Category Archives: economic sociology

Back of the envelope math for internalizing costs.

Colleague sent me this article about renewable energy costs.

Check out this article from today’s New York Times, page B1!

Reminded me of this problem that has been bugging me for awhile…

It always bugs me how the entrenched interests hold up the cost piece when nuclear and oil have huge externalized costs.
For nuclear, the s government developed the technology (manhattan project) and GAVE it to the industry so they would produce plutonium as a by product of energy.  SOmethling 20+billion in today’s dollars.
Meanwhile, some portion of our US military budget is for protecting global oil supply.  It would be complicated, but imagine if some portion of it were factored into price at the pump.  US military budget was like $500 billion last year.  in 2013 we used 135 billion gallons of gasoline.  If 10% of us military is for oil supplies, then that is $50 billion, about $0.25 per gallon….
Ok, I am procrastinating…

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Filed under economic sociology, economics, sociology

Nodes and Notes (I’ve Died and Gone to Heaven)

So, a Senior, who took my “Six Degrees” foundation seminar many years ago is a dancer.  She tells me she is choreographing a piece that will link the idea of connectedness and thresholds into a dance piece in March.

Specifically, she wants to express the idea that the little things we do can spread and ripple out across the world, a world bound up by far-flung networks that still have short paths.  She didn’t quite say that, but that is where she was headed.  Like, not “just the six degree effect” she said.

I’ve died and gone to heaven.  This is the perfect intersection of my love for music and for netcentric thinking.

Of course, I immediately thought of the great John Guare play, Six Degrees of Separation.  (Yeah Wendy West for directing it back at Carleton!).

She is interested in spoken word OR music.  I started an RDIO playlist of ideas.  I’ll add more.
And of course, I’ll be sure to ask the good folks at SOCNET, still the lifeblood of much netcentric talk and thought.

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Filed under Bucknell, digital culture, economic sociology, Network Society, Networks

Labor Day Thoughts

This post is mostly for my students (and myself)  since the unyieldingess of the academic calendar means we are in class on labor day.

I know as a kid growing up with two professional, salaried parents, I had no concept of labor day aside from that three day weekend.  I wonder how many of my students have a similarly hazy and immaterial understanding of the “labor” part of labor day.

So, how is the state of our workforce?  Not good. 

Official unemployment is at 9.7%.

This number of course, due to how it is measured (those actively looking for work in last four weeks).  That doe snot include discouraged workers, those who are marginally attached (would work more), or who have dropped out of the labor force.  This NY Times article nicely adds a human face to those categories.

They were left out of the latest unemployment rate, as they are every month: millions of hidden casualties of the Great Recession who are not counted in the rate because they have stopped looking for work.

And it has pictures!

This discouraged worker carpenter fills his time by cutting grass with clippers.

This discouraged worker carpenter fills his time by cutting grass with clippers.

The Bureau of Labor Statistics (BLS) has a very broad category to capture these various situations people find themselves in.  In August, the u6 measure, as it is known, came in at 16. 8 million. That was a 6 million increase over the year prior.  At 155 million in the labor force, that is an unemployment rate of 10.8%.  Throw in the number of people dropping out of the labor force all together, and you can  add another % point to get to an unemployment rate of around 12%.

Over at CalculatedRisk, the following chart captures the way that unemployment is steeper (big drop) and longer (more time to recover) than most recent recessions.  In short, this is a whole new world and historical analogies are rough at best.

Click to enlarge.

Well, there are bound to be bumps when you unleash the creative, destructive forces of capitalism, some might say.  Overall, we do better if we take the long view.

This is not a jobless recovery, it is a  jobless economy.  The amount of job growth since 200o is essentially zero. This graph shows that the ten year change in private employment is almost zero.

Edit

UPDATE: Here is a small glimmer of good news.  While labor-managemment, or labor unions in general, are usually seen in pretty negative terms, I am happy to share this little list of organizations acorss sectors that are successful and rely on collaborative organizaed labor partnerships.

