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Petty’s “Taxes and Contributions” PDF

Petty’s “Taxes and Contributions” PDF

I have generated an easy-to-read PDF of William Petty’s Taxes and Contributions. You can download it here.

Hard copies of the book, comprising poor photocopies of older editions, make difficult work on the eyes. This edition is typeset as a modern document. I did write a script to generate it though, so it’s likely that there are some errors in there. Please let me know if you find any.

Due credit to the nice people from McMaster University who transcribed the plain-text copy.

A Danger to the Men?

A Danger to the Men?

Most employees in Ireland are women. This fact does not imply that most workers are women, because men have a higher rate of self-employment. Nonetheless, most employees in Ireland are women.

Note that the male and female paths pre- and post-2008 are almost parallel, but there was a huge shift in the composition of the labour force in 2008-2009.

(Title of the post refers to this book.)

Petty on a poor people and wasted country

Petty on a poor people and wasted country

“Ireland is a place which must have so great an Army kept up in it, as may make the Irish desist from doing themselves or the English harm by their future Rebellions. And this great Army must occasion great and heavy Leavies upon a poor people and wasted Countrey; it is therefore not amiss that Ireland should understand the nature and measure of Taxes and Contributions.”

— William Petty (1662), A Treatise of Taxes & Contributions

Olson on causality

Olson on causality

“Although we should not be satisfied with any theory that fails to explain a lot with a little, we need not of course expect any one theory to explain everything, or even the most important thing. Absolutely nothing in all of epistemology suggests that valid explanations should be monocausal. An explanation may be entirely valid, yet explain only a part (and even a small part) of the variation at issue. […]

Since no monocausal explanation is offered, one well-known test of validity is not applicable. It is often said in methodological discussions that every meaningful scientific theory must specify one or more possible events or observations, or experimental results, which would, if they occurred, refute the theory. This rule has no applicability to multicausal conceptions unless a perfect experiment is performed, or one so nearly perfect that we could be certain that it was the error in the theory rather than the flaw in the experiment that accounted for the result. In view of the limited possibilities for experiments in economics and other social sciences, the impossibility of controlled experiments on historical events, and the extreme improbability that nature or history will on its own provide anything resembling a perfect natural experiment, a search for a single decisive refutation is futile. I am told by some philosophers of science that even in the physical and natural sciences the rejection of theories usually occurs not because of a single negative experiment, but more often from a series of anomalous observations combined with the emergence of a better alternative theory. What we should demand of a theory or hypothesis, then, is that it be clear about what observations would increase the probability that it was false and what observations would tend to increase the probability that there was some truth in it.”

— Mancur Olson (1982) – writing before the profession’s focus on quasi-experimental empirical estimates – in “The Rise and Decline of Nations”.

Lagrange multiplier symbol code

Lagrange multiplier symbol code

Economists often denote a Lagrangian maximization problem with a scripted L. Unless you exert a little bit of effort, this looks poorly when produced by LaTeX. The code below allows you to easily typeset the symbol in a larger font-size.

The code creates four new commands: \lagrange1, \lagrange2, \lagrange3, and \lagrange4. They produce the “Lagrangian L” with increasing size.

\documentclass{article}

\usepackage{relsize}
\usepackage{mathrsfs}
\usepackage{xstring}

\newcommand{\lagrange}[1]{\IfEqCase{#1}{{1}{\mathscr{L}}{2}{\mathlarger{\mathscr{L}}}{3}{\mathlarger{\mathlarger{\mathscr{L}}}}{4}{\mathlarger{\mathlarger{\mathlarger{\mathscr{L}}}}}}}

\begin{document}
$$ \lagrange1 $$
$$ \lagrange2 $$
$$ \lagrange3 $$
$$ \lagrange4 $$
\end{document}
Pigou on learning economics

Pigou on learning economics

“I would add one word for any student beginning economic study who may be discouraged by the severity of the effort which the study, as he will find it exemplified here, seems to require of him. The complicated analyses which economists endeavour to carry through are not mere gymnastic. They are instruments for the bettering of human life. The misery and squalor that surround us, the injurious luxury of some wealthy families, the terrible uncertainty overshadowing many families of the poor—these are evils too plain to be ignored. By the knowledge that our science seeks it is possible that they may be restrained. Out of the darkness light! To search for it is the task, to find it perhaps the prize, which the ‘dismal science of Political Economy’ offers to those who face its discipline.”

