My Kind of Liberal March 30, 2009
Posted by David in Personal stuff, Politics, Reflections.Tags: Don Boudreaux
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I came across an outstanding passage about what true liberalism should be about, although it’s not necessarily true of people who like to call themselves “liberals.” The following excerpt is from “I am a Liberal,” a blog post by Don Boudreaux, who is Professor of Economics at George Mason University:
“[T]he world is bigger than economics; economics does not explain everything. Human values are among the values that matter far beyond gains from trade and economic efficiency. … One of the great tenets of liberalism — the true sort of liberalism, not the dirigiste ignorance that today, in English-speaking countries, flatters itself unjustifiably with that term — is that no human being is less worthy just because he or she is outside of a particular group. Any randomly chosen stranger from Cairo or Cancun has as much claim on my sympathies and my respect and my regard as does any randomly chosen person from Charlottesville or Chicago. … For the true liberal, the human race is the human race. The struggle is to cast off as much as possible primitive sentiments about “us” being different from “them.” … [T]he liberal points out, as occasions permit, that what matters is that people be free to associate as much as possible as they voluntarily choose without being constrained by culture or force to associate on different terms with foreigners than with fellow citizens.”
I think this passage is downright inspiring. I also think that Boudreaux has pinpointed the source of why I – and I hope many others – came to the conclusion that illiberalism — whether it calls itself cultural conservatism, social engineering, or communism — is incompatible with most of the things that are inspiring about the world, such as individual integrity, tolerance, a cosmopolitan outlook, or peaceful interactions with anonymous others.
The quotation does however allude to a dilemma for modern democracies. Such states are usually based on accidents of birth or heritage, and are not very representative of the small — but rapidly growing — number of people whose interpersonal networks and location trajectories pay no regard to political boundaries. Nor does it take into account that most people affected by certain policies — such as the foreign policy of the United States — have no influence on the outcome of the elections that in the end determine whether policy x or y will prevail. And unfortunately, a lot of people seem to accept the fiction that it is natural and desirable for the link between, say, Boston and Anchorage to be stronger and more “patriotic” than the link between, say, Detroit and Windsor or Copenhagen and Malmo. Fortunately, markets, science, and civil society are eroding the “nation-centeredness” of social life to some extent. But will these countervailing pressures be enough to set us free from nationalism, patriotism, and ethnocentricity?
Can Asia Inspire the West? March 30, 2009
Posted by David in Economics, Personal stuff.add a comment
I’m contributing a book chapter to a forthcoming book entitled “Current Issues in Economic Integration: Can Asia Inspire the West?”. The book is currently being edited by Bernadette Andreosso-O’Callaghan and Bruna Zolin. My chapter is about the effects of high-speed rail accessibility on house prices in Taiwan. I don’t know if that can “inspire the west,” but perhaps indirectly it can. So far, the estimates imply that high population densities, high incomes, and a substantial portion of the labor force in knowledge services contribute to make high-speed rail potentially viable. Now, if it really is the best use of scarce resources is impossible to say, but at least we can say that an East Asian spatial structure is better suited to high-speed rail investments than a European structure (let alone a North American structure).
These are the chapter headings (with authors) for the new edited volume:
Introduction: The Current Economic Crisis and Economic Integration (Bernadette Andreosso-O-Callaghan and Bruna Zolin)
Part 1: Current Macroeconomic Issues
Inflation or Deflation: What Next? (Dino Martellato)
Economic Crisis: What are the Scenarios for the Chinese Economy and Currency? (John Ryan)
The Rise and Fall of “Chimerica”: China and the Collapse of the American Model (Guilhem Fabre)
The Impact of de facto Trade Integration in Eastern Asia on Exchange Rate Policies (Francoise Nicolas)
Land, Biofuels, and Food Security: Another “Impossible” Trinity Theorem? (Bernadette Andreosso-O’Callaghan and Bruna Zolin)
Part 2: Firm and Industry Level Issues
The Future of Family Business in Japan (Bruno Amann and Jacques Jaussaud)
Indian Multinationals: Which Competitive Advantages? (Giovanni Balcet)
Strategies of MNEs and the Chinese Institutional Response (Michael von Wuntsch)
A Critical Assessment of the “Equipment Hypothesis” – The Case of the Die and Moldmaking Industry in Ireland and Japan (Tomoko Oikawa)
Policy Support for SMEs – China and Europe (Esmeralda Gassie and Ju Hu)
High-speed Rail Accessibility and House Prices – Hedonic Estimates from Two Taiwanese Regions (David Emanuel Andersson and Oliver F. Shyr)
Conclusion – Can Asia Inspire the “West”? (Bernadette Andreosso-O’Callaghan and Bruna Zolin)
I would expect the book to be available “at a library near you” in 2010.
My Workplace (NSYSU) March 23, 2009
Posted by David in Life in Taiwan, Personal stuff.Tags: Kaohsiung, National Sun Yat-sen University, Taiwan
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Lots of visitors remark that our campus is unusually attractive, being surrounded as it is by forested hills and the sea. We even have our own “university beach.” A picture of the beach:
Here is another picture that shows some NSYSU buildings in front:
And finally, here is a view from within the campus:
My Jonkoping and JIBS connections March 22, 2009
Posted by David in Economics, Personal stuff.Tags: Daniel Wiberg, JIBS, Jonkoping, Per-Olof Bjuggren
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I spend most of my time in southern Taiwan, but when I’m not here you would be more likely to find me in Jonkoping, Sweden, than anywhere else. There are several reasons for this; my parents live there, my son goes to school there, and the European cost of living makes me avoid places where I have to stay at hotels and eat out (unless I’m fully funded).
Now, my family connections would be sufficient to ensure my recurrent visits. But there is also JIBS – Jonkoping International Business School – which is an excellent resource. It happens to be our Swedish partner university; I’ve taught a total of 5 JIBS students at NSYSU. And it has one of the best economics departments in northern Europe, with a focus on empirical research in entrepreneurship, institutions, and regional economics.
This month, my school is hosting a visit by two JIBS economists, Daniel Wiberg and Anders Hogberg. They have been lecturing on Swedish economic history and Swedish financial institutions. From their lectures I learned that the largest Swedish firms have been engaging in systematic overinvestments over the past several decades (they use a method called marginal Q analysis). They also showed that all of the largest 50 firms were founded before 1970, and that a distinction between closely held A shares and openly traded B shares have enabled the leading business dynasties to endure for several generations (An A share is associated with 10 times as many votes as a B share). According to Daniel Wiberg, the empire-building of Sweden’s “financial nobility” have crowded out entrepreneurship and the service sector. More surprisingly, this has been a deliberate effect of the taxation policies and subsidy programs perpetrated by a succession of Social Democrat governments. In effect, the Social Democrats instituted corporatism in Sweden – powerful families such as the Wallenbergs were given various “empire-building” advantages in exchange for acquiescing in the government’s redistribution of incomes. There is thus a tiny group of very wealthy captains of industry at the top, and a large majority of people with roughly the same after-tax incomes working either in the public sector or for old multinational manufacturing corporations such as Ericsson, Atlas Copco, Electrolux etc. Two holding companies – controlled by the Wallenberg family and a major bank, respectively – control more than 60% of total market capitalization on the Stockholm Stock Exchange. Wiberg’s conclusion is that the collusion between Sweden’s Social Democrats and the leading business empires have reduced opportunities for entrepreneurship and Schumpeterian creative destruction, resulting in an ossified industrial structure and lower economic growth after World War II. Interesting stuff.
Both Daniel Wiberg and Anders Hogberg are associated with Per-Olof Bjuggren, one of the leading Swedish economists with an interest in law and economics and new institutional economics. Now at least three of the faculty – and several Ph.D. students – at JIBS are engaged in institutional research. Per-Olof studied with Armen Alchian and Harold Demsetz in the 1970s, and has recently been collaborating with Oliver Williamson and Dennis Mueller.
