We were a bunch of economics students last week at the projection of Life and Debt and we were asked at the end what we thought of the situation in Jamaica and what happened there with the IMF. We had nothing to say. I have to admit I had absolutely no idea. Was it the IMF's fault? Were its structural adjustment loans a deadly weapon? We, as economics students, should have an opinion about this. I don't. I never was taught anything about this and I haven't read anything convincing either. But at the same time I think that when economics professors teach us that everybody is wrong except economists, we get scared to have false opinions, so we end up with no opinion. Y'all know what I mean?
We were then asked if it was possible that the WTO, by promoting free trade, was making the same mistake the IMF did with its conditional loans. We had no idea. I mean, if we thought free trade was good, we didn't want to say too much, probably scared of being wrong on something. The truth about free trade is that we don't know. Who wins? Who loses? Who knows? That's what empirics say, and even Krugman is back at it with a new working paper (on trade and wages in the US). Of course, trade theory has many answers but, as Markusen would say, "give me anything you want and I'll build a model to prove it" On this, read this.
Anyway, here's some things you might be interested in. In this new book, Stephen A. Marglin argues that market relationships erode community. I agree. Here's an extract.
"In the past, for example, when a farm family experienced a setback--say the barn burned down--neighbors pitched in. Now a farmer whose barn burns down turns, not to his neighbors, but to his insurance company. Insurance may be a more efficient way to organize resources than a community barn raising, but the deep social and human ties that are constitutive of community are weakened by the shift from reciprocity to market relations".
If we subtitute social capital with formal institutions aren't we gonna destroy humankind? Sometime I do believe I'm becoming stupid by applying economic theory ot my personal life dilemas...
So Tim Harford has a new book, "The logic of life". Thomas C. Schelling, 2005 Nobel Laureate in Economics liked it:"This is a terrific read. It’s one those books that forever changes the way you look at things. It proves economics is not a subject for dull textbooks; but is really a way of thinking that can shed light on all aspects of life." Apprently, it explains that racists, drug addicts, revolutionaries and rats – comply with economic logic, always taking account of future costs and benefits, even if they don’t quite realise it.
Finally, here's a preview of the unoffical t-shirts and hoodies you will be able to purchase soon.
OH! and most importantly, see you all next Monday at Bain des Paquis for the department's annual fondue dinner! Bring 30 chf cash!