The Twelve Days of Economics

In the midst of the recent holiday season, someone alerted me to the idea that the song “The Twelve Days of Christmas” was actually a way for Catholic children to learn about their faith in the face of discrimination from the Church of England. )
As a Catholic who was taught by Episcopalian sisters as a young child, I was skeptical of this interpretation, and it didn’t take me long to find others who also disagreed with this interpretation  .
This idea did, however, get me wondering, if such a “one to one correspondence” could be created for any subject. And so, as the twelfth day of Christmas arrives, I propose that this particularly odd collection of gifts given between Christmas and the Epiphany can be matched with ideas from my own discipline, Economics. I go on to present just one possible matching below.
First, the proposed “hidden meaning” of the song, associated with the days of Catholic persecution in England in the 16th century, which some claim was a way for children to learn about their faith.
• A Partridge in a Pear Tree = Jesus
• 2 Turtle Doves = The Old and New Testaments
• 3 French Hens = Faith, hope, and charity, as the principle theological virtues
• 4 Calling Birds = the Four Gospels
• 5 Golden Rings = The first five books of the Old Testament, the “Pentateuch,” which gives the history of man’s fall from grace
• 6 Geese A-laying = the six days of creation (highlighting life)
• 7 Swans A-swimming = the seven gifts of the Holy Spirit, the seven sacraments
• 8 Maids A-milking = the eight beatitudes
• 9 Ladies Dancing = the nine Fruits of the Holy Spirit
• 10 Lords A-leaping = the Ten Commandments
• 11 Pipers Piping = the eleven faithful apostles
• 12 Drummers Drumming = the twelve points of doctrine in the Apostle’s Creed

Now, my proposed “hidden meanings” for the twelve gifts, which, perhaps, can be used for students to learn Economics.

• A Partridge in a Pear Tree = I point of equilibrium, where curves such as Supply and Demand. AD and AD, or IS and LM, intersect.
• 2 Turtle Doves = Two curves intersecting. Information about an equilibrium is found at the intersection of these two curves.
• 3 French Hens = Three measures of cost; fixed cost, variable cost, and total cost.
• 4 Calling Birds = Four graphs of cost; average fixed, average variable average total cost, and marginal cost.
• 5 Golden Rings = the four measures of cost, which, when combined with the equilibrium price level, allows for the calculation of the optimal level of production under perfect competition.
• 6 Geese A-laying = Four graphs of cost (average fixed, average variable, average total cost, and marginal cost) which, when combined with the quantity of output associated with each cost, as well as the competitively given market price, allows us to calculate the optimal level of production in a competitive market
• 7 Swans A-swimming = Four measures of cost (average fixed, average variable, average total cost, and marginal cost), which, when combined with the quantity of output associated with each cost, as well as the price determined by the demand curve, allow us to calculate the optimal level or production for a monopolist.
• 8 Maids A-milking = the number of qualitatively different results possible when shifting two intersecting curves on a graph either to the right or to the left.
• 9 Ladies Dancing = the seven measures of cost (fixed, variable, total and average fixed, average variable, average total as well as marginal cost) which, when combined with the quantity and selling price, allowing for the calculation of a profit maximizing level of output under perfect competition.
• 10 Lords A-leaping = the information needed to calculate the profit maximizing level of output for a monopoly; the 7 measures of cost, plus price, total revenue and marginal revenue for each level of output.
• 11 Pipers Piping = The number of years that the Great Depression lasted, from 1930-1941.
• 12 Drummers Drumming = the number of Federal Reserve Banks in the U.S.

Wishing everyone a very Happy New Year!

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The Good Jobs go to Gentlemen

In the tradition that I began years ago as a blogger for Inside Higher Ed , I greet my readers in December with a revision a holiday song . This year, it is one that has special meaning to my fellow labor economists. Wishing all of my readers a wonderful season!

The Good Jobs go to Gentlemen

The good jobs go to gentlemen

Which leaves me in dismay

Women work at least as hard

And get point-eight the pay

A majority in the ivory tower,

But they still get hurt today.

Getting fair pay would be such a joy

Such a joy.

Getting fair pay would be such a joy.

 

From the top of their classes

The women students came

But those who ran admissions said

“We can’t have more of the same.”

Even after graduation,

They found more of that sad game

Getting fair pay would be such a joy,

Such a joy

Getting fair pay would be such a joy.

 

Fear not said human resource

When she looked for a job.

We don’t discriminate, of course,

Between Sally, Sue and Bob.

But when the offers were made that year

The difference was quite clear.

Getting fair pay would be such a joy

Such a joy

Getting fair pay would be such a joy.

