economics

July 20, 2009

Bread, Milk, and Pocket Change: A Brief History of Childhood

Filed under: Uncategorized — ktetaichinh @ 12:39 am
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une 23, 2009

sinakidconsumethumbA spread in Southern Metropolis Weekly features writers recalling their childhoods in China, from the ’60s through the ’80s. These brief essays follow the thread of China’s modernization and opening up, from the simple, hopeful lives of the Cultural Revolution to the first big influx of products and ideas two decades later. Here’s the translation…

Three Decades of Children’s Consumer Experience

childhoodsmw1pThe children of the 1960s lacked money to consume, and lacked consumer stores; they were dedicated to education, under the firm belief that in the future, “we can have bread, and milk too.” Children of the 1970s had snacks, children’s books, and also TV and movies; it was a beginning step toward realizing a “tandem physical-spiritual bumper harvest.” Children of the 1980s weren’t lacking for physical things nor for time: they had foreign dolls, game machines, and newly created extracurricular classes.

1960s: No Concept of Consumption, Self-Made Toys
Interviewee: Liu Xiaohui, female, born in 1964, assistant professor in higher education institutechildhoodsmw2pI simply didn’t have a concept of spending money; there was a particular lack of material goods. Even if the family had money we could not buy things. If someone wanted a small item from the store, it would be treated as if they have a “capitalist tail” and needed to be dealt with. Therefore, I would go into the elementary school class period, and all around the school there were no snacks sold.

That was a difficult decade; everyone’s days were all tight, with barely enough. Before 15 years old, I was not passed down any genuinely new clothes, all were big brother’s and big sister’s hand-me-downs, and the clothes had lots of patches on them. If on Chinese New Year I could have some new clothes made by my parents out of some useless cloth or old clothes, I was indescribably pleased.

I didn’t even have a concept of purchasing toys; I made toys by myself. Girls liked to fly kites, to jump rubber ropes, and boys were crazy about slingshot guns. I loved flying kites in spring, finding some sliced bamboo and some pieces from a used exercise book which could be made into a kite. Boys used some iron wire and some rubber ropes to make a real “weapon,” and fearing they’d be found by the teacher, boys in class always hid them in girls’ desks, because teachers never checked on girls.

At that time, life was rough; still I think my childhood was fairly happy. This might be related to the red brand we had when we were born — from an early age we had been required to dedicate ourselves to inheriting the glorious tradition — therefore my feelings toward consumption were just like the classic dialog “we will have bread and milk” in the movie “Lenin in 1918.” Toward the future, the people in our generation had a happy sense of anticipation.

1970s: Snacks, Pocket Comics, and Movies
Interviewee: Xiong Fang, male, born in 1972, Private business ownerchildhoodsmw3pWhen I went to primary school, it was not long after the Cultural Revolution ended, and my father, who had been characterized as a reactionary, returned to work at the “Institute of Classical Literature” with a monthly salary of 60 yuan. Meanwhile, my brother and I had 1 mao daily pocket money, which increased to 2 mao by Grade 5 or 6.

We spent almost two thirds of our pocket money on buying snacks. Snacks were cheap at that time: 1 fen for candy, 2 fen for a packet of salty nuts, 5 fen for 2 ice sticks, and 5 fen for cotton candy. With more lenient policies, there were more and more people running small businesses; at the beginning, there was only one small store near the school, which became four when I graduated.

I bought some writing supplies every week, like a pencil for 1 fen, an eraser for 2 fen. During Spring Festival, our parents bought us new clothes and gave us pocket money, most of which we had to turn in, though we could keep 5 yuan. Besides food, the largest expense in my childhood was to buy pocket comics such as “Shuo Yue,” “Journey to the West,” “The History of 3 Kingdoms,” “Dingding’s Story,” etc. I had all of them. It seemed to be 7 fen for one. I remember that I sorted and found over 300 pocket comics when we moved to a new home during high school.

TV was a rarity at that time, so all the neighbors in the building would run to watch TV at whosever home had one — TV programs like “Curdled blood,” “Fearless,” etc. I have a fresh memory of it still. Then father took us to the cinema, 5 fen per person. Before screening the film, generally there was a cartoon like “Atom,” which was the happiest moment for the kids. It was always full in the theater no matter what movie was on at the time.

