Adam Smith Lives!

History of recent economics, mechanism design, etc.

The recent Nobel set off a flurry of remarks to which I don't hope to add.  But I should say that it also prompted a note to me from Kyu Sang Lee, former Young Scholar at the HES and participant in the Summer Institute at George Mason University.  Not surprisingly, given his interest in the history of recent economics, Kyu earned his PhD from Notre Dame University under Phil Mirowski.  He reminds me that his 2006 HOPE article is an attempt to write a history of design mechanism:

Mechanism Design Theory Embodying an Algorithm-Centered Vision
of Markets/Organizations/Institutions
Kyu Sang Lee

This article examines mechanism design theory (MDT), which has recently
garnered widespread attention in the microeconomics literature. The main
conclusion drawn here is that MDT provides the dominant Walrasian general
equilibrium tradition with a new transpersonal, algorithm-centered
vision of markets/organizations/institutions while leaving unsolved the lingering
problems associated with that tradition, many of which were plainly
revealed by the Sonnenschein-Mantel-Debreu (SMD) results (Ingrao and
Israel 1990, chaps. 11, 12; Rizvi 1994).

The study of recent economics has now engaged enough historians of economic thought that a new group has emerged along with a new set of conferences, the first of which was held at Nanterre, last June. You can find out more by checking their website:  HESREC.  I like old and dusty books -- this week I enjoyed re-reading some Mandeville -- but the new stuff, in my mind, is like a breath of fresh air in a sub-discipline that can sometimes be so far removed from the present that it ceases to overlap sufficiently with what economists know, today. 

HES line up for Allied Social Sciences Association annual meeting

Perry Mehrling has lined up a terrific set of sessions for the ASSAs.  If you're going, check these out.  The ASSAs allocate sessions and pay attention to attendance (someone counts!) so we need a good turn out for all.  Last year, there were people standing in the doorway and sitting on the floor for the HES session on Chicago-style economics! 

Also (another reminder later):  the HES will host a reception for those interested in talking about teaching or research in the history of economic ideas.  Friday.  6:30-8:3 p.m.  Room tba. Plan to attend and meet up with some like-minded types.
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The History of Economics Society is sponsoring the following sessions at the 2008 ASSA meetings in New Orleans.
Jan. 4, 10:15 am
HES/AFA

What Was/Is Financial Economics? (B2)

Presiding: STEPHEN BUSER, Ohio State University

GEOFFREY POITRAS, Simon Fraser University, and FRANCK JOVANOVIC, University of Quebec-Montreal--Pioneers of Financial Economics

HICHEM BEN-EL-MECHAIEKH and ROBERT DIMAND, Brock University--Louis Bachelier's 1938 Volume on the Calculus of Speculation: Efficient Markets and Mathematical Finance in Bachelier's Later Work

PETER BERNSTEIN, Peter L. Bernstein, Inc.--In the Thick of This World: The True Story of Modern Finance

PERRY MEHRLING, Barnard College, Columbia University--The Spirit of Finance and the Development of Macroeconomics


Jan. 4, 12:30 pm
HES

Keeping the Faith: The Continuing Engagement of Economics with Religion (B1)

Presiding: SPENCER BANZHAF, Georgia State University

STEPHEN MEARDON, Bowling Green State University--Whence Commerce Followed the Missionary: Religions Origins of Doctrines of U.S. Trade and Expansion

HARRO MAAS, Amsterdam School of Economics--A Hard Battle to Fight: The Dismal Science in Cambridge 1820-1850

DANIELA PARISI, Catholic University of Milan--Economics to the Service of Humankind: The Political Economy of Francesco Vito

Discussants: BRAD BATEMAN, Grinnell College
PAUL OSLINGTON, University of New South Wales
SPENCER BANZHAF, Georgia State University


Jan. 5, 10:15 am
HES/AFEE

Thorstein Veblen at 150: Rethinking a Survivor (B1)

Presiding: ANNE MAYHEW, University of Tennessee

MATTHEW WILSON, University of Denver--Veblen on Veblen: Social Critic, Evolutionary Scientist, or Both?