 

When they made calculations

To find a relative weight.

It seemed that women were paid

A factor of point eight.

“Time off for kids,

Collars pink,

Spent less time in school;

That’s what economists think”

Getting fair pay would be such a joy

Such a joy

Getting fair pay would be such a joy.

 

The good jobs go to gentlemen

Which leaves me in dismay.

Women work at least as hard

And get point-eight the pay.

Getting fair pay would be such a joy

Such a joy

Getting fair pay would be such a joy.

 

Getting fair pay would be such a joy

Such a joy

Getting fair pay would be such a joy.

 

Looking forward to the day when that is true. In the mean time, Merry Christmas to everyone!

 

 

 

Who We Are

From  Arrow’s Impossibility Theorem to the study of the effects of fiscal policy, it is impossible to study Economics without encountering the political. And so, as our country approaches another election, I find myself, as an economist and as a human being, becoming very aware of the decisions that are being made this week.
It seems like only yesterday that I took my daughter to an election headquarters so that she could be there when history happened , when our country elected its first woman president. As we all know, that is not exactly what happened . In response, I began to think ahead to this week, to the next election, when we would have an opportunity to speak up once again. And so, as our country prepares to vote tomorrow (or has already voted,) I want to leave my readers with some thoughts about the voting process, thoughts not designed to convince you to vote for any particular candidate (for me, at least, there are too many races to keep track of,) but thoughts that I think will help us all remember what our country is truly about, and what an amazing process we participate in, a process known as “democracy.”
Before you pull that lever or touch that screen, I encourage you to ask yourselves these questions.

Who is it that you truly are, at your very core? What is the spark of divine in you that permeates every cell of your being, like water soaks a sponge?
What is it like to be something unique in the universe, a piece of creation that can look back on the rest of that creation and admire the creator? What is it like to see the infinite stars in the sky or a beautiful sunset, or the smile of a baby? What is it like to taste cool water on a hot day? What is it like to smell flowers given to you by a lover? What is it like to hear Beethoven’s ninth symphony? What is it like to feel the hand of a lifelong companion in yours?
What would you say in a conversation with the brave men who fought to bring to birth our country, or with the women who were the strong support system that made their efforts possible? What would you say to Paul Revere, to Sybil Ludington , to Martin Luther King moments before he was murdered or to Abraham Lincoln, as he stood amid rotting flesh and spoke of “four score and seven years ?” What would you say to the soldiers who returned home from Europe, unable to un-see or un-smell the gas chambers they encountered on their way to liberate concentration camps? What would you say to the freedom riders who risked and gave their lives so that our fellow citizens could vote? What would you bring to the conversation about what our country is and can be?
What kind of world do you want to leave your children, your grandchildren, and the children you pass on the street everyday on your way to live out your own life? When you are gone from this world for a few seconds or a few centuries, what do you want to be your legacy for being here?
What do you want written on your tomb stone?

Most of all, I encourage my reads to make sure that they participate in this election. May we show the world that we are the good people that I know we are.

“Next Year”

In economics, we can talk about the price of a good as being, in part, dependent on when the good is available. For example, a bathing suit may not be as desired in January as it is in June. Further, we are willing to pay interest on a purchase in order to have the product today rather then in the future, when we, presumably, will have saved enough money to purchase it outright. We therefore take out loans for cars and homes, willing to pay extra in order to possess a good or service today and not “next year.”

I found myself thinking of this as I sat down to write October’s entry into the blog. I had hoped that I could be writing about cheering on the Cleveland professional baseball team as they made their way through the playoffs.

Alas, as of yesterday, that is no longer an issue. And so, as I remember many entertaining moments in Cleveland baseball from this past summer, I find myself saying the refrain that is heard so often in Cleveland, “just wait until next year.”

 

