by Tyler Cowen
on August 25, 2011 at 12:25 pm
1. Mike’s dinner with me and Chug, and my take.
2. Does Australia have a Dutch disease?
3. Energy and the Industrial Revolution, very good piece.
4. David Beckworth provides a neo-monetarist critique of the “balance sheet recession” view.
5. Why more polygyny in West Africa? (pdf)
#2 I think you could say the exact same thing about Canada
You should have gone to Karahi across the shopping center. Paper plates and plastic utensils, but very good food…
#1 Damn restaurants that serve in Styrofoam plates; destroys the whole experience.
PS. What’s that triangular sandwich like thing in your plate? Doesn’t seem very Indian nor Pak……..
What’s that thing that looks like a penis? To clarify, I refer to the second photo.
A phallic samosa ?
True moslems refuse to eat triangular samosas.  The triangle ones have vague Christian suggestiveness.
Yeah it’s a strangely shaped samosa. I really don’t like the idea of going to a restaurant and eating on Styrofoam plates either.
Re: Wrigley article.
The article was less persuasive than it might have been before I read McCloskey. But what fried my shorts was the PC line:
“On balance, the forces released by the industrial revolution may be thought beneficial rather than malign but the balance is a fine one.”
Really? A fine balance? Close question whether we are better off than Tudor England.
Yeah, I’m thinking of the Gapminder videos. Late 1800s, how well-off is everyone? How healthy? How about now?
There are many reasons the 20th century saw a gigantic population boom.
Yeah; that irked me too. Unless one were blue blooded nobility (perhaps not even then) it’d be hard to chose to be born in 1800 over today. It never ceases to amaze me, this sepia tinted, quaint view people have of bygone eras.
Isn’t coal an explanation already offered?
And, McCloskey’s claim that coal existed for centuries in other parts of the world so why weren’t people using it…
Coal is poisonous, so it had limited use before the technology was developed to sequester it properly. Thus early steam engines (which were powered by condensation of steam within a chamber, not steam pressure) were powered by wood. Only as these engines improved could coal be used in any abundance.
3. I like Tainter style models where one input (energy) is everything. Simple and elegant. The internet age is a myth. We live in the gasoline age.
# 2. Tyler, thanks for the article on Australia. Some quick comments:
1. Despite the increasing integration into a Global Market Economy, many economists and (all?) journalists still think in terms of national economies (and in large countries in terms of regional or state economies). They are the worst kind of defenders of the status quo –they are afraid to lose their privileges (both their human capital and their well-paid jobs). They are not different from the Luddittes, the old monument to futility. Indeed, it’s not different from the stupid reaction to Texas’ better performance within the U.S. Yes, good for Texans, Australians, and all others that are collecting the low hanging fruits planted by China and the other emergent economies.
2. Rather than celebrating the integration of China and the other emergent economies into the world economy, the modern Luddittes are scared and frustrated by their lack of ideas. One typical reaction is to denounce the “Dutch Disease” as if it were a plague sent by God. It only means that the shock to world economy is forcing a reallocation of resources in most countries and even within countries. It’s forcing it in all advanced economies as well as on the economies of Latin America, Africa and Asia. It’s MR! It’s Hope and Change for billions of people! And thanks God, the fraudulent clowns cannot stop it –at most they can slow it down.
3. I know little about Australia, but today Australia in many ways resemble what is going on here in Chile. Both are becoming mining economies –most of the investment is closely related to increasing mining output directly or indirectly (I ignore environmental concerns that have slowed down the process). And long ago both countries established systems of free floating exchange rates. Rather than eliminating their national currencies –by far their best option in today’s Global Market Economy– they have chosen to let the rates float –and indeed they have been floating in just one direction for the past several years. In theory this should have accelerated the reallocation of resources towards mining, but the losers are fighting back and lobbying the fraudulent clowns for a reversal of the large appreciation of the national currency. This weekend, at Jackson Hole, the governors of the two central banks may tell nice stories about how they have been able to control inflation but little about how the economy is adjusting to the shock to the world economy.
Capital can flown swiftly across borders but labour is, for the most part, tied to the land of its birth (like a modern day serf). Crossing borders is MUCH more difficult for labour then capital therefore for most people national economies still matter a hell of a lot.
Rather than eliminating their national currencies –by far their best option in today’s Global Market Economy– they have chosen to let the rates float
What does that mean? They should use the dollar?
This guy wrote a lot – a lot of nonsense, every one of his points are idiotic.
Rahul, what all countries need today are good payments systems. Rather than wasting time about how to improve systems of fiat currencies issued by national governments, today challenges are to improve the safety of payment systems based on electronic credits and debits of demand deposit accounts, and to reduce the prices charged by licensed enterprises.
For example, you may have heard that last June Larry Summers joined Square’s board, a company that provides electronic payments services for small business. I don’t know how reliable their services are, but they charge 2.75% per transaction (see https://squareup.com/). Here in Chile almost all businesses rely on an electronic system that is regarded as safe but charges well over 3% per transaction. Of course, in most countries, today all large, legal transactions rely on special electronic systems for domestic and international payments. I like to say that the only relevant role of the Federal Reserve System is in relation to payments services and in particular to electronic payments (see http://www.federalreserve.gov/pf/pdf/pf_7.pdf).
If tomorrow California and Greece were to get out of the U.S. dollar zone and the Euro zone respectively, and someone were willing to pay you $10 million for designing payment systems for them, what kind of system would you recommend?
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The authors never consider that causation could run the other way, i.e. that polygyny weakens a society so much that it is easy to overpower by bad people, such as slave traders.
(For those who havent read, they argue that the abduction of male slaves across the Atlantic from Western Africa caused a lack of males, and that has led to polygyny centuries later).
Two indications are that a) polygyny persists at a higher rate in African Americans today, just like in Western Africa and b) in Eastern Africa, where mostly women were enslaved, polyandry is still not common.
#5 is a spectacularly stupid paper. Through lots of massage of unreliable data they discovered some (weak) correlations and decided they are causal, concluding that polygyny is more common in Western Africa than Eastern Africa due to the trans-Atlantic slave trade. They do not even attempt to seriously consider alternative explanations (e.g. the fact that women are traditionally the primary food producers in West Africa, requiring less paternal investment), or explain why polygyny would persist centuries after the sex ratios normalized. They just disregard all the previous work done on the determinants of polygyny in Africa in favor of their explanation of which they are cocksure.
Are you referring to this paper? I didn’t know there was an east-west difference.
“in favor of their explanation of which they are cocksure”: which reminds me – to be sure that slaving in E Africa depleted females more than males it is not enough to count the slaves delivered to the Red Sea or India. Male slaves taken for Muslim markets were often castrated, and only those who survived the castration were delivered. So the male depletion rate would be substantially bigger than the male delivery rate. You’d need to allow for that in quantitative arguments about E and W Africa.
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