Friday , April 16 2021
Home / Peter Radford
Peter Radford

Peter Radford

Peter Radford is publisher of The Radford Free Press, worked as an analyst for banks over fifteen years and has degrees from the London School of Economics and Harvard Business School.

Articles by Peter Radford

The crooked timber of history

14 days ago

From Peter Radford
I was lucky enough last week to meet a few friends for the first time in person since the pandemic swept all before it.  We are an eclectic group with more than a fair influence of Wall Street.  Given all that is going on, and has gone on since we last met face-to-face, I expected to be drawn into endless political discussions.  But no, we spent a majority of our time talking about how the pandemic has accelerated the current wave of technological change.  At one point someone asked whether there were lessons from the Industrial Revolution that we could apply to where we are now.  Our conversation evolved from there.
Near the end of the introduction to his history of the British experience between 1700 and 1850 Joel Mokyr gives us his abbreviated perspective on the

Read More »

Inflation: who matters?

16 days ago

From Peter Radford
There are times when you really don’t need to say much.  The facts make the argument for you.  At such times all that matters is that the largest number of people are aware of those facts and that at least some of them speak to the issues raised.
So too is with a small snippet of news I saw this morning.
I came to it via the New York Times.  The original report being in Business Insider.
Apparently Wall Street bonuses have risen 1,217% since 1985.  Quite what the significance of 1985 is I cannot tell, but the number itself seems to have the right feel.  Having seen a few of those years first hand I can attest to the pace of increase from an anecdotal perspective.
More importantly, if we applied the same rate of increase to the minimum wage over a similar period it

Read More »

Reform of what?

22 days ago

From Peter Radford
We have heard a great deal in the American media about the so-called Biden reform agenda.  The huge injection of government spending into our hibernating economy is meant not just to sustain it until we arrive at a post-pandemic moment when it will spring back to life by itself, but also to reform it.  That is to say the $1.9 trillion package is not just disaster relief, but is also politically motivated to change the economic landscape beyond the pandemic.
I think the politics of muddling the two goals, relief and reform, into one big package are clear: the Republican party would fight tooth and nail against reform and with the wafer thin majorities that the Democrats enjoy delaying it would court permanent postponement of even the most modest reform.
But the

Read More »

The social question

March 9, 2021

From Peter Radford
If you were to ask me what the greatest intellectual error of the past fifty years has been I wouldn’t hesitate.  Shareholder value.  It’s an easy response.  Yes, it reflects my own curious interest in the fundamentals of business and its intersection with economics, but it is also emblematic of so much more.
Derived as it is from the wrong turn in economics and politics in the middle of the last century it carries with it so many of the ill founded ideas that have brought us all to where we are now: bedeviled once more by the social question.
How is it that the wealthiest nation the earth has ever witnessed is so ill equipped to ensure a secure life for its citizens?  All its citizens.
The history of the concept we know as shareholder value is well rehearsed.  There

Read More »

Sameness is just wrong

February 26, 2021

From Peter Radford
There is something truly odd about any economist who lives wholly in the world of equilibrium.  Truly odd.  Just think of what they have to assume to get there:
The first step is to make sure the problem they are tackling is well defined.  Really well defined.  Without ambiguous objects lurking in dark corners.  The problem must be well lit and sanitized of any potential taint.  And it mustn’t be connected to anything that might, under some circumstance or another, become entangled with it.  Good luck with that in the real world.
Then, this being economics, all the actors within the problem have to be identical.  They have to behave rationally — where rationality is something defined by the economist to make sure the math works out nicely — and they have to “know”

Read More »

AI and democracy

February 22, 2021

From Peter Radford
Just a quick thought prompted by my reading of a talk given by Allison Stanger during the Santa Fe Institute’s 2019 Fall symposium.  First she gives us a nice quote from Hannah Arendt’s “The Human Condition” who says the question is not …
“whether we are the masters or slaves of our machines, but whether machines still serve the world and its things or if, on the contrary, they and the automatic motion of their processes have begun to rule and even destroy the world and its things.”
This quote obviously resonates with fundamental interest to those of us struggling to understand the economy as we hurtle into the digital age.
The central issue as Stanger describes it is that all the algorithms based on big data, those that increasingly drive chunks of how we deal with

