By Scott E. Page
Essay by author via Harvard Business Review
Without models, making sense of data is hard. Data helps describe reality, albeit imperfectly. On its own, though, data can’t recommend one decision over another. If you notice that your best-performing teams are also your most diverse, that may be interesting. But to turn that data point into insight, you need to plug it into some model of the world — for instance, you may hypothesize that having a greater variety of perspectives on a team leads to better decision-making. Your hypothesis represents a model of the world.
Though single models can perform well, ensembles of models work even better. That is why the best thinkers, the most accurate predictors, and the most effective design teams use ensembles of models. They are what I call, many-model thinkers.
By David Colander and Craig Freedman
Summary via publisher (Princeton University Press)
Milton Friedman once predicted that advances in scientific economics would resolve debates about whether raising the minimum wage is good policy. Decades later, Friedman’s prediction has not come true. In Where Economics Went Wrong, David Colander and Craig Freedman argue that it never will. Why? Because economic policy, when done correctly, is an art and a craft. It is not, and cannot be, a science. The authors explain why classical liberal economists understood this essential difference, why modern economists abandoned it, and why now is the time for the profession to return to its classical liberal roots. Carefully distinguishing policy from science and theory, classical liberal economists emphasized values and context, treating economic policy analysis as a moral science where a dialogue of sensibilities and judgments allowed for the same scientific basis to arrive at a variety of policy recommendations. Using the University of Chicago—one of the last bastions of classical liberal economics—as a case study, Colander and Freedman examine how both the MIT and Chicago variants of modern economics eschewed classical liberalism in their attempt to make economic policy analysis a science.
By Jonathan Tepper
Interview with author via Bloomberg TV
Jonathan Tepper, Variant Perception founder and chief editor, discusses his new book, “The Myth of Capitalism: Monopolies and the Death of Competition.” He says that the economy is quantitatively less competitive than it used to be. Tepper also points out that industries are becoming increasingly more concentrated. He speaks on “Bloomberg Markets: What’d You Miss?”
● The Signs Were There: The clues for investors that a company
is heading for a fall
By Tim Steer
Review via Investment Week
The former manager of the long/short UK Growth fund at Artemis, which had around £750m in assets when he retired from the firm in 2015, criticises fund managers, auditors and regulators alike for failing to spot rogue numbers in annual reports as he adds more emphasis should be put on training fund managers up on reading accounts.
In his book, which is released on 27 November and carries the strapline ‘the clues for investors that a company is heading for a fall’, Steer details ten ‘share price disaster scenarios’ and provides 22 examples of ‘catastrophic’ share price falls, many of which he shorted throughout his fund management career.
● Insane Mode: How Elon Musk’s Tesla Sparked an Electric Revolution to End the Age of Oil
By Hamish McKenzie
Summary via publisher (Dutton)
Hamish McKenzie tells how a Silicon Valley start-up’s wild dream came true. Tesla is a car company that stood up against not only the might of the government-backed Detroit car manufacturers but also the massive power of Big Oil and its benefactors, the infamous Koch brothers… As McKenzie’s rigorously reported account shows, Tesla has triggered frenzied competition from newcomers and traditional automakers alike, but it retains an edge because of its expansive infrastructure and the stupendous battery factory it built in the Nevada desert. The popularity of electric cars is growing around the world, especially in China, and McKenzie interviews little-known titans who have the money and the market access to power a global electric car revolution quickly and decisively.
● Aquinas and the Market: Toward a Humane Economy
By Mary L. Hirschfeld
Summary via publisher (Harvard University Press)
Economists and theologians usually inhabit different intellectual worlds. Economists investigate the workings of markets and tend to set ethical questions aside. Theologians, anxious to take up concerns raised by market outcomes, often dismiss economics and lose insights into the influence of market incentives on individual behavior. Mary L. Hirschfeld, who was a professor of economics for fifteen years before training as a theologian, seeks to bridge these two fields in this innovative work about economics and the thought of St. Thomas Aquinas. According to Hirschfeld, an economics rooted in Thomistic thought integrates many of the insights of economists with a larger view of the good life, and gives us critical purchase on the ethical shortcomings of modern capitalism. In a Thomistic approach, she writes, ethics and economics cannot be reconciled if we begin with narrow questions about fair wages or the acceptability of usury. Rather, we must begin with an understanding of how economic life serves human happiness. The key point is that material wealth is an instrumental good, valuable only to the extent that it allows people to flourish.
