I am happy with our little book clubs, but they induce the wish to read more books than we actually read. Especially I have found it frustrating that we had to cut our economics studies short. I know some people have tried to read very large amounts in a very short time span like 12-24-36 hours. It is really demanding but most likely very rewarding.
Now I should like to try this on:
Carlin and Soskice (2014) Macroenomics: Institutions, Instability, And The Financial System – about 600 pages
Eric Smith and Harold Morowitz (2016): The Origin and Nature of Life on Earth.
I should like to start Friday morning 9AM and be done by Sunday 6PM.
We will start with the Origin of Life book and do it April 21st to 23rd.
Does somebody want to participate?? It is possible to do via Skype.
I suggest each day:
Read 100 pages
Write 1 page summary
Run 7 km
Read 100 pages
Write 1 page summary
Dinner – Sleep
Take Monday off. Maybe all week. Maybe quit academia.
We will also make a powerpoint presentation over the book, but maybe after the 3 days.
I originally wanted to suggest running a marathon, but realism made me suggest a ½ marathon in installments instead
The humanities book club is currently reading Noam Chomsky’s Aspects of the Theory of Syntax first published in 1965. The following is a summary written by Mathias Cronjäger of the first chapter:
The first chapter of Chomsky’s book sets the stage for the subsequent discussion in the three later chapters of the book. Whereas he will later go into more technical detail Chomsy here paints with a rather broad brush. This frustrated some members of the group who expressed a desire to see concrete examples and exact statements. In the chapter, Chomsky outlines what he means by grammar (a model of how an idealised speaker-listener processes language), and introduces a range of critical distinctions (such as linguistic performance versus linguistic competence). In terms of grammatical structures, he is keen to distinguish the surface structure of sentences (structural rules about how they are pronounced and expressed) from their deep structure (structural rules for how their semantic content is organized and how to interpret them). He gives a simple example of two English sentences (“I persuaded John to leave” and “I expected John to leave”) and proceeds to demonstrate that they have very different different deep structure in spite of their similar surface structure.
A further distinction made is between descriptive and explanatory theories of grammar. A descriptive account of language is just a set of rules for producing valid sentences in a language (a grammar), or a set of such, which reproduces the structure of a language in a manner that conforms to the linguistic intuitions of native speakers. An explanatory theory of language goes further by also assigning each grammar of a language a notion of “simplicity”, which accounts for what grammar gives the simplest account of a corpus of linguistic data. Such an explanatory theory is not just a theory of language structure, but also one of language acquisition. This is because such a theory can then explain why someone learning a language internalises one set of rules (the simpler ones) over another potential set of rules. The correct notion of “simplicity” in this context is therefore one that corresponds to how humans internally process language. After having introduced this notion of simplicity, Chomsky proceeds to spend a great deal of effort outlining why there is noting simple about determining which measure of simplicity actually accounts for how language acquisition works in humans.
This chapter also includes discussion of linguistic universals; a topic where Chomsky has strong opinions and with which he is often associated. He contrasts the empiricist position (that the only mental procedures universal to all language acquisition is our general capacity for inductive reasoning) with the rationalist position (that we are all born with some basic mental procedures specifically for acquiring and processing language). To put it mildly, Chomsky is not convinced by the arguments of the empiricists. The rationalist position holding true would imply the existence of universal properties that all languages posses: discovering and formalising these into a universal grammar is a project that motivates much of Chomsky’s theory-building. In particular, it is the reason why he is not content to just give an account of English or German language use: he wants to find structures that all languages share (being able to do so would also lend empirical support to the rationalist position).
Today we turned the last page on John Maynard Keynes: General Theory. It has been an extremely impenetrable book: There is hardly any data and the formulas that are there are very simple and not central to the main arguments. I hope to arrange that we can meet with an economist (Sophocles Mavroides) a couple weeks from now. We will each suggest 2 books for what to go through next. Since reading Keynes didn’t make me understand of the overall economy has not increased a lot, so I am keen to study a more modern work with both theory and data analysis. I myself went through 2 very large papers by Mavroides that he then explained to me, which was very rewarding for me. One was on identifiability of a set of dynamics models for macroeconomics and the second was on fitting the New Keynes Philips Curve [NKPC] to economic data for the last 60 years. The Philips Curve was originally an empirical observation of reciprocicity of the levels of inflation and employment. These papers contained much of what I missed in Keynes: Data and Theory.
However, my co-readers felt they had had Economics enough for now. I intend to suggest these two for next readings:
Jotun1: Noam Chomsky (1965) Aspects of the Theory of Syntax
Chomsky is a towering intellect and I read 1 longer 1955 grammar paper and it could be the best paper I have ever read. A larger summary of this theory would be very rewarding to read and it is about 200 pages.
