by Tyler Cowen
on January 17, 2012 at 12:22 pm
1. A claim that China will democratize, and soon.
2. Why is household formation slow? and Caplan reviews Murray.
3. Taleb podcast on antifragility, with Russ Roberts.
4. Why are fewer Puerto Ricans playing major league baseball?
5. Liberty Fund has a blog.
RE China: I don’t believe anything about democratization or liberalization in China, as long as they still hold last year’s Nobel Peace Prize laureate as a prisoner: http://andreasmoser.wordpress.com/2010/10/15/liu-xiaobo/
I agree that PR China is very far from Democracy, but South Africa was very close to it in the final years of Mandela’s imprisonment, so that may not be good logic.
It’s much closer to democracy than the European Union.
Holding the Nobel Peace Prize laureate as a prisoner is exactly the kind of conditions that suggest China is approaching critical civil unrest. I’d say it’s a very good sign.
Re 2: A lot of guys tell me they don’t wanna marry because the legal system makes families very fragile. They now bear the majority of the downside risