Harvard's Edward Glaeser has a good piece in a recent NY Times that looks how people's interaction is not forgotten by (financial) economists.
"Economists are not believers in the virtues of lone wolves. Economics should be seen as a discipline that has spent centuries chronicling the enormous gains that come from people connecting with each other. Ayn Rand’s heroes, like the architect Howard Roark, may have been distinguished by their lack of standard social connections. But the heroes of Adam Smith or Alfred Marshall or even Milton Friedman are not isolated.
From finance there are many many examples of this. Indeed all trade, momentum investing, studies that show competition matters, and even "location matters" studies all are testament to the acknowledgement that people do not operate in a vacuum.
Glaesner wraps up with:
"But the social nature of mankind — the fact that we depend on one another– helps make the case for the value of institutions like markets that help us work together. Fettering trade doesn’t respect the social nature of mankind; it works against it."
No comments:
Post a Comment