Books: The Economic Approach - Unpublished Writings of Gary S. Becker

(Drivebycuriosity) - Gary Becker was one of the most important economists of the 20th century. I had the luck to meet him in Prague in the early 90s - shortly before he received the 1992 Nobel Prize in economics. He joined a conference of leading economists who discussed about how Eastern Europe should change to prosper after the fall of the wall. I was there as a journalist working for a German magazine.

Even though Prof. Becker belonged to the rock stars of economics, he was very polite and friendly and talked openly with a humble journalist like me. He treated me as if I had been part of the elitist scientists he usually dealt with. I am very grateful for that and I feel especially honored by his generous treatment.

Gary Becker was one of the leading thinkers in microeconomics and focused on decisions of households, how you and I respond to economic incentives. Becker's Nobel Prize lecture is entitled "The Economic Way Of Looking At Life".

Becker belonged to the pioneers of human capital theory: "Becker pointed out what again seems like common sense but was new at the time: Education is an investment. Education adds to our human capital just as other investments add to physical capital" (econlib ). In the preface for his book "Human Capital" (1964) Becker explained the importance of human capital (the sum of knowledge and skills) by "a substantial growth in income in the United States remains after the growth in physical capital and labor has been accounted for".

Greater education provides greater knowledge and information, and skill at processing information, that also improve many other aspects of life. These include health and how long individuals live, their skills at investing in their children, the quality of the marriages they make and more.

Becker dealt - in a methodical & scientific way - with a lot of aspects of everyday life, including "allocation of time within a family, using the economic approach to explain the decisions to have children and to educate them, and the decisions to marry and to divorce" ( econlib).

Becker`s economic theory of the family includes a theory of marriage. According to him promiscuous dating on the campus could result in a better knowledge of the other sex and develop communication skills and hence be a part of a selection process to find the most appropriate mate. In the language of economists the cost of sex could be an investment in human capital (knowledge) and hence an investment into the future.

 Becker has been called a conquistador among economists, colonizing other fields. He became famous for his theory of the allocation of time, based on the insight that households are producers as well as consumers. Inspired by him his students explored religious sects and signaling one`s devotion to the deity or looked at cheating among Sumo wrestlers. When economists study non-traditional topics, such as suicide, addiction, riots, warfare, charity and identity, they are all ultimately following the path the Gary Becker blazed.

Recently I read "The Economic Approach: Unpublished Writings of Gary S. Becker" (215 pages  amazon). The book - edited and curated by Julio J. Elias, Casey B. Mulligan & Kevin M. Murphy - gives a short introduction into his works and presents some of his speeches plus some drafts & notes. Even though the book is very short the editors guide the readers to Becker´s basic thinking and describe his influences on today´s economic thinking.
 

Becker said in the banquet speech for his Nobel Prize celebration: "This prize gives recognition in the most influential way possible to all economists who endured many obstacles, criticisms, and even ridicule to study and analyze broader aspects of behavior than is traditional in economics...Economics surely does not provide a romantic vision of life. But the widespread poverty, misery, and crisis in many parts of the world, much of it unnecessary, are strong reminders that understanding economic and social laws can make an enormous contribution to the welfare of people" .
 

While Becker´s teacher Milton Friedman was concerned with making the government smaller, Becker was more concerned with making government better. For instance Becker thought that the generosity of US and EU welfare systems made open borders impracticable because "a significant fraction of people will move to try to take advantage of welfare benefits...The incentives created by welfare benefits would attract both an inefficiently large number of immigrants and immigrants who preferred public benefits to working". Today´s deluge of so called "refugees" to Europe confirms him. Becker recommended selling visas would attract " skilled, young people and those who want to make a commitment to the country". Government could be made more efficient through the power of prices. 

Becker also implied that criminals respond to incentives as professors and others in choosing their occupations. Potential criminals consider the cost as well as benefits from crime in deciding whether to become criminals. He assumed that a better education (investment in human capital) reduces crime by raising earnings from legal activities. Otherwise a greater likelihood of apprehending and punishing criminals also reduces crime by raising the cost to potential criminals of engaging in crime.,

I find it also interesting that Becker studied first mathematics and that he "accidentally took an economic course".

Contemporary Art: Expressionism From Eastern Europe

  (Drivebycuriosity) - Gallery Marc Strauss on Grand Street belongs to the stalwarts of Manhattan´s art scene (marcstraus ). I spotted so many interesting shows there. Recently I enjoyed an exhibition with paintings from Eastern Europe artists, all created after the fall of the wall (exhibitions ). Because there are so many amazing paintings, too many for one blog post, I report in 2 tranches.

