A Neoinstitutionalist Analysis of Iraq War Coverage?

So, first off, I’m deep into the organizational theory literature, bouncing back and forth right now between Resource Dependence and New/Neo Institutionalism. Expect a couple posts on related themes.

For today, I’d like to talk about institutional isomorphism – that is, when different organizations doing the same sorts of things move towards having the same structure or behaviors for reasons other than obvious competitive advantage. Often, the reasons involve some notion of legitimacy, rather than efficiency. In particular, I want to talk about normative, coercive and mimetic processes (Dimaggio and Powell’s (1983) trinity of mechanisms that lead to institutional isomorphism). Then I’ll connect this to some recent revelations on the coverage of the lead up to the current war in Iraq from Salon. If you want to skip the org theory, just go read the story, it’s more important anyway.

The Problem With Assuming Exogenous Preferences: Women in Science and Math Edition

There has been a lot of discussion of the gender imbalance in certain technical fields – mathematics, computer science, etc. While gender ratios in some fields (medicine, biology) are evening out, women are still quite underrepresented in the “hard” natural sciences. Via the Contexts Crawler:

The significant gender gap in these careers is often blamed on science and math classes in schools, apparent differences in aptitude, as well as potentially sexist companies. Although women make up nearly half of those participating in the paid labor market, they hold only a small proportion of careers requiring high-qualifications and receiving high earnings. Women make up only 20% of our country’s engineers, less than 30% of chemists, and only about 25% of those specializing in computing and mathematics.

Contexts Crawler goes on to cite a Boston Globe story reporting on recent research by economists with an utterly unsurprising (to me) finding:

Now two new studies by economists and social scientists have reached a perhaps startling conclusion: An important part of the explanation for the gender gap, they are finding, are the preferences of women themselves. When it comes to certain math- and science-related jobs, substantial numbers of women – highly qualified for the work – stay out of those careers because they would simply rather do something else.
…
One study of information-technology workers found that women’s own preferences are the single most important factor in that field’s dramatic gender imbalance. Another study followed 5,000 mathematically gifted students and found that qualified women are significantly more likely to avoid physics and the other ‘hard’ sciences in favor of work in medicine and biosciences.

My question is this: What does this finding explain? If you believe preferences are exogenous – determined at birth say – then this finding explains a lot. Equally capable men and women have different preferences for careers and thus we will naturally find a wide gap in certain fields.

But who actually believes that preferences are determined exogenously at birth? And if preferences are not exogenous, then what you have really found is a new question: Why do women prefer to “work with people” while men prefer to “work with things”? The Boston Globe article actually does a reasonable job of raising precisely these questions. The problem is not in the more nuance discussion in the last page of the article, but in the first:

It’s important to note that these findings involve averages and do not apply to all women or men; indeed, there is wide variety within each gender. The researchers are not suggesting that sexism and cultural pressures on women don’t play a role, and they don’t yet know why women choose the way they do. One forthcoming paper in the Harvard Business Review, for instance, found that women often leave technical jobs because of rampant sexism in the workplace.

But if these researchers are right, then a certain amount of gender gap might be a natural artifact of a free society, where men and women finally can forge their own vocational paths.

Here’s a hint: “society” doesn’t have “natural artifacts”. To the extent that the two are useful analytical terms, they are quote opposed. If society is producing women and men with divergent interests, that is by no means a natural outcome. Indeed, I’d bet the ‘interest gap’ has declined in the last 100 years as more women have been taught that careers in science and math were even a possibility, let alone a perfectly reasonable life plan. This kind of research will be used to justify cutting precisely those programs that might instill in mathematically-talented women a desire to go into math or physics in the name of sacred, immutable preferences.

Take home point: Preferences do not precede society. Explanations in terms of preferences are thus not ‘natural’ or ‘immutable’ and while they do lead to a new question (why do people have these preferences?), these explanations are not particularly satisfactory on their own.

The Past Was Not So Different: Spam Edition

So, I’ve always thought of the phenomenon of spam as a somewhat modern problem. I suppose there’s always been junk mail, but most junk mail seems to be of the coupons and contests variety. The quintessential piece of modern spam, on the other hand, is the Viagra or Cialis ad. We all get them, and no matter how good our spam filters are, one or two slip through. Would you like some Cialis? It’ll help please the ladies! Etc.

It turns out that the past was not so different. In Institutional Change and the Transformation of Interorganizational Fields: An Organizational History of the U.S. Radio Broadcasting Industry, Leblebici et al. discuss the birth of the modern radio industry. At first, most stations were paid for by radio manufacturers themselves, trying to increase demand (as there was excess capacity in the factories that had made radios for the military in WWI). A few large retailers joined in. But soon, as more and more people owned radios, and thus sales slowed for the manufacturers, new actors were needed to provide content and to pay for it. Several proposals were considered. The winners?