Read More »

Complexity, institutions and firms

February 20, 2021

From Peter Radford
Are they associated?
We all know that one of the central problems of economics is the existence of uncertainty.  At least since Frank Knight’s work in the 1920s, uncertainty has been something of concern to economists.  Knight’s description of uncertainty as being a condition in which no probability distribution existed, or could exist, has led some of the most eminent theorists of economics to argue that theorizing is simply not possible.  Which is a rather formidable obstacle.  I assume they meant that their particular form of theorizing was not possible.
One person who rose to the challenge represented by uncertainty was Douglass North, who famously built his theory of institutional change to show how humans respond to  the endemic uncertainty they deal with on a

Read More »

Information take two

February 18, 2021

From Peter Radford
Keeping the conversation going.
Let’s start with Shannon, from his personal papers published in 1993 …
“The word ‘information’ has been given different meanings by various writers in the general field of information theory.  It is likely that at least a number of these will prove sufficiently useful in certain applications to deserve further study and permanent recognition.  It is hardly to be expected that a single concept of information would satisfactorily account for the numerous possible applications of this general field.”
So Shannon is fine with an eclectic vision of information, and expects a variety of definitions to emerge as useful.  This seems extremely wise.  Especially given his own somewhat narrow version.
Weaver, in 1949, expanded on  this ecumenical

Read More »

The information conundrum

February 16, 2021

From Peter Radford
Kolmogorov, I think, hit the nail on the head when he said:
“At each given moment there is only a fine layer between the ‘trivial’ and the impossible.  Mathematical discoveries are made in this layer.”
He might just as well have said that life itself is discovered in this layer.  But let’s not get ahead of ourselves.
A few days ago I tried to point our way towards an acceptance of a certain humility.  I used a couple of quotes, one from Durer and one from Soros, to provide us with insights form well-regarded figures separated by a good long period.  Obviously the need to recognize our inherent fallibility has a long history.  The problem is that we keep forgetting and frequently end up acting as if we had some form of ultimate knowledge.  I used the word ‘utopia’ to

Read More »

What do Durer and Soros have in common?

February 13, 2021

From Peter Radford
I know, this is one of those more philosophical moments.  In my case prompted by my continued meditation on the deleterious effects of a belief in utopias.  Such beliefs seem always to end up with authoritarian consequences.  People can all too easily get swept up by the illusion of having solved life’s great mysteries.  It’s been going on for ages.  It appears to be a commonly held human attribute.  We need, apparently, to think we understand things that are, beneath the surface, remote, opaque, and inscrutable.  It’s the way we are.
The issue keeps popping up.  In the humdrum world of economics and economic history utopian ideas bedevil analysis.  Whereas we began with the humanistic description of the workings of an economy, for instance as articulated by Adam

Read More »

Forecasting errors

February 10, 2021

From Peter Radford
I suppose forecasting errors is one of those phrases that needs a bit of explanation.  Are we forecasting errors?  Or are we discussing the errors in forecasting?  I think it’s both.
Take the current debate going on about Biden’s $1.9 trillion economic relief package.
A few notable economists, including both Larry Summers and Oliver Blanchard, are arguing that Biden is proposing on spending too much.  This criticism is not based on any analysis of the level of unemployment, the ability to pay rents, the likelihood of imminent re-employment, or any other issue of urgency.  It is based on the usual orthodoxy economists trot out year after year.  The argument is this: the economy was not in distress prior to the pandemic, meaning there were none of those infamous

Read More »

January 6th, one month on

February 8, 2021

From Peter Radford
It’s been a month.  It seems a great deal longer.
Trump has slunk off the stage and the first signs of what the post-Trump political arena might look like are emerging.  It isn’t hopeful.  Not if you’re looking for peaceful politics.
As we become more able to adjust our focus and ask “what just happened?” with a better degree of clarity, it becomes more obvious, to me at least, that the entire movement that has come to be known as Trumpism was not actually Trump’s at all.  It pre-existed him.  He simply packaged and branded it as if it were one of those buildings that bears his name but which he does not own.  Trump was and remains a veneer.  He is always willing to push to the head of a crowd and claim it was his idea to gather.  He is always willing to present

