Can’t do without Jane Jacobs

I’m sure I once had a copy of The Economy of Cities by Jane Jacobs, but when my son asked to borrow it, I couldn’t find it. So I ordered a 2nd hand one from Abe and it just arrived – can’t do without one on the bookshelf. (No doubt the other copy will turn up soon….)

There’s a great quote from Herodotus to start with:

“I will tell the story as I go along of small cities no less than of great. Most of those which were great once are small today; and those which in my own lifetime have grown to greatness, were small enough in the old days.”


Guest review of Lean In

This is a guest review by Ian Bright, @brighteconomist, of Lean In: Women, Work and the Will to Lead by Sheryl Sandberg

Behind every good book there is a mountain of research. It would be a mistake to dismiss this short book’s discussion of the problems women face in reaching senior management positions in business and public life simply because its story-telling approach is not to your liking. Its style was not to my taste but I read on regardless, drawn in by the footnotes that chronicle important research and details. The book’s strength is in this research, which naturally appeals to the economist in me.

There are 35 pages of small print footnotes accompanying 182 pages of text. These account for 19 per cent of the pages but add so much more of the content. I found myself continually flipping between the text and the notes. Anecdotes throughout are usually supported by academic research that indicates the problem is pervasive or that gives detail that would otherwise disturb the flow of the story being told.

Sandberg, currently Chief Operating Officer at Facebook, is one of the most senior and prominent women in global business. She holds a position of power and influence. It is appropriate that her stories provide the narrative for the text as they provide a way to shed light on the important issue of advancing women in the workplace and society. To her credit, she openly pays tribute to the contribution of Marianne Cooper, a sociologist at the Clayman Institute for Gender Research at Stanford University, as the book’s lead researcher.

The book covers various issues such as the ambition gap displayed by women, the tension that can exist between success and likeability that can affect women particularly, the role of fathers/partners/families in child rearing and the role of mentors. Many issues are approached with an anecdote from Sandberg’s or a friend’s experience, but a close reader will be drawn to the footnotes for details.

The book’s title comes from the advice to “lean in” to tables when at meeting rather than to sit back or stay at the side of the room and therefore not participate. The advice to others – both men and women – in positions of management and power appears to be to provide the environment to allow more women to contribute. Even simple things such as ensuring toilets are available for women as well as men at meeting venues can play a part.

When story-telling to highlight an important topic, there can be a fine line between trivialising and getting the main message across. For some, this line will be crossed at times and they may be thinking “too much information”. For example, I would never ask a woman of a newly-born child “Do you need to pump?” But Sandberg notes that her writing partner, Nell Scovell, “was insistent that we keep searching until we found the right way to talk about these complicated and emotional issues.” Sandberg and Scovell are right. The issue of advancing women in the workplace is complicated and emotional. If it takes a story from a powerful woman to make the issues more accessible, acceptable and understandable, so be it.

For economists, there is an interesting insight into the working relationship between Sandberg and Larry Summers. Sandberg was a research officer for Summers when he was Chief Economist at the World Bank. Sandberg did not know how to use Lotus 1-2-3 (an early version of Excel spreadsheets) to complete a task. Her colleagues appear to have been amazed at her lack of knowledge and apparent unsuitability for the job she had been given. Summers took a different tack. He taught her how to use the software.

Further, for the economics profession this book has great relevance. Women are under-represented in the profession. This is generally accepted and even highlighted by Nobel laureate Robert Shiller in a tweet of March 1 referencing an article by Claudia Goldin titled “Will more of our daughters grow up to be economists?” ( ).

Lean In won’t provide all the answers but it provides a way to think about this issue and how it can affect your working and family life.

Adventures in international finance

The Summit: The biggest battle of the Second World War by Ed Conway is a rattling good read. It is of course about the Bretton Woods conference in 1944, which laid the foundations for the post-war international economic arrangements, and the part they played in the stability and growth of that remarkable 30 years.

I picked it up expecting a book going over familiar territory. Only last year I read Benn Steil’s excellent  The Battle of Bretton Woods. However, The Summit is well worth a read even by Bretton Woods afficionados. It combines terrific storytelling with new archival material.

And what a story! You get a real sense of the physical location – the book starts and ends with the hotel – and the bustle of a huge international conference, meeting everywhere, people huddled in corners. Keynes called it a “monstrous monkeyhouse.” The hotel owner got so fed up with the delegates and the confusion that he threw everybody out before the treaty was entirely ready. Nobody had read every page and the stage was set for much further wrangling.

