Sight & Sound: Milton Friedman

February 6, 2009

Professor Cheung has discussed and referenced Milton Friedman many times and I first got exposed to Milton’s work through Steven. Here are some sights and sounds from Milton.

Here is Milton in his famous and popular Free to Choose TV series (1980 & 1990). Call me old school, I love the original 1980 series (10 hours in total) much much more because it was less “produced” and more spontaneous/heated in the debate, plus there were a total of 10 episodes in 1980 and only 5 in 1990. Hong Kong got an honourable mention in episode 1 where Milton was in Hong Kong to shoot the series.


P.S. You will see Arnie introducing the 1990 series. (smile)

P.P.S. It has not escaped my attention that this series is available online for free for all to watch. A good example of “Free Lunch”? (smile)


Sight & Sound: Ronald Coase

February 6, 2009

Over the years, I have been exposed to some really interesting and insightful economists by the columns of professor Cheung. And as one math professor taught me well, I’ve always try to learn directly from the masters themselves. So here are some sights and sounds from these masters starting with professor Ronald Coase.

Here is prof. Coase’s 2003 Coase Centennial Speech (500MB QuickTime file, recommend downloading it before you watch it) from Ronald Coase Institute’s online material section. I now can say I have watched or listened to the video more than five times now, and I am sure I will still learning from it when I watch it again.


Father and Son – 想像力的培养 – On Creativity

February 5, 2009

I am very touched by Professor’s lovely and touching post “想像力的培养“.

To me the post is about,

  • the love between a father and son,
  • his journey in finding creativity,
  • and ultimately an attempt to impart his views on creativity to his son and the sons and daughters of China.

While it is probably presumptuous for me to share my views on creativity, I am blessed with the firm belief that my lack of knowledge on something should not be a reason to stop me from writing about it. I know I am an idiot sometimes and I am proud of it. (big smile)

Anyways, I love to read a lot. And a lot of useless stuff. Magazines, books, biographies, and fictions. I started a love affair with libraries because of the free books & magazines (yes, Seventeen was one of my fav) I could browse and borrow plus the wonderful air conditioning in a hot Hong Kong! I also picked up some of my English speaking and listening skills from watching a few fun but completely pointless and silly TV shows. And, I seem to not mind making a fool out of myself which has helped me a lot in learning English when I first came to Canada for my last year of high school.

Keeping this post to a reasonable length, I want to mention just one more story.

In 2001, I discovered prof. Mihaly Csikszentmihalyi‘s (a former head of U of Chicago Department of Psychology) wonderful book “Creativity: Flow and the Psychology of Discovery and Invention” by random “chance”. (ah, one of the benefit of reading loads of random stuff.) And I also had a great time listening to his audio-book “Flow: The Psychology of Optimal Experience” read by Csikszentmihalyi himself. A few things that prof. Cheung wrote about him experiencing reminded me of what the state of “Flow” is all about,

Finally, allow me to end this post with the music video of the song “Father and Son” by Cat Stevens. I picked up this song from Kevin Roberts‘ whose ideas (through his articles, interviews, books, etc) I’ve tried to learn from for over 10 years now. (Kevin is the CEO Worldwide of Saatchi & Saatchi.)

P.S. I think prof. Cheung may have been too harsh on himself re the way he had taught his son. For me, I will ask if Ronald is happy himself. He has to walk his own path and be his own man. I am sure Ronald is creative in his own way that prof. Chueng is not aware of.

P.P.S. While I said random “chance”, I also believe chances favoured the prepared minds. When you have worked hard and are prepared, sometime “lucky” things seem to happen. 🙂 Well, thats what I hope and use as an excuse to pile on learning about “useless” stuff and reading about “useless” things. This is a gamble. But what else in life isn’t? (big smile)

山登绝顶我为峰 II

February 4, 2009


Professor Cheung’s   山登绝顶我为峰triggers me to write about what make a top economist: someone sitting at the peak of economics.  Cheung himself and Keynes shared their opinions on the similar issue and here are my humble ones.

