Quotes of the day

The same forces that have generated greater inequality in writing - the leveraging of intellect, the declining importance of physical labor in the production of value, cultural and economic globalization - are at work throughout the economy. Thus, if you really want to understand inequality today you must first understand Harry Potter.--Alex Tabarrok

It is all very fine to say that markets provide a means to communicate tacit knowledge, and it is even true of many markets, especially small scale ones with participants who know each other, know the product and so on. But global markets do not rely on tacit knowledge. They rely on standardization – the homogenization of products so that they can be lumped under the appropriate heading within a set of standard codified categories. Far from communicating tacit knowledge, the price system (and the codified standards that underlie it) destroys it systematically.--Henry Farrell

The best empirical work looks at a variety of data, and does not focus on variations within a very narrow approach. There are important issues in the data, like how you measure crimes, or how punishment for crime changed over the period. This latter work isn't as interesting to economists because it's so parochial, and economists want to find eternal, generalizable truths like Newton's laws, because that's what scientists do. This makes them truly academic, uninterested in facts and issues related to messy, real data, because such facts do not play into their comparative advantage, which is the slick econometrics. So, if Harford thinks that Levitt and Donahue's abortion paper is the best example of what economics can do for us, he might as well admit economics is sociology with more math, so it necessarily has smarter practitioners, but they are no closer to the truth when they actually apply to the data.--Eric Falkenstein

Bottom line: diversification is still good, but volatility is not priced risk (and [Milton] Friedman, as usual, was right).--Eric Falkenstein

Despite his goal of global openness, however, [Facebook's Mark] Zuckerberg remains a wary and private person. He doesn’t like to speak to the press, and he does so rarely. He also doesn’t seem to enjoy the public appearances that are increasingly requested of him. Backstage at an event at the Computer History Museum, in Silicon Valley, this summer, one of his interlocutors turned to Zuckerberg, minutes before they were to appear onstage, and said, “You don’t like doing these kinds of events very much, do you?” Zuckerberg replied with a terse “No,” then took a sip from his water bottle and looked off into the distance. This makes the current moment a particularly awkward one. Zuckerberg, or at least Hollywood’s unauthorized version of him, will soon be starring in a film titled “The Social Network,” directed by David Fincher and written by Aaron Sorkin.--Jose Antonio Vargas