1980s: Popular Entertainment Everywhere
Interviewee: Wang Yizhu, female, born in 1985, senior student in universitychildhoodsmw4pWhen I was studying in primary school, I had 2 yuan for pocket money everyday. I spent 5 mao or 1 yuan on breakfast, and the rest went to the small shops in or around school. I still remember the 2 mao chopstick candy, 1 mao red fruit skins, 1 mao sour plum powder, 5 mao Big Big Bubblegum etc. But I liked the 1 yuan package of jumpy candy, which was the kind of candy that will ping pong and jump around when you put some in your mouth. Sometimes in order to eat the jumpy candy, I had to save two or three days of pocket money.

As far as playing goes, for girls it was role-playing games, except for rubber-rope-jumping. Dolls were seen quite often, and a doll that could change clothes was over 30 yuan. In order to own a doll, I had to beg my parents for one or two months.

As far as playing goes, boys were different from girls; for example, one year my older brother would save 1 yuan each day, in whatever way he could, to play computer games. When he was in grade 6, father bought him a video game player close to 1000 yuan. It was absolutely the most expensive toy at the time, and every weekend there were many boys coming to my home to play games. My brother liked to read comics, 2 yuan for one, and every month he would beg our parents to buy him two; now there are still over ten “Saint Seiya” comics he bought in childhood at home.

Chinese New Year was the most cheerful for my brother and me, because our parents bought us new clothes and shoes. I still remember, in Grade 5, Mom took me to buy new clothes — a 40 yuan white shirt, an 85 yuan princess dress, a pair of 50 yuan red boots — which were my most expensive clothes during primary school. We surely had New Years pocket money, about 200-300 yuan every year, but we had to hand them in before Grade 3. Soon we went to secondary school, where we could receive 500 a year and save 50 or 100 for ourselves.

Now, I am thinking, true play is the theme of our childhood — not too much homework, and not as many extracurricular classes as nowadays. Our generation neither lacked for entertainment, nor for material things, nor time.

NOTES:
1 yuan = 1 RMB
1 mao = .1 RMB
1 fen = .01 RMB

Candies
kuaizitangChopstick Candy (筷子糖 Kuaizi tang)
Chopstick-shaped candy in different colors, sizes and flavors, which kids like to suck and chew. Very popular in the late 1970s and early 1980s.

guodanpiRed Fruit Skin (果丹皮 Guodanpi)
A popular snack with kids, sweet and sour, made of a dry, bright red fruit like hawthorn, or produced from apples and pears. Still can be found in shops today.

sourplumpowderpSour Plum Powder (酸梅粉 Suanmei fen)
A very sour, salty powder made from preserved plum.

dadagumpBig Big Bubblegum (大大泡泡糖 Dada Paopao Tang)
A roll of bubblegum similar to “Bubble Tape” in the United States.

jumpycandy“Jumpy” Candy (跳跳糖 Tiaotiao Tang)
A candy that pops in the mouth, like “Pop Rocks” in the United States.

Pocket Comics
pocketcomic1ppocketcomic2ppocketcomic3ppocketcomic4ppocketcomic5p

pocketcomic6ppocketcomic7ppocketcomic8ppocketcomic9ppocketcomic10p

Original Story: 三代儿童消费体验

July 19, 2009

How to Be Silicon Valley

Filed under: Uncategorized — ktetaichinh @ 3:58 pm
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May 2006

(This essay is derived from a keynote at Xtech.)

Could you reproduce Silicon Valley elsewhere, or is there something unique about it?

It wouldn’t be surprising if it were hard to reproduce in other countries, because you couldn’t reproduce it in most of the US either. What does it take to make a silicon valley even here?

What it takes is the right people. If you could get the right ten thousand people to move from Silicon Valley to Buffalo, Buffalo would become Silicon Valley. [1]

That’s a striking departure from the past. Up till a couple decades ago, geography was destiny for cities. All great cities were located on waterways, because cities made money by trade, and water was the only economical way to ship.

Now you could make a great city anywhere, if you could get the right people to move there. So the question of how to make a silicon valley becomes: who are the right people, and how do you get them to move?

Two Types

I think you only need two kinds of people to create a technology hub: rich people and nerds. They’re the limiting reagents in the reaction that produces startups, because they’re the only ones present when startups get started. Everyone else will move.

Observation bears this out: within the US, towns have become startup hubs if and only if they have both rich people and nerds. Few startups happen in Miami, for example, because although it’s full of rich people, it has few nerds. It’s not the kind of place nerds like.

