Economy


Our life chances are shaped by the positions we occupy, the resources we control, the ability we have, the effort we exert, luck, and any number of other possible factors. Games can help us to better see how such factors can shape outcomes, especially when, as in the case of some games, the deck seems stacked in favor of some and at the expense of others.

SOCiable – A Game of Life Chances is a card game inspired by the traditional Chinese card game Zheng Shangyou (争上游), meaning “struggling upstream.” Many variations of this game exist, including Dai Hin Min (大貧民) in Japan, Tiên Lên in Vietnam, and President in the United States. Unlike many games popular in the United States, starting positions in these games are hierarchical. Players do not begin with equal resources, power, or opportunities to win. SOCiable is a streamlined version of those games designed to speed up game play in order to fit more hands and games into a shorter period of time (such as a class period).

I’ve been experimenting with using SOCiable in class and thought I’d pass it along. I’ve found it to be helpful when talking about the relationships between structure, individual ability/effort, and luck. I’m hoping that others will give it a try and find it useful, too. I’d love to hear what worked and what didn’t, how students responded, what lessons might have been learned, etc. I would also welcome suggestions for changes or descriptions of how you adapted it to suit your purposes.

I am including both a PDF with full instructions (SOCiable – A Game of Life Chances – version 1.0) and the somewhat briefer PowerPoint file I used to introduce the game in class (SOCiable – A Game of Life Chances (PowerPoint) – version 1.0) . I hope you find them useful.

I talk about these kinds of games in the opening vignette for SOC Chapter 5 as a means of introducing the significance of structures, so it could be used in conjunction with that chapter, but I’ve also used it in my Social Problems course and plan to give it a try in my stratification course this coming semester.

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NPR has a story up, “More Americans Hungry For Food Stamps,” about the rise in food stamp use over the past few years. As the economy weakened, people turned to this program to provide for their basic food needs. According to Marilyn Geewax, the author of the story, food stamp use is up 70 percent over the past four year. She writes:

At this time four years ago, before the recession hit, about 27 million people were using food stamps. Today 46 million get help through the Supplemental Nutrition Assistance Program — what most people call food stamps — which is roughly 15 percent of the population.

The problem is compounded by the fact that food prices have been rising even though wages have remained stagnant.

Included with the story is an audio link so that it possible to listen to the NPR report.

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“I believe in education for action. I believe in telling children the truth about the history of the world, that it does not consist of the history of kings, or lords or cabinets. It consists of the history of the mass of the workers, a thing that is not taught in the schools. I believe in telling children how to measure value, a thing that is not taught in any school.”

– James Bryson McLachlan, Secretary-Treasurer, United Mine Workers Union, District 26, circa 1925.

[h/t Quotation of the Day]

“I believe in education for action. I believe in telling children the truth about the history of the world, that it does not consist of the history of kings, or lords or cabinets. It consists of the history of the mass of the workers, a thing that is not taught in the schools. I believe in telling children how to measure value, a thing that is not taught in any school.”

– James Bryson McLachlan, Secretary-Treasurer, United Mine Workers Union, District 26, circa 1925.

A report on working conditions at a Microsoft factory in China: “China’s Youth Meet Microsoft: KYE Factory in China Produces for Microsoft and other U.S. Companies.”

Pew has a report up on the percentage of young adults moving back home: “Home for the Holidays…and Every Other Day: Recession Brings Many Young Adults Back to the Nest.” According to the article:

To measure changes in household arrangements, the Pew Research survey asked all adults if they lived in their own home or with one or both parents in the parents’ home. The survey further asked all adults if they had moved back in with their parents “as a result of the recession.” Overall, about 11% of all adults 18 or older live with their parents in their home and 4% of all adults say they were forced to move back with their parents because of the recession, a proportion that rises to 10% among those ages 18 to 34.

The full report, including data on the percentages of young people living alone, is available here.

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The Washington Post has an article up on African American unemployment rates: “Blacks hit hard by economy’s punch“.  The numbers are particularly bad for young African American males:

Joblessness for 16-to-24-year-old black men has reached Great Depression proportions — 34.5 percent in October, more than three times the rate for the general U.S. population. And last Friday, the Bureau of Labor Statistics reported that unemployment in the District, home to many young black men, rose to 11.9 percent from 11.4 percent, even as it stayed relatively stable in Virginia and Maryland.

