FACT: “The 1930s brought the first inklings of New York fashion talent. In February 1931, a group of fashion leaders, Helena Rubenstein, Elizabeth Arden, Vogue editor Edna Woolman Chase, and Eleanor Roosevelt held the first meeting of the Fashion Group, organized as a ‘force’ in propelling women’s careers in the industry. By 1938, the first issue of Vogue Americana hit the stands, and the establishment of the Costume Institute created greater links between fashion and performing arts.”

The Warhol Economy: How Fashion, Art, and Music Drive New York City by Elizabeth Currid

Which is more important to New York City’s economy, the gleaming corporate office—or the grungy rock club that launches the best new bands? If you said “office,” think again. In The Warhol Economy, Elizabeth Currid argues that creative industries like fashion, art, and music drive the economy of New York as much as—if not more than—finance, real estate, and law. And these creative industries are fueled by the social life that whirls around the clubs, galleries, music venues, and fashion shows where creative people meet, network, exchange ideas, pass judgments, and set the trends that shape popular culture.

Ken Rogoff co-author with Carmen Reinhart of the bestselling ‘This Time is Different’ had ‘Lunch with the FT’ in which he was interviewed by Gideon Rachman during the World Economic Forum at Davos. In the decade that he has been attending Davos this was Ken’s first opportunity to have a decent lunch. As well as discussing the global economic crisis the conversation also covers his early love of chess and how thinking about chess helps him get through boring meetings!

Roman Frydman and Michael D. Goldberg’s bookBeyond Mechanical Markets: Asset Price Swings, Risk, and the Role of the State is a finalist for the 2011 TIAA-CREF Paul A. Samuelson Award. This award is named after Nobel Prize winner Paul A. Samuelson in honor of his achievements in the field of economics, as well as for his service as a CREF trustee from 1974-1985. The Samuelson Award is given annually in recognition of an outstanding research publication containing ideas that the public and private sectors can use to maintain and improve America’s lifelong financial well being.

The book was also a Financial Times (FT.com) non-fiction favourite of 2011, and was reviewed by the FT’s John Authers:

“The debate over how to re-regulate [markets and banks] to avoid another financial crisis is urgent and it cannot conclude without resolving the problem that economics’ most basic assumption is flawed. [Beyond Mechanical Markets is one] of the most interesting contributions [to] find a new way to model markets.”

Check out a terrific review of Ruth Grant’s new book STRINGS ATTACHED: Untangling the Ethics of Incentives in yesterday’s Sunday Business section of the New York Times.

WHAT does it mean to treat human behavior as if everyone has a price? That’s the broad question animating “Strings Attached: Untangling the Ethics of Incentives”, by Ruth W. Grant….

Daniel A. Bell, co-author of The Spirit of Cities: Why the Identity of a City Matters in a Global Age with Avner de-Shalit, visited Hub’s Davos Pavilion and spoke with Hub Culture’s Executive Editor Edie Lush during his recent trip to the World Economic Forum. Professor Bell uses “I Heart NY” as the best known example of “civicism,” the term for urban pride he and de-Shalit coined in their recent PUP book, but from the looks of it, perhaps “I Heart Davos” is next:

  We are delighted to announce that Professor Paul Seabright will deliver the second annual Princeton University Press in Europe lecture during the London Book Fair. This year’s lecture, which marks our annual celebration of the Princeton University Press European Advisory Board, will take place on Wednesday 18th April at Goodenough College in London, under the [...]

“Are the champions of the capitalist system now turning against the super-rich? And if they are, what will they now do about it? How can change be achieved without undermining the logic of capitalism?” Raghuram Rajan, author of Fault Lines: How Hidden Fractures Still Threaten the World Economy joins a panel to discuss these questions on Analysis on BBC Radio 4. The interview is now available to listen to online on the Analysis website.

Robert Frank, author of The Darwin Economy: Liberty, Competition, and the Common Good and Sheldon Garon, author of Beyond Our Means: Why America Spends While the World Saves were both interviewed for the Vox EU podcast recently.

Robert Frank’s interview is available to listen to here

Sheldon Garon’s interview is available to listen to here

We hope you enjoy them!

FACT: “By 1636 the Cortes de Castilla had established the first tobacco monopoly, ‘the precious jewel’ among Spanish taxes copied in many European polities thereafter. Thanks to it, a Real Cedula exclaimed in 1684, ‘there is no monarch in the world who derives a comparable treasure.’ Cocoa and chocolate were taxed in many towns, too. In the northern regions discussions about he inclusion of maize in the tithe payments promptly emerged in the early seventeenth century. New World commodities became an almost instant success with consumers and tax collectors alike.”

Distant Tyranny: Markets, Power, and Backwardness in Spain, 1650-1800
by Regina Grafe

Spain’s development from a premodern society into a modern unified nation-state with an integrated economy was painfully slow and varied widely by region. Economic historians have long argued that high internal transportation costs limited domestic market integration, while at the same time the Castilian capital city of Madrid drew resources from surrounding Spanish regions as it pursued its quest for centralization. According to this view, powerful Madrid thwarted trade over large geographic distances by destroying an integrated network of manufacturing towns in the Spanish interior.