Whereas Pittsburgh has the opposite problem: plenty of nerds, but no rich people. The top US Computer Science departments are said to be MIT, Stanford, Berkeley, and Carnegie-Mellon. MIT yielded Route 128. Stanford and Berkeley yielded Silicon Valley. But Carnegie-Mellon? The record skips at that point. Lower down the list, the University of Washington yielded a high-tech community in Seattle, and the University of Texas at Austin yielded one in Austin. But what happened in Pittsburgh? And in Ithaca, home of Cornell, which is also high on the list?

I grew up in Pittsburgh and went to college at Cornell, so I can answer for both. The weather is terrible, particularly in winter, and there’s no interesting old city to make up for it, as there is in Boston. Rich people don’t want to live in Pittsburgh or Ithaca. So while there are plenty of hackers who could start startups, there’s no one to invest in them.

Not Bureaucrats

Do you really need the rich people? Wouldn’t it work to have the government invest in the nerds? No, it would not. Startup investors are a distinct type of rich people. They tend to have a lot of experience themselves in the technology business. This (a) helps them pick the right startups, and (b) means they can supply advice and connections as well as money. And the fact that they have a personal stake in the outcome makes them really pay attention.

Bureaucrats by their nature are the exact opposite sort of people from startup investors. The idea of them making startup investments is comic. It would be like mathematicians running Vogue— or perhaps more accurately, Vogue editors running a math journal. [2]

Though indeed, most things bureaucrats do, they do badly. We just don’t notice usually, because they only have to compete against other bureaucrats. But as startup investors they’d have to compete against pros with a great deal more experience and motivation.

Even corporations that have in-house VC groups generally forbid them to make their own investment decisions. Most are only allowed to invest in deals where some reputable private VC firm is willing to act as lead investor.

Not Buildings

If you go to see Silicon Valley, what you’ll see are buildings. But it’s the people that make it Silicon Valley, not the buildings. I read occasionally about attempts to set up “technology parks” in other places, as if the active ingredient of Silicon Valley were the office space. An article about Sophia Antipolis bragged that companies there included Cisco, Compaq, IBM, NCR, and Nortel. Don’t the French realize these aren’t startups?

Building office buildings for technology companies won’t get you a silicon valley, because the key stage in the life of a startup happens before they want that kind of space. The key stage is when they’re three guys operating out of an apartment. Wherever the startup is when it gets funded, it will stay. The defining quality of Silicon Valley is not that Intel or Apple or Google have offices there, but that they were started there.

So if you want to reproduce Silicon Valley, what you need to reproduce is those two or three founders sitting around a kitchen table deciding to start a company. And to reproduce that you need those people.

Universities

The exciting thing is, all you need are the people. If you could attract a critical mass of nerds and investors to live somewhere, you could reproduce Silicon Valley. And both groups are highly mobile. They’ll go where life is good. So what makes a place good to them?

What nerds like is other nerds. Smart people will go wherever other smart people are. And in particular, to great universities. In theory there could be other ways to attract them, but so far universities seem to be indispensable. Within the US, there are no technology hubs without first-rate universities– or at least, first-rate computer science departments.

So if you want to make a silicon valley, you not only need a university, but one of the top handful in the world. It has to be good enough to act as a magnet, drawing the best people from thousands of miles away. And that means it has to stand up to existing magnets like MIT and Stanford.

This sounds hard. Actually it might be easy. My professor friends, when they’re deciding where they’d like to work, consider one thing above all: the quality of the other faculty. What attracts professors is good colleagues. So if you managed to recruit, en masse, a significant number of the best young researchers, you could create a first-rate university from nothing overnight. And you could do that for surprisingly little. If you paid 200 people hiring bonuses of $3 million apiece, you could put together a faculty that would bear comparison with any in the world. And from that point the chain reaction would be self-sustaining. So whatever it costs to establish a mediocre university, for an additional half billion or so you could have a great one. [3]

Personality

However, merely creating a new university would not be enough to start a silicon valley. The university is just the seed. It has to be planted in the right soil, or it won’t germinate. Plant it in the wrong place, and you just create Carnegie-Mellon.

To spawn startups, your university has to be in a town that has attractions other than the university. It has to be a place where investors want to live, and students want to stay after they graduate.

