Top 100 books review & non winners' curse for economists

The Guardian has just published online an list of the top 100 non-fiction books, which its staff has compiled. While the books in it are thoroughly intriguing, and worth taking a sabbatical in one's job to read them, economics, the "dismal science" as Paul Krugman puts it in a book, has no entry.

To fill this gap, I thought I'd think about some titles, and email them to the Guardian, curiosly waiting for their reply.

The Theory of Moral Sentiments by Adam Smith

The Great Crash, 1929 by John K. Galbraith

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven Levitt and Stephen J. Dubner

The Accidental Theorist: And Other Dispatches from the Dismal Science by Paul Krugman

I bet that I have forgotten some, hence hat tips are welcome!

Screws and bolts: the Italian prime minister and the opposition

In the latest issue of The Economist, an article is about the Italian prime minister Silvio Berlusconi . It starts with the following title: The man who screwed an entire country .


The articles describes the reasons why the prime minister is deemed unfit for office in Italy, an opinion that The Economist has put forward since 2001, and its consequences for the country. In 2003 the magazine also posed the prime minister 6 questions about the determinants of his past achievements as entrepreneur. Such question offer useful information to also assess why the entrepreneur turned to politics.


While the analysis in all such articles is accurate, its focus is 100% on the government coalition, rather than also on the opposition, thus omitting information that helps to explain the long survival in office of the controversial Italian entrepreneur, who firstly ran for elections in 1994.

In short, the reason why the centre-left parties or coalition party have only managed to win over Berlusconi, and the centre-right coalition party,  twice in elections is the lack of pragmatic focus on the ingredients to win democratic elections. One needs 50.1% of consensus by voters to buy a party and its candidate prime minister the right to rule a country. Sounds rather easy, hey!

However, adverse selection of member of parliaments and party leaders, the tendency by politicians to preserve (in)direct control over the public administration and firms in (little) competitive markets, and shifting the balance towards "political engineering", rather a balance of this and also grassroots politics, leave too little time for a busy candidate standing against Silvio Berlusconi in elections to also focus on counting the votes that one would get in exchange for pragmatic ideas that are spelled out simply, and tend to buy votes!

This problem leads to a double consequence for both end of the political spectrum in Italy: the centre-left coalition struggles to find a candidate that can deliver in elections, and instead focuses on little constructive criticism of the opponents. As per the centre-right coalition, it heavily depends on the entrepreneur-politician Silvio Berlusconi. Voters in the country face a similar problem to an agency problem in their support to either of party in a simplified 2-party system, and in delegating his preferences over what (not) do to in a country.

Voters are principals in their rights as citizens to delegate to a politician, who may or may not put all the effort in winning elections. Easier shortcuts than winning 50.1% of votes include quarrelling with colleagues over abstract ideas and plans (see Peoples' Front of Judea in Monty Python's Life of Brian !) The delegation problem is made even more difficult by the fact that the tasks that a politician carries out to win votes and elections are multidimensional in nature: competing with other politicians, campaigning by talking to households, firms or lobbyists, media coverage, considering alternative jobs to politics, fending corruption attempts, etc.  A way to describe this in words is that delegation is multidimensional in nature (see this link for a similar example that applies to managers in the private sector). This makes the game sound less easy, hey!

rain in Spain and England sunland: Bermuda high!

"London at 24C (75F) will be comfortably hotter this weekend than Barcelona at 16C and Corfu at 17C" (source: http://www.guardian.co.uk/uk/2011/apr/21/weather-spain-uk-sizzle )

Why? Check the intuition behind the Bermuda high, or Azores high, a weather phenomenon that "manufactures" good and bad weather in the Middle of the Atlantic, to then distribute it to the East Coast in the USA, as well as to Europe.

Happy Bermuda High Easter!

Piolets d'or: vertical sailing in Greenland!

An expedition of Belgian climbers in Greenland has been awarded the 2011 Piolets d'or, a prestigious prize for climbers succeeding in opening geographically remote and otherwise unknown climbing routes. 

Beyond their climbing skills, the  the recipients of the prize attract the attention as their expedition used a sailing boat as a base camp in Greenland.

In addition, the climbers carry musical instruments in their backpacks. According to them, music is very helpful to cope with such psychological challenges in climbing as forced bivacs on a mountain wall due to bad weather conditions.

Will the 2012 edition of the Piolets d'or perhaps focus its attention on horizonal climbing!?

Dan Neil reviews Fiat's 500 in the WSJ

A recent review by Dan Neil in the WSJ is about the new Fiat 500 car: "the 500 makes the SLK look like Brock Lesnar", how flattery!

An earlier version of that car was originally planned and designed in the 1950s in Mirafiori, the first production plant by Fiat in Torino.

Sixty years later, a 21st century make of the same car shoots across the pond to challenge the US car market, one with little fuel efficient for European standards, but also solid cars for long-distance driving. Surprises in both markets may come in the next decade, also thanks to the partnership between Chrysler and Fiat.


The old Fiat 500 has become a symbol of the post World War II economic boom in Italy. Inter alia, this led the management of Fiat to make migration of workers to Torino attractive to keep up with demand for cars, as well as mailing job offers to entires classes of students completing high school diplomas in technology subjects, one of whom was my dad!

The CEO Sergio Marchionne has so far seized the opportunity of jointly exploiting Fiat expertise with that of colleagues at Chrysler, as well as reminding Rawlsian-type union leaders in Italy that unions need to innovate, beyond playing nostalgic revolutionary songs, to win workers' votes. Will he be so canny to tweak the "500 and economic boom" correlation into causation!?

20 years of Linux: long life to the penguin!

In 1991 Linus Torvalds released the first Linux kernel.

20 years later millions of desktop and server computers worldwide run open source operating system (see interview with Jim Zemlin, Executive Director of the Linux foundation). Without Linus, and the GNU project by Richard_Stallman, such computers may now process information far slower and less efficiently.

Recently, the apparent challenge that open source technology posed to the studies of intellectual property has been reconciled by documenting the following insights:

1) competition in the open source industry works similarly to any other market as ownership is limited to the product rather than to the general idea;

2) Open source software is a similar institution to a "local anti-trust" in the market for operating systems.

This may challenge Schumpeterian entrepreneurs and antitrust authorities, who after some pondering perhaps, will join me in wishing Linux Happy birthday!

A puncture in my tyre: Keynes, Smith and GDP in the UK

I've just fixed my bike, after the second suspicious puncture in the back wheel tyre. Suspicious as it occurs at night: romance, chance, or more likely cheap financing, as per recently surveyed by the Guardian?

Adam Smith wrote about the needle factory in 1776, perhaps similar sharp objects hit my wheels tonight. Just a coincidence or is a new Industrial revolution, the 3rd to date, forthcoming!?

I got my wheels punctured twice in less than three years:  you need to be street-smart and bike-street-smart in London!

If active bike thieves keep punching tyres at a sustained pace, how many bikes will they reap by so doing? How much money to bike shops, and any unintended actions there!? Enough to revive stagnating domestic demand (for tyres) in the UK? Would John Keynes agree on similar reasoning, and Mr Cameron?