We invite you to check out our new 2012 economics & finance catalog at:
http://press.princeton.edu/catalogs/econ12.pdf

Be sure to check out Robert Shiller’s latest book, Finance and the Good Society, Robert Frank’s The Darwin Economy, and Daniel Hamermesh’s Beauty Pays. We’re also featuring 2 of our Princeton Shorts titles—The Second Great Contraction (from This Time is Different) and The Five Habits of Highly Effective Honeybees (and What We Can Learn from Them) (from Honeybee Democracy). Many new paperbacks and ebooks are also available. It’s easy to download the catalog to your smartphone or tablet for browsing.

We’re at this year’s ASSA meeting, which started today in Chicago. Stop by and visit us at booth #714.

Ruth Grant, author of Strings Attached: Untangling the Ethics of Incentives, sat down with our co-publishers The Russell Sage Foundation for a brief Q&A in which she offers her take on what happens when you dig beneath the surface of incentives and view them as a form of power. Here are a few questions to whet your appetite, but head over to the Russell Sage Foundation site to read the complete interview: http://www.russellsage.org/blog/interview-ruth-grant-ethics-incentives

Q: While incentives are largely viewed now as an alternative to social control, you look at the history of their use at the turn of the 20th century and find a much more controversial and worrying story. How were incentives perceived back then, and in what context were they discussed?

A: The term “incentives” was introduced in America in the early 20th century in several different contexts, including Frederick Taylor’s scientific management in industry and the new field of behaviorism in psychology. (Surprisingly, the term is not found in 18th century writers like Adam Smith). Incentives were introduced in industry as a tool of social engineering, while in psychology, behaviorists believed that they could gain social control by using incentives to induce desired behaviors. Incentives were quite controversial at the time. They were often criticized as dehumanizing, and in the form of piece-rate wages, they were a source of conflict between unionized labor and management.

Q: Someone defending incentives could say they merely offer a choice to the public. So, for example, states didn’t have to compete in the Race to the Top education program if they didn’t want the strings attached to the federal funds. But you suggest this focus on voluntariness relies on a rather narrow definition of freedom and rationality. Could you elaborate?

A: When incentives are viewed as a type of bargain or trade, the ethical focus is exclusively on whether or not the transaction is voluntary. So, for example, people argue over whether offering large sums of money to a poor person to participate in research is “coercive.” But this is not the only question. When incentives are viewed as a form of power – one way I can get you to do something you otherwise wouldn’t – additional ethical questions arise of the sort that always arise about the use and abuse of power. To return to the example — if the research is filling out a questionnaire, nobody would really worry about coercion. If the research involves invasive and painful procedures, then the first question is whether the researcher ought to be conducting this study on human subjects at all. (Of course, often the answer will be “yes”).

Incentives do offer a choice – but that is not sufficient. Mice in a maze also have choices: left or right? Studies have shown that incentives with human beings often backfire in situations where people find the incentives insulting. Incentives imply that you wouldn’t do the thing you are being asked to do for intrinsic reasons. Studies show that people tend to feel insulted by incentives when they take the place of persuasion; when they micromanage; or when they fly in the face of people’s generous impulses – for example, paying for blood “donations” can decrease the number willing to give. In other words, while incentives offer choices, they are based on a psychology that assumes people are reactive and malleable, like the mouse. They do not treat people as fully autonomous rational agents.

You can also read a sample from Ruth’s book here: http://press.princeton.edu/chapters/s9546.pdf

Along with “quit smoking” or “lose weight,” “save more” is consistently one of the most popular new year’s resolutions. But that’s easier said than done, especially when millions of Americans still lack access to a basic bank account.

Sheldon Garon, Princeton professor and author of Beyond Our Means: Why America Spends While the World Saves, argues that there are ways to change that. In addition to the new reforms and protections recommended by the Dodd-Frank Act and the Consumer Finance Protection Bureau, the U.S. Postal Service could provide services similar to the postal banks still popular in countries with high personal savings rates–such as Belgium, France, and Germany. In the process, the USPS might also “save” itself from its well-publicized financial woes.

Professor Garon recently talked with Kiyoshi Okonogi of the Asahi Shimbun about postal savings and other possible solutions–read the full Q&A here. (See also Reid Cramer’s post at the New America Foundation’s The Ladder blog, Felix Salmon’s article at Reuters, and Tim Fernholtz’s post at GOOD.)

Gregory Mills of the Urban Institute‘s MetroTrends blog wrote up a post earlier this week about the importance of making it easier for would-be small savers to access basic financial services. He goes on to argue that the U.S. could seriously benefit from “modern-day, higher-tech equivalents” of school or postal savings banks.

Want to add your two cents to the discussion? Prof. Garon will be speaking with Marty Moss Coane on WHYY’s “Radio Times” this coming Tuesday, January 3rd–call in with your questions!