Sunday, November 26, 2006

Why Home Schooling is Controversial?

I have long been an advocate for parents to have the right to teach their children at home here in HK. In the US, and some other countries, it is legal for parents to teach their kids at home.

I am always curious why such a sensible policy seems so controversial to most people.

The basic rationale in support of homeshooling is this: nobody knows a kid better than his/her parents. QED.

I am not arguing for the banishment of traditional schools, I am arguing for a marginal change in educational system, to let parents have one more choice in seeking out the best education for their kids. And what's wrong with that?

On the supply side, for those with vested interests in the exisiting education system, I can see why they would oppose such a sensible policy. For an example, if you were a teacher at a public school, more kids being taught at home mean less students enrollment. That in turn means less funding and one might have to accept a pay cut someday.

Another reason for opposing home schooling came to my mind after I read this story in the New York Times. I call this the "I know your kid better than you do syndrome". Educational experts simply know, or think they know, how to teach other peoples' kids better than those kids' parents. This is certainly debatable.

From the demand side, the reason why parents may not want to teach their own kids (other factors being held constant, like their income, time availability, their educational level) at home also occured to me while reading the same NYT story. Peoples' innate fear to go about their own way without guidance. People simply want to be told what to do. This seems related to what Hayek has said in Fatal Conceit. That contemporary people still have that lingering longing to be led, part of the legacy we inherit to this day from the time when we live in a small community and individuals' decisions are made according to the directions of the wiseman in the group.

Thursday, November 23, 2006

Ben Bernanke in China

New York Times reported that Treasury Secretary Paul Paulson Jr. has enlisted Fed Chairman Ben Bernanke to join him in yet another trip to China next month.

The main goal of the trip is again to push (or is the word threaten more appropriate?) China to do something about the massive trade imbalances between the two countries. Certainly the value of Yuan would once again be the focus of discussion.

What would stengthen Paul's hand in negotiating with the Chinese is not the presence of Fed Chief Bernanke though. It is the fact that the Democrats have staged a comeback in eletions just completed. Paul could leverage on the fact that he needs to bring home concrete results in order to stop the Congress, now in the hands of the Democrats rather than controlled by the Republicans, from passing protectionist laws that might have harmful effects to China's exports i a bid to get concessions from his Chinese counterparts.

Will the Chinese be so easily bluffed? Stay tuned, we would find out in a month.

And here is the NYT story.

Tuesday, November 21, 2006

Monday, November 20, 2006

Robert Barro Right, Gary Becker Wrong, Can it be Real?

" In a 1973 workshop, I presented my paper, published in the 1974 Journal ofPolitical Economy, about Ricardian Equivalence for budget deficits. (In the model, taxesand budget deficits had equivalent economic effects, along the lines expressed by theclassical British economist David Ricardo. However, I should mention that no one in the1973 workshop noted the connection between my paper and Ricardo.)

This was the onlytime I witnessed a seminar attended simultaneously by the three great pillars of theChicago School—Milton, George Stigler, and Gary Becker. At one point, Gary and I gotinvolved in a heated dispute on a technical point in the paper. I recall Milton putting hishead down, deep in thought for at least a full minute, while the room was silent. Given Milton’s mental quickness, this prolonged deliberation was quite unusual, and there wasan atmosphere of thick tension in the room.

Finally, Milton lifted his head and declared,in an incredulous way, that Gary was wrong (a nearly unprecedented event) and that I was therefore right. For some reason, Gary lacks any recollection of this event."

Read on Bob Barro's recollection here, also make sure you scroll down to the very end of the paper where you will two extremely nice pics of M.F., one with him standing patiently waiting for his traffic ticket!

Thomas Sowell on M.F.

"Milton Friedman may well have been the most important economist of the 20th century, even if John Maynard Keynes was the most famous."

Tom Sowell on his teacher M.F. in WSJ.

Gary Becker on M.F.

"After my first class with him a half-century ago, I recognized that I was fortunate to have an extraordinary economist as a teacher. During that class he asked a question, and I shot up my hand and was called on to provide an answer. I still remember what he said, "That is no answer, for you are only restating the question in other words." I sat down humiliated, but I knew he was right."

That is Gary Becker writing about his first contact with his teacher M.F. Read it here.

Dick Posner's post is far more negative though, read it also.

Larry Summers on M.F.