The prevailing idea, though, came from an unsavory group at the periphery of the industry. It was introduced by sellers of questionable commodities who could no longer persuade most print media to accept their advertising. They bought radio stations to offer services, ranging from fortunes in real estate to hair-loss remedies to fortune tellers. Prominent in this respect was “Doctor” J.R. Brinkley. He established Station KFKB in Milford, Kansas in 1923 to hawk his infamous goat-gland operations, of which he performed thousands, to revitalize elderly gentleman’s sex lives for a fee of $750.

That’s right folks, the modern radio industry was given birth in part by spam. And not just any spam, but by male impotence spam. And of course, once the spammers of the day showed the rest of the industry that direct advertising could work to fund broadcasts, major corporations moved in, and advertising agencies began to not just fund radio but to write and produce it as well.

The past is kind of awesome.

ASA-Bound

Not too much to report on the home front, except that I’ve decided somewhat brashly to attend ASA this year. Now I just need to figure out where I’m staying, what events to attend, what would make the best Drek costume, etc. I’m looking forward to meeting (or at least, standing in the majestic presence of) the Soc blogging community.

Any advice for a 1st time ASA attendee with no paper to present and no particular agenda?

In other, unrelated news, James D. Thompson’s Organizations in Action is pretty stellar. Contingency theory is attributed to Thompson, which is seen as a precursor to resource dependence, but I see a lot more going on. For example, his analysis of the ambiguity of most “standards of desirability” (assessment metrics) strikes me as very neo-institutionalist. Here’s a nice quote:
“The controversy over maximizing and satisficing has pulled attention away from what is a more crucial problem, at least from the point of view of the organization, of how organizations keep score.”

It’s Not Marx’s Labor Theory of Value, Ok?

As reading for prelims and a research assistant gig have picked up their speed, I’ve been posting quite a bit less often. Sorry about that. This week I’m going to try and make a few shorter entries and maybe a long one somewhere along the way. For right now though I just want to offer a silly thought: I really miss the labor theory of value.

Let me explain a bit. Political economists from Adam Smith through Karl Marx subscribed to something called the Labor Theory of Value. The handy Economist dictionary defines that theory as: “The notion that the value of any good or service depends on how much labour it uses up. First suggested by Adam Smith, it took a central place in the philosophy of Karl Marx. Some neo-classical economists disagreed with this theory, arguing that the price of something was independent of how much labour went into producing it and was instead determined solely by supply and demand.” There are some serious problems with the Labor Theory of Value (LTV) as a theory of price – as far as I know, it basically doesn’t work for a lot or most commodities. The problem is scarcity – if there are only a handful of diamonds on the planet, it does not matter how easy or hard they are to extract, their price will be almost independent of that cost (unless of course people are unwilling to pay at least enough to extract them).

Are Primaries Like the Stock Market?

Open question: In what ways are primaries like the stock market? In particular, this headline led me to this question: “Clinton victory could raise doubts about Obama”. What I want to know is, why? Why would Clinton winning a primary she is favored to win by 30-40 points raise new doubts? Shouldn’t the pundit class (and the public at large) have figured this into their calculations already? Isn’t that the point of the expectations game – expected results can’t change the race, only unexpected ones? I don’t actually know much about how the stock market works, but doesn’t the same hold with expected earnings and the like?

Ok, enough questions, time for speculation: There is something different about an earnings forecast distributed amongst professional investors and a poll result distributed to the public at large and to the pundits. But what? With the public, you could argue that the poll is seen as softer than the actual result, I think – that even if someone is expected to win by 20, a win of 20 still feels like a pretty big win (unlike say if GM is expected to make $.10 per share and does, or something like that). But shouldn’t the headline writers at CNN not be that susceptible to expected outcomes? Or are they merely reacting to the public opinion which is? Is there some performativity/looping going on here -the media set the expectations, and decide if they’ve been met or not, and thus influence the very public opinion which they are simultaneously trying to gauge to determine whether expectations have been met… etc. Maybe it all boils down to expectations not being set perfectly by the media?

This is what externalities look like? South Africa and the Alien Tort Claims Act

So, one of my favorite critiques of modern economics is that it sees externalities as small and relatively inconsequential to the larger stories of the modern economy. Sure, there are problems with pollution, and maybe something related to carbon emissions (take Mankiw’s Pigou Club for example), but the market still works pretty well – meaning, market prices are pretty close to true prices, and thus externalities are small.

But maybe we should think of externalities as something a bit more fundamental. Wikipedia (the most convenient if least authoritative source on hand) defines an externality as “an impact (positive or negative) on any party not involved in a given economic transaction.” One impact we could think about is the so-called “race to the bottom”, where countries compete on labor and environmental standards and tax policies (or states within a country, for that matter) to attract businesses. One way to be attractive to business is to have a repressed workforce with few labor rights. Every time a company chooses to locate a factory (etc.) in a country with crappy standards, other countries feel more pressure to lower their standards or else lose out on more opportunities. The citizens of those countries suffer as labor and environmental standards are lowered to keep the same businesses that were already there. Thus, there is an externality to the transaction of a company choosing to do business in a country with low standards.