Jotun2: I would not suggest a book but rather to go through 10 Nobel Lectures by key economists doing 2 lectures at each meeting. I recently read 3 2013 Nobel lectures in Chemistry by the Karplus, Levitt and Washell and they were an absolute ideal introduction to the history and problems of Molecular Dynamics. So now I suggest the same for economics and it could be these laurates: Friederich Hayek, Leonid Kantorovich, Paul Samuelson, Milton Friedman, John Nash, Daniel Kahneman, Paul Krugman, Scholes, Stieglitz and Amartya Sen. This could be done in 5 meetings lastting 3+ months.
In general this Book Should:
- Read things I would/could not have read otherwise.
and the actual books fall into 2 topics:
I. Current Affairs: Global Warming, Immigration Studies, What is Democracy, The Cause of Conflicts, Theories of Religion, Understanding the Economy, Conceptual Foundation of Political Ideologies, … I rather want to read 3-500 pages of good overview, than a lot of daily news
II. Real Classics: Spinoza, Kant, Hegel, Hume, Global Sacred texts,…
2. I think too long books takes too much time. Ideally 2-300 pages, max 500.
3. I think it is a good idea to put possible books in Dropbox so we can pre-view them before buying them.
This book club is an endeavour to broaden our horizons and critically engage with good writing from across the humanities. We intend to go through a book per term, and tend to meet roughly once every 3rd week to discuss new sections of whatever book we are currently going through. Past books that we have read include:
- The General Theory of Employment, Interest and Money, by John Maynard Keynes
- The Qurʼān – A New Annoteted Translation, by Arthur J. Droge
- On Politics, by Alan Ryan
- Capital in the Twenty-First Century, by Thomas Piketty
[Summary by Ulla S. Koch]
Chapter 10: The marginal propensity to consume and the multiplier
The MPC is based on the psychological assumption that tendency to increase/decrease consumption in sync with real income. MPC is defined as the change in comsumtion divided by the change in income. (If I earn an extra 100 kr and spend 80 – my MPC is 0.8). An increase in production means increase in income means increase in spending means increase in production etc. This benign circle gives the multiplier = 1/1-MPC in this example it would 1/0.2 = 5. So every extra kr. I earn generates 5 kr extra income in Denmark – if I only buy Danish stuff. Spending on imoprts adversely affects the multiplier effect.
MPC is subject to psychological and political influences, and is liable to decrease as incomes and employment levels rise.
In situations with underemployment the benificient effect of public works is largest, since the MPC and the multiplier at the margin is very large. If politics are against public invest ment, even burying bottles with money and leasing the right to excavate for them would have positive effect on employment. Gold mining and wars are example of private/public futile investments that fuel the economy. Building pyramids thus a paramount example of good public works, they do not “stale with abundance”. (Sounds like the mechanism of service economy?)
Chapter 11: The marginal efficiency of capital
Seems to me to be investment theory.
The marginal efficiency (MEC) is “equal to that rate of discount which would make the present value of the series of annuities given by the return expected from the capital asset during its life just equal to its supply.” I.e. the expected rate of profit. In other words, the marginal efficiency of a capital asset is the rate at which the prospective yield expected from one additional unit (marginal unit) of the asset must be discounted if it is just equal to the cost, that is, the supply price of that asset.
So, you invest, if the percentage you earn from an investment (calculating its present day value) is higher that what you would earn by the discount rate.
The MEC is the factor through which “the expectation of the future influences the present” through the demand price for surable equipment.
Chapter 12: The state of long-term expectations.
An excursion into psychology. MJK distinguishes between short-term (day to day, ch. 5) and long term expectations. He describes the function of the state of confidence, a psychological factor which influence investment. Cold calculation is not in itself enough to make people invest, without an element of gambling and pride of achievement no pyramids would be built. Historically, an investment was hard to reevaluate or change after being made. The introduction of the stock market changed that. The investment for the individual is based on reliance on the convention that changes are not drastic and that the future can be extrapolated from the present, with only minor, often foreseeable, changes. However, in the stock market investment is made by people who have no actual knowledge of the businesses they invest in, i.e. the general evaluation of prospects is unreliable. Stock markets are prey to ephemeral phenomena (e.g. ice in summer) which cause fluctuations, just as it is prey to moods (“psychology”), which means long term evaluation is unreliable.
JMK compares the expert trading the stock market with someone playing musical chairs. Or with a contest for picking the six pretiest faces, which does not entail choosing the ones you yourself fancy, but those you second guess others will. (Is there some element of game theory here? In effect this means no long term expectations?)