Read More »

Epistemic revolution? The search for algorithmic justice

February 3, 2021

From Peter Radford
This is a long speculation, for which I apologize, provoked by the following:
“In an information civilization, societies are defined by questions of knowledge — how it is distributed, the authority that governs its distribution and the power that protects that authority. Who knows? Who decides who knows? Who decides who decides who knows? Surveillance capitalists now hold the answers to each question, though we never elected them to govern. This is the essence of the epistemic coup.”  — Shoshanna Zuboff, New York Times,  January 2021 
Coups are all the rage right now.  Is Zuboff right that we are the victims of an “epistemic coup”?  What do we even mean by an epistemic coup?
It gets complicated.
For years now we have been bombarded by articles, many of which emanate

Read More »

Game stop 2: What are stock markets for?

January 28, 2021

From Peter Radford
The sudden attention being given to the gyrations of Game Stop stock prices has caused all sorts of hand wringing within the hallowed walls of high finance.  In typical fashion the people who like to carry on their trading and associated activities beyond the public gaze are all a twitter because a bunch of apparently crazy outsiders are not adhering to the sedate rules of the game.  This produces truly odd results.  Normally virulently anti-government voices are suddenly calling for SEC investigations and even regulation to prevent outsiders spoiling things.  Some are swooning over the event as a demonstration of the awful greed and selfishness that has overtaken even average Americans — rather than just Wall Street denizens.
How dare average people become as greedy

Read More »

A reminder from Berlin

January 22, 2021

From Peter Radford
Sorting out my old bookshelves I came across an old Isaiah Berlin Essay “The Pursuit of the Ideal”.  At the risk of being boring here is a very long extract, he begins the essay this way:
“There are, in my view, two factors that, above all others, have shaped human history in this century.  One is the development of the natural sciences and technology, certainly the greatest success story of our time — to this, great and mounting attention has been paid from all quarters.  The other, without doubt, consists in the great ideological storms that have altered the lives of virtually all mankind: the Russian Revolution and its aftermath — totalitarian tyrannies of both right and left and the explosions of nationalism, racism, and, in places, of religious bigotry, which,

Read More »

Memo to self

January 18, 2021

From Peter Radford
This is short:
I have been accused recently of mis-using the word “coup” when I discuss the events of January 6th.  Worse, I have been called ignorant.
Here is what the dictionary says:
Coup = a sudden, violent, and illegal seizure of power from a government.
Perhaps my critics would feel safer with “insurrection” which seems to be the preferred word in the media.
Here is what the dictionary says:
Insurrection = a violent uprising against an authority or government.
The subtlety of the difference between the two words seems to revolve around the first being seizure of power, whilst the second is an uprising against those in power.  Beyond that they are both a reference to violence and an attempt to unseat, or change government.  Presumably a failed coup implies that

Read More »

Corporate reckoning

January 15, 2021

From Peter Radford
The aftermath of a coup attempt is one of those moments when a nation gets a really serious insight into its values.  Do, for instance, its politicians rally around some higher set of principles, or do they slide quickly back into the day-to-day argy-bargy of political positioning and infighting?
Ours are perilously close to the latter.  And this after their own place of work was invaded and trashed while they hid and cowered in sundry hiding places.  Profiles in courage are few and far between right now within our politics class.
The reason is obvious: one of major political parties is complicit in the ruin of democracy and in the rise of a far right version of populism based on white supremacy, nativism, and grievances of various sorts.  Perhaps this was the

Read More »

Under pressure

January 13, 2021

– the vital difference between a “firm” and a “corporation”
from Peter Radford
I am learning that it takes a while to come to terms with the trauma of an attempted coup.
Various people are reacting differently depending on their state of mind prior to the attempt.  What catches my eye, given my own perspective on the role of business in society, is the pressure emerging on our large corporations.  Having spent the past few years busily ignoring the moral corruption and ineptitude of the Trump regime business leaders are suddenly trying to appear pious.  Many of them are suspending their support for political groups and individuals.  Others are suspending social media platforms that were used to organize insurrection and ferment violence.
This is all too little too late.