The two like much the same things, because most startup investors are nerds themselves. So what do nerds look for in a town? Their tastes aren’t completely different from other people’s, because a lot of the towns they like most in the US are also big tourist destinations: San Francisco, Boston, Seattle. But their tastes can’t be quite mainstream either, because they dislike other big tourist destinations, like New York, Los Angeles, and Las Vegas.

There has been a lot written lately about the “creative class.” The thesis seems to be that as wealth derives increasingly from ideas, cities will prosper only if they attract those who have them. That is certainly true; in fact it was the basis of Amsterdam’s prosperity 400 years ago.

A lot of nerd tastes they share with the creative class in general. For example, they like well-preserved old neighborhoods instead of cookie-cutter suburbs, and locally-owned shops and restaurants instead of national chains. Like the rest of the creative class, they want to live somewhere with personality.

What exactly is personality? I think it’s the feeling that each building is the work of a distinct group of people. A town with personality is one that doesn’t feel mass-produced. So if you want to make a startup hub– or any town to attract the “creative class”– you probably have to ban large development projects. When a large tract has been developed by a single organization, you can always tell. [4]

Most towns with personality are old, but they don’t have to be. Old towns have two advantages: they’re denser, because they were laid out before cars, and they’re more varied, because they were built one building at a time. You could have both now. Just have building codes that ensure density, and ban large scale developments.

A corollary is that you have to keep out the biggest developer of all: the government. A government that asks “How can we build a silicon valley?” has probably ensured failure by the way they framed the question. You don’t build a silicon valley; you let one grow.

Nerds

If you want to attract nerds, you need more than a town with personality. You need a town with the right personality. Nerds are a distinct subset of the creative class, with different tastes from the rest. You can see this most clearly in New York, which attracts a lot of creative people, but few nerds. [5]

What nerds like is the kind of town where people walk around smiling. This excludes LA, where no one walks at all, and also New York, where people walk, but not smiling. When I was in grad school in Boston, a friend came to visit from New York. On the subway back from the airport she asked “Why is everyone smiling?” I looked and they weren’t smiling. They just looked like they were compared to the facial expressions she was used to.

If you’ve lived in New York, you know where these facial expressions come from. It’s the kind of place where your mind may be excited, but your body knows it’s having a bad time. People don’t so much enjoy living there as endure it for the sake of the excitement. And if you like certain kinds of excitement, New York is incomparable. It’s a hub of glamour, a magnet for all the shorter half-life isotopes of style and fame.

Nerds don’t care about glamour, so to them the appeal of New York is a mystery. People who like New York will pay a fortune for a small, dark, noisy apartment in order to live in a town where the cool people are really cool. A nerd looks at that deal and sees only: pay a fortune for a small, dark, noisy apartment.

Nerds will pay a premium to live in a town where the smart people are really smart, but you don’t have to pay as much for that. It’s supply and demand: glamour is popular, so you have to pay a lot for it.

Most nerds like quieter pleasures. They like cafes instead of clubs; used bookshops instead of fashionable clothing shops; hiking instead of dancing; sunlight instead of tall buildings. A nerd’s idea of paradise is Berkeley or Boulder.

Youth

It’s the young nerds who start startups, so it’s those specifically the city has to appeal to. The startup hubs in the US are all young-feeling towns. This doesn’t mean they have to be new. Cambridge has the oldest town plan in America, but it feels young because it’s full of students.

What you can’t have, if you want to create a silicon valley, is a large, existing population of stodgy people. It would be a waste of time to try to reverse the fortunes of a declining industrial town like Detroit or Philadelphia by trying to encourage startups. Those places have too much momentum in the wrong direction. You’re better off starting with a blank slate in the form of a small town. Or better still, if there’s a town young people already flock to, that one.

The Bay Area was a magnet for the young and optimistic for decades before it was associated with technology. It was a place people went in search of something new. And so it became synonymous with California nuttiness. There’s still a lot of that there. If you wanted to start a new fad– a new way to focus one’s “energy,” for example, or a new category of things not to eat– the Bay Area would be the place to do it. But a place that tolerates oddness in the search for the new is exactly what you want in a startup hub, because economically that’s what startups are. Most good startup ideas seem a little crazy; if they were obviously good ideas, someone would have done them already.

(How many people are going to want computers in their houses? What, another search engine?)

That’s the connection between technology and liberalism. Without exception the high-tech cities in the US are also the most liberal. But it’s not because liberals are smarter that this is so. It’s because liberal cities tolerate odd ideas, and smart people by definition have odd ideas.