– Arthur Pigou, November 1928

Leibenstein on prediction and explanation

Leibenstein on prediction and explanation

“Predictive capacity without explanatory capacity is worthless. Mere clairvoyance, irrespective of its sharpness, does not itself have scientific standing. Only predictive capacity that arises out of having coherent and communicable explanations has scientific standing. The power to predict is subsidiary to the power to explain. Explanation without prediction is sufficient, but prediction without explanation is of no consequence from a scientific standpoint.

— Harvey Leibenstein (1966), in “Beyond Economic Man”.

Fitting tables to the width of a page

Fitting tables to the width of a page

Ever have the problem of Stata regression output being a little too wide? Worry no more.

I use Ben Jann’s excellent esttab to export Stata regressions into LaTeX documents.

My only problem with esttab is that the tables can be too wide, i.e. wider than the width of the text in the PDF. So I made a few edits to esttab that automatically scale the tables to the text-width.

I have called this program estwide. You can download it here. As it is based on estout, Ben Jann should be considered a co-author. Click here to see an example of its effect. (If you wish to replicate the above example, you can download the associated do-file here and the TeX file here.)

To use estwide:
1. Make sure estout is installed. To do this, in Stata type ssc inst estout, replace
2. Save estwide.ado to the same folder that estout is now installed in. You can check the folder by typing which estout
3. Restart Stata.
4. Rather than exporting your tables using the esttab command, simply replace esttab with estwide, e.g. estwide using hello.tex, style(tex) replace
5. Make sure you have both the adjustbox and booktabs LaTeX packages installed.
6. Make sure you have called both of these packages up by including \usepackage{booktabs} and \usepackage{adjustbox} in the header of your LaTeX file.
7. Include your tables as normal. You can copy and paste the output into your TeX file, or have the tables update automatically when you make changes by using \input{myfilename}.

VN-M motivating strategic interaction

VN-M motivating strategic interaction

“Consider now a participant in a social exchange economy. His problem has, of course, many elements in common with a [Robinson Crusoe] maximum problem. But it also contains some, very essential, elements of an entirely different nature. He too tries to obtain an optimum result. But in order to achieve this, he must enter into relations of exchange with others. If two or more persons exchange goods with each other, then the result for each one will depend in general not merely upon his own actions but on those of the others as well. Thus each participant attempts to maximize a function (his above-mentioned “results”) of which he does not control all variables. This is certainly no maximum problem, but a peculiar and disconcerting mixture of several conflicting maximum problems. Every participant is guided by another principle and neither determines all variables which affect his interest.

This kind of problem is nowhere dealt with in classical mathematics. We emphasize at the risk of being pedantic that this is no conditional maximum problem, no problem of the calculus of variations, of functional analysis, etc. It arises in full clarity, even in the most “elementary” situations, e.g. when all variables can assume only a finite number of values.

A particularly striking expression of the population misunderstanding about the pseudo-maximum problem is the famous statement according to which the purpose of the social effort is the “greatest possible good for the greatest possible number.” A guiding principle cannot be formulated by the requirement of maximizing two (or more) functions at once.

Such a principle, taken literally, is self-contradictory. (In general one function will have no maximum where the other function has one.) It is no better than saying, e.g., that a firm should obtain maximum prices at maximum turnover, or a maximum revenue at minimum outlay. If some order of importance of these principles or some weighted average is meant, this should be stated. However, in the situation of the participants in a social economy nothing of that sort is intended, but all maxima are desired at once–by various participants.

[…] Sometimes some of these interests run more or less parallel–then we are nearer to a simple maximum problem. But they can just as well be opposed. The general theory must cover all these possibilities, all intermediary stages, and all their combinations.”

— Von Neumann and Morgenstern (1944) — prior to Arrow-Debreu — on the “peculiar and disconcerting” properties of general equilibrium, on the motivation of game theory, and on political rhetoric.