JIBS also offers students a truly outstanding library (at least from my point of view). Not only has it won architectural prizes, it is also Scandinavia’s leading library for both entrepreneurship theory and entrepreneurship studies. In fact, it’s the only library I have been to where I can count on finding books that are unavailable in even the best of Taiwan’s libraries (because of that library, I’ve had the opportunity to spend my summer break reading books by little known but highly readable economists such as Emily Chamlee-Wright or Virgil Storr).
So, all in all, I feel very privileged to divide my time between sweltering Kaohsiung and crisp Jonkoping.
My Only Comment on the Economic Crisis March 10, 2009
Posted by David in Economics, Personal stuff.Tags: Roger Koppl
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I don’t think it has escaped anyone’s attention that the current economic crisis is the topic for bloggers at present. I have for this and other reasons avoided long disquisitions on the stimulus package, business cycles etc. The other main reason is that I’m not primarily intersted in macroeconomic problems. This does however not imply that I have no opinions about it. I have both a theoretical understanding and a self-centered opinion.
My theoretical understanding is shaped by the most persuasive account that I have encountered; it is Roger Koppl’s theory of the interplay of institutions and expectations and how it impacts macroeconomic phenomena such as currency rates and stock market indices. But I have not written or done any empirical research in this field. Thus, while I believe more in Koppl’s account than in alternative theories, I’m not as confident in my beliefs as I am in fields to which I have devoted substantial amounts of time.
My narrowly self-centered judgment of the crisis is that it is good. Of course, this is an insensitive thing to say when so many people have recently lost their jobs. So from an altruistic point of view I don’t enjoy the crisis. Nevertheless, for college faculty in Taiwan the crisis is good news: fixed salaries, falling prices, and increasing demand for education (controlling for countervailing demographic variables).
This is also the reason why academics should avoid boom towns. In fact, the best choice is probably a good university in the rural part of a lagging region that is mired in a deep depression. The only exception is for people who are more interested in private-sector consulting than in their actual job description – in that case, aim for a dynamic metropolis in a booming economy.
Hedonic Prices March 6, 2009
Posted by David in Economics.Tags: HSR, Taiwan
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This is a map of Taiwan’s high-speed railroad (HSR). The colored areas correspond to those seven metropolitan areas that are served by HSR stations. The HSR was opened in 2007, and has reduced the travel time from Kaohsiung (Zuoying station) to Taipei from 4 to 1.5 hours.
In one of the research projects that I’m involved in, we’re attempting to estimate the effect of HSR station accessibility on residential property prices. We use hedonic price estimation, which is an econometric technique for decomposing real estate prices into several separate attribute effects, including both location attributes – such as HSR accessibility – and conventional structural attributes such as the characteristics of the house itself (e.g. lot size and floor area).
We have completed our estimations of the Tainan and Hsinchu metropolitan areas, and are now collecting data or estimating hedonic price functions for the Taoyuan, Taichung, Chiayi, and Kaohsiung metropolitan areas. So far, the results seem more conclusive – in the sense of effects that are both substantial and significant – for the regions between Taipei and Taichung.
The research group consists of myself and transportation specialist Oliver Shyr in the Department of Urban Planning, NCKU, as well as three master’s degree students.
Recently, we have extended our hedonic price studies to other effects of infrastructure-related accessibility. Among other things, we’re looking at the effects of a freeway tunnel in the northeastern county of Yilan, and at the effects of the new transit system in Kaohsiung. A graduate student at NSYSU, Zoltan Kettinger, has also joined our endeavor with the aim of comparing transit accessibility effects in Kaohsiung and Budapest.
Hedonic price estimation was my first specialization. It was the topic of my Ph.D. dissertation, which compared monocentric and polycentric specifications of the condominium market in Singapore (the monocentric specification performed better). The interesting thing about hedonic price studies is that they also give indications of cultural differences between different parts of the world. For example, Europeans and North Americans tend to place a greater valuation on space and waterfront locations than Asians. Asians, meanwhile, seem to favor downtown locations to a much greater extent.
