Archive for January, 2007

Milton Friedman Day

Monday, January 29th, 2007

Max Sawicky on Milton Friedman:

Friedman’s impact of economic thinking is large in two connected, malignant ways. One is the idea that the economy is a self-regulating, self-correcting mechanism that works for the best when left alone. The second is that this state of affairs has an ethical foundation.

I shy away from most of the criticisms that Max endorses, but these three sentences are spot on. Paul Krugman’s look back at Friedman in the NY Review of Books is a must read. He is catching some criticism for his opening:

Until John Maynard Keynes published The General Theory of Employment, Interest, and Money in 1936, economics—at least in the English-speaking world—was completely dominated by free-market orthodoxy.

Check out this post on the History of Economics Society mailing list about the state of the discipline pre-Keynes. The thread is fascinating.

Update: Why do I shy away from the linked criticisms? Well actually, the only one that caught my eye was Dean Baker’s take on the natural rate hypothesis. Baker finds it worthless in its current formulation, but I think it’s an elegant model that fits the facts. I’ve read some of the other criticisms but I don’t feel like looking them over again…

One Laptop Per Child (OLPC)?

Friday, January 5th, 2007

There is a fever going around the open source community lately over the One Laptop Per Child project. For those who are not familiar, OLPC is a project to create and sell a $100 laptop to poor communities, for use by children. The story goes that by giving these kids access to first world technology, they will be better equipped for the electronic economy of the 21st century, or something like that.

Everything I read about OLPC is setting off warning bells. The techie in me worries about the design philosophy. In order to avoid paying fees to Microsoft, the laptop will run a custom built distribution of Linux with its own new interface. I have no confidence that the interface will be particularly good, and more importantly, the OLPC experience will have little relation to that of a “real” computer. We don’t need new paradigms; we don’t need to reinvent the wheel because we have a scheme to save the world.

Even worse, the project has been milking its strange new interface for publicity — they apparently think it is an asset! Thankfully, Microsoft has gotten Windows CE to run on the laptop, which is a promising development, and I imagine some of the countries that purchase the laptop will opt to have WinCE preinstalled instead of the Linux distribution.

The more fundamental problem with OLPC is the notion that one road out of poverty for poor nations is giving children cheap access to technology. I can understand why people who love computers would feel that everyone should have a computer, but come on. Education is enormously important to economic growth and poverty reduction, but the countries which moved into sustained economic growth did not do so by giving students laptops! (How do I know? Because many of these countries experienced a shift in growth before laptops existed: see South Korea, Taiwan, Thailand, etc.)

If rich countries really want to help, they should consider much more carefully what poor countries need. Is it laptops? Last I checked, careful studies had shown medical interventions to be quite effective in increasing school attendance and even aptitude (kids who are sick when they are very young tend to do worse in school when they are older.) Are there any studies showing that laptops in schools increase aptitude? Are there any studies about laptops in schools in poor countries, at all?

It is noble to want to help the poor, but if we are going to devote a limited amount of resources to help, then we should make sure to maximize the benefit the poor receive from those resources. By this metric, OLPC fails miserably. It is a very nice but fundamentally flawed idea. If it does fail, I just hope that people aren’t discouraged from helping out in general.