 

This post focuses on art works which seem to me especially expressionist. On top of this post you can see Zsolt Bodoni`s wall filling "100 Years" (2010, acrylic on canvas, 55.1 x 114.2 in (140 x 290.1 cm) followed by 2 details shots. I love the powerful cinematic style of this work. There is so much dynamic in it. According to Wikipedia Bodoni`s art is inspired by the history of Transylvania, where he was born ( wikipedia).

 

I added images with a similar style, including Daniel Pitrin´s "Ogres" (2009, Oil, acrylic, paper on canvas). According to Artsy the Czech painter "produces large, visually complex paintings, dense with imagery and subtle references to films and canonical works of art" (artsy )

 

Above Leonardo Silaghi`s massive "Untitled #116205" (2011). This artist is also born in Romania.

Above this paragraph the sinister "Untitled (nr. 63 Church)" ( 2005, acrylic on canvas) by Janos Avotin. The artist lives and works in Riga, Latvia.

To be continued

Science Fiction: The Three Body Problem II: The Dark Forest By Cixin Liu

 (Drivebycuriosity) - Watching Netflix`s show "The Three Body Problem" left me with mixed feelings because they turned Cixin Liu`s science fiction novel into a soap opera for the American taste. So I got an appetite for the real thing and reread Liu`s "The Dark Forest", the second volume of the original "Three Body" series, also known as "Remembrance of the Earth`s Past" (amazon. ).

This post is for those who watched the Netflix opus or - even better - read the Chinese original novel (translated by Ken Liu) and are familiar with the basic situation, the expectation of an invasion of aliens, who are far more advanced, in about 400 years.

The book - like the whole trilogy - is build around Liu`s "dark forest hypothesis". Explaining the theory would be a spoiler and I don`t want to ruin the reading experience (this is a spoiler free blog. You can find a synopsis here wikipedia). 

The trilogy is about humans and possible interactions with other civilizations in the universe, who might be much more advanced. Like tales about real dark forests (for instance the Brothers Grimm`s stories) the novel is pessimistic and sinister, but it is also fascinating and based on cosmology, strategic thinking (game theory) and quantum physics - and plausible.  

The book has 2 very different parts. The first part (about 60%) happens in the presence and describes how humanity is responding to the thread of an invasion by technological superior aliens in four centuries in the future. There are many conflicts between optimists and pessimists and Liu describes the discussed defense strategies, the struggles between different ideas and introduces persons who became important roles in the preparations. 

The second part jumps about years 200 years into the future. Humans are still preparing for the alien invasion. Some important characters from Part I awoke after a long period of hibernation and are confronted with a very different world. 

Liu describes the advances in technology, social and sexual behavior and paints a fascinating new world - but still in the shadow of the advancing superior aliens. 

In the remaining 25% of the books the plot gains a lot speed; it becomes very dramatic and culminates into spectacular actions. There are some striking ideas based on Liu´s vast imagination and stringent use of logic & cutting-edge physics. For instance the author describes over about 14 pages an arresting and extremely violent episode, which demonstrates Liu`s literary talents.

"The Dark Forest" is part of a huge space opera - a scifi epic on a grand scale comparable to Homer´s Odyssey and  Richard Wagner´s Ring cycle. Liu plays with the laws of physics & mathematics and translates relativity, string theory, quantum physics and much more science into speculative & fascinating fiction, often apocalyptic and bizarre. Reading the novel was not only entertaining, it animated me also to think about the universe around us, about other civilizations and how they might respond to us.

The trilogy is the best science fiction of the 21st century so far and the proof that Liu is not only the most gifted science fiction author today, "The dark forest" is an essential part of contemporary literature as well.

Contemporary Art: Sarah Martin-Nuss & More @ Gallery Rachel Uffner New York

(Drivebycuriosity) - Manhattan`s Lower East Side is mainly known for offering a legion of fast food restaurants and bars, being a magnet for party people. But there are also some interesting art galleries. Gallery Racher Uffner on Suffolk Street belongs to the stalwarts.

 

This week I saw a show with paintings by Sarah Martin-Nuss. The exhibition is called "pouring water into water" ( racheluffner). On top of this post you can see "Mirage on the Horizon" (2024, oil, pastel and oil pastel on canvas) followed by "Pouring Water into Water" & "Exposure". I love her almost violent style.

 

                               Fallen Angel

Rachel Uffner also has a group show, titled arcus, displaying paintings from different artists ( racheluffnergallery). Above you can see "Fallen Angel" by Angela Wei & "Wipe" by Asher Liftin.

