Is there a good person?

How to decide if a person is good or bad? What make people think of an action as bad or good? Can one person be good, if he or she has bad elements inside them? Is there any one on earth without bad element inside? Is there a person perfect? Well, enjoy this video!!!

[Continue reading...]

The Lucifer Effect: Review

Brain is the master of all evils and devils. Yet, we have understood it so little. How are human behaviors shaped, were human born good, can good people turn evil etc. remain unending questions.

Among subjects in undergraduate level, psychology deals with this kind of issues and brain the most (unless your major is neuroscience). My encounter with two psychology classes in my under shaped my ways of thinking in a positive way (at least I think so.) It is in those two classes that I got to hear the name Phillip Zimbardo, a prominent professor of psychology of Stanford University. It is from there that I started to follow lectures, speeches and the book.

The book stems from his worldly famous Prison Experiment at Stanford. He who organized the experiment was also shaped by the experiment. That is he was also turned bad by the system he set. Another uncontrollable fact was he happened to get to know his wife because of the experiment!!!

The author tries to answer these questions in this book:

“Is it possible for a good person to turn evil? Do you think you have an inner demon, or do you think that you could ever be swayed by bad influences, people or systems? Could you or someone you know ever rob a bank, steal from a neighbor or torture another human being? You'd be surprised at some of the good people who have found themselves doing truly evil things! Could this happen to you?”

Buddha believed that human were born good. Ignorance makes people do bad things by forming ill-willed desires and/or blinding ones from seeing that their actions would lead to harmful consequences. These are coincidentally also the main ideas of this book. The author backs up his arguments by the empirical evidence, especially the Prison Experiment.

Final Words

It is very easy, but maybe irresponsible, to just say that dictators such as Pol Pot, Stalin, Hitler etc. are evils. But it is not a responsible move to say that they are not nationalists. Consider the case of Pol Pot of Cambodia. He was selected, although not totally by his merits, to study in France. He could choose to live happily doing a decent job in Cambodia or France after graduation but he chose to write opinions in a magazine criticizing the government on the unjust (in his subjective opinion) environment in his country and chose to fight against the government. He escaped to the forest, lived with modestly and feared the purge by the incumbent government troops.

Maybe none of us dear to sacrifice that much for our country or community. However, the sacrifice alone is far from deserving the label of a good person. Under his reign, the estimated of 1.7 million people died, starvation was prevalent, and people lived with the fear of death every second for unknown reasons. In this regard, the question of good people and bad people should be reconsider, and this book may enlighten its reader, I believe.

Full title: The Lucifer Effect: Understanding How Good People Turn Evil
Publisher: Random House Trade Paperbacks; Reprint edition (January 22, 2008)
My rating: 5/5
Author:  Philip Zimbardo

[Continue reading...]

Theoretical Research vs. Empirical Research in Economics

Back in Waseda University, I was wondering what a theoretical research in economics is and how different it is from an empirical one. Most students from Cambodia, at least, choose empirical research for both undergraduate and graduate studies. I do not like empirical research because  I would have to look at computer screen with millions of data there. It took me quite a long time to see the difference and finally I chose empirical research. Here I hope to help you see the difference in a short period of time.

Theory, as it sounds, is about explaining how things work. For instance, you may say consumer behavior of spending this month is dependent on their income this month. If you think this is correct, you will find proof to prove that your income this month affects your spending this month. Thus, your research here is empirical. If you think that your behavior of spending this month is dependent on your income this month, next month and several months ahead, you will do a theoretical research because you are modifying the previous theory. 

Is theoretical research about description? If you are a genius, it is true! your description of the theory is more than sufficient. For instance, F.A. Hayek's The Use of Knowledge in the Society is a theoretical paper which uses only words to describe his theory. You may find plethora of such paper as well. However, as a student, even in a Ph.D program, theory research tends to mean utilization of mathematics. You will have to use mathematics to prove your theory. Milton Friedman's Permanent Income Hypothesis, for instance, utilizes the simple concept of marginal utility of consumption. 

