Category Archives: Books and movies

Waffle Street on IMDb

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It really is going to be a movie and how I know is because it is now up on the IMDb website. The movie is, of course, Waffle Street and this is the plot line as described:

Waffle Street’s riches-to-rags tale is an adaptation of James Adams’ 2010 memoir of the same name (published by Sourced Media Books), which chronicles the financier’s foray into the food industry. After being laid off at the hedge fund where he worked, and further jaded by his culpability in the crisis, Adams chose to work at a popular 24-hour diner where he claims “most of his financial knowledge has been gleaned.” Offering a fresh take on the fallout of corporate greed, Adams’ is a tale of the redemption and unlikely friendship found under the tutelage of Glover’s character Edward, the best short-order cook in town.

My own way of thinking about it, however, is how a bond trader at the top of the income tree is felled by the GFC and finds himself a few weeks later as the night manager of a Waffle House. He therefore enters a world that until then had only been seen at a distance but is now his daily presence. Part of what he learns is the up-close reality behind the kinds of things that are taught in economics and finance courses – things such as Say’s Law – discovering their deeper meaning by seeing them as an inseparable part of the way in which the world works. But the most astonishing lesson is embodied in the person of Edward Collins, an ex-convict who has found his own productive meaning in life by becoming not just a Waffle House cook but a moral philosopher. It is Jean Valjean again except rather than Collins being a character from a novel, he is someone from real life.

The story is exceptional, but a movie is not a book. They have the makings for the film of the year but we shall see. Release date is 2015 so it’s not long to go. I’ll let you know how well it’s been done right after the premier.

Economic definitions

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I start the 2nd ed. of my Free Market Economics with a set of definitions of the common words that are brought across into economics and then used as technical terms. But while technical in economics (e.g. neither “demand” nor “supply” are, for example, specific amounts) their slithery meanings create an imprecision that makes discussion sometimes difficult. The book therefore starts with a set of definitions that try to nail down what each term means in the context in which they are used. But the definitions are also ordered so that they present the entire argument of the book, which is an explanation of why only a market-based economy can create economic prosperity. And here a market based economy is defined as one in which private entrepreneurs, who are unknown and unrelated to anyone in government (except by chance), make most of the economic decisions in an economy and personally carry the responsibility for the success or failure of the enterprises they run.

Each term should therefore be seen as itself carrying part of the weight of the argument. They are each discussed because they provide an important part of the story. You cannot understand how an economy works unless you understand supply and demand in a particular way, which you are very unlikely to have thought of unless you have formally studied economics.

But it is also necessary to fit each of these concepts into a larger framework representing the economy as a whole. The parts are then seen in relation to some fuller context. In this I am following Aristotle as discussed by Mary Midgley* who was looking at biology when she wrote:

[Aristotle] starts from the basic, primitive question about each particular, “What’s this for?” and proceeds by looking for whatever outcomes can, in the particular context, be intelligibly seen as advantages. By doing this systematically it begins to understand these various functions as parts of larger wholes, systems within which the relations between the various parts continually makes better sense of them.

The productive apparatus of a community, the aspects that contribute to the production and distribution of both goods and services and of incomes, works in some way. These definitions are the words necessary to understand both how these outcomes are explained as well as being able to follow the theories that are used. Theory is a representation of reality. These words used as they are properly defined are the necessary elements in making sense of the theory. And I might add, it is necessary to understand the theories to make sense of the words as they are used. The fusion of the words within properly specified theories is what an education in economics is about.

* Mary Midgley. 2014. Are You an Illusion? Durham UK. Acumen.

After the IRS the American left thinks it can do anything it wants

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What is one to make of this?

The chairman of the Federal Election Commission today blasted Democratic colleagues opposed to his effort to protect conservative media after they imposed rules on the publisher of Rep. Paul Ryan’s new book, opening the door to future book regulations — or even a ban.

“By failing to affirm this publisher’s constitutional right, statutory right, to disseminate a political book free from FEC conditions and regulations, we have effectively asserted regulatory jurisdiction over a book publisher,” warned Chairman Lee E. Goodman, one of three Republicans on the six-person FEC.

“That failure reveals a festering legal uncertainty and chill for the free press rights of books and book publishers to publish and disseminate political books free from government regulation,” he added.

The left in the US no longer even pretends.

Say’s Law goes to the movies

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A while back I posted Say’s Law as Literature about a book of the name Waffle Street written by James Adams. The book is now being turned into a movie, and the story is now out in the open as they have now signed Danny Glover to play the lead role of Edward Collins. This is from the press release:

Legendary actor Danny Glover (Lethal Weapon 1-4, The Color Purple, Dreamgirls) has signed on to star in the upcoming feature film, Waffle Street. The drama-comedy tells the story of James Adams, a VP of a $30 billion hedge fund who lost his job in the recent market crash and wound up working as a waiter in a waffle shop. Amid the greasy madness of the 24-hour diner, Adams befriends ex-con grill master Edward Collins (played by Glover), who serves up hard lessons about finance, life, and grits.