Read More »

JANUARY 6, 2021

January 11, 2021

From Peter Radford
The crisis lingers on.
One would think, although we are now in an odd world, that abetting, instigating, and applauding an attack on Congress would result in more than a gentle rebuke.  Apparently not.  The wheels of American politics move extremely slowly and the perpetrator of the crime still is hunkered down in the White House bloviating, no doubt, about how he was robbed of his victory in November’s election.  Perhaps there will be enough spine amongst those who were attacked to exact appropriate revenge.  Perhaps not.
For, already, the political calculation that infects everything done in Washington is slowing and possibly preventing prosecution.  The Republican Party, now terrified of its full complicity and concerned about whatever is left of its public image,

Read More »

The firm, yet again

December 9, 2020

From Peter Radford
There is a new eBook published by the Stigler Center which is an offshoot of the Booth Business School at the University of Chicago.  The publication contains a number of short essays either attacking or defending the infamous pronouncements by Milton Friedman on the role of the corporation.  This year, you may recall, is the 50th anniversary of the newspaper article in which Friedman described his view that the purpose of the corporation is too maximize shareholder value.  The subsequent decades have seen that view permeate the business and  legal systems such that to argue against it is seen as oddball in the extreme.
Steve Kaplan leads the defense of Friedman with the opening essay and slides almost immediately into a humdrum general defense of capitalism rather

Read More »

Historic Perplexity

December 3, 2020

From Peter Radford
A week or so ago I wrote that I was in the midst of reading Robert Skidelsky’s book “What’s Wrong With Economics”.  His account is complete and balanced, he clearly has a great deal of respect for the discipline, but his critique is well worthwhile the time it takes to read.  At the end the reader might well ask what is left of the mainstream line of theorizing after all the holes Skidelsky punches through it.
The problem that many of us might have is that this ground is all too familiar.  The absurdities of the neoclassical method are well known and have been shredded time and time again.  Yet the discipline plods its merry way forward apparently oblivious to the farce that it appears to those on the outside.  It applauds itself endlessly and ignores the steady

Read More »

“A primer for the perplexed”

November 20, 2020

From Peter Radford
That’s the subtitle of Robert Skidelsky’s little book “What’s Wrong With Economics”?.  A primer for the perplexed.  With the U.S. election past us, I decided to start reading some of the books that had accumulated in my “to read” pile.  Skidelsky being one of my favorite authors I started with his.  The problem is that perplexity is insufficient to describe my usual emotion or state of mind whenever I engage with economics.  So, here I am, a mere fifty or so pages in, and already I am experiencing that same exhaustion I have felt these past few decades any time I wander into the morass that passes for economics.  Time and again I do this to myself.  It seems such an important topic.  It seems so relevant and useful to understand.  It seems so necessary for anyone who

Read More »

Friedman’s bad turn

September 14, 2020

From Peter Radford
Today is quite an anniversary.  It is fifty years since Milton Friedman’s article on the responsibilities of corporate management appeared in the New York Times.  Whilst it was not the only argument in favor of the shift towards a narrow focus on shareholder value, it was certainly one of the more persuasive and influential.  I have long held that Friedman’s reputation was ill-deserved because of his overt ideological bias and thus lack of any pretenses to scientific thought, but I realize he is well respected and protected by his peers.  His academic peers keep pointing us to his many “contributions” and accomplishments in order to prevent too dramatic a revision of his stature.  I prefer to reflect on the enormous impact his relentless pursuit of libertarian

Read More »

Pandemic Musings

September 9, 2020

From Peter Radford and WEA Commentaries
I have been digging around a fair bit lately trying to understand the role of economics in the extent of the inequality being laid bare by the pandemic — more on that later.  A few interesting nuggets worthy of a quick note popped out along the way.
Thomas Phillipon opens chapter one of his recent book this way:
“The big debates in economics are about growth and inequality.  As economists, we seek to understand how and why countries grow and how they divide income among their citizens.  In other words, we are concerned with two fundamental issues.  The first is how to make the pie as large as possible.  The second is how to divide the pie.”
Presumably his approach ignores the ugly dismissal of inequality by the likes of Lucas who said it was of

Read More »

The missing middle?

