity that lead to better decisions, and those, that are not ready to employ such solutions or simply, out of ignorance or corruption, choose not to. 

In other words: managing expectations is key. 

For the sake of simplicity, I'll leave the reader to interpret what "managing expectations" means here. I'll try to sum it up in one thought though: managing expectations in this context means making sure people understand the work that is required to accomplish the task in question, the reward that comes with this work, and assuring that those involved, at the end of the day, will be able to see light at the end of the tunnel (i.e., they'll maintain their motivation).

As always, when it comes to managing expectations, the jury is still out on how to best accomplish this. 

Given this fact, I've always been a fan of keeping things simple, or as simple as possible. 

To exemplify a theory grounded in simplicity: Einstein's famous early 20th century theory of special relativity was profoundly absent of the "detail work" most of the scientific papers at the time were chock full of, with the theory having been proven mostly through Einstein's own thought-experiments and well thought out abstract notions. Yet everyone (in the scientific community at the time) was at the very least able to understand where he was coming from once the paper was published. Once others proved Einstein's theories through experiments, he became an instant celebrity overnight. People now understood - or understood enough. Or...understood more. And those that understood Einstein's theories deeply (like Stephen Hawking) have been able to further explore the universe and the matter (or energy...e=mc2...Einstein helped us understand that both are one and the same) that it consists of. The rest is history. 

I'm almost certain Richard Feynman wrote or said the following (paraphrase): if you cannot teach something complex to a teenager, as evidenced by having him not understand what you're trying to teach, then it's impossible to believe the idea is true or, alternatively, that you truly understand it.

Meaning: truly understanding something should give a rational person the the ability to be able to explain an idea clearly to someone else and to have that person fully understand the concept - which should result in the clarity needed to perfectly manage expectations. 

This revelation has made it difficult for me to implement theoretical and abstract models like optimal decision making models after having supposedly "learned" them. Most of the time, I've realized that I did not truly understand the models I was looking to implement - which, funnily enough, has turned out to be a blessing in disguise. Knowing that you know nothing, like Plato once said, turns out to be quite advantageous: one gets to truly learn what one is looking to implement after further study and experimentation.

At least one of them has a sense of humor.

Working extra to do things well does pay off.

So, amidst all this complexity, it's advisable to subscribe to the following tenets (as mentioned in this very entertaining History Channel video regarding Einstein's life), to keep the faith and motivation as one looks to implement the best systems and processes possible.

As followed by Einstein, to readily answer the question "Why have faith that something is right?", as he did with his thought-led yet-to-be-proven theories (at the time):

1. What is proposed must be simple and beautiful 

2. Understand that most scientists (or the respective professionals that will be on the receiving end, depending on the situation) may not or will not initially see it that way 

3. Disregard how long it will take to prove your theory, justifiably keep at it

The third point is key - the level of discipline needed to keep on moving must be extraordinary, regardless of whether the world is with you or against you.

So, in terms of the initial baby steps the business world can take to make better decisions, I'd advise executives the following: read the latest (March/April 2014) MIT Technology Review Business Report.

An article titled "Scientific Thinking in Business" summarizes how, by employing the scientific method, a set of defined principles meant to apply reason to problem solving (i.e., making a decision regarding a specific question), businesses can benefit more through these age-old reasoning techniques than by relying solely on intuition. The article explains, in a very clear manner, how relying solely on data can be equally dangerous: over-reliance on data can lead to the wrong results, whereas successfully employed creativity can help decision makers ask the right questions, and interpret the data correctly. Big data has proven to be a minefield for those that quickly misinterpret or impulsively derive quick results without employing a scientific method led inquiry and experimentation to their analysis.

The article is realistic, in the sense that it acknowledges how the scientific method is most useful when employed by academics, who live in a world where making a decision based on carefully perused data is prone to careful examination by others - where as in the political, business, policy and advertising worlds strategic decisions have to be made rapidly, according to the company in question's strategy (this effectively means that following point #3 becomes quite challenging).

Yet maintaining a level of healthy skepticism, mixed with a livelier sense of intuition, that spurs creativity, is completely necessary, and can be accomplished, by relying on the scientific method...to ask the right questions, testing them with data, and repeating the process if need be. Blindly following the data, or ignoring it completely and substituting its validity with hunches, is, in the end, equally damaging.

So, after all has been said and done, it must be acknowledged that humans and their decision-making abilities have and will be studied under the biological, scientific, business, and overall system-based microscope, but in the end, whether a brilliant idea is derived by experimental deduction, or confidently, through intuition, the success that lies behind the idea's implementation rests mostly on what lies within the person proposing it, and not entirely on the idea itself. 

Let us then look for better ways to make decisions by better preparing ourselves first, instead of blindly following someone else's instructions.

Creative Routines - food for thought

From the Huffington Post - larger version here:

What It Looks Like To Find Out You Were Right About How The Universe Started

From the Huffington Post:

The Geographical Dispersion of US Inflation

Never thought of it this way.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1971

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1971 was awarded to Simon Kuznets.