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Filed under Business, economic sociology, economics, Political Economy

0% almost never appears in public polls

The National Economy
No Americans say that the national economy is getting better, 13% say it is staying the same, and 82% say the national economy is getting worse.

National economy

Getting better

Staying the same

Getting worse

Undecided

Sep 2008 13% 82% 5%
Aug 2008 18% 19% 60% 3%
Jul 2008 3% 20% 76% 1%

You almost never see 0% in public polls. They must not have any BOA executives, gold stock holders, or other speculators who bet the right way in their poll.  Or maybe those folks see that their immediate gain comes with the risk of financial downturn for all?

And Bush’s approval is down to 19% among RVs in the same poll.  That has to be some kind of record?

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Filed under economic sociology, economics, macroeconomics

Discussion from Socnet on Organizing and Networks

Here is Blyden Potts’ response to a socnet query bout who first started refering to organizations as networks…

It seems to me that asking the question the way your friend does
misunderstands the nature of the issue.
Social organization means patterns of social relations, and any pattern of
social relations is — or at least can be understood as — a social network.
Social networks are not a “fundamental form” of social organization, they
are a way of conceptualizing any and all social organization.

If your friend’s desire is to argue that people are organized in social
networks no reference to any literature would seem to be needed. It is
essentially tautological to say that people are organized in social
networks, a bit like saying the weather is organized meteorologically, and
if it really needs to be demonstrated then why not ground it directly in
empirical examples? The “new era” discovery of social network research was
not finding a new way in which people were organized. It was in finding a
new way to conceptualize and analyze whatever ways people are organized.

I think your friend would do well to reframe his approach from understanding
social networks as a type of organization, which it is not, to understand
social networks as a way of thinking about social organization, which it is.

And I would think Barnes would be a good example of an early work that lays
the foundation for the network way of thinking about social relations:

“Each person is, as it were, in touch with a number of other people, some of
whom are directly in touch with each other and some of whom are not…. I
find it convenient to talk of a social field of this kind as a network.* The
image I have is of a set of points some of which are joined by lines. The
points of the image are people, or sometimes groups, and the lines indicate
which people interact with each other. We can of course think of the whole
of social life as generating a network of this kind. For our present
purposes, however, I want to consider, roughly speaking, that part of the
total network that is left behind when we remove the groupings and chains of
interaction which belong strictly to the territorial and industrial systems.
… what is left is largely, though not exclusively, a network of ties of
kinship, friendship, and neighborhood. This network runs across the whole of
society and does not stop at the parish boundary.”  (p.43)

*Barnes’ footnote for “network” makes clear he is talking about an “image”
and “convention” for depicting social relations, not some particular KIND of
social relation.

Blyden Potts

Its a great quotation to have of Barnes.

I thought Simmel did some early conceptual framing… but i never got around to reading Simmel.  :<)

Barry Wellman’s original query:

Continue reading

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Filed under economic sociology, Networks, Scholars, Social Networks, social theory

Can’t Grasp Credit Crisis? Join the Club

A good and brief description of how the housing boom, deregulation,  CDOs, and market ideology led us into this mess…

Can’t Grasp Credit Crisis? Join the Club – New York Times
Because these loans go to people stretching to afford a house, they come with higher interest rates — even if they’re disguised by low initial rates — and thus higher returns. The mortgages were then sliced into pieces and bundled into investments, often known as collateralized debt obligations, or C.D.O.’s (a term that appeared in this newspaper only three times before 2005, but almost every week since last summer). Once bundled, different types of mortgages could be sold to different groups of investors.

Investors then goosed their returns through leverage, the oldest strategy around. They made $100 million bets with only $1 million of their own money and $99 million in debt. If the value of the investment rose to just $101 million, the investors would double their money. Home buyers did the same thing, by putting little money down on new houses, notes Mark Zandi of Moody’s Economy.com. The Fed under Alan Greenspan helped make it all possible, sharply reducing interest rates, to prevent a double-dip recession after the technology bust of 2000, and then keeping them low for several years.

