金融学专业英语.docx

金融学专业英语.docx

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金融学专业英语

Thegreattrailblazer

EconomistseverywhereshouldmournthepassingofGaryBecker.

IFTHEREisonepersontoblameforeconomists’habitofopiningoneverything,itisGaryBecker,whodiedonMay3rd.Notcontentwithstudyingtheworld’seconomies,hewasthefirstprominenteconomisttoapplyeconomictoolstoallaspectsoflife.Hisrevelationwasthesortthatseemsobviousonlyinhindsight:

thatpeopleareoftenpurposefulandrationalintheirdecisions,whethertheyarechangingjobs,takingdrugsordivorcingtheirspouses.Thisinsight,andtheworkthatfollowedfromit,earnedhimaNobelprizein1992.NolessaneminencethanMiltonFriedmandeclaredin2001thatMrBeckerwas“thegreatestsocialscientistwhohaslivedandworkedinthelasthalf-century”.

AttheheartofMrBecker’sworkwastheviewthat“individualsmaximisewelfareastheyconceiveit.”Welfareneednotmeanincome;itcouldderivefromthepleasureofaltruismorthethrillofdeviancy.Butcritically,thisthesisimpliedthatpeoplerespondtoincentives—arealisationthatopenedthedoortoinsightsacrossthewholerangeofhumanactivity.

MrBeckerfirstusedthisapproachinhisdoctoralstudyofdiscrimination,arawissuein1950sAmerica.Atthetimeeconomists’modelsassumedthatemployerscaredonlyaboutproductivity,whateverthecolouroftheworker.Shuntingthisviewaside,MrBeckerinsteadassumedthatmanyindividualshada“tastefordiscrimination”,andperceivedthemselvestobeworseoffwhenforcedtoworkalongsidepeopleofotherraces.Hethenexploredhowthispreferenceaffectedlabourmarkets.

InAmerica,wheretheblackpopulationwasroughlyone-tenthofthetotal,discriminationagainstblacksledtorelativelysmallreductionsinwhiteincomesbutfarmoresubstantialonesforblackworkers.InSouthAfrica,withafarhigherproportionofblacks,discriminationbroughtmuchlargerreductionsinincomesacrosstheeconomy.MrBeckerpointedoutthatalthoughcompetitionfrommorerationalfirmsmightgraduallyeliminatecorporatediscrimination,marketforcesalonewouldrarelyerodediscriminationrootedinthetastesofworkersorconsumers.Hisbookonthesubject,“TheEconomicsofDiscrimination”,becamethefoundationforsubsequentresearch.

MrBecker’srestlessmindthenfocusedoncrime.Hebecameintriguedafterweighingtheoddsandcostofgettingaparkingticket,anddecidingtoriskit.Helookedscepticallyontheview,commonatthetime,thatcrimewassimplydeviantbehaviour—aformofmentalillness.Atleastsomeofit,hereckoned,sprangfromarationalconsiderationofperceivedcostsandbenefits.Moralnormsmightinhibitsomeindividualsfrombreakingthelaw,butotherswouldovercometheirqualmswhenthereturntocriminalactivitywashigh,orthelikelypunishmentmild.Suchcalculationswouldapply,heargued,acrossawidevarietyofcrimes,fromparkingscofflawstocorporatefraudsters.

MrBeckerpuzzledoverwhycrimewaseconomicallycostly（somethingthatmightseemobvious）.Partoftheanswer,herealised,wasthatitrepresentsrent-seeking:

fightingoverthespoilsofproductiveactivityratherthancreationofnewwealth.Resourcesinvestedincommissionofcrimes（orindeterringthem）mightotherwisehavegonetowardsgrowth-boostingactivity.Hisworkcontributedtonewcrime-fightingmethods.Hereckonedthereisanoptimalamountofcrimeinsociety,sinceitmakeslittlesensetopayhugesumstowipeoutillegalactivitycarryinglowsocialcosts.Whereenforcementispatchy（notcontinuous）,governmentsmightstilldetermisbehaviourbyincreasingtheseverityofthepunishment—byraisingfines,say.

MrBeckerwasagainapioneer,alongsidehisColumbiaUniversitycolleagueJacobMincer,indevelopingtheconceptof“humancapital”,theinvestmentsindividualsmakeintheirowneducation.MrBeckerventuredthatspendingoneducationandtrainingshouldbethoughtofasaneconomicchoice,madeinanticipationofperceivedfuturegains,ratherthanahigh-mindedsearchforculturalenrichment.Hisviewgaveinsightintolabour-marketoddities.Bytakingintoaccountthedifferencebetweengeneralknowledge（ofmaths,say）and“firm-specific”skills（suchasknowledgeofin-housesoftware）,MrBeckercouldexplainwhyskilledworkersarelesslikelytochangefirms,orwhyfirmsaremorelikelytopromotefromwithin.Humancapitalalsoshedlightongapsinpayacrossdemographicgroups—betweenmenandwomen,forexample.That,inturn,shapedMrBecker’sgroundbreakingstudyontheeconomicsofthefamily.