Kuznets was awared the prize for "for his empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development".

A quick proflie from the nobelprize.org website:

Even though Kuznets was awarded the prize for his work on economic growth, he had previously applied his knowledge and expertise in statistics to further develop and standardize the various accounts, that as a whole, measure GNP (the total market value of all final goods and services produced over a specific time period by a country's residents). To be specific, Kuznets focused on National Income, which is closely related, if not, practically equal to GNP. Note: GNP was the lead aggregate measure for national income and output until a few decades ago.  

Before Kuznets, the methods used to analyze national income and output were, by some accounts, less meticulous and comprehensive - and while Kuznets did not invent the GNP yardstick (a common misconception), he certainly heralded a new era of national income measurement, and spearheaded quantitative-based efforts to further define it, through its intricate bits and pieces.

Kuznets went so far as to attempt to include unpaid housework as part of the GNP, but was discouraged, and eventually forbidden from formalizing this initiative.

Along the same lines, albeit at a different time, and for a related but different purpose, the following video, from the Social Progress Imperative organization, aims to propose a new measure for human wellbeing (the Social Progress Index) - in doing so, the video mentions Kuznets's declaration that welfare "can scarcely be inferred from a measure of national income as defined by GDP":

The people behind the initiative mean well. They end the video by saying "...[this is meant] not to replace GDP, but to complement it."

The Social Progress Index has produced interesting results. One piece of information that struck me as interesting was the US's relatively low score on "Health and Wellness", despite their increasingly high spending (per capita) when it comes to healthcare. No wonder Obama wants to solve this issue, but has apparently failed to devise a proper solution, according to most Republicans.  

Michael Porter, a leader in anything and everything related to competitive strategy and the man behind the Porter five forces analysis, is the organization's advisory board chair  and one of its main proponents. His support, as well as his colleagues' and fellow leader's backing, will certainly bode well for the future of the GNP/GDP measurement. 

The underlying result that comes from proper measurement is a fitting way to analyze economic results, and thereby propel economic growth. 

Kuznets' genius in the matters discussed here was twofold: he (i) devised a better and more complete way to measure the national product and (ii) found a superior method to determine growth analysis - his accomplishments in the economic field were such that he was able to find different ways of enhancing this particular area of study (growth via measurement) - relating distinct facets of the national and global economic engine, resulting in impressive findings and conclusions. One such finding, as presented in his paper "Economic Growth and Income Inequality" went on to explain how economic growth in emerging markets increases income inequality between the nation's affluent and its poorer population, as opposed to reducing it, as happens in more developed countries.

In the end, Kuznets revolutionized these specific areas, as well as the overall quantification and scientific based thinking that was becoming all the rage amongst economic circles after the World Wars. He laid the foundation that his colleagues and students benefited from, and was a defining factor in official government statistics and economic reporting.

Richard Feynman - The Universe in a Glass of Wine

From Shane Parrish's most recent Farnam Street blog post - a great video, featuring great words, from a great scientist.

Quick note on the continuing Nobel Prize in Economics Profile Series

Hey there.

Hi.

I'm sure that Dora the Explorer caught your attention. If not yours, then it certainly has mine - this cartoon has been thrown in my face ever since my daughter caught sight of her.

So - irregardless of Dora's current relationship with my family, she served her purpose well: she has made you keep on reading.

So, let's get back to the subject at hand: Economics. Pseudo-economics, in my world.

Step 1 when addressing a lack of continuance in posts: Acceptance.

I have not been very good at posting lately.

At first, I thought that my slowdown was a combination of writer's block and an overall lack of time.

Fortunately, my reason for not having posted the 1971 Nobel Prize in Economics Winner Profile (in effect, the last in line as of today) is not due to apathy. Nor for any reason related to anti-motivational factors, like procrastination - as visually exemplified by the picture below:

Why leave for tomorrow what you can do to...*Snooze*

My reason has been analysis paralysis.

To profile a Nobel Prize in Economics winner is as easy or as hard as you want to make it.

I've realized it is an insurmountable task when the goal is to cover everything the Nobel Prize Winner had accomplished, who he influence, who influenced him and the overall effect he or she had on the Economics realm (Academic and otherwise). 

I have a draft on the 1971 Nobel Prize in Economics winner (Simon Kuznets) that has yet to see the light of day (or the CyberWorld's version of what a "day" is). 

The reason? Simple: Kuznets not only helped revolutionize Modern Economics, as did the two Winners before him, he also contributed greatly. To mention him in passing would be a disservice to him, his legacy, and more selfishly, it would do me no good either. My journey to auto-didacticism and becoming economically literate would be in peril were I to half-ass (pardon my French) my attempt to cover the man's body of work and reason for having won the prize partially.

The solution?

Divide and conquer. Divide and rule. Partial (yet complete) posts. Irregardless of the time it takes to accomplish.