The article also includes quotes from sociologists Devah Pager and Algernon Austin.

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TransUnion has released a report on credit card debt. In their news release they summarized the findings as follows:

Average bankcard borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) inched upward nationally 0.33 percent to $5,729 from the previous quarter’s $5,710, and 1.96 percent compared to the fourth quarter of 2007 ($5,619). The highest state average bankcard debt was in Alaska at $7,466, followed by Nevada at $6,638 and Tennessee at $6,560. The lowest average bankcard debt was found in Iowa ($4,267), followed by North Dakota ($4,414) and West Virginia ($4,555).

The Des Moines Register included a graph as part of its report on the story which focuses on Iowa and Des Moines, but also includes a graph showing the national trends over time:

Credit Card Debt Graph

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BusinessWeek has a post up reporting on how consumption has changed in the last year: A Surprise: What Are Americans Consuming Less of? They report that:

In real terms, Americans are spending $164 billion less (in 2007 dollars) in January 2009 compared to January 2008. Out of that, $112 billion is user-operated transportation–purchases of cars and trucks, and spending on gas and oil.

But another $56 billion of decline came from food! That is to say, adjusted for inflation, real personal consumption of food fell by $56 billion. That’s the second largest contributor to the decline in personal consumption. Number 3, clothing, was only $18 billion down.

In a table that they include in their post, they include spending trends in variety of other categories as well. They report that spending for alchoholic beverages fell $11.2 billion.The largest increase in spending was for medical care which is up $35.6 billion.

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When I read yesterdays headline in the New York Times, “A.I.G. Reports Loss of $61.7 Billion as U.S. Gives More Aid,” I thought I remembered having seen commercials that they had run about their financial stability. Sure enough, a YouTube search brought up a series of such commercials with the tagline being “The Strength to Be There.” The one that most caught my attention featured a little boy who couldn’t sleep because he was worried about his family’s fiscal future. His parents calm his nerves by saying, “Buddy, we’re with AIG” at which point he volunteers to go back to bed and tuck himself in. [link]

According to that New York Time article,

The government intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets.

This past September when the bailout began a series of blogposts pointed out the irony of the AIG commercials. For example, this post at Consumerist.com includes links to three such commercials, and this post at WallStreetFighter.com links to eight AIG commercials.  This post at 1to1media.com indicates the ads were still running as of the middle of September and raises the question as to when companies should “stop whistling past its own graveyard when problems arise, and address its customers’ concerns?”. Even the New York Times got on board with a blogpost suggesting that the new tagline for the above commercial should be changed to “Buddy, we’re with the Federal Reserve.”

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Wired.com has an article up about factors leading to the current economic crisis. Felix Salmon, in “Recipe for Disaster: The Formula That Killed Wall Street,” focuses attention on mathematical formula by David X. Li that Salmon suggests played a  pivotal role in the economic downturn. Speaking of Li’s formula, for example, Salmon writes:

His method was adopted by everybody from bond investors and Wall Street banks to ratings agencies and regulators. And it became so deeply entrenched—and was making people so much money—that warnings about its limitations were largely ignored.

Then the model fell apart. Cracks started appearing early on, when financial markets began behaving in ways that users of Li’s formula hadn’t expected. The cracks became full-fledged canyons in 2008—when ruptures in the financial system’s foundation swallowed up trillions of dollars and put the survival of the global banking system in serious peril.

While the article is interesting for its analysis of what happened, to me, as a sociologist, it is also interesting because it points to the limits of reliance on too narrow quantitative indicators for complex social phenomena. For example, Salmon writes:

During the boom years, everybody could reel off reasons why the Gaussian copula function wasn’t perfect. Li’s approach made no allowance for unpredictability: It assumed that correlation was a constant rather than something mercurial.

And he later adds:

Bankers should have noted that very small changes in their underlying assumptions could result in very large changes in the correlation number.

And:

They didn’t know, or didn’t ask. One reason was that the outputs came from “black box” computer models and were hard to subject to a commonsense smell test.

One of the dangers of over-reliance on such quantitative indicators is failure to recognize their limitations. In this case it would appear that part of the problem was that many of those who used the formula either didn’t fully understand or underestimated such weaknesses. In practice, both quantitative and qualitative approaches are invaluable as tools to help us to better understand our social worlds, but any method we might use to collect data can only tell part of the story.

David X. Li's Copula Function Formula

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