Wednesday, October 06, 2004
Good News
"The divorce between an interest in the psychological and cultural foundations of economic life and an interest in the consequences of economic interaction has been a peculiar feature of professional economics during the second half of the twentieth century ..." So writes Paul Seabright (p. 100) in The Company of Strangers: A Natural History of Economic Life. Many fine authors, including Seabright and Deepak Lal and Paul Rubin and others, have been working hard to reconcile the fields.Geography and selection (nothing succeeds like success) can safely be taken as exogenous (Jared Diamond). It then becomes possible to say interesting things about how endogenous genetics, psychology and political economy interact.
Through history, groups coalesce, organize, and hill-climb, often to gain local optima. Local optima may be precarious and eventually give way -- sometimes, at great cost, including wars, revolutions and oppressions.
So, good news and bad news. But perhaps the bottom line is the following: " ... across the world, the average risk of violence faced by the world's citizens is almost as low as it has even been in our history" (p. 246). May it last.
Monday, October 04, 2004
Futures Markets Everywhere
Futurists, soothsayers and plain old forecasters may have finally had it. We can now see the advent and spread of futures markets for almost any event for which enough betters can be found. One firm (www.newsfutures.com) now licenses the software whereby we can each create our own site to mediate bets on almost any forecast.There will soon be enough such markets that arbitrage between them becomes attractive -- which will, in turn, make each of them a better source of information.
Hitch markets to broadband and good things happen. The more prescient get financial rewards and everyone else, including those on the sidelines, get to see the light sooner rather than later.