Waffle Streets riches-to-rags tale is an adaptation of James Adams 2010 memoir of the same name (published by Sourced Media Books), which chronicles the financiers foray into the food industry. After being laid off at the hedge fund where he worked, and further jaded by his culpability in the crisis, Adams chose to work at a popular 24-hour diner where he claims most of his financial knowledge has been gleaned. Offering a fresh take on the fallout of corporate greed, Adams is a tale of the redemption and unlikely friendship found under the tutelage of Glover’s character Edward, the best short-order cook in town.

The story is a story of redemption for both the author, James Adams and for Edward Collins, who has found himself in productive work. How this relates to Say’s Law is through the “lessons about finance, life and grits” which includes experiencing the core understanding of economic life that the law of markets provides. This is from the review of the book by the President of the Mises Institute, Doug French:

But Adams does scrap with John Maynard Keynes in the pages of Waffle Street, lamenting, “How far we’ve fallen” in the area of economics education. Pointing out that Say’s Treatise was once the top economics textbook in America, he explains that now, “Instead of learning sound doctrine, today’s undergraduates are inundated with principles that will not bear the scrutiny of common sense and experience.”

I am still waiting to hear who will play Jimmy and then his wife. An amazing story. I’ve never been to a Hollywood premier before, but this is one I do not intend to miss. Meanwhile, you should read the book.

HETSA symposium on the future of the history of economic thought

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We’ve just had a symposium on my book, Defending the History of Economic Thought, at the History of Economic Thought Society of Australia meeting here in Auckland. I’m no fan of economics in the form of running a line through a set of dots, although I’m not an enemy either. But the astonishing transformation of economic theory from a philosophical study to social physics may be all right for the academic world – may be – but it’s not so all right for those who need to understand what’s going on if they’re trying to make policy.

Economics has a vast store house of approaches that are different from the mainstream, some bundled into different schools, such as Austrian economics, and some just part of an array of models that had been part of the mainstream in the past but have been sidelined for one reason or another. No natural science, for example, has ever had some concept from the past return in the way that Malthus’s early nineteenth century theory of over-saving and demand deficiency was resurrected as Keynesian economics and remains embedded in Y=C+I+G. The challenge to today’s mainstream provided by discarded theories and different schools has seen an effort made to push HET out of the economics classification and, as was attempted in Australia in 2007, to blend it into a category that was to be called, History, Archaeology, Religion and Philosophy, as far as possible from economics itself. My book is about that attempt, and a similar one in Europe in 2011. And the interesting part for me, during this symposium, was to find how many even here in Australia, want to make that transformation.

Why that is, I still cannot fully understand. There’s plenty of sociology in HET even as it stands, but there is also a good deal of rethinking old ideas as well. In the present structure you can do both. If HET became history and philosophy of science, the traditional form of HET would disappear, even as it is already shrinking in North America.

The contrast between our meeting in Auckland and the American HET meeting in Montreal at the end of last month was incredible. You would think that with economic theory at such a low ebb, that there would be many papers looking at the pre-Keynesian theory of the cycle, as just one example. As it happens, there was not a single paper in Montreal on either Keynes (or Marx for that matter), and very few that dealt with economic theory as in what did economist A say about issue B. There instead remains a systematic effort to reward sociology of knowledge. Here in Auckland, however, there have been just the kinds of papers that interest me, on both sides of these debates, and there are knowledgable people who can offer truly in-depth analyses and critiques.

It is, in fact, my wish that HET become in part what it never quite has been able to be, become a proving ground for older ideas that are tested in a pit of criticisms by people who are interested in these issues and know an immense amount about these ancient theories. It now happens in a haphazard way, but I think it should become institutionalised. There is, in fact, a new on-line journal that has opened called “History of Economics and Policy” which in my view is the direction things should go.

At the symposium, there were many things said from the floor that I found very useful and interesting, but amongst them was that MIT is about to make a history of economic thought course compulsory for its PhD candidates. If that is actually true, HET will be back within a decade.

The zero percents

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America Movie Review

There are certain moments when the deep left nature of the American media truly reveals itself and this is one such moment. America is a movie that no self-respecting person on the left and in the media can ever admit to liking. It is part of the bias that keeps incompetent idiots in government. Independent minds they are not, and they are ruining America in ways that will one day be written about in the same terms as the Fall of the Roman Empire, which itself may take the same 1500 years to appreciate what has been lost. If American falls, history will be written by the same zero percents who can never say a good word about the right.

(Lifted from Small Dead Animals.)

