Thursday, May 31, 2012

Cartoon Teaches Economics "By Word Of Mouse"

It has Sylvester the cat but the real star is a little mouse who is an econmics professor. It is called "By Word Of Mouse." It was produced by Warner Brothers in 1954. Here is what IMDB says about it:

"This was the first of three cartoons on economic subjects underwritten by the Alfred P. Sloan Foundation. It was followed by Heir-Conditioned and Yankee Dood It."

Here is what Wikipedia says about it:

"Starting in 1950, New York University’s Institute of Economic Affairs received annual grants for projects concerned with educating the public on economics issues, including a series of educational animated short films through Warner Bros. Animation starring Sylvester and Elmer Fudd and directed by Friz Freleng that illustrate basic elements of capitalism. This series includes By Word of Mouse (1954), Heir-Conditioned (1955) and Yankee Dood It (1956)."

Monday, May 28, 2012

Great New Book On Neuroscience By Economist Paul Zak

It is called The Moral Molecule: The Source of Love and Prosperity. Zak coined the term neuroeconomics but this book seems to be about so much more than the title suggests. I doubt I can convey how interesting and well written this book is (I may not be totally objective since I am among the people thanked for their help in the acknowledgements).

Zak wrote a good summary article in The Wall Street Journal. See The Trust Molecule.

The "moral molecule" is oxytocin and the book explains many experiments that show that we tend to be more trusting when it is present or increases (how oxytocin affects us and works with other hormones and neurotransmitters is alot more complex than this, though, as Zak's work shows). How this is related to empathy is discussed and this is where Adam Smith comes in (his theories on sympathy).

The book examines when and why people are nice and when they are not. When are we altruistic and when are we selfish? The role that evolution played is examined. How this all affects us socially and politically is discussed. Zak is an expert on how trust is a key ingredient to the success of economies and trust is related to oxytocin. His experiments show what happens when people have their amount of oxytocin increased. How this is all related to relgion is discussed.

The book is also full of humorous anecdotes and personal stories. It is highly entertaining and thought provoking. The insights into human nature are amazing. I especially liked the discussion of "in-groups" and "out-groups." You don't have to be a neuroscientist or economist to understand it and it might be a great book for professors to assign to undergraduates.

It received an excellent review in The Wall Street Journal. See Kin and Kindness by MICHAEL SHERMER, publisher of Skeptic magazine and a monthly columnist for Scientific American.

Here are two articles about professor Zak's 2010 Mind Science Foundation lecture from the San Antonio Express-News:

Emerging field offers insight into human virtues

Humans release ‘niceness' chemical

More information about neuroeconomics can be found at (these are two short articles by Zak that give you some idea of what he does in his experiments):

Neuroeconomics Explained, Part One

Neuroeconomics Explained, Part Two

Adam Smith vs. Bart Simpson. (A post of mine from last year and it also has a link to a video of Zak lecturing on all of this)

Wednesday, May 02, 2012

Joseph Campbell Meets Joseph Schumpeter (The Entrepreneur As Hero)

(Published in The New Leaders: The Business Bulletin for Transformative Leadership, November/December 1992.)

Entrepreneurs are heroes. They are not like heroes, they are heroes. Heroes and entrepreneurs are called to and take part in the greatest and most universal adventure that life has to offer: the simultaneous journey of self-discovery, spiritual growth, and the personal creativity they make possible. In fact, the entrepreneur’s journey closely resembles the journey of the “hero” in mythology, as outlined in the book The Hero With a Thousand Faces, by Joseph Campbell. There is an amazing and profound similarity between not only the journey that entrepreneurs take and the adventure of heroes but also in their personality traits. The comparison is profound because the myths are about universal human desires and conflicts that we see played out in the lives of entrepreneurs. 

But what is the hero's adventure? Campbell writes "The standard path of the mythological adventure of the hero is a magnification of the formula represented in the rites of passage: separation-initiation-return, which might be named the nuclear unit of the monomyth. A hero ventures forth from the world of common day into a region of supernatural wonder; fabulous forces are there encountered and a decisive victory is won; the hero comes back from this mysterious adventure with the power to bestow boons on his fellow man." How is the hero's adventure similar to the entrepreneur's adventure?

The hero's journey begins with a call to adventure. He or she is awakened by some herald which touches his or her unconscious world and creative destiny. The entrepreneur, too, is "called" to the adventure. By chance, he or she discovers a previously unknown product or way to make a profit. The lucky discovery cannot be planned and is itself the herald of the adventure.

The entrepreneur must step out of the ordinary way of producing and into his or her imagination about the way things could be to discover the previously undreamt of technique or product. The "fabulous forces" might be applying the assembly line technique or interchangeable parts to producing automobiles or building microcomputers in a garage. The mysterious adventure is the time spent tinkering in research and development. But once those techniques are discovered or developed, the entrepreneur now has the power to bestow this boon on the rest of humankind. 

Heroes bring change. Campbell refers to the constant change in the universe as "The Cosmogonic Cycle" which "unrolls the great vision of the creation and destruction of the world which is vouchsafed as revelation to the successful hero." This is similar to Joseph Schumpeter's theory of entrepreneurship called “creative destruction.” A successful entrepreneur simultaneously destroys and creates a new world, or at least a new way of life. Henry Ford, for example, destroyed the horse and buggy age while creating the age of the automobile. The hero also finds that the world "suffers from a symbolical deficiency" and "appears on the scene in various forms according to the changing needs of the race." The changing needs and the deficiency correspond to the changing market conditions or the changing desires for products. The entrepreneur is the first person to perceive the changing needs. 

Regarding personality traits, the hero and entrepreneur are risk-takers and creators. But what is the source of their creativity? People become creative when in the words of Campbell, they "follow their bliss." This is the message of mythology. It means you should engage in an activity, pursue a career or entrepreneurial venture because it is what you love to do and it gives you a sense of personal importance and fulfillment, not because the social system dictates that you do so. The drive comes from within. It is this courageous action that opens up doors and creative possibilities that did not previously exist. This is the journey of self-discovery and spiritual growth. Although it may be long, painful, and lonely, it is very rewarding.

Both the entrepreneur and hero are aided by mentors, are humble enough to listen to others in order to learn (and thus become creative), and face a road of trials where they must continually slay the demons and dragons of their own unconscious (such as fear, their egos) in order to discover their creative ability which ultimately comes from giving themselves up to a higher power. 

Ultimately, they become selfless and can see the creative possibilities that the universe offers. They become masters of two worlds, one of imagination and creativity and the other of material things and business. This mastery makes it possible for them to bestow the boon.

Here is a link to a longer, more academic version.