Wednesday, September 9, 2009

Creating your own economy with Becker

I often start, but don't finish good books. This probably happens for one out of every three books I start to read. For example, I started (but did not finish) The Life of Pi, Catch 22, The Hobbit, Homage to Catalonia, and Gang Leader for a Day. And even though I stopped reading those books, I really enjoyed reading the parts of those books that I actually read.

Why do I bring up this nasty habit? I am afraid that it is happening again.

I started, but probably won't finish, Create Your Own Economy by Tyler Cowen (of Marginal Revolution fame). I read the first three chapters, which puts me on page 65 of 228. I have really enjoyed the book so far, but other cultural bits are demanding the use of my time, and I found that the narrative in the book is being told in other places. I'll probably take up Cowen's narrative in those other places.

So, what's in the book that I am not going to finish?

The big idea behind Create Your Own Economy is that our chaotic world -- filled with Google, Blackberries, iPhones, netbooks, Twitter, Facebook, IM, and e-mail -- is a product of our own choices. We choose to be bombarded with a firehose-stream of information because we can take the little bits of our chaotic world and weave together beautiful narratives. In other words, we use the little cultural bits as inputs to "create our own economy."

It's a beautiful way to look at apparent chaos. It really resonates with the way I browse the Internet, use Facebook and Twitter, and check my e-mail.

For me, Cowen was re-telling a narrative I have seen developing in my own surfing of the web. But, it is also a re-telling of my favorite economic model, Becker's household production model (which I applied here). In Becker's model, households produce their own commodities, using both goods inputs and time inputs. Households do this with every commodity they consume.

Applying Becker to Cowen's setting, a "balanced musical experience" is a commodity that households produce using an iPod, some time to enjoy the music, some time to find the music and organize it, and perhaps some digital copies of the music. The fact that we see people "creating their own economy," is an artifact of the technological improvements that make mixing and remixing tiny cultural bits much easier.

That's precisely the point Cowen makes, but as nearly as I can tell in the first three chapters, he does so without reference to Becker's clear and simple way of thinking about the problem. So, I'll definitely continue my Create Your Own Economy narrative, and I may return to Chapter 4.

This morning, I will probably listen to Cowen's EconTalk podcast, then head over to the Becker-Posner blog, and maybe watch some Jon Stewart. And, if you don't like my information stream, don't judge me. I'm just creating my economy. Go create your own.


  1. Way to go. You have a beautiful wife and if you miss out on spending time with her for this your life would be missing something very valuable.

    I do want to thank you for the comments we traded a while back. Reminds me that I could use some free ice cream, but I don't want to stand in line. :)

    I haven't studied economics formally in 30 years. I enjoy the subject and have recently started auditing a Ph. D. level course which has really got my mind going again. I have a BS in finance and or economics. They let me choose what to call it but had to pick one and only one. I picked finance, but earned better grades in economics.

    I want to get more into the arena of economics ideas. I tend to see things differently than it appears most economists do. I think I can make a contribution, but really don't know where to start hence auditing the class. I guess that is a start, but would you have any other suggestions? Where to be around economists? Where to write or submit writing? I do read econ blogs and other literature most notably Greg Mankiw which is how I found you. I am open to other suggestions. The reason I ask you is I like your approach to discussing the subjects we traded comments on and I need to start asking around and, well you're first. No big deal if you have no thoughts on this rambling request. I look forward to reading your entries to come.



  2. Thanks, Fletch. I appreciate the support.

    If you want to get into more economics, I see several options for you (depending on your preferences).

    First, the best place to find economists is an economics department. If you want to hang around them, you're doing the right thing by auditing (and/or taking) economics courses.

    Second, in addition to taking courses at your local economics department, you may want to take a job in an economics department (if you don't already have another job). If you're worried that you need a PhD, Econ departments don't just hire professors. They need research assistants, too. And, if you make a favorable impression in the classes you take, that could lead to actually working at an econ department.

    Third, if you really would like to have people engage your ideas, you may like to start a blog. If you have thick skin, it is a nice way to subject your point of view on economics to scrutiny, even by the random web surfer.

    Lastly, keep following economics blogs. To save you some search time, here is a list of blogs I like to read

    Greg Mankiw's blog (
    Marginal Revolution (
    Economists Do It With Models (
    Cafe Hayek (
    Becker-Posner (
    Cheap Talk (
    Mark Thoma's blog (
    Paul Krugman (

    I don't exactly agree with all of them (especially the last two on the value of UChicago economics), but I think my reading list provides a nice spectrum of interesting topics.

    With reference to Cowen's Create Your Own Economy, this list is part of my own internal economy, so you may not enjoy everything on the reading list. Then again, you might and I hope you do.

    Thanks again for all of your comments. I hope to trade comments with you in the future.


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