Mathematics is not about calculation only. Its underlying concept is the most important part in theoretical research. For instance, Y= X and X=Y are different, with the latter meaning that Y causes X; X happens as a result of Y.  If you like this kind of concept in mathematics, you will find theoretical paper interesting. 

Empirical research is about proving or disproving an existing theory. The theory may not be a perfect one for you to prove or disprove. Using the above example, you may think incomes for two months determine your behavior of spending this month.  In that case, you have to modify the theory first; that means somehow you will include the theoretical part in addition to the main part of your empirical research. Still, your research is an empirical one. Nonetheless, it is not important to classify if your paper an empirical or theoretical one. You definitely can do both in a paper. 

See my Master's Thesis as an example of theoretical research in economics.

[Continue reading...]

An Example of Theoretical Research in Economics, Master's Thesis

My Master's paper is not the best paper, nor is it rigorous. It is not published any where else. I publish it here with the sole purpose: to allow you to take it as an example for your research and write a better one.

[Continue reading...]

Rich Dad, Poor Dad

I was curious about finance and surfed the web for the best book for laymen like me. The title came up but I did not dig into it. However, when I walked in different libraries in my graduate school of Waseda University, I frequently saw it in both Japanese and English versions, which means it is seemingly popular. So I decided to read it. I put it in my iPhone, printed out some pages and also borrow the English version from my library. 

The book is fun to read, plain, coherent and very insightful. I did not get bored reading any part of the book. In fact, I greatly enjoyed reading it. Not only his writing skill that keeps me reading it till the end but also the issues he is trying to deal with that arouses my curiosity. Below are some main ideas he deals with.

Work for Other or Run Your Own Business? 

If  you were born in a family who owns no business, like my family, you tend to focus on secure job and wage you receive per month. At worst, you even hate businessmen as you were taught, by religion perhaps, that profit is a sin. There is a high chance you were taught that aspiration to acquire wealth is bad and you have to control this kind of sinful ambition.

Even if you were born in a family who owns a (successful) business, perhaps it is not your choice to continue the business. You may like working in a company, for a government or charity organization or run a different business instead of fulfilling your parents' wish to continue their business. 

This book would help you answer this question. Spoiler: the answer of course varies from one person to another. 

Can You Become Rich?

Throughout this book, he teaches readers about financial literacy you may have not learned elsewhere. He teaches not only that you can become rich ( I am not talking about every one being a millionaire), but also that you should want to become rich. Of course not all people aspire to become rich or exceptionally rich. There are also significant number of people who desperately want to be rich. In either case, instead of saying you should become a millionaire, he just wants to share his experience of how you can unlock your potentials to increase your wealth, thus the wealth of the society.

Government or Entrepreneur?

Again, this book touches the debate of how far the government should intervene in private life. What the use of business is in the society?  What is the use of government then? Are you sure you know it? 

Does Smart Mean Rich? 

Of course not, exclaim you. Rich does not imply smart as well. However, it is a sad thing when you are smart when stay poor, or when you are rich but stay dumb. 

Final Words

What the most important concept in this book is that he does not say you have to be an entrepreneur, to work in a government sector, in a private company or else. Ask yourself what you like and do best, and plan for it, but in addition to it business is important. The concept of business can raise your wealth in a great deal. Raising your wealth is not a sin. In stead it means you provide goods or service in return for the wealth. 

I believe this book will change your mindsets, for good, toward education, business, government and society.

Full title: Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
Author:  Robert T. Kiyosaki
Publisher: Plata Publishing; 8.2.2011 edition (August 16, 2011)
My rating : 5/5

[Continue reading...]

Free to Choose

Prof. Mankiw of Harvard has written two worldly popular textbooks in economics: Principles of Economics and Macroeconomics. There are many universities and professors who use his textbooks in classrooms. In my university, Kobe University, his textbooks are popular for undergraduate and graduate levels. I enormously like his books, and that is where I got to know the book Free to Choose. 

 

In his note on his further reading at the end of the Principles, Mankiw put it as something like How market economy improves society. This description of him did not catch my attention that much. However, the title Free to Choose did catch my attention. What does it mean by free, and choose what?

Smart people who make themselves easily understandable are admirable. Milton Friedman, a Nobel Laureate in economics science, is also a brilliant writer. This book is fun to read, coherent and stick to the point. His main idea is simple: as long as you are free to choose, the society is prosperous and the economy keeps growing. This principle is loud and clear. All examples throughout this book follow this principle except one (see Conundrum below). 

His ideas in the book largely were built upon those of Adam Smith and Bastiat. To put it in two simple sentences: voluntary cooperation between individuals in the society is the main engine of prosperity and justice. Government role in the society is to facilitate those voluntary cooperation. Did I just say Justice? Friedman is in the school of thought that postulate that voluntary cooperation is a just action. (For more on justice, see Justice: What’s the Right Thing to Do, by Michael Sandel, not yet reviewed here).

The most important parts of this book, to me, are the prefaces and the first chapter The Power of Market. The power of market is exemplified by that fact that people from East Germany risked their lives crossing the Berlin Wall to find opportunities, to where they can freely choose and make the decisions they think are right and not the decisions imposed on them by people in the government in the name of love. 

The most eye-opening examples the authors used that make readers (including Nobel Laureate Gary Becker) see how relevant economics in the society is choice in education: What’s Wrong with Our Schools? Have you ever asked who should run a school? Is it not ubiquitous that schools are run by the government? People also take for granted that good schools are run by government, and to be a prestigious schools, they have to be run by a government. Cambodians would look at examples of prestigious universities in Singapore, for instance the National University of Singapore. People in Japan are also in a similar situation where they see national universities such as The University of Tokyo, Osaka University etc. as the prime examples of superiority of state-run universities over private-run ones such Waseda University and Keio University. If you think so, I challenge you to read this book. If you are an educational reformer who have no specific idea in mind yet, this book is best for you as well. Friedman popularized the concept of school choice, or voucher school.  

Because the authors explained how economy works and people cooperate in societies in plain language, various Third World leaders were thankful to the book, for instance, Estonian Prime Minister Mart Laar.

The Conundrum

There are two main opponents of Keynes: Milton Friedman and F.A Hayek. As a student, however, Friedman was a Keynesian. Every one tended to be one in his time. As a matter of fact, he later won the Nobel Prize in Economic Science by disproving Keynesian fiscal policy. Keynes postulated that consumers consider their current income before making decision to spend. Friedman, in contrast, theoretically and empirically proved that people make decisions on how much to spend basing on their expected long-term income (Permanent Income Hypothesis). Thus, according to Friedman, a tax cut to increase spending is ineffective. 

Another debate is with regard to monetary policy. Instead of discretionary monetary policy, he favored rule-based policy. The reason is the market is stronger that government and so complicated that government can manipulate it with its monetary tool. Thus, supplying money basing on expected economic growth is the safest measure. For example, if the economy is expected to grow 2 % next year, the central should just supply money 2% more, not less to impede growth, not more to induce inflation.

One point that people tend to misunderstand Friedman is with the regard to the abolition of the Fed. Milton Friedman was for the abolition of the Fed. He agreed with Hayek that market can supply money more effectively and efficiently to meet their own needs of money than the government can. Because the possibility of the abolition of the Fed was too slim, he postulated the above-mentioned Monetarism. This is where Friedman did not focus on freedom to choose. Is freedom to choose who to supply your notes good for the society? 

My Intervention

There are many providers of phone service around you. Why do you think we need many providers? Why not ask government to keep only one? Competition is favorable to the economy, you may say. Decentralized management, i.e. two companies managing it instead of one big company, is more efficient, you continue. You name it. So why government allows only one money supplier, namely itself? 

Economists divide functions of money into three: unit of account- what you use to count how much a goods is, store of value- for what you save, and medium of exchange- you can use money instead of changing a book for a tire of a bike. These functions make money special that require central control. I agree with this description (cause I am the one who wrote it here!). However, it is not enough to restrict the supply to only government. No king wants an opposition party!!!

Full title: Free to Choose: A Personal Statement Paperback – November 26, 1990

Authors:  Milton Friedman (1912-2006) , Rose Friedman(1910-2009)

Publisher: Mariner Books; LATER PRINTING edition (November 26, 1990)
My rating: 5/5
This book is complimented by another book of Friedman: Capitalism and Freedom.