ROBERT PRASCH, Middlebury College--Thorstein Veblen's Theory of Consumption

ERIC HAKE, Eastern Illinois University--Thorstein Veblen's Theory of Business Enterprise, Business Cycles, and Industrial Organization

Discussants: MALCOLM RUTHERFORD, University of British Columbia
JANET KNOEDLER, Bucknell University


Jan. 5, 2:30 pm
HES

Rawls and the Economists (B3)

Presiding: SANDRA PEART, University of Richmond

SANDRA PEART, University of Richmond, and DAVID LEVY, George Mason University--The Buchanan-Rawls Correspondence

JOHN DAVIS, Marquette University and University of Amsterdam--Rawls and Sen on Deliberative Democracy

JOE PERSKY, University of Illinois-Chicago--Rawls' Thin Defense of Property

Discussants: STEVEN DURLAUF, University of Wisconsin
DAVID COLANDER, Middlebury Coll

Dead Economists' grave sites

This is a fascinating resource for those of us like to rummage around with the ideas of dead economists. 

Malcolm Rutherford writes to the HES listserve:  "I have just completed an update of my Famous Economists' Grave Sites web pages.  I have included many more links and found that every
person on my list had a Wikipedia entry--some good some not so good.  Take a look.  Feedback and new sites always welcome."  You can enter his collection here.

Terence Hutchison dies

Goncalo Fonseca tells the HES below that Terence W. Hutchison has died.  I came to know his work  through that of Sam Hollander.  I failed initially to understand the significance of his assessment of Jevons on experimental legislation.  This was my own shortcoming; I soon came to appreciate the significance of all he wrote.   He attended the first professional presentation I made, as a young assistant professor at William and Mary, a paper in which I criticized his characterization of Jevons on policy.  I like to think that kindness (not lack of interest) prevented him from publicly taking me down a notch -- the paper wasn't particularly good and I'm sure he could have done so.  He was a tremendous source of ideas and knowledge for all of us.
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Dear HESers,

I have just received news that Terence W. Hutchison died, aged 95, at 1300
hours today, 5 October 2007 in Winchester, UK.

As everyone here knows, Prof. Hutchison was particularly highly regarded
among historians of economics and his passing will be received with much
sorrow.  A great loss.

Goncalo Fonseca

Experts and Influence, correction

I'm taking the paper on Galton down until David and I sort out the argument better.  James Surowiecki is has pointed to a key error in the original sketch -- since, as he notes, Galton did in fact compute the mean.   At this point we're considering what part of the argument to hold onto and what will need to change.  We've emphasized the importance of entry and competition to ensure that work of experts is checked; now we're in the midst of this ourselves.  Our apologies to Surowiecki.

One paragraph we'll add to the next version is:

One of Galton’s defenses for the sample median as the vox populi was it that bounds the influence of any individual voter. Replication and checking of the work of experts may be a way to bound the influence of experts. It is important for the  reader to know that in an earlier version we denied the existence of Galton’s mean. This emphasizes the importance of replication and competition precisely to bound the influence of such error.

 

Here’s what we are prepared to defend :

The majority-rule context of Galton’s publications is lost when the sample median, upon  which Galton put such stress, is no longer reported.

 

Robin Hanson's Overcoming Bias has more comments by Surowiecki and Levy and Peart.

Experts and Influence

David Levy and I have sketched out a paper in which we check the expertise of the past.  We can do that since the data that were used by Francis Galton -- people's guesses about the weight of an ox -- have been preserved.  The paper first talks about Galton's use of the data (he chose the median guess as the best estimate of the ox weight) and then about how Galton's results were re-told, and changed over time.  Here are a couple of paragraphs from the paper, which looks at this as a case study of the role of expertise:

The question of expertise enters into this because, if experts pass along false information (wittingly or unwittingly), they become part of a process by which errors are diffused. If experts are trusted (and if they trust the experts whose work they cite), mistakes are diffused and remain uncorrected. If, by contrast, expert results are not accepted automatically, then their results are more often subject to the scrutiny associated with replication. Knowing this, an expert whose work might be scrutinized will check the work carefully. An expert who expects deference, acceptance of results without checking, will check the work less carefully. Paradoxically, such trust increases the probability of mistakes being made or passed along. Thus, we expect that the errors made by experts will tend to be systematic because they will be repeated by those who trust them.

Our examination begins with Galton’s contribution on voting as estimation as a way to bound influence. But this is only the beginning of our story. Even more interesting, perhaps, than Galton’s contribution itself, is the “retelling” that has occurred since. Though Galton was defended the median as the estimator for the ox weight, the tale of Galton’s median was changed soon after. In addition to the median location of central tendency, Pearson suggested the mean. Along the way in the historical retelling, embellishments were added so that Galton’s original procedure was entirely misconstrued. Our story recounts the misconstruing. As we do so, a key question is whether the tale was changed deliberately (falsified) or whether, not knowing the truth, the retold (and different) tale was passed on unwittingly.

A pdf of the paper will be available when we fix it.

Here's a scan of some of Galton's data: