Quotulatiousness

February 13, 2016

You notice you only ever hear of the Baltic Dry Index when it’s way down?

Filed under: Economics — Tags: — Nicholas @ 02:00

Tim Worstall says that the Baltic Dry Index is way down … and there’s zero reason to panic over it:

The Baltic Dry Index is now down to 293, near 50% down on a year ago and almost 40% down just so far this year. This does not though, despite a remarkable amount of panicking over it, mean that global trade has fallen off a cliff. It does not even mean that global trade has contracted at all. The important point here being, as it is about any other price in the economy, that the price is determined by the interplay of supply and demand, not just demand alone.

Actually, we need to take a further step back. The Baltic Dry Index is an index of the price of shipping (specifically, of large bulk dry cargoes like grain and iron ore, there are other similar measures for oil, containers and so on), not an indication of the volume of shipping or trade. It’s then that we have to recall that prices are about the interplay of supply and demand, not just demand itself.

And the truth is that global trade is not shrinking, despite what is happening to the price of doing that shipping of that trade. Now, if trade were shrinking that would be a problem, yes, because it would be an indication of a general slow down, possibly even recession, in the global economy. That’s not something we want to happen. But the price of shipping falling is something very different.

[…]

Yes, the Baltic Dry Index has collapsed: but that’s a collapse in the price of shipping, not in the volume of shipping nor of global trade. Far from this being a bad sign for the global economy, it contains within it the seeds of good news. If shipping is becoming cheaper therefore it will be cheaper to trade and there will be more of it. Which is good news, because more trade makes us all richer.

And we need to recall this basic point when we think about either economics or public policy. Yes, price changes are indeed telling us something about the economy around us. But we do have to be careful that we pick up the right message. A falling price can be a symptom of increased supply just as much as it can be of reduced demand.

QotD: Education

Filed under: Bureaucracy, Education, Humour, Quotations — Tags: — Nicholas @ 01:00

I put the donkey ears on “teaching” to this purpose. I do own a tweed jacket, though as a priestly colleague has pointed out, it lacks the regulation elbow patches. That is about the extent of my formal credentials as a pedagogue, yet by unlikely fate I have found myself “teaching” sometimes, at the “post-secondary” level, on a variety of topics — from development economics, to science and scientism in Hellenistic times, to the elements of typography, to the prehistory of modern journalism, to proper English Lit — and these days will do almost anything for money.

My father was also reduced to teaching, on several occasions — medicine, for instance — in addition to art, when it was discovered in a certain developing country that he actually knew some anatomy, and had access to a nursing textbook belonging to my mother.

From him, I learned to cite Hippocrates: “First do no harm.” The young, shall we call them, have almost invariably greater capacities for learning than will be revealed in modern schools. This is not only because their wee minds are therein seldom teased nor challenged. It is also because subjects are taught to them in a methodically lethal way, dispensed in cubes from the intellectual freezer, by teachers who, as a general rule, know nothing of the subjects themselves. (They have specialized degrees in “education.”)

I retain vivid memories of a Canadian high school where best efforts were made to kill my budding interests in poetry, theatre, music, art, biology, physics, math, &c.

There are, as George Bernard Shaw once counted, two basic methods of teaching. One is “education through art,” in which the student learns essentially through mimesis, by doing and making, gradually unfolding himself, as a flower to the sun in the moist air, feeding upon the nutrients beneath him — rich soils collecting through time. And the other is through torture. Each has its own standards. (I’m not against torture as a last resort.)

The expression “education through art” could easily mislead the literal-minded, who may not realize that science is an art. One acquires science by doing science, starting at the most rudimentary level, with small children, magically enthralled. Moreover, the various subjects are entwined. To master biology, for instance, one must learn to draw, in order to observe with precision. Physics, which naturally pairs with math, also pairs with music, which turns to pair with dance. The art of writing requires the art of reading, but vice versa equally so. And as throughout this world, while body and soul stay united, form has everything to do with content; meaning everything to do with style. Neither, and nothing, can be “prioritized”: until it comes time for the waterboarding.

“First do no harm.” God has set before every teacher this anciently humane instruction. Even if he should fail to do a student any good, at least do no evil. Do not repel him from the book forever; nor clutter his head with falsities. Even the torture should be carefully administered, leaving a prospect of some better way, and the happier alternative of following it.

David Warren, “Sigrid Undset”, DavidWarrenOnline.com, 2014-12-04.

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