Parliamentary systems are much much better than republics, much better

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I have noted before that Parliamentary systems are better than republics but here someone in American has also taken notice. The presidency has turned into an “elective monarchy” is the title, but it’s not a recent thing, it is the nature of the system. The article is a commentary by an American on an article by one F.H. Buckley, a Canadian who, like all of us who have inherited the British system, knows the difference:

First off, we’re hardly “the freest country in the world.” As Buckley points out, his native Canada beats the United States handily on most cross-country comparisons of political and economic liberty. In the latest edition of the Cato Institute’s Economic Freedom of the World rankings, for example, we’re number 17 and we don’t try harder. Meanwhile, as Buckley points out, the Economist Intelligence Unit’s “Democracy Index” ranks us as the 19th healthiest democracy in the world, “behind a group of mostly parliamentary countries, and not very far ahead of the ‘flawed democracies.'”

And who do you think he was thinking of when he wrote this:

“Thin-skinned and grandiose” characters do better in presidential regimes, Buckley writes, whereas “delusions of Gaullist grandeur are fatal for Prime Ministers.” In the UK, they have to face the music in person every week. The aforementioned Harold Macmillan, British PM from 1957 to ’63, admitted that the very prospect used to make him physically sick.

The PM’s Question Time is but one facet of the superior executive accountability offered by parliamentary systems.

The US is a mess but there is nothing I can even conceive of that will fix what has gone wrong. Make the President the majority leader in the House would do much to fix things but as utopian as making impeachment in the US a realistic tool of government.

The author of the article doesn’t quite believe it in the end so if you want to read Buckley’s book, you can find it here: The Once and Future King: The Rise of Crown Government in America .

HET Montreal 2014

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The History of Economic Thought conference in Montreal has just ended and, as always, it was wall-to-wall interesting. I have already given a background report on the paper I gave before it was given and I can now report how nicely it went. Even in HET where historical change is our line of work, there is that dreamworld notion that everything stays as it is without effort so my warning that the history of economics has enemies who would drive it as far as they can from economic theory seems remote and incomprehensible. But the people who would move it are still in executive positions, but now it’s for a new generation to deal with.

The most remarkable aspect of the conference was that there was not a single paper on Keynes. Two, three, four years ago, such conferences were crawling with “Keynes, return of the master” sorts of things. Now, not a one. It’s not that the Keynesians have gone anywhere since it is still impossible to think about macro without aggregate demand. Instead, there is confusion and uncertainty about how to go forward, but try to find a textbook that talks about the national economy without mention of C+I+G. It can’t go away unless economists begin to understand Say’s Law and that’s not happening soon. So it is a sullen quiet resentment that hovers over economics with the vultures ready to pick at the bones of economies that fail to recover due to perceived failures of the various austerity programs. I think the Chinese are more likely to try a market-based solution before the Americans but that really means no one is likely to try one any time soon.

And as a bonus, Montreal is lovely, more similar to Melbourne, as I’d been previously told, than it is to Sydney. But the many “a louer” signs everywhere shows a city down on its luck. But aside from six months of winter with ten foot snow drifts, this seems a very liveable place to be.

Why economics needs the history of economic thought

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My reason for being on the road and in Montreal is to attend the American History of Economic Society meetings. I wrote my Defending the History of Economic Thought in response to attempts to remove HET from within the economics classification and place it in some remote category as far from economics itself as they could arrange. In Australia (2007) it was to be, “History, Archaeology, Religion and Philosophy” while it Europe (2011) it would have been, “The Study of the Human Past: Archaeology, History of Memory”. If you had therefore been studying HET, you would not have been studying economics. Your papers also would not have been HET. As near death as HET already is, over the precipice it would have gone.

For HET has enemies everywhere. For the makers of the Classification Codes at the OECD, because the history of economic thought was “history”, neatness demanded HET be included as part of the humanities with other types of history, not with economics in the social sciences. But the more I became involved, the more it turned out that the mainstream of the profession wants HET out of economics because, so far as they are concerned, it gives legitimacy to alternative approaches to economic theory, approaches such as my own, which is seen as part of the “heterodox” tradition rather than the orthodox, orthodox like Y=C+I+G. For the mainstream, this is one way to get rid of the competition. Competition may be fine in theory, but not so much in practice.

But the odd part turned out to be that the elite of the HET establishment were also actively seeking this change. Because so much of HET is made up of people who think the mainstream is useless – uninteresting questions, badly answered – there is a push at the very top of the HET executive (its current president, for one) to turn HET into the history and philosophy of science. No more of these Austrians, or post-Keynesians, or Institutionalists, or Sraffians, or John Stuart Mill classicals. Out with the lot and HET can be a study of the sociology of knowledge. The American Society is at the centre of this attempted shift, and my efforts to preserve HET within economics and then write a book about it is resented in a way you would not believe, or at least I would not have. Just think of them as the equivalent of global warmists and you will get some sense of what they think about what I wrote. If you think my sweet little book on defending HET has had a series of lovely reviews within HET journals, you would not be right. Astonishing for me. I suppose I should not have been surprised but I have been.

So today I will present in defence of my book. Will let you know how it went later.