"Milton Friedman and I probably never voted the same way in any election. To my mind, his thinking gave too little weight to considerations of social justice and was far too cynical about the capacity of collective action to make people better off. I believe that some of the great challenges we face today, like rising inequality and global climate change, require that the free market be tempered instead of venerated. And like any economist, I have my list of areas where I believe Mr. Friedman oversimplified or was simply wrong.

Nonetheless, like many others I feel that I have lost a hero — a man whose success demonstrates that great ideas convincingly advanced can change the lives of people around the world."

That is from a NYT oped written by Larry Summers, read the whole thing here.

Sunday, November 19, 2006

Origin of the Methodology of Positive Economics?

In an 1992 interview, as a digression while responding to a question on the Mont Pelerin Society, M.F. said:

"As an amusing footnote, one of the major benefits that I personally derived from the first meeting of the Mont Pelerin Society in 1947 was meeting Karl Popper and having an opportunity for some long discussions with him, not on economic policy at all, but on methodology in the social sciences and in the physical sciences. That conversation played a not negligible role in a later essay of mine, "The Methodology of Positive Economics," which has probably led to more pages of subsequent print by others than anything else I've written. It just shows how nature and science works in wondrous ways."

Read the interview here.

James Shikwatis versus Jeff Sachs

Mr. Shikwati, from Kenya, is now a conservative phenomenon.

"He has published scores of articles hailing business as Africa's salvation; offered free-market lectures on five continents; and, defying the zeitgeist of the Bono age, issued scathing attacks on foreign assistance, which he blames for Africa’s poverty. When Western countries pledged to double African aid last year, an interview with an angry Mr. Shikwati filled two pages of Der Spiegel, the German magazine.

“For God’s sake, please stop the aid!” he told the magazine."

That is from an excellent story in NYT on how ideas matter on the policy front. Read it here.

The line that I like best is :

“We have to stop looking for other people to save us. We need to look for ways to save ourselves.”

Wong Kai-wai story in the New York Times, yes, you read it right, NYT

"ON a SoHo film set last August, Jude Law and Norah Jones were getting intimate. Repeatedly intimate. To be precise, they had kissed upwards of 150 times in the past three days.

The occasion for this outbreak of passion was “My Blueberry Nights,” the first English-language film by Wong Kar-wai, the maverick Hong Kong director turned avatar of cosmopolitan cool. This particular night was stifling as the crew spilled out of Palacinka, a small cafe on Grand Street that was the principal New York location, preparing for yet another take of the scene known as “the Kiss.”"

Read the whole story here.

Now who said HK film industry is dying? Yes, there may be less locally produced firms. What happens is, in the age of globalization, a task (film-making) is sliced up into finer parts with each of them being made at the location best at doing it.

Other stuff, like clothing has long been produced that way. So if we are not worry about there are less locally made shirts or ties, there is also no reason to sweat over the dwindling number of locally made movies. What is interesting is to investigate what factors account for this new mode of production in the movie business. Is it financial innovation? Is it technological advancement? Or is it some sort of organizational change which makes coordiating the task of making a movie in many different places a far more manageable task?

Milton Friedman on Hong Kong (1998)

"According to the latest figures I have, per capita income in Hong Kong is almost identical with that in the United States.

That is close to incredible. Here we are—a country of 260 million people that stretches from sea to shining sea, with enormous resources, and a two-hundred-year background of more or less steady growth, supposedly the strongest and richest country in the world, and yet six million people living on a tiny spit of land with negligible resources manage to produce as high a per capita income. How come?"

The above is written by M.F. for the Hoover Digest back in 1998. Read the whole thing here.

With the HK government playing with the idea of introducing minimum wage, competition law and a host of other hand-out schemes, and formal abrogation of its long-held "positive non-intervention" economic philosophy, Friedman must be very upset and heart-broken when he wrote this shortly before his death.

Thursday, November 16, 2006

Thoughts on M.F.

Here's how David Friedman, son of M.F., remembers his father.

Chicago economist Austan Goolsbee wrote in the NYT:

"When we heard the news at the University of Chicago that he had died, we actually stopped arguing and were quiet for a moment. It was a most extraordinary event for Chicago economists. Each of us seemed to contemplate Mr. Friedman’s legacy for ourselves. After that bit of calm, the argument resumed.

It was, perhaps, just what the old man would have wanted."

Read the whole thing here.

Milton Friedman 1912 -- 2006

Milton Friedman, Champion of Freedom

Tuesday, November 07, 2006

The Chinese Economy

Barry Naughton at UCSD has done it again, after his 1995 "Growing Out of the Plan", he has offered us students of Chinese economy another comphrensive book entitled "The Chinese Economy".