 

 

Above follow "Untitled (Balcony I)" by Lucia Rodriguez Perez; "Immiscible" by Nianxin Li; "Still Life with Juice" by Piper Bangs & "An Arch holds a Dome, a Dome holds a Tulip" by Brittney Leanne Williams.

 

To be continued

Economics: Would Trump II Bring More Inflation?

 (Drivebycuriosity) - The US election is approaching. President Biden`s chances to continue another period are falling apart. The Democrats are in panic. A group of 16 Nobel Prize winners, all Biden sympathizers, claims that Trump´s return to power would cause even more inflation ( cnn).

The image above shows the inflation over the last 10 years, which covers Trump`s and Biden`s presidentships so far (source ). During Trump´s regency the rate fluctuated between minus 0.2% (April 2015) and 2.9% (July 2018). During Biden`s regency inflation jumped up to 9.1% (June 2022) and is now hovering above 3%. Trump has certainly a much better inflation record.

But anyway, Joseph Stiglitz, a left-wing Columbia University professor, says that "Donald Trump will reignite this inflation, with his fiscally irresponsible budgets" ( cbsnews). The Biden supporters also claim that Trump will worsen the trade war with China and other nations and will hike tariffs on imported goods, which will raise the price level in the US. They also allege that Trump´s announced tax cuts will accelerate the economy and so strengthen inflation.

Higher tariffs are indeed bad for US consumers and lead to higher prices. But Biden isn`t a free trade supporter himself, he continues Trump´s economic war against other nations and made it even worse by executing new sanctions on China and oil suppliers Russia & Iran. And Trump´s budget policy and his tariffs did not push inflation above 3% and his regency ended with an inflation rate of 1.2%.

Apparently the Biden supporters ignore economic theory and history. “Inflation is always and everywhere a monetary phenomenon” said Milton Friedman. His insight is based on history.

 

                      Helicopter Money

The recent high inflation is caused by the Biden government who flooded the economy with stimulus checks in the value of trillions of dollars to fight the Covid19 recession (American Rescue Plan). The government checks got financed by massive bond purchases by the Federal Reserve (Quantitative Easing known as QE1,QE2 & QE3).  

The government money landed directly on the bank accounts of the Americans, blowing up the money volume M2 (bank notes & coins & deposits at banks). Milton Friedman described this as helicopter money (cato ).

 

 ( source)

As a result in 2021 & 2022 the US money supply M2, the engine of the inflation, jumped 40% (image above). The money deluge met a constrained supply of goods & services partly - because of Covid19. "Inflation is caused by too much money chasing too few goods and services", noticed the economists at fisherinvestments".

 

                        Causal connection

The causal connection between money and inflation is known since the 16th century at least. Nicolaus Copernicus described already in the year 1522 how "too much money" causes inflation. Copernicus` "quantity theory of money" is based on observations: 

Early in the 16th century Spain conquered today`s Latin America and looted the silver stocks. The Spaniards send the precious metal to Europe where is was printed into coins and used as money.

As a result the European money supply jumped, meeting a restrained supply of goods (agriculture, hand works) &  services. The flood of money raised suddenly the demand for scarce goods & services and caused a jump of the price level.

Elaborated studies by Milton Friedman, Karl Brunner, Allan Meltzer and many other economists (known as Monetarists) described already in the 1960s how and why the inflation rate follows the growth rate of money with a time lag (causal connection).

Nobel Prize or not, the Trump inflation claim is based on economic illiteracy.

 

Books: The Best American Mystery Stories - The First Ten Years

 (Drivebycuriosity) - If we believe the science fiction writer Theodore Sturgeon then "ninety percent of everything is crap". There are indeed so many books which are a waste of time. Therefore I skim short story collections and try to find some gems there - the valuable 10%.

I liked the anthologies "The Best American Mystery Stories" from 2013 and 2015 (here are my reviews: 2013  2015). So I gave another collection of the series a try: "The Best of  the Best American Mystery Stories - The first ten years " ( amazon). But this time I got disappointed.

Apparently the stories were chosen for the literary quality, there is a hostage situation, revenge, adultery and many more evil topics, but not much mystery.

I found 2 tales from 20 ok:

Jeffery Deaver: "The Weekender" is about a cat & mouse game between murderous abducters and their victim

Brendan Dubois: "The Dark Snow". A man, who lives at a remote lake, gets harassed by vicious neighbors. 

I would not call the rest trash, but they don´t belong into a "Mystery" collection.