See also: 
PBS TV series: Free to Choose (1980) and Free to Choose TV (www.freetochoose.tv/)

[Continue reading...]

Essays on Liberty

Summary 

The birth of modern government system began with two simple principles: one is government is to protect one citizen from being abused by another citizen. Two is government is to protect itself from abusing citizens. The first principle requires that government sets up laws to protect property rights of all citizens. The second principle requires that government assigns limited roles to itself and there be clear laws specifying that the government cannot do specific actions such as taxes on this or that. That is government should be small. As a matter of fact, the war for independence began with the British government charged too high tax on American colony. 

Current U.S governments are far from being small and more principles, in addition to the simple two, are implicitly included. Medicaid, Medicare, Social Security, those social programs are added to the government spending, which eventually requires higher and higher taxation.

"Paul wants some of Peter's property. For moral as well as legal reasons, Paul is unable personally to accomplish this desire. Paul therefore persuades government to tax Peter in order to provide funds with which the government pays Paul a 'subsidy'. Paul now has what he wanted. His conscience is clear and he has proceeded 'according to law."

Does it change the situation if it is the government that persuades Paul to vote them in exchange for the subsidy?

Set your principles first, then degree. 

Who should read it

This book is a collection of essays by freedom lovers, some may call it libertarian or classical liberal (because it is the original sense of liberty in its creation). For Cambodians, and other people from developing countries, I believe it is crucial to understand the concept of liberty.  Because liberty refers to the freedom you would get from the rule of law, it is far from what most people in developing countries misunderstand. Currently, governments in developed countries differ in  degree of their belief in the principles of liberty. More and more taxes are imposed on citizens.

It is a good beginning for those who are interested in the principle of the rule of law, democratic government and free market economy. Those who are familiar with example of minimum wages, labor union rigor in socialist countries in Europe may find these essays disturbing. Keynesian economists, as prominent as Paul Krugman and Joseph Stiglitz, may find these essays archaic. 

Authors: Henry Hazlitt, James Madison, Ludwig Ludwig von Mises, et al.
Publisher: Foundation for Economic Education, July 3, 2013.
My rating: 4.5/5

[Continue reading...]

The 7 Habits of Highly Effective Teens

No doubt, this book is a worldly famous self-help book. The author, Sean Covey , was influenced by his father Stephen Covey, the author of 7 Habits of Highly Effective People, and made it simpler especially for teens. Personally I am highly positively influenced by it. If I hold it to read again, I am not sure if I can stop. Just a little exaggeration, though! And this is why you see this review.

Knowing what is right is difficult. However, urging or forcing ourselves to do the right thing is ways more difficult. Part I of this book is about knowing what is right. So what is right then? To develop yourself, although you sometimes deny it, you know that you are the driver, the main driver, of your life. Thus, be responsible for your life. If you disagree to this, you can stop reading this review and burn the book down (except you bought its e-book version). 

This is book is divided into 4 main parts. Because the flow of his book is superb, I will have to just review it accordingly.

Then, part II is about forming the habits. Again, it begins with perceptions. He calls it paradigms. You have to form a habit of thinking that you can do. Define your goals and its possibility.   Prioritize what is more important and do it in that order. 

Part I and II are about yourself. Make them habits for yourself, the habits that after repetitions no longer burdens but what you like doing. Part III is about dealing with other people. There is only one truth. Christianity refers this as the Golden Rule. Other people have good intentions like us as well. They find it difficult to raise themselves up as well. They misunderstand, sometimes do bad deeds intentionally like us as well. Thus, to grow is to grow together. That is how we should think and do. 

Part IV is about doing it as a habit. Repetitive, is it not?  You keep thinking positively, do it till it becomes a habit, do it with others, do it together, and then your life would be effective. 