Familyvalues

MrBeckerbroughthischaracteristicanalysistothequestion,assumingthatpeopleareguidedinfamilychoicesbyadesiretoimprovetheirownwelfare.Thatincludedmarriageanddivorce:

hisanalysisimplied,forinstance,thatthoseinwealthyfamilieswoulddivorceatlowerrates,apredictionborneoutbydata.Hisworkalsohelpedexplainfallingfertilityinrichcountries.Aswagesrise（especiallyforwomen）,theopportunitycostofraisingchildrenincreases,andlargefamiliesbecomelessattractive.Whatismore,asthelinkbetweeneducationandeconomicsuccessgrowsstronger,parentsinvestevermoreintheirchildren（notleast,asMrBeckernoted,sincesuchinvestmentcanbeaformofsavingforone’scareinoldage）.

MrBecker’strailblazingearnedplentyofcriticism.Theinterdisciplinaryadventurismitembodiedpeeved（annoy）othersocialscientists,whodoubtedthatcool-headedanalysisplayedmuchpartinmattersofloveorlarceny（theft）.Buthisworkyieldedunexpectedinsightsandforcedsocialscientiststorethinktheirassumptionsandsharpentheiranalyses,thebettertolearnwhypeoplebehaveastheydoandhowpolicycanbesthelp.Wholebranchesofmicroeconomicsowetheirexistencetohim.Itishardtoimagineamorewelfare-improvingcontribution.

Debt,moralityandthecycle

ATTHEheartofthebattlebetweenGreeceanditsEUpartnersoveritsdebtcrisisareconceptionsaboutmoralityoverdebtandeconomics;issuesthathavebeendebatedforthousandsofyears.TheideaofinterestpaymentsondebtwasaroundatthetimeofHammurabi,rulerofBabyloninaround1800BC;hiscodesetmaximumratesof33.3%forloansofgrainand20%forthoseofsilver.Therewasalotoffocusonwhatwas"fair";thosewholentcattletotheirneighbourwereentitledtosomeorallofthecalvesthatmightbeborn.TheSumerianwordforinterest,mas,meanscalves.Aristotlearguedthataninertcommoditylikesilver,whichdidnotbearfruit,shouldnotcarryinterest.

Theconceptofusury（anexcessiveinterestrate）wasdevelopedbytheCatholicChurch,althoughtheparableofthetalentsimpliesthatmoneyshouldbesettowork.SeeMatthew25:

27

Wellthen,youshouldhaveputmymoneyondepositwiththebankers,sothatwhenIreturnedIwouldhavereceiveditbackwithinterest

Lateron,therewastheconceptofproductiveandunproductiveloans:

lendyourneighbourthemoneytopayforhospitaltreatment,andnointerestshouldbeexpected;lendhimthemoneytostartabusiness,andinterestshouldbehandedover.

Byandlarge,thecreditorwasseenasthepotentiallyimmoralpartyinthetransaction;therewassympathyforthedebtorwhocouldnotrepaydebtowedtothe"grasping"lender.Buthereistherub.Creditorsriskednotgettingtheirmoneybackandsoneededtochargehighratestocompensate,butrestrictionsonratesdidnotallowthistohappen.

Unsurprisingly,HomerandSylla,intheirepichistoryofinterestrates,findvirtuallynodataoncreditandratesfromtheendoftheRomanEmpiretothe12thcentury. AstepchangeinmoralattitudesreallycameaboutwiththeriseofthemerchantstatesoftheNetherlandsandBritaininthelate17thandearly18thcenturies.Therulersofthesestatesfinancedthemselveswithloansfromthewealthyoftheland（theBankofEnglanddatesfromthisperiod）.Parliamentsinthosestateshadastronginterestinhavingthemonarchpaymoneyback.Asthestatesdemonstratedtheircreditworthiness,theircostofborrowingfell.Tothesecreditors,manyofwhomweremotivatedbyanaustereProtestantismthatemphasisedtheworkethic,failuretorepaydebtshowedalackofmoralfibre.Theideaofthe"debtors'prison"isbroughtdowntousbyDickens（whohadchildhoodexperienceofthephenomenon）;butevenwithhisinnatesympathyfortheirplight,hemadebothMrDorritandMrMicawberratherridiculousfigures.

Themoraltideturnedafter1945,perhapsbecausedebthasbecomesowidespread;ifdebtorsaresinners,thenweareallguilty.Forthosewhoexperiencedthe1930sdepression,debtwastheroadtoruin.Forthosebornafter1945,debtwasbotheasytoaccessandtheonlywaytodealwithlife;ithelpedthatinflationerodedtherealburdenofrepayment.

Tiedupwiththishistoryistheroleofthestateasbothdebtorandcontrollerofthemoneysupply.Medievalmonarchsneededtoborrowmoneytofinancetheirwars;whenthetimecametorepay,theycouldsimplyrefusetodoso,orrepayindeflatedcurrency.Asalreadystated,BritishandDutchmerchantshadmuchbetterexperienceswiththeirowngovernmentsafter1700.Butlendingtootherpeople'sgovernmentshasalwaysbeenatrickiermatter.Evenifthegovernmentisanally,thingscanchangerapidly,asFrenchinvestorswhoboughtTsaristbondsbefore1917subsequentlydiscovered. 

Howcanyouenforceacontractwithasovereignnation?

TheBritishresortedtosendingingunboatsonafewoccasionsandWoodrowWilson'sactionsinHaitiandtheDominicanRepubliccanbeseeninasimilarlight.Thesagaoffirstworldwarreparationsgavethedebateanewtwist;Keynes,inhisfamous"EconomicConsequencesofthePeace",argued