Enter South Africa and the American Courts:

Supreme Court Won’t Hear Apartheid Lawsuit – New York Times:

The Second Circuit reinstated the human rights suit against a list of American, Canadian and European corporations “on behalf of all persons who lived in South Africa between 1948 and the present and who suffered damages as a result of apartheid.” The Second Circuit overruled a 2004 federal district court ruling dismissing the suit for lack of jurisdiction.

The suit is based on the Alien Tort Claims Act, a law enacted in 1789 that was meant to protect American ships from pirates and American diplomats from attack overseas. In throwing out the suit in 2004, Judge John E. Sprizzo wrote that courts must be “extremely cautious in permitting suits here based upon a corporation’s doing business in countries with less than stellar human rights records,” and that such suits could have “significant, if not disastrous, effects” on trade.

Yes, these suits could indeed have significant effects on trade. But maybe those effects would just be correcting for the (massive) externalities suffered by all? Imagine if companies had to worry about lawsuits when they choose to do business with repressive governments. Then it make not make economics sense to do so, and they would in fact locate their factories, etc. in countries with above average standards, creating some sort of race to the top. That would be disastrous, wouldn’t it?

On Money, Shame and Class

“Money is the alienated essence of man’s work and existence; the essence dominates him and he worships it.” – Marx

For the past year, I have worked as a math tutor to pay (some of) the bill. I worked with high school students, undergraduates (mostly calc 1 and 2), and graduate students (mostly in intro stats classes). One interesting thing I noticed this year was the variability in how people preferred to pay and, more interestingly, the affect associated with that act. For example, some students preferred to give a check each time, and had pre-filled out the check with the amounts and such before meeting. Others paid in crumpled up bills kept in a separate pocket during the tutoring session. With a larger sample, I would love to see what the correlates are, but I have a guess already: class plays a big role.

Let me explain with a key example. One of the students I worked with was a sophomore in high school in an advanced algebra class. For convenience, we met at the student’s house, and the student’s parents were often present for at least some of the time. The parents always paid in cash, but nine times out of ten they put the cash in an envelope, sealed the envelope and put my name on it. Once or twice they put the money in the envelope in my presence, having forgotten to do so earlier. Why? I’m not in any way certain, but I feel like the family’s background (they live in a nice part of town, have three cars, both parents have at least college degrees and work professional jobs with a lot of time flexibility for raising children, etc.) might play a role. There’s something dirty about handing cash to someone for providing a service, especially a sort of professional service (math tutoring) by a professional (in training anyway). So, in order to someone shroud this transaction, the parents put the money in a sealed envelope.

It’s possible that they simply do not want their child to know how much tutoring costs. This explanation seems unlikely to me, but not impossible. Still, that would not really undermine my proto-theory as much as complicate it.

That’s all I’ve got. Back to reading Complex Organizations: A Critical Essay by Charles Perrow.

Some Thoughts on the Mortgage Crisis, Performativity and General Linear Reality

First, before I go any further, I should say that I really don’t understand macroeconomics or the recent economic crisis. It’s a goal for the next year, but for the moment I’m working on a very piecemeal understanding, the kind you get from trying to puzzle through the financial stories in the New York Times occasionally. So, I very much appreciated two things I came across recently. The first is this hilarious analysis (made more hilarious by it being British) of the mortgage crisis that I highly recommend if you have 10 minutes:

I love how the new financial models created new markets for derivatives and trenches and all sorts of fancifully named packages of mortgages. Finance theory created new markets for new things that could not have existed before.

The second is an excellent NYT Magazine piece (from a couple weeks ago) on the mortgage crisis and in particular the role of rating agencies like Moody’s in the whole mess. I’ve read accounts of the importance of credit agencies in the crisis before, but none that were as well-written.

Explaining Not Change: Inequality in the 19th-20th Century

So, I’ve started reading a classic, Joseph Schumpeter’s 1942 Capitalism, Socialism, and Democracy. At the beginning of part II, as Schumpeter begins to explain why he believes capitalism is doomed, he starts with some historical data on national incomes and other macro indicators including inequality. In order to refute the arguments by some economists (including Marx and his followers) that capitalism leads to a natural increase in inequality, Schumpeter argues that inequality data show no change in inequality in the 19th and early 20th century, and thus “there is no such tendency… There is, so long as we are discussing what the capitalist engine might do if left to itself, no reason to believe that the distribution of incomes or the dispersion about our average would in 1978 be significantly different from what it was in 1928.” (65-66)

A number of things interest me in this quote.