EconTalk this week

Michael Munger of Duke University talks with EconTalk host Russ Roberts about his latest book (co-authored with Kevin Munger), Choosing in Groups. Munger lays out the challenges of group decision-making and the challenges of agreeing on constitutions or voting rules for group decision-making. The conversation highlights some of the challenges of majority rule and uses the Lewis and Clark expedition as an example.

A direct link to the audio is available here.

EconTalk this week

Benn Steil of the Council on Foreign Relations and author of The Battle of Bretton Woods: John Maynard Keynes, Harry Dexter White, and the Making of a New World Order talks with EconTalk host Russ Roberts about Bretton Woods, the conference that resulted in the IMF, the World Bank, and the post-war international monetary system. Topics discussed include America and Britain's conflicting interests during and after World War II, the relative instability of the post-war system, and the personalities and egos of the individuals at Bretton Woods, including John Maynard Keynes and Harry Dexter White.

A direct link to the audio is available here.

A firm with no employees is not a firm

or so says Jim Rose at the Utopia - You are standing in it! blog.

As a practical notion the statement is ok but as a theoretical statement it is not.

The most obvious counter to it is the Grossman-Hart-Moore approach (or property rights approach, also sometimes called the incomplete contracts approach) to the firm under which a firm is defined to be a collection of jointly-owned (non-human) assets. Ownership of an asset is the possession of the residual control rights over that asset. So a firm could involve having no employees, it would just have owners and assets. Some worker cooperatives would be like this.

This means, for example, that the distinction between an independent contractor and an employee, if there is one,  turns on who owns the non-human assets with which the agent works. An independent contractor owns his own `tools' while an employee does not.

Note also that ownership does not involve having residual income rights. One problem with using income rights as a definition of ownership is that they are too easy to contract away. Consider, for example, a manager who is on an incentive contract which involves him getting a percentage of the profits of the firm. This makes him a residual claimant to the firm's profits but does not make him an owner.

EconTalk this week

Daniel Sumner of the University of California talks with EconTalk host Russ Roberts about agricultural subsidies in the United States, the winners and losers from those subsidies, and how the structure of subsidies has changed from the New Deal to the present. Sumner also explains how American policies have affected foreign farmers.

A direct link to the audio is available here

And the Canterbury econ department goes to hell in a handbasket

It has been pointed out to me that the graduate offerings in economics at Canterbury this year are

ECON 610-S1/S2 Directed Readings in Economics I
ECON 613-S1/S2 Directed Readings in Economics II
ECON 641-S2 Monetary Economics: Theory
ECON 642-S1 Monetary Economics: Policy
ECON 643-S2 International Finance
ECON 644-S2 Microeconomics I
ECON 667-S1 Behavioural Economics
ECON 668-S2 Experimental Economics

Now one semester of micro, one of 'metrics and no macro at all is not a grad program. The offerings in non-core papers are thin on the ground as well.

What was once the best econ department in the country has been, deliberately we assume, turned to crap. Not a good look.

Philippe Aghion on Jean Tirole's contribution to economics

From VoxEU.org comes this audio in which Philippe Aghion is interviewed by Viv Davies on the subject of the recent Noble prize winner Jean Tirole’s contribution to economics.

A direct link to the audio is available here

EconTalk this week

Luigi Zingales of the University of Chicago talks with EconTalk host Russ Roberts on whether the financial sector is good for society and about the gap between how banks and bankers are perceived by the public vs. finance professors. Zingales discusses the costs and benefits of financial innovation, compares the finance sector to the health sector, and suggests how business education should talk about finance to create better behaviour.

A direct link to the audio is available here.