August 11, 2020

From Peter Radford
A couple of things before we get started:  when I say that economics is not history, I mean exactly that.  Geology is not history either.  That is not the same as saying that economics ought pay no heed to history.  Let’s not get confused over that.  Economics is its own discipline with rules and territory that its exponents determine.  That might frustrate or annoy some of us who would like to think of it more broadly, but it’s up to us to find doors to open to help in that broadening.
Fortunately there are plenty of such doors because the current core of economics is rather narrow with respect to the full range of interesting topics or phenomena that appear to be economic.  In its endeavor to become a more formal activity economics has ceded swathes of territory to

Read More »

Damn facts

July 31, 2020

From Peter Radford
It seems appropriate to mention increasing returns today.  After all, this is the day on which several of our modern titans of industry are appearing before Congress to respond to the concerns raised by the gargantuan size that their respective businesses have grown to become.  The CEOs of Apple, Amazon, Google, and Facebook are all under the gun to defend the enormous clout that each wields in the modern marketplace.  Today is the culmination of a long investigation by Congress into the problems, or perceived problems, that these four companies represent.  Whatever the outcome the simple fact that the four are being clustered into one band of rogues taints them with an aura of indecency we normally associate with the pharmaceutical, banking, or tobacco industries.

Read More »

Ontology, framing, and all that jazz

July 22, 2020

From Peter Radford
The collection of papers edited by Uskali Mäki and published in 2001 under the title: “The Economic World View, Studies in the Ontology of Economics” seems to be quite pertinent given the reaction to my recent comments on complexity.  It is a wonderfully rich source of thought about what, exactly, economics is, which is something that seems to confound a great number of people.  Quite often I get the sense that some critics are upset with economics because it isn’t physics, or chemistry, or, more controversially, biology.  No it isn’t.  Nor are they economics.  Hopefully we all agree on that.  Nor is it history or any other thing.  It is economics.  Which is something that has coalesced around certain ideas over the last couple of hundred years.  Quite what it is,

Read More »

More Complexity

July 14, 2020

From Peter Radford
Economists have been talking about complexity for a very long time.  This may surprise many of you given the state of mainstream economics, but it is true.  A good place to discover a preliminary history of complexity in economics would be the short volume edited by David Colander published in 2000.  The papers it contains were all presented at a History of Economics Society Conference in 1998.  Colander provides a good introduction and tries to put complexity into the context of economics since its inception.  There are times when, in my opinion, he errs a little too much in favor of the older methodologies as if he finds it difficult to shed old habits himself.  Nonetheless the papers in the volume cover a wide and interesting territory, including the similarities

Read More »

Complex ideas

July 9, 2020

From Peter Radford
The economy as a sea of information, constantly churning, far from equilibrium, with computation its key activity.  It is complex.  It is inscrutable to any method that fails to accommodate its multitude of layers, interconnections, feedback loops, and constant dynamism.  Since reading Ilya Prigogine ages ago I have never understood how anyone could not view the economy through such a lens.  The interplay between creative forces needed to sustain life and the constant dissipation or disordering that inevitably follows upon such creativity is, to me, the central theme being played out in an economy.
Given this, attempts to contain analysis within a neat box simply defy reality.  The instances of an economy that are unstable and out of equilibrium far outnumber,

Read More »

Carter on Keynes

June 27, 2020

From Peter Radford
The biography of Keynes by Zachary Carter ends on a decidedly wimpy note.  The concluding chapter is devoted to the financial crisis of 2008 and the subsequent half-hearted sort-0f-Keynesian policy response.  Whilst Carter seems fine with his condemnation of neoliberal policies and is clear about the abject failure of the notion that financial markets act in either a self-correcting or a rational manner, he then goes on to ask why Keynesianism has proven to be so politically weak:
“But pointing the finger at neoliberalism raises uncomfortable questions for Keynes and his defenders.  Why has Keynesianism proven to be so politically weak, even among ostensibly liberal political parties and nations?  The Keynesian bargain of peace, equality, and prosperity ought to

Read More »