Conversely, a town that gets praised for being “solid” or representing “traditional values” may be a fine place to live, but it’s never going to succeed as a startup hub. The 2004 presidential election, though a disaster in other respects, conveniently supplied us with a county-by-county map of such places. [6]

To attract the young, a town must have an intact center. In most American cities the center has been abandoned, and the growth, if any, is in the suburbs. Most American cities have been turned inside out. But none of the startup hubs has: not San Francisco, or Boston, or Seattle. They all have intact centers. [7] My guess is that no city with a dead center could be turned into a startup hub. Young people don’t want to live in the suburbs.

Within the US, the two cities I think could most easily be turned into new silicon valleys are Boulder and Portland. Both have the kind of effervescent feel that attracts the young. They’re each only a great university short of becoming a silicon valley, if they wanted to.

Time

A great university near an attractive town. Is that all it takes? That was all it took to make the original Silicon Valley. Silicon Valley traces its origins to William Shockley, one of the inventors of the transistor. He did the research that won him the Nobel Prize at Bell Labs, but when he started his own company in 1956 he moved to Palo Alto to do it. At the time that was an odd thing to do. Why did he? Because he had grown up there and remembered how nice it was. Now Palo Alto is suburbia, but then it was a charming college town– a charming college town with perfect weather and San Francisco only an hour away.

The companies that rule Silicon Valley now are all descended in various ways from Shockley Semiconductor. Shockley was a difficult man, and in 1957 his top people– “the traitorous eight”– left to start a new company, Fairchild Semiconductor. Among them were Gordon Moore and Robert Noyce, who went on to found Intel, and Eugene Kleiner, who founded the VC firm Kleiner Perkins. Forty-two years later, Kleiner Perkins funded Google, and the partner responsible for the deal was John Doerr, who came to Silicon Valley in 1974 to work for Intel.

So although a lot of the newest companies in Silicon Valley don’t make anything out of silicon, there always seem to be multiple links back to Shockley. There’s a lesson here: startups beget startups. People who work for startups start their own. People who get rich from startups fund new ones. I suspect this kind of organic growth is the only way to produce a startup hub, because it’s the only way to grow the expertise you need.

That has two important implications. The first is that you need time to grow a silicon valley. The university you could create in a couple years, but the startup community around it has to grow organically. The cycle time is limited by the time it takes a company to succeed, which probably averages about five years.

The other implication of the organic growth hypothesis is that you can’t be somewhat of a startup hub. You either have a self-sustaining chain reaction, or not. Observation confirms this too: cities either have a startup scene, or they don’t. There is no middle ground. Chicago has the third largest metropolitan area in America. As source of startups it’s negligible compared to Seattle, number 15.

The good news is that the initial seed can be quite small. Shockley Semiconductor, though itself not very successful, was big enough. It brought a critical mass of experts in an important new technology together in a place they liked enough to stay.

Competing

Of course, a would-be silicon valley faces an obstacle the original one didn’t: it has to compete with Silicon Valley. Can that be done? Probably.

One of Silicon Valley’s biggest advantages is its venture capital firms. This was not a factor in Shockley’s day, because VC funds didn’t exist. In fact, Shockley Semiconductor and Fairchild Semiconductor were not startups at all in our sense. They were subsidiaries– of Beckman Instruments and Fairchild Camera and Instrument respectively. Those companies were apparently willing to establish subsidiaries wherever the experts wanted to live.

Venture investors, however, prefer to fund startups within an hour’s drive. For one, they’re more likely to notice startups nearby. But when they do notice startups in other towns they prefer them to move. They don’t want to have to travel to attend board meetings, and in any case the odds of succeeding are higher in a startup hub.

The centralizing effect of venture firms is a double one: they cause startups to form around them, and those draw in more startups through acquisitions. And although the first may be weakening because it’s now so cheap to start some startups, the second seems as strong as ever. Three of the most admired “Web 2.0” companies were started outside the usual startup hubs, but two of them have already been reeled in through acquisitions.

Such centralizing forces make it harder for new silicon valleys to get started. But by no means impossible. Ultimately power rests with the founders. A startup with the best people will beat one with funding from famous VCs, and a startup that was sufficiently successful would never have to move. So a town that could exert enough pull over the right people could resist and perhaps even surpass Silicon Valley.

