Friday, July 25, 2008

Great Observation by Shiller

Bob Shiller called the internet bubble in 1999, and created the housing index now so valuable for monitoring the current economic crisis. Pretty good. He really nails this description of 'two types of people':

influential people seemed to be sharply divided into ‘cosmopolitan influentials,’ who habitually orient themselves with respect to the world at large, and ‘local influentials,’ who orient themselves with respect to their own town. As he and his assistants interviewed people, the division between the two groups became more intriguing, and significant, in his mind.

Merton did not say that the cosmopolitan influentials were influential outside Rovere — apparently none of them was. What stood out instead was their habitual frame of reference, which was tied to their personal identities. When Merton engaged people in conversation, any topic would remind the cosmopolitan influentials of the world at large, while local influentials were reminded of things in their own town.

I think there are advantages to both, and like anything, moderation is key. Blowhards totally ignorant of their city are pretentious and really not that smart--you learn a lot from the practicalities of your city's politics and trends. But then, people who don't know about Norway, Brazil, or Japan, are missing out on a lot too.

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