All these investments, of course, were highly risky. Higher returns almost always come with greater risk. But people — by “people,” I’m referring here to Mr. Greenspan, Mr. Bernanke, the top executives of almost every Wall Street firm and a majority of American homeowners — decided that the usual rules didn’t apply because home prices nationwide had never fallen before. Based on that idea, prices rose ever higher — so high, says Robert Barbera of ITG, an investment firm, that they were destined to fall. It was a self-defeating prophecy.

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Filed under economic sociology, economics, policy, Political Economy

Lessig talk on ‘hybrid economy’ March 27 || Bucknell University

I am encouraging all of my former Capstone (“Rise of the Network Society”) students to attend this one.   Lessig is an important voice discussing the pratcical and poitical implications of the overalps between technology, culture, law, and also politics.

As the press release states, Professor Eric Faden, who is bringing Lessig, is a client due to his creation of A Fair(y) Use Tale which explore issues of copyright protection.

Looks good!  Hope you can make it!

News: Lessig talk on ‘hybrid economy’ March 27 || Bucknell University
Lawrence Lessig, the renowned copyright and intellectual property rights author and Stanford Law School professor, will present a talk titled, “Remix — Making Art and Commerce Thrive in the Hybrid Economy,” on Thursday, March 27, at 7 p.m. in Bucknell University’s Trout Auditorium.

The talk is free and open to the public.

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Filed under Creativity, digital culture, economic sociology, Government, policy, Political Economy, Scholars, technology

Facing Default, Some Walk Out on New Homes

This NYT article caught my attention as a nice example of economic sociology.  The gist of it, captured in the quotation below, is about the shift in attitudes and practices around home buying and ownership in the US.   Traditionally home ownership is promoted by government policy and cultural norms because it is a means of encouraging personal savings, it boosts household credit ratings, and it improves neighborhoods by creating more local buy-in.  However, When those laudable goals merged with the world of financial innovation, deregulation, and a rise in a particular portfolio thinking world view, we end up with a new set of attitudes and behaviors about home ownership.  less than a Jimmy Stewart, feel-good, iron clad agreement between bank and homeowner, home ownership is a more fluid, transient financial deal that can be done or undone depending on the individual valuations of the players involved.  Home-ownership is one more liquid and negotiable financial arrangement, like owning stock, buying futures, or being paid in stock options.

Facing Default, Some Walk Out on New Homes – New York Times
You Walk Away is a small sign of broad changes in the way many Americans look at housing. In an era in which new types of loans allowed many home buyers to move in with little or no down payment, and to cash out any equity by refinancing, the meaning of   and foreclosure have changed, economists and housing experts say.

As the article points out, this change is made clearer by the foreclosure bulge (upswing?  crisis?  not sure which term is the most objective).  As Todd Sinai, a professor at Wharton, points out, the very loans that made the housing market balloon set the stage for people to walk away.  many marginal home buyers shifted from being renters to nominally owners.  What actually happened is that they started renting from the bank with the chance to won if the value of the home increased faster than their repayment obligations.  If it doesn’t, quite rationally, they walk away from a mortgage that costs more than the underlying value of the house.  For the purchaser, he says, its a Heads-I-win-tails-you-lose situation.

Of  course, banks could sue in some states, but what bank is going to sue someone who can’t afford the mortgage?  Seems like a bit of poetic justice to me.

The article also focuses on You Walk Away, a company that somehow (I don’t get the business model) makes a profit on people walking out.  There seems to be  another interesting tension over the knitting  together of economic and moral realities.  Traditional auxiliaries to the home buying process don’t want to encourage people to walk away due to the embedded assumption that home ownership is indisputable social good.  Jon Maddux, one of the owners of You Walk Away responds:

“It’s not a moral decision,” Mr. Maddux said of foreclosure. “The moral decision is, ‘I need to pay my kids’ health insurance or my car payment so I can get to work.’ They made a bad decision, but they shouldn’t make more bad ones just because they have this loan.”