Nonviolence, Labor Day and Change

When I decided to choose Labor Economics as one of my fields of study on my way to a Ph.D. in Economics, I did so because I was intrigued with some of the issues raised in this area of study. I was perhaps most interested in questions of how time is used by decision makers and consumers alike, a line of study that eventually led to a dissertation on the “market” for volunteer labor. And I was interested in the question of reduced wages for certain groups in the economy, such as women, minority groups, and, eventually, people who work in the nonprofit sector. However, while many modern labor economists do not focus on the foundation and growth of the labor union movement in the U.S., I was also interested in the development of the labor union movement in the U.S., a movement that we celebrate this weekend. I have an image in my mind relating to that movement that will not be silenced. It is of a woman standing amid workers who are being abused, holding a sign that says “Union.” As the definitive scene from the 1979 movie “Norma Rae,” it illustrates the power that is created when people come together to stand against evil when they recognize it as such, especially when they realize that others are being abused. Recent headlines had me thinking of that movie, as I realized that this may be a point in history where good people need to come together to collectively say “no more.”
This has been effectively done throughout history, especially modern history beginning with Gandhi, through the use of nonviolent responses as a way to confront evil. I recall a class I took in college (because I was honestly interested in the topic, and not because it was a required course) taught by Father Richard McSorley, a confidant to the Kennedys and an author of Peace Eyes He was among those who claimed that the nonviolent response can be very powerful and can, ultimately, be even more effective than that of violence. And so, I want to take a moment to recall some of the techniques that have been employed to peacefully bring about positive change in the world. Now an economist, I am most intrigued by the fact that many of these approaches have aspects of them that relate to economics.
One possible response to evil is to not financially support it economically. Gandhi suggested people not buy unjustly taxed salt from the British, but instead obtain salt from the ocean. Martin Luther King urged people walk and therefore to not ride segregated buses. As part of a general effort to not purchase goods produced by Southern plantations, some Northerners wore sweltering wool in the summer rather than purchase cotton grown by enslaved people. The ability to not financially participate in ways that benefit those whose behavior you wish to change is a very powerful tool in working to limit the ability of the powerful to perpetuate evil.
Another way to leverage the power of economics to change reprehensible behavior is to not work for an organization that is itself perpetuating evil. For workers in the for-profit sector, especially those with the option to do so, this may mean finding a workplace that promotes a climate that is consistent with one’s values. Alternatively, for those involved in the nonprofit sector, this may mean reducing donations of time or money to such organizations. Today, the word “whistleblowing” is used to describe an employee who acts in such a way as to be true to their own conscience rather than to participate in an employment-related activity that they perceive to be immoral. People who have taken on this role have played important roles in history, perhaps one of the most famous being the man often called “Deep Throat” from the Watergate era. Whenever someone chooses not to cross a picket line, they not only economically forfeit some potential purchasing power, but they also become part of the solution and help make things better for those who can’t speak for themselves. Indeed, one example of withholding “work” to bring about change is also found in the ancient play “Lysistrata” in which women withheld affection from the men in a “boycott” to end a war. Such an approach might not work as well, however, if the behavior one is trying to change is done by people who have promised to live celibate lives.
Of course, there is always the option of working directly for change. One such way is to work to bring about changes in laws, perhaps through legislative methods. Alternatively, one could work to bring about change from the inside of an organization. This was done by Catherine of Avignon, who successfully encouraged Pope Gregory to return to Rome. She did this in a day when women were not expected to speak up in such a manner. Not only did she stay around to work for change from within, she was eventually recognized as a saint in the very church that she influenced. Although some think of loyalty as simply repeating the positive things that leaders say about themselves, I believe that it is sometimes the ultimate form of loyalty to remain in an organization and to speak up as a member, rather than to quietly obey instructions that may perpetuate evil. However, this can be a difficult and frustrating approach; indeed, some would urge us to “remember what happened to most of the prophets.”
Another possiblitiy is to not follow rules and laws that are obviously wrong, as was done in the case of segregated lunch counters at Woolworth’s , by Rosa Parks, and Gandhi, among others. Ultimately, especially in large institutions, much of their power comes from the fact that so many people voluntarily submit to the authority of that institution. In the face of wrongdoing, it is up to the people to decide that their trust has been violated, and to act accordingly.
Speaking up for change can take many forms, perhaps the most recognizable being protest marches. The 1963 march for civil rights in Washington, D.C. helped usher in an era in which legal structures better promote the equality of all citizens. A recent march of millions of women to speak up about current politics eventually led to many more women running for public office than has been see in recent history. People taking to the streets in South Africa helped lead to a country that democratically elected leaders who had once been oppressed and imprisoned. And who can forget the image of a student bravely standing in front of an oncoming tank standing in front of a tank the 1989 protest in Tiananmen Square, China ?
I also believe that education is another important way to bring about change in the world, especially when what needs to be changed is behavior by those who hold authority in civil and sometimes religious structures. Knowing that a fellow driver can read and understand the letters on a red sign that says “STOP” is reassuring to all drivers. Extending this idea, it can be argued that education is a “public good”, and others possessing knowledge of why things that are wrong makes everyone better off.
Today, there is no “Norma Rae” standing in a factory holding a sign, but I have to believe that, in the end, the people of this world, including the members of some of our most revered institutions, ultimately hold the power to make sure that evil ends. And that it ends. right. now.

