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The list of 9 over simplified points is not what I'd expect from somebody with Dr. Cowen's background. When I first read the blog I thought, "Really, is some 2

The list of 9 over simplified points is not what I'd expect from somebody with Dr. Cowen's background. When I first read the blog I thought, "Really, is some 20 something programmer questioning Grove, cute." I don't agree with everything Grove has to say either but to dismiss things without analysis is not justified either. I'll pick on point #3 about "scale, scale, scale". Cowen states that Germany does not have the scale of the USA and is a big exporting success. Germany does have scale in the luxury auto market. See: http://blog.polk.com/blog/new-vehicle-sales/0/0/audi-outpaces-luxury-rivals-in-early-2010 http://blog.polk.com/blog/new-vehicle-sales/0/0/audi-outpace... Germany also has scale in many other industries it chooses to compete in. I'd like to have a more in depth discussion with him on Grove's essay. He should at least give it the same amount of analysis and thought that Grove did. This blog post does not do it justice.

gojomo 16y ago
A bullet list of reactions/avenues-for-consideration is often Cowen's style. I appreciate the conciseness. Grove has given this subject more words, not more analysis and thought. And Grove's words are the same as from economic debates of decades ago. That's the real reason that Cowen is parsimonious with his response. Cowen concludes with: Grove is writing from a time warp in which these debates never happened or never were settled or never something -- I don't know what.
- SkyMarshal 16y ago
  1. Decades is not a long enough time period to know anything in Econ with certainty. 2. Even if it were, the global economy is a highly complex system, subject to change. What was right decades ago may not be today. 3. Economics has a pretty dismal recent record. Most of the theorists coughKrugmancough completely missed the buildup to the biggest economic event in recent history, the financial crisis. Rather it was the historians like Rogoff & Reinhardt, crisis-experts like Roubini, and shrewd business people and money managers (who make their living putting their money where there mouth is) who foresaw it. Not the theorists. There are a host of problems with the field of economics, from physics envy to sociology of science, that critics like Taleb and Wilmott have exposing. The field's understanding and credibility is highly suspect. Grove knows what works, and has proven that his way actually does create jobs. And his point about scale enabling additional innovation beyond the original concept is exactly right. What has Cowen done but get good grades and write about it?
  - gojomo 16y ago
    Grove knows how to build a near-monopoly in a single capital-intensive industry with giant returns to scale (and occasional government favors). I wouldn't necessarily trust him with tax policy, trade policy, international relations, or anything related to small or service businesses. I would not want any more of the economy dominated by Intel-like enterprises (funded by investments from his giant government-run 'scaling fund'). And, if you really want jobs in a particular favored strategic industry, shouldn't you penalize scale -- force multiple redundant companies to operate below optimal scale? Sure, you're penalizing the rest of the economy, burning more resources than necessary for a given level of production, but you do get more people employed in your chosen industry. Just like Grove wants to penalize Asia and world living standards, to reserve for domestic manufacturers a protected market. No, thanks.
  - deleted 16y ago
    [deleted]
    - jbellis 16y ago
      Cowen isn't the kind of partisan that Krugman portrays in his op eds. (For that matter, I doubt Krugman really is, either.) Some quickly googled examples of Cowen agreeing with or praising Krugman: http://www.marginalrevolution.com/marginalrevolution/2010/04/krugman-on-austrian-business-cycle-theory.html http://www.marginalrevolution.com/marginalrevolution/2010/04... http://www.marginalrevolution.com/marginalrevolution/2008/12/paul-krugmans-nobel-lecture-and-slides.html http://www.marginalrevolution.com/marginalrevolution/2008/12... http://www.marginalrevolution.com/marginalrevolution/2006/03/paul_krugman_on.html http://www.marginalrevolution.com/marginalrevolution/2006/03... Many more examples can be found of partial agreement, e.g. http://www.marginalrevolution.com/marginalrevolution/2009/02/paul-krugmans-response.html http://www.marginalrevolution.com/marginalrevolution/2009/02... and http://www.marginalrevolution.com/marginalrevolution/2006/03/krugmans_introd.html http://www.marginalrevolution.com/marginalrevolution/2006/03...
    - gojomo 16y ago
      Grouping Krugman and Cowen isn't so bad; they're both professional economists, academics, and popularizers, though Krugman is more activist/hyper-partisan. It's where SkyMarshal equates Cowen's professorial objections to Andy Grove with Glenn-Beck-ish punditry -- another nearby comment -- that I think he really goes off the rails.
SkyMarshal 16y ago
Agreed, that was something I'd expect to see from a Glen Beck-ish type pundit. Another problem is that the econ profession is too informed by and reliant on theory. We know from past history that Grove's prescription (everything but the tarriffs part at least) works. The jury is still out on the economic theories that have guided the nation's industrial policy for the past ~20 years. They may have given us lots of cheap stuff faster than we would otherwise have gotten to these price points, but at the cost of a hollowed manufacturing sector and a massive cash outflow. It is far from clear yet whether those tradeoffs were worth it, yet the Econ profession acts as if the question is settled. It isn't.