Speculation is forecasting the psychology of the market. Speculators invest not for “income”, but for a rise in popular evaluation of the investment – they are interested in what “average opinion expects average opinion to be”. Speculation is the evil of modern investment markets – an investment should have the permanency of a marriage. A cure for crisis of confidence would be to compel people to either consume or order production of specific capital asset.
MJK points out that our decision making is often based on “animal spirits” rather than calculation of quantitative probabilities (yup – cognitive illusions, Kahnemann). He advises the state take more responsibility for organising invest ment, since it has better information at its disposal.
(Note: Since I read the Gutenberg free PDF, my page numbers do not correspond to the printed edition used by the rest of the reading group)
[Summary by Jotun Hein]
It is 35 pages but again is not easy
Chapter 4 “The Choice of Units”
The chapter is quite imprecise but JMK has some amusing formulations like ”To say that net output today is greater, but prize level lower, than then years ago or one year ago, is a proposition of similar character to the statement that Queen Victoria was a better queen but not a happier woman than Queen Elizabeth – a proposition not without meaning and not without interest, but unsuitable for differential calculus”
Chapter 5 “Expectation as Determining Output and Employment”
Keynes presents a very common sensical argumentation for the importance of psychology in economics. He has a distinction between short-term and long-term expectation where the former that is clear, but again very hard to measure exactly.
Chapter 6 “The Definition of Income, Savings and Investment”
Clearly a major concern of the book is how to keep up consumption, but I what you earn but don’t consume is Saving or Investment, but I can’t see the difference between the two. I can see a difference between putting in the bank and under the madras but I am not sure it coincides with this distinction.
Appendix on User Cost
For an outsider it is hard to understand why there is so much contention about seemingly simple concepts. And I haven’t ready anything I would call ingenious. And the lack of mathematics surprises me. And few well chosen examples would really have helped the book. Today we could easily have made a few simulations but this book came out the same year as Turing’s most famous publication and that was not an option.
This book might be much clearer upon 2nd reading if I ever goet so far.
Next time is October 13th 5.30 PM UK time and we will meet at University College, Oxford and we will discuss chapters 7-9 (The Meaning of Savings and Investment + The Propensity to Consume I+II)
[Summary by Jotun Hein]
It is 37 pages in a very large font. In principle it should be easy but there was a lot of high level description of the Classical Theory that I didn’t understand too well. This seems like an ideal book for this kind of intense discussion groups and a lot of issues became clear as we went through the pages. I am sure even more would dawn upon us by reading it a send time. But it is also a very tough read where we read single sentences aloud for each other and had quite a discussion of them.
the general theory is 1 page and explains the word GENERAL and that his book is in contrast to CLASSICAL theory. I am surprised the JMK can describe it as one thing. Not that I know much about it, but there are Smith, Malthus, Richardo, Mills, Marx, Veblen, Marshall,….
The postulates of the classical theory is 19 pages and starts with 2 tenets that JMK says characterize the CLASSICAL:
“I. The wage is equal to the marginal product of labour
II. The utility of the wage when a given volume of labour is employed is equal to the marginal disutility of that amount of employment.”
We would like to have had 2 illustrations here, showing how this defined two equilibrium points. JMK asserts that CLASSICAL does not allow for involuntary unemployment, but does have frictional [due to a shift in production from say potatoes to bananas] and voluntary when a worker prefers not work since salary too low. I think JMK then show that certain empiricial consequences of I-II above [basically how the equlibrium point shifts] are generally violated.
There are lots of fun and interesting comments, like that Richardo asserted that political economy could make no statement about absolute level of production, but only about value distribution. An interesting discussion about value-wage versus money-wage. JMK uses a Prof. Pigiu to illustrate all that is wrong with CLASSICAL. JMK say the CLASSICAL are as foolish as a Euclidian Geometer that faced with non-Euclidian Geometry would yell at the lines for not be being parallel in the right way.
The principle of Effective Demand is 12 pages devoted to a preview of the whole book and the first simple equations appear. JMK defines aggregate supply and demand function defines a series of properties of the system. We were a bit tired at this point and i should read it again.
More enjoyable sentences like ” It could only live on furtively, below the surface, in the underworlds of Karl Marx, Silvio Gesell or Major Douglas.”
September 22nd time we take Book II [Definitions and Ideas] chapter 4-6 which is about 29 pages. I said we would be done by X-mas and somebody said that what the generals said in 1914 about WWI. But I hope this JMK wont last 4 years and have a similar loss of life.