Mr. Zulueta said he felt he had let down the lender, himself, and his family.

“But you got to move on,” he said. “I know in a few years my credit’s going to be fine. If I want to get another house, it’s going to be there. I’m not the only one who went through this. I know I’m working the system, but you got to do what you got to do. There’s always loopholes.”

Zulueta is one of the homeowners who Walks Away (is that trade-marked?  haha).

His line of reasoning seems good to me.  The financial and home buying industries ravaged the marginal home buyers and waved their magic wands of financial innovation to off load the debt to other financial players.  The unraveling of a social compact around home buying started among the banks and mortgage companies.  Seeing the writing on the wall, the home owners are following suit and treating a mortgage as one more financial arrangement and not a “marriage contract.”

My interest  in this was piqued by some work Jerry Davis is doing on “The Portfolio Society.”  So keep an eye peeled for that.

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Filed under Banking, economic sociology, innovation, macroeconomics, Political Economy

Professional Development Workshop Ideas (for any Management/Org Studies Conference)

Some professional email correspondence led me to brianstorm the kinds of PDWs I would like to see happen or participate in.

As I will never get around to all of these, here they are for the taking:

Ideas for AOM PDWs

– Collaborative knowledge tools for researchers (how to use blogs, wikis, podcasts, and so on).  My thinking was more about how to use them to support and advance research (as opposed to self-promotion, but that could fit too.)

– Qualitative and Mixed Method Network Analysis (Dvaid Obstfeld and I have kicked this around in passing).

– Network Analysis/Netcentric thinking for Org and Strategic Interventions.  At Sunbelt or AOM once David Krackhardt (And a few others) talked about this.  Could be OMT and ODC joint project and focus on more full cycle research (not just anecdotes).

– The “lost” theory of networks (Simmel, White, Econ Sociology, Complexity, Emirbayer): An attempt to push back on networks as all method no theory idea.  I don’t agree, but am  a little wary of opening a structuralist vs. individualist cat fight.  I mean, I like healthy disagreement, as opposed to paradigm policing.

– Using Web 2.0 to collect data:  I have been doing some research on SecondLife and other virtual worlds.  I have also wondered how to take advantage of facebook et al to get some network data.  So, this would be like sharing tips and tricks of the trade.  Also, discussing thorny issues of human subject review.  And privacy.   Maybe AOM could throw its weight around (ha ha) and get us a social network CEO to come and talk about corporate-research data sharing.

– Institutions, Organizations, and Networks: Common Ground and Common Agendas:  I feel like there is some sort of gap between institutional theory and network research.  or maybe its just niche proliferation, but i have been wondeirng why some sort of “grand synthesis” hasn’t been created (or maybe it has and I missed it out here in the wilds of Pennsylvania).

– Social Entrepreneurs and Networks.  Do the networks and network strategies of social entrpreneurs/innovators differ from the plain old “normal” ones?  Does the prima facie need to address a social concern and claim a higher moral authority effect how social entrepreneurs get things done?  Maybe a SIM, ENT, OMT, CMS joint project.

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Filed under conferences, economic sociology, organization studies, Orgs Stuff (theory, science, studies), Research, Scholars, Social Networks, virtual worlds

Market contagion

This will make economic sociologists of all of us.   Expand later…

A Crisis of Faith – New York Times
Today, we’re witnessing another kind of contagion, not so much across countries as across markets. Troubles that began a little over a year ago in an obscure corner of the financial system, BBB-minus subprime-mortgage-backed securities, have spread to corporate bonds, auto loans, credit cards and now — the latest casualty — student loans.

Indeed, this week the state of Michigan suspended a major student-loan program because of the sudden collapse of another $300 billion market you’ve never heard of, the market for auction-rate securities.

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Filed under Banking, economic sociology, Political Economy