Comparative Advantage (or not)

Economics teaches us that we (and countries) should find skills that are our own comparative advantage and then focus on doing what we are good at, trading to get things that we would not be very good at producing. Such thinking concludes that, since I am pretty good at teaching Economics, I should do that, and then use my salary as a professor to buy things that I need that are produced by people with other skills. Sounds simple, right?
However, I found myself wondering about this theory recently as I steamed wallpaper almost as old as I am off the walls of a bathroom in our home. Surely, this was not the best use of my skills, or my graduate education! However, it made sense at the moment, as the “summer off” that teachers are supposed to get provided me with the time to take on the project, even if my checking account did not have enough in it to justify paying someone who would do the same job in a fraction of the time. So, wanting the ugly 1980s floral wallpaper to finally be gone from the bathroom, I borrowed a steamer and began scraping the paper off the walls, with plans of painting it soon. Yes, my family will do that ourselves, too.
The experience made me think of other tasks I have taken on that are certainly not my own “comparative advantage.” I am not a good cook, but so far nobody in my family has starved to death, even though my efforts to put food on the table each night often involve prepared foods or take-out. Recently, my co-authors on a new edition of a textbook realized that reprinting cartoons used in an earlier edition wound be much too expensive, and so I found myself drawing cartoons to match some economics jokes that they came up with. I think that everyone agreed I should not give up my day job, but the cartoons made the points they wanted to make, even if they were not as professional as the ones used in the previous edition. And I often laugh at myself when I fumble with pumping gas or run into a problem with checking out at a grocery store, knowing that there are obviously people who could do those jobs much better than I can.
But the task that made me most convinced that I was not qualified for a job was the experience of having a tiny baby put into my arms, who looked up at me with an expression of complete dependence. I know what it feels like to be good at something, and my efforts, especially my first efforts, to care for this tiny person definitely did not give me that feeling. Perhaps the classical economists would say that I should focus only on my own comparative advantage, but in the end, I continue to move forward with many tasks that I am not particularly good at, such as cooking for my family, stripping wallpaper to redecorate a bathroom or even parenting a baby who is now a teenager.
And so, I ask my readers, what are some tasks that you assume that are not necessarily your own “comparative advantage?”

Detours

Those of us who study Labor Economics like to think that decisions about human capital investment are made in a logical manner, when people compare the cost of education to the benefits (often, but not always, financial) that arise from such education. However, in looking back over my own life and in seeing the often nonlinear paths taken through life by many people I know, I realize that the “marginal this equals marginal that” approach to such decisions does not always represent the process actually undertaken by people as they make decisions about where they will focus the efforts of their lives.
As we celebrate the birthday of our country, I stumbled across an article an article (well, to be honest, I was caught by “clip bait” when I logged onto my computer) about what the founding fathers did before they signed their names to the Declaration of Independence, an act that gives us all a very long “weekend” this year, due to the fact that its anniversary falls in the middle of the week. As I scrolled through the names and the stories of what they had done before becoming part of the revolution, I was struck by the fact that while some of them had very “successful” lives before their involvement in the revolution, many did not. In fact, some might have been called “failures” had it not been for their later involvement in one of the most successful projects in human history.
As I am someone whose life has taken many non-linear turns, I was amused to hear that these men did not live lives that led them directly to acts that would assure that their names would be read on a computer over 200 years later. And, yes, they were all men who actually signed the document, even though their wives were, I am sure, strong forces that made the document possible. It almost certainly would not have been possible for the men to gather together to write the Declaration of Independence had they not had the support and encouragement of wives. Perhaps some of those wives brought them food and drink during the long days spent composing it, and almost certainly those wives cared for any children at home and kept up with daily chores. As is seen often in history, the acts that are remembered are only made possible by the support and labor of many whose names are not remembered.
Indeed, it would have been very possible for some of the signers’ names to have also been lost to history. As someone whose life did not take the path I expected, learning of this reassures me that such detours are not always the end of the story. I am amused to learn of a signer who is now described as an “incompetent tax collector” and another who survived several shipwrecks while another had several businesses fail and another actually vanished at a young age. There was the cousin of traitor Benedict Arnold, a college dropout and an indentured servant, as well as a smuggler. Reading the stories of the lives of these people whose bravery allow me to write this so many years later, I am humbled and assured that my own failures do not have to be the final word in the story of my own life.

I would like to wish my readers a very happy Fourth of July, and encourage us to recall, in this divided time in our history, all that there is on which we can agree. I suspect that people of all political persuasions appreciate the warmth of sunshine, the smile of a tiny baby, the smell of a barbecue, the taste of cool water on a humid day, and the sound of a babbling brook as we pause to relax. As much as there is that separates us, there is so much that unites us. Let us all join with those we love to appreciate our shared freedoms and hope in the future on this important day.