The characters are extraordinary, from Keynes (who comes across as more unlikeable the more one reads about him) to China’s H.H.Kung, the drunken Russians, the (probably) Soviet spy and chief American negotiator Harry Dexter White, and the obstreperous Indian delegation (some habits die hard…). The book quotes the then UK ambassador to the US commenting on Keynes’ manner: “He was really too offensive for words and I shall have to take measures.” Also amusing is the personality clash between Keynes and Lionel Robbins, another self-confident economist in the British delegation.

It’s always good to be reminded that alongside the debates about economic theory and practicalities, personalities, politics and the vagaries of history shape our institutions.

This would be a terrific introduction to international monetary matters for students, an enjoyable way to dip into some of the economic debate before getting started on it in earnest. And for everybody, it’s not only a good read but good background for reflecting on how international finance is ordered – or not – today, and what it took in 1944 to bring about a different kind of agreement.


Mission impossibility

I’m preparing my new course on Economics for Public Policy that I start teaching at the University of Manchester in a few weeks, and one of the things preoccupying me as I look over the specific material is the evaluation question. Of course impact assessments are a big deal now, and randomised control trials (disguised as ‘pilots’ in the developed world context) very fashionable. Looking at whether policy interventions actually achieve what they were meant to is of course important; and the answer is usually ‘no’ as a host of recent books (The Blunders of Our Governments by Anthony King and Ivor Crew, Why Government Fails So Often by Peter Schuck, Government Failure vs Market Failure by Clifford Winston, Wrong by Richard Grossman) amply testify. But I’ve been thinking more about what the policies are meant to achieve in the first place, the underlying social welfare justification. I started mulling this over when writing last year’s Pro Bono Economics Lecture, The Economist as Outsider, and the philosophical basis of the standard approach in economic policy – identify the market failure and the corresponding Pigouvian intervention – seems profoundly flawed the more you think about it. The recent excellent Interfluidity blog posts on welfare economics spell out some of the issues.

That’s a subject for another day, possibly another book. Meanwhile, I just read The Arrow Impossibility Theorem, lectures by Eric Maskin and Amartya Sen. It’s not an easy read, but it does make the Impossibility Theorem as simple as can be – pretty much equation-free, and clearly explained by two of the biggest brains in the business. Maskin’s lecture looks at the implications for voting systems, Sen’s at the informational basis on which one can make social welfare assessments. The book is an excellent one stop shop on the Impossibility Theorem. Useful for teaching it, and also an important reminder to economists who talk about or operate in the policy world that this question of social welfare is difficult and important.


Innovation, the Romans and ‘us’

There’s a new e-book free to download from Vox EU,Secular Stagnation: Facts, Causes and Cures.

The list of contributors is stellar, starting with the leading Stagnationists, Robert Gordon and Larry Summers, but also including economists such as Ed Glaeser and Joel Mokyr who disagree with the basic secular stagnation assertion that the pace of innovation and therefore technology-driven growth has declined.

For example, Glaeser writes: “It is hard to think of any innovations before the modern age that increased demand for the most skilled workers while providing consumer benefits for
the masses. Indeed, for such a thing to occur, one must imagine a world in which highly paid elite workers toil for the benefit of services that will be used by the poor. Could
such a thing be imaginable in pre-revolutionary France or in Ming China? Yet that is
exactly what happens at Google or Facebook. Highly paid workers work constantly to
improve a service that is provided freely to hundreds of millions of poorer users.”

He continues: “This inversion of the traditional nature of innovations represents the rise of superstarlike technologies (Rosen 1981) that enable the highly competent to provide their
services as almost a public good, with no congestion in use. The most natural precursor
to this modern inversion was well-paid artists, such as writers and movie stars, who
entertained the masses. The inversion also happened when Fred Astaire and Ginger
Rogers danced for depression-era movie audiences. The essentially zero marginal cost of providing internet-related services means that they are often monetised through the advertising of goods with a positive marginal cost. It is free to use Google, but their search engine will nudge users towards their advertisers. The free nature of these services has meant a democratisation of access to information; a fact that is rarely considered in attempts to measure inequality.”

However, the essay goes on to say this does not mean that all is well. It focuses on the adverse employment consequences of the interaction of negative demand shocks and labour market/educational institutions. There’s innovation, and then there’s who benefits from it. In that famous question, ‘What did the Romans ever do for us?’, the emphasis should be on ‘us’ not on ‘Romans’.

The book is a great summary of the state of the debate. I’m in the Glaeser/Mokyr camp at present, but none of us should be anything other than open-minded about these questions.