Do you see what the most special point of this book is? There is a high chance that you got it. There are too numerous books on self-help. Another one you might hear about or read is Think and Grow Rich by Napoleon Hill. I read this one as well but I must admit that it does not influence me much or at all. I am sorry to its fan, and I know there are a lot! Of course the latter offers enormous number of good theories. The reason for its low rating being that it does not show me HOW to make those good theories applicable or how to force oneself to apply the theories. As I previously said above, people can know what the right thing to do is easily, but it is hard for them to do the right thing. For instance, people tend to know that reading is good for them, but they just do not read. Because the 7 Habits could do this, I give it the crown, which effectively means my rating for it is 5/5.

Author: Sean Covey
Publisher: Touchstone, newest edition (May 27, 2014)

[Continue reading...]

Cambodia promotes motorcycle helmets to halt rise of traffic deaths

In the end of 1990s to 2000s, the largest social ill in Cambodia was the spread of HIV/AID. Recently this is no longer the issue. Most people now understand about the disease and how to prevent it. However, currently the largest social ill is death toll from traffic accidents. Statistics aside, I can see traffic accident one every day in average on my way of commutation from and to workplace. The article is right in that people do not respect laws, including traffic law in Cambodia. 

Why they do not respect laws? Take me as an example in traffic law. At a traffic law, I was not sure if the red light there meant I could not turn right. I did turn right and was stopped by a policeman right a way. He stopped me according to the law but I could pay my way out. That demeans the meaning of law! This is a prime example of laws in Cambodia. Therefore, people do not have the sense of respecting laws or see the need of it. 

What is the main problem here? Requiring drivers to wear a helmet may reduce death tolls but I will not in any way reduce traffic accidents. I find it close to useless. The only solution is requiring a license, meaning people have to know how to drive on the street. From my experience, 99.99 % of Cambodians do not know how to drive on the street. They do not give signals before they turn; When they have to turn, they do not know that those who are going straight in front of them have the priority. 

When they do not even know what the right thing to do, how could they try to protect themselves? 

See the PBS News...

Cambodia promotes motorcycle helmets to halt rise of traffic deaths

[Continue reading...]

Why Nations Fail

You may wonder why Cambodia, among other poor countries, fail to develop. Why we are poor and other are rich? You have answers, of course. You may point to the fact that we had wars, thus no human capital i.e. no knowledgeable persons who know how to develop the country. Some would point to the fact that we are born lazy, i.e. our culture does not induce hard working like Vietnamese culture or Japanese culture. Of course, very few would point to the fact that Cambodia does not have natural resource as we have too many including the sea. So what make us poor? Some would argue that we do not have a good leader. How to have a good leader then? Can another good leaders come and continue to be good after a good leader is dead of old age? In this book, Daron Acemoglu & James Robinson deal comprehensively with these theories. 

Summary

A country fails to grow not because it does not have natural resources. Case study, Japan. 

A country fails to develop not because of culture. Case study South Korea versus North Korea. 

A country does not grow not because of the lack of human capital. Knowledge can be bought these days. Case study, Japan and other countries (Cambodia as well before the France took over the country) bought Western technology and knowledge and even fought with the West like Japan did against Russia. 

A country fails because it does not have an inclusive institution. Rather, it has extractive institution. That is it has a system where growth, or wealth,  is extracted to a group of people from another group of people. A typical example is when a country has a government which taxes their citizens (of course every government lives by money from tax) and provide no or little service in return. The government does not protect the property rights of its citizens, for instance. 

Conundrums

Theories in this book are mostly in direct contrast to those in The Wealth and Poverty of Nations. If you want to dig deeper into this debate, the latter is a good start. In economics, Acemoglu along with other prominent economists such as Douglas North are categorized as institutional economists. They tend to favor institutions as a cause of growths.

In this book, by emphasizing that institutions, i.e. the systems, make a country rich or poor, the authors do know shed lights on how those systems can be made. If you were the United States who imposed system on Japan after WWII, this book is best for you, except you cannot be one. This book is also best for policy makers of aid organizations such as Jica, USAID, AusAid etc. For politicians, especially opposition politicians in a dictatorship countries this book only brings hopelessness. I suggest another book From Dictatorship to Democracy.

I hope you would read the book, republished in 2012, after this review. My rating is 5/5.

Authors: Daron Acemoglu, James Robinson.
Publisher: Crown Business; 1 edition (March 20, 2012)

[Continue reading...]