Stay tuned. 

Links of interest

Just do it.

A couple of my picks from Barry Ritholtz's weekly Sunday AM and Weekend reads list:

• The world put $4 billion on Starbucks Gift Cards last year 
• Indecision is sometimes the best way to decide

The article amongst the lists mentioned that most caught my attention:

Farnam Street's  - How to read a book

Farnam Street's raison d'etre and it's content (which exalts virtuous goals like: promoting mental stimulation and beneficial thought processes, to name a few) has resonated with me.

I'm sure it will with you too.  

Intellectual Spotlight: Roberto Mangabeira Unger

Today I wrote a few notes regarding the profile on Simon Kuznets, who won the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel in 1971 - but I've yet to synthethise my thoughts regarding Kuznets' win and flesh out a proper profile.

As I predicted, and as I originally intended - with this Nobel Prize in Economics Profile Series, I've gotten more than what I bargained for. In looking to understand more about what lies behind past and present economic theory, and how the different prizes represent (pardon the redundant use of terms to denote points in time) the past, present and future in mainstream and heterodox economics, I've found out about different Economists, Intellectuals, Politicians, Revolutionaries and all around influential people through the tangential topics that are related to the different schools of economic thought that have shaped the history of economic thought. 

One of the people I read about today that falls neatly into one of the aforementioned categories is  Roberto Mangabeira Unger, a professor at Harvard Law School and a Brazilian politician, who knows the topics I've only begun to learn about inside-out.

Roberto Mangabeira Unger

As an aside and complement to this series, I will make sure to mention these people, to effectively archive their significance as part of the whole that makes up the social science and politics-led world we all live in today.

References:

Roberto Mangabeira's website.

An interesting video in which Roberto Mangabeira speaks of what could be.

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1970

From nobelprize.org:

The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1970 was won by Paul Samuelson:

Samuelson's work was so multi-faceted that even the reason for having given him the prize is general ("...actively contributed to raising the level of analysis in economic science.").

Paul Samuelson Quick Bio:

Paul Samuelson's Nobel Prize win was a relevant one in many regards:

1) He was the first American to win the Nobel Prize in Economics - paving the way for many fellow citizens to come.

2) As a mathematical economist, his contributions to economic analysis and its sophistication were pervasive and permanent - bringing in an era of applied economics, where economic theory was complemented and either validated or updated through rigorous examination. 

His contributions included (from Wikipedia): 

• Neoclassical Synthesis: Translating John Maynard Keyne's theory into the Economics Curriculum Core Studies we all know and love: Neoclassical Economics
• Mathematical Economics: further allowing Economists to back up claims made through clear and comprehensible economic models, that explain quantitative relationships between variables, that in turn, result in a set of significant assumptions and consequences
• Economic Methodology
• Revealed preference: a concept first introduced by Samuelson.  
• International Trade 
• Economic Growth
• Public Goods

After having checked out the nobelprize.org website, and read a little more about Samuelson, I realized how important it was to understand the whole picture before jumping to conclusions about the why and how regarding his prize. I took a look at his lecture and banquet speech - in order to get the full picture behind his nobel prize win. Having remembered my previous post, I quickly looked up the 1969 winners to take a quick peek at both Frisch's and Tinbergen's lectures as well. 

I was taken aback at their collective genius - not surprisingly, they all summarized their academic findings, the theory behind their reasoning, and the different applications of their methods, models and economic concepts in an all-encompassing way...subtly and very casually explaining their body of work and what led up to it. All these lectures are equally stupendous and very revealing, concerning the men that gave them and the greatness behind them.

Paul Samuelson's lecture starts by mentioning how Economics is more than an Academic afterthought - that its relevance in his lifetime was stronger than ever, and that its practical application (e.g. as "managerial economics") is a reality today, more so than ever before. Note that "today" then was 1970.

A tangent I will look to take soon is to delve deeper into the different economic concepts that can be linked to business, management, finance and other economic fields and subfields which have practical applications for those of us that look to go beyond the academic. I will leave that for a future post.

Two phrases in the lecture that struck me as interesting and relevant to the analytical path Economics was taking at the time...  

"A good explanation is a simple one that is easy to remember and one which fits a great variety of the observable facts." 

"The scientist who formulates laws of observed empirical phenomena is essentially an economist or economizer."

In other words, the observational empirical-led and data-driven analytical approach can lead to thorough economic analysis.

An Economist, in essence, to Samuelson was a Maximizer - a person or entity that made the most of what he was able to given the resources available to him.

In his Banquet Speech, he very eloquently gave advice on "how to get a Nobel Prize":

The requirements (in summary):

1) Have great teachers

2) Have been blessed with great colleagues, collaborators and fellow students

3) Have great students

4) Read the works of the great masters

5) Luck

Anyone can attest to the fact that these 5 points can certainly apply to what leads to success in realms outside of Economics. Learning to properly observe and analyze, as Samuelson certainly did, can only help.