gojomo 16y ago

A bullet list of reactions/avenues-for-consideration is often Cowen's style. I appreciate the conciseness. Grove has given this subject more words, not more analysis and thought. And Grove's words are the same as from economic debates of decades ago. That's the real reason that Cowen is parsimonious with his response. Cowen concludes with: Grove is writing from a time warp in which these debates never happened or never were settled or never something -- I don't know what.

SkyMarshal 16y ago
1. Decades is not a long enough time period to know anything in Econ with certainty. 2. Even if it were, the global economy is a highly complex system, subject to change. What was right decades ago may not be today. 3. Economics has a pretty dismal recent record. Most of the theorists coughKrugmancough completely missed the buildup to the biggest economic event in recent history, the financial crisis. Rather it was the historians like Rogoff & Reinhardt, crisis-experts like Roubini, and shrewd business people and money managers (who make their living putting their money where there mouth is) who foresaw it. Not the theorists. There are a host of problems with the field of economics, from physics envy to sociology of science, that critics like Taleb and Wilmott have exposing. The field's understanding and credibility is highly suspect. Grove knows what works, and has proven that his way actually does create jobs. And his point about scale enabling additional innovation beyond the original concept is exactly right. What has Cowen done but get good grades and write about it?
- gojomo 16y ago
  Grove knows how to build a near-monopoly in a single capital-intensive industry with giant returns to scale (and occasional government favors). I wouldn't necessarily trust him with tax policy, trade policy, international relations, or anything related to small or service businesses. I would not want any more of the economy dominated by Intel-like enterprises (funded by investments from his giant government-run 'scaling fund'). And, if you really want jobs in a particular favored strategic industry, shouldn't you penalize scale -- force multiple redundant companies to operate below optimal scale? Sure, you're penalizing the rest of the economy, burning more resources than necessary for a given level of production, but you do get more people employed in your chosen industry. Just like Grove wants to penalize Asia and world living standards, to reserve for domestic manufacturers a protected market. No, thanks.
- deleted 16y ago
  [deleted]
  - jbellis 16y ago
    Cowen isn't the kind of partisan that Krugman portrays in his op eds. (For that matter, I doubt Krugman really is, either.) Some quickly googled examples of Cowen agreeing with or praising Krugman: http://www.marginalrevolution.com/marginalrevolution/2010/04/krugman-on-austrian-business-cycle-theory.html http://www.marginalrevolution.com/marginalrevolution/2010/04... http://www.marginalrevolution.com/marginalrevolution/2008/12/paul-krugmans-nobel-lecture-and-slides.html http://www.marginalrevolution.com/marginalrevolution/2008/12... http://www.marginalrevolution.com/marginalrevolution/2006/03/paul_krugman_on.html http://www.marginalrevolution.com/marginalrevolution/2006/03... Many more examples can be found of partial agreement, e.g. http://www.marginalrevolution.com/marginalrevolution/2009/02/paul-krugmans-response.html http://www.marginalrevolution.com/marginalrevolution/2009/02... and http://www.marginalrevolution.com/marginalrevolution/2006/03/krugmans_introd.html http://www.marginalrevolution.com/marginalrevolution/2006/03...
  - gojomo 16y ago
    Grouping Krugman and Cowen isn't so bad; they're both professional economists, academics, and popularizers, though Krugman is more activist/hyper-partisan. It's where SkyMarshal equates Cowen's professorial objections to Andy Grove with Glenn-Beck-ish punditry -- another nearby comment -- that I think he really goes off the rails.

SkyMarshal 16y ago

Agreed, that was something I'd expect to see from a Glen Beck-ish type pundit. Another problem is that the econ profession is too informed by and reliant on theory. We know from past history that Grove's prescription (everything but the tarriffs part at least) works. The jury is still out on the economic theories that have guided the nation's industrial policy for the past ~20 years. They may have given us lots of cheap stuff faster than we would otherwise have gotten to these price points, but at the cost of a hollowed manufacturing sector and a massive cash outflow. It is far from clear yet whether those tradeoffs were worth it, yet the Econ profession acts as if the question is settled. It isn't.