conversableeconomist

I Want to Be Your Weak Tie

\”I want to be your weak tie.\” Sounds like a country music classic! But after posting at this blog for a little over three months now, I think it answers that question which sometimes came up on long-ago teenage dates: \”What do you want to be with me?\” As the academic year gets underway, it\’s perhaps worth saying what I hope to accomplish by doing this blog.

\”Weak ties,\” of course, refers to a classic paper by Mark Granovetter called \”The Strength of Weak Ties,\” published in May 1973 issue of the American Journal of Sociology and available at Granovetter\’s website. The original paper is only modestly technical, but for a quick summary of the argument, I\’ll offer Granovetter\’s own explanation in a 1983 paper in Sociological Theory, \”The Strength of Weak Ties: A Network Theory Revisited.\” Granovetter writes (parenthetical citations omitted):   

\”The overall social structural picture suggested by this argument can be seen by considering the situation of some arbitrarily selected individual-call him Ego. Ego will have a collection of close friends, most of whom are in touch with one another-a densely knit clump of social structure. Moreover, Ego will have a collection of acquaintances, few of whom know one another. Each of these acquaintances, however, is likely to have close friends in his own right and therefore to be enmeshed in a closely knit clump of social structure, but one different from Ego\’s. The weak tie between Ego and his acquaintance, therefore, becomes not merely a trivial acquaintance tie but rather a crucial bridge between the two densely knit clumps of close friends. To the
extent that the assertion of the previous paragraph is correct, these clumps would not, in fact, be connected to one another at all were it not for the existence of weak ties.

It follows, then, that individuals with few weak ties will be deprived of information from distant parts of the social system and will be confined to the provincial news and views of their close friends. This deprivation will not only insulate them from the latest ideas and fashions but may put them in a disadvantaged position in the labor market, where advancement can depend, as I have documented elsewhere (1974), on knowing about appropriate job openings at just the right time. Furthermore, such individuals may be difficult to organize or integrate into political movements of any kind, since membership in movements or goal-oriented organizations typically results from being recruited by friends. While members of one or two cliques may be efficiently recruited, the problem is that, without weak ties, any momentum generated in this way does not spread beyond the clique. As a result, most of the population will be untouched.

The macroscopic side of this communications argument is that social systems lacking in weak ties will be fragmented and incoherent. New ideas will spread slowly, scientific endeavors will be handicapped, and subgroups separated by race, ethnicity, geography, or other characteristics will have difficulty reaching a modus vivendi.\”

I\’m hoping that this blog will be a weak tie for a number of readers: that is, it will offer connections and information that are outside your usual network, and thus potentially more valuable. This blog is mostly a reaction to the question that might arise if you and I worked down the hall from each other, and on the way over to lunch or to pick up the mail, you asked me: \”Read any interesting comments or seen any interesting figures and tables lately?\”  In the blog, I\’ll typically mention an essay or report I\’ve seen, link to it, maybe quote a paragraph or two, and maybe put up a few figures or tables that seem interesting to me (in jpeg format, so they are easy to copy over to your own powerpoints if you wish). Sometimes I\’ll add a few thoughts of my own; sometimes not.

As I explain in the FAQ page on this website, I will try to serve as a bridge between what the philosopher David Hume labeled as the \”learned\” and the \”conversable\” world. In Hume\’s words, I will \”consider myself as a kind of resident or ambassador from the dominions of learning to those of conversation, and shall think it my constant duty to promote a good correspondence betwixt these two states, which have so great a dependence on each other.” I will avoid questions like: \”Have any opinions about what\’s in the headlines today?\” or \”Why is everyone who disagrees with me a big fat idiot?\” or \”What\’s my personal philosophy of life?\”

I\’m clearly not trying to be anyone\’s one-stop shop for economic news. I\’m only planning to post on work-days, and usually only once a day. In part, my goal with this blog is just to create a  system for myself of storing and categorizing the articles I run across so that I can find them again when I want them! But I also  hope  to build up a collection of information and figures and readings that may serve broader uses.  I hope that this note may encourage some readers new to the blog to surf back through postings over the past three months, because if you\’re interested in economics, almost every one of these posts is a potential port of entry to a broader subject area.

conversableeconomist

Bruce Yandle on environmental economics

David A. Price of the Richmond Fed has an interview with Bruce Yandle.

On the difference between a “systems approach” and a “process approach” to environmental policy issues: 
\”A systems approach is where the “brightest and best” get together and look at a problem and come up with
what they believe to be the best solution. They describe the system that can be installed that will lead to a solution of the problem and so it tends to be top-down.  In a process approach, you identify goals and outcomes, develop some rules of the game, and then let the process take hold, holding accountability with respect to outcome. You don’t tell people how to do things; you say this is the outcome that must be achieved, or it’s going to be costly for you.\”

On problems of transactions costs:
\”Transaction costs are large under either approach. The transaction costs are high in a technology-based

systems approach on the input side. The difficulty is no one is keeping score on the output side and we literally
have rivers that come close to dying, even though every discharger is meeting the requirements of the law. So you have a community of legal polluters killing a river. You can say we saved a lot of transaction costs. Well, I would say, “But you didn’t save the river!” Should we be concerned with transaction costs or outcomes? You do have a trade-off there.  I looked at the level of litigation under common law and statute law. We looked at the amount of litigation in the post-1970 world and the pre-1970 world and it looks like you get about the same amount of litigation with the statutes as you do at common law. It’s not an apples-to-apples comparison because all we’re looking at are counts of cases that are brought. Statute law generates a huge amount of litigation, and litigation costs are transaction costs in a way. That’s an important consideration, but I think the more important consideration is outcomes, and then to look, in some way, at the costs.\”

The start of the \”environmental saga\”:
\”From 1970 through last year, we had 2.5 million pages of the Federal Register published during that period; from 1940 to 1970, about 350,000. What I call the environmental saga begins in the United States in about
1970 and that’s when the world changes dramatically.\”

On  \”bootlegger and Baptist\” coalitions: 

\”That was the story of two groups who favor restrictions on the sale of alcoholic beverages on Sunday. The Baptists take the moral high ground; they would like to see a diminution in the consumption of alcoholic beverages. The bootlegger just wants to get rid of competition one day a week. I called it bootlegger and Baptists  for alliterative purposes. It could  have been called “bootlegger and Methodists” and you would have the same story. … I was working on the White House staff reviewing newly proposed regulations during the end of the Ford administration and the first part of the Carter administration, in a unit of the Council on Wage and Price Stability. My beat was the EPA. I reviewed the copper smelter standards. I would get their big regulatory bundles and review them, and we would make comments in an attempt to try to reduce the cost of accomplishing the goal. EPA had an excellent economic analysis. The last section said when this regulation becomes final, there will never be another copper smelter built in the United States of America. How would you feel if you had a copper smelter? You’d just been told you will never have any new competition.\”

For a short and readable recent article by Yandle, see my post of July 1 on \”The Accumulation of Regulations.\”