For all its power, Silicon Valley has a great weakness: the paradise Shockley found in 1956 is now one giant parking lot. San Francisco and Berkeley are great, but they’re forty miles away. Silicon Valley proper is soul-crushing suburban sprawl. It has fabulous weather, which makes it significantly better than the soul-crushing sprawl of most other American cities. But a competitor that managed to avoid sprawl would have real leverage. All a city needs is to be the kind of place the next traitorous eight look at and say “I want to stay here,” and that would be enough to get the chain reaction started.

Notes

[1] It’s interesting to consider how low this number could be made. I suspect five hundred would be enough, even if they could bring no assets with them. Probably just thirty, if I could pick them, would be enough to turn Buffalo into a significant startup hub.

[2] Bureaucrats manage to allocate research funding moderately well, but only because (like an in-house VC fund) they outsource most of the work of selection. A professor at a famous university who is highly regarded by his peers will get funding, pretty much regardless of the proposal. That wouldn’t work for startups, whose founders aren’t sponsored by organizations, and are often unknowns.

[3] You’d have to do it all at once, or at least a whole department at a time, because people would be more likely to come if they knew their friends were. And you should probably start from scratch, rather than trying to upgrade an existing university, or much energy would be lost in friction.

[4] Hypothesis: Any plan in which multiple independent buildings are gutted or demolished to be “redeveloped” as a single project is a net loss of personality for the city, with the exception of the conversion of buildings not previously public, like warehouses.

[5] A few startups get started in New York, but less than a tenth as many per capita as in Boston, and mostly in less nerdy fields like finance and media.

[6] Some blue counties are false positives (reflecting the remaining power of Democractic party machines), but there are no false negatives. You can safely write off all the red counties.

[7] Some “urban renewal” experts took a shot at destroying Boston’s in the 1960s, leaving the area around city hall a bleak wasteland, but most neighborhoods successfully resisted them.

Thanks to Chris Anderson, Trevor Blackwell, Marc Hedlund, Jessica Livingston, Robert Morris, Greg Mcadoo, Fred Wilson, and Stephen Wolfram for reading drafts of this, and to Ed Dumbill for inviting me to speak.

(The second part of this talk became Why Startups Condense in America.)

The New Stars of the Blogosphere

Filed under: Uncategorized — ktetaichinh @ 1:51 pm
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By KELLY EVANS

Americans trying to understand the nail-biting financial trauma of the past several months are flocking by the millions to a surprisingly lively source of enlightenment: blogs written by economists.

Such blogs are thriving in this recession, driven by intense interest from policymakers, investors, academics and people like Zina Poletz, a Minneapolis public-relations executive who says she had little interest in economics before the financial crisis intensified last fall. “I never thought I’d be sitting up late at night reading what [Federal Reserve chairman] Ben Bernanke thinks, but now I do,” she says.

For many people, economics has never seemed so captivating, or so relevant. The enormous appetite for information and guidance right now is hardly a surprise: Even those with a basic knowledge of supply and demand have struggled to keep tabs on the global downturn.

“My [economics] professors were always saying, ‘This is the most relevant class you could ever be in,’” says Christa Avampato, a product developer in New York City with an M.B.A. from the University of Virginia’s Darden School of Business. “But I think until the last 18 months I never really believed them.”

The result is a watershed moment for economics bloggers, ranging from academics to armchair economists, who are all too happy to help readers fill in the blanks—or find a place to vent their frustrations. Traffic to the top sites, such as Marginal Revolution, Freakonomics and the blogs from academics such as Paul Krugman, Greg Mankiw and Brad DeLong, surged anywhere from 80% to 250% from July to September 2008 as the financial crisis intensified, according to Compete.com, a Web site that measures Internet traffic. The most popular blogs can attract as many as 50,000 to 100,000 page views a day.

“The ‘Financial Crisis for Beginners’ page is the most successful feature of our blog,” says Simon Johnson, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. Mr. Johnson started his blog, Baseline Scenario, in September along with his brother-in-law James Kwak to build on the popularity of his blogging stint as chief economist of the International Monetary Fund, and to help people make sense of the unfolding crisis.

“I think there’s a big market for explaining to people what the heck is going on in a global context,” says Mr. Johnson. “Blogging can now be part of this portfolio you can do as an academic.”

Selling Books

Blogging, in return, helps academics raise their profile and connects them to a wider audience. “I make no money from my blog, but I do make money selling books,” says Mr. Mankiw, a Harvard University economics professor who served as chairman of President Bush’s Council of Economic Advisers earlier this decade. Mr. Mankiw is also the author of several textbooks on economics. His eponymous blog has received some 10.9 million visits since he started it as an extension of his academic work in March 2006.

“My publisher loves it that I do the blog,” he says. Its growth and popularity is partly owed to Mr. Mankiw’s succinct style and ability to connect external events to economics—debating the merits of taxing people by height, for example, or exploring how bus drivers respond to hourly rather than per-passenger pay.

He is also known for being a conservative voice in the typically polarized blog universe, which came of age under the Bush administration and led to the popularity of liberal voices like Mr. Krugman, a Princeton University economics professor and newly minted Nobel laureate who writes and blogs for the New York Times, and Mr. DeLong, an economics professor at the University of California, Berkeley, known for his rants against Republican policies.

The financial crisis—and ensuing recession—has helped turn economics bloggers like (clockwise from top left) Greg Mankiw, Paul Krugman, Alex Tabarrok and Mark Thoma into Internet celebrities

The financial crisis has helped crystallize the ideological split between the liberal economists who favor government action and intervention in the economy and the conservatives who prefer a more hands-off approach. The result often pits Mr. Mankiw and other conservatives—such as Arnold Kling, an economist and scholar with the Cato Institute who writes for EconLog, or Megan McArdle, a self-described libertarian who blogs for the Atlantic—against Mr. Krugman or Mr. DeLong in fast-paced, high-profile arguments over health care, budget deficits and stimulus packages.

The economics blogosphere “can be a rancorous place,” says Jared Walczak, a 22-year-old legislative director for a Virginia state senator and a fan of the blogs. Mr. Walczak says he prefers the blogs that instead point toward interesting research and ideas, such as Marginal Revolution, which was started by two George Mason University economics professors and examines a wide range of topics from poetry to autism to ordering at ethnic restaurants. “It’s very eclectic and always a source of something new,” he says.

Marginal Revolution is one of the best-read economics blogs, attracting more than 23 million visitors since its launch in 2003. Its success has boosted the careers of its co-founders, Tyler Cowen—the general director of GMU’s Mercatus Center, which is known as a bastion of libertarian thought—and Alex Tabarrok, a research fellow there.

‘It’s Changed My Life’

“It’s really changed my life,” says Mr. Cowen of the blog, saying he gets several requests for speaking or writing engagements every day and has been recognized “eight or nine times in public—and I don’t even go out that much!” He is the author of several books, including “Discover Your Inner Economist.” His latest book, “Create Your Own Economy,” was released July 9. He and Mr. Tabarrok also have a textbook for introductory economics due out in the fall—the collaboration that years ago sparked their blog in the first place.

While economics blogs have helped fill the public’s craving for guidance to the recession, some of them also became popular for helping alert readers—from the layman to the sophisticated investor—to the looming financial crisis before it hit. One in particular, Calculated Risk—run by Bill McBride, a retired executive in Orange County, Calif.—is often cited as being particularly prescient in warning about the housing bubble and bust, while the Big Picture, a blog run by investor and author Barry Ritholtz, also stands out from the pack. Paul Kasriel, an economist with Northern Trust bank in Chicago, says reading blogs like Calculated Risk helped him realize how bad the housing market was back in 2006-07, when many of his peers were still optimistic.

Some of the most popular economics blogs are those run by major media organizations, including The Wall Street Journal’s Real Time Economics, the New York Times’ Economix and Freakonomics, and the Economist’s Free Exchange, all of which offer a broad swath of news, analysis and daily links of interest. There’s also Economist’s View, a Web site started by University of Oregon economist Mark Thoma in 2005, with detailed analysis of the economy and the Fed, and a comprehensive daily roundup of links for the insatiable reader.

Fans of the blogs say reading them has not only helped them understand the economy, but has also helped them make improvements to their everyday life. Even those who majored in the subject in college, such as Nate Chenenko, 23, who works in Washington, D.C., as a government business analyst, say they have a new appreciation for the subject.

Mr. Chenenko, for example, recently decided to hire a moving company rather than take the weekend off from his part-time job operating a “pedi-cab”—a bicycle taxi—around the streets of the capital. “I realized the opportunity cost of taking the day off would be greater than paying movers,” he says, “and I’m not sure I would have thought of that if wasn’t consuming economics on a day-to-day basis.”

—Justin Lahart contributed to this report.

Write to Kelly Evans at kelly.evans@wsj.com

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