1.  Methodology

It is important, if not essential, for any economist to adopt a good methodology.  Some many brilliant scholars having spent years in a research area that ends up generating limited use and influence.  Refutable hypothesis, observable variables, real world constraints, evidence based analysis and transaction cost in an ordinal sense are all very good approaches being preached by Ronald Coase and Professor Cheung;

2.  Professional ability

Being able to work with abstract concepts and ideas is definitely crucial in order to succeed in the study of economics.  Many existing economists are very strong in mathematics and statistics without the mastery of Price Theory, which includes law of demand, law of variable proportions, the concept of rent, capital, interest as well as profit, and thus achieve very little in interpreting economic phenomena and behaviors.  After reading the work of Milton Friedman and Armen Alchian, one just cannot deny that they are the masters of Price Theory.  The empirical part, which is to confirm a hypothesis by data and facts, is also important.  Friedman, again, is equally good at it: A Theory of the Consumption Function illustrates how a theory can be supported by evidence in a scientific way.

3.  Logic and deductive reasoning

Individuals like David Ricardo (comparative advantage), Irving Fisher (capital and interest), Paul Samuelson (trade theory) and Kenneth Arrow (impossibility theorem) are so strong in logic that they can simply deduce ‘pure’ theories without worrying much about real world constraints.  For the rest of us, to start with observation of real world constraints is a much safer step.

4.  Originality and creativity

This is rare even among very good economists.  Even Friedman, whose professional ability was second to none, cannot described as very original and creative in the academic area (his most innovative idea must be the policy recommendation of educational voucher).  Most of his ideas are very much the elaboration of thoughts from Marshall, Knight and Fisher.  Although Schumpeter’s thinking is not free of flaws, I would argue that he is one of the most original and creative ones in the last century (to come up with the ideas of creative destruction and innovation).

5.  Taste

Knowing ‘what is important’ is a gift.  Douglas North, though not particularly creative and talented, is so good in detecting the ‘Big Fish’.  His combination of history and new institutional economics creates large impact.  In the history of economics, who gets a better taste than Adam Smith?

A reply to Wallace’s 山登绝顶我为峰

February 2, 2009

Here is my reply to Wallace’s 山登绝顶我为峰 blog entry,

As a non-economist, I am not knowledgeable enough to pick Prof. Steven Cheung’s best economics paper. But I can say his way of thinking and analyzing problems have played an important role in shaping my own. So to me, the most important series of articles were the following three that he wrote in 1984 to share his insight about how to think and analyze.

思考的方法(上), (中), (下)

For me, I try to read and learn from people like Professor Cheung, Warren Buffett (his 2008 biography), Richard Feynman, and Bill Buxton for their specialized knowledge but also the way they analyze and solve problems and sometimes even how they live their lives.

Wallace, you mentioned,

2. The style is getting closer to Adam Smith

One major strength of Smith’s work is the evidenced based approach. I would argue that Professor Cheung’s articles in recent years are often short of evidence, despite that the creativity still exists.

I wonder if the main reason of Prof. Cheung’s articles in recent years being “short of evidence” was due to Prof. Cheung having “internalized” lots of these “evidences” and not wanting to spend time and energy to write and record them? You see, this reminds me of the story of a math professor standing in front of a class proving some theorem and then stop for half an hour and then said to himself, “oh yes, this is obvious” and then continue on with his proof without any additional explanations.

Wallace, am I right to think and say that those missing evidence and data may be “obvious” to professor Cheung, but for many other economists to have a chance to understand and follow the professor’s line of reasoning in a concrete and reproducible manner, a lot more of these missing evidence and data have to be included and provided?

While I don’t know how likely is this, but without the missing evidence and data, there is much less chance to point out any potential flaws in the analysis and reasoning thus making the theory less able to stand the test of time?


January 23, 2009


This article by Professor Cheung has brought up two discussable issues.

1.  Among all his works, which is the best?

I personally would vote for ‘The Fable of the Bees’: a paper with much originality and supported by solid empirical data

2.  The style is getting closer to Adam Smith

One major strength of Smith’s work is the evidenced based approach.  I would argue that Professor Cheung’s articles in recent years are often short of evidence, despite that the creativity still exists.


January 21, 2009

Professor Cheung has said this paper is another peak of his academic achievement.  It is thus very worthwhile to spend time to study this work.

I like the idea of adopting Contractual Arrangement as the theoretical basis for the concept is more comprehensive and fundamental compared to property rights, institutions (which are simply various types of contractual arrangement).   Using regional competition to interpret the growth of China is another powerful approach. 

I expect Cheung to go more in depth the role of government in marketization.  It also surprises me that the process of establishing necessary infrastructures (especially the legal and financial ones) is not covered.  The part on China’s monetary policy is interesting but there is obviously a lack of details, especially without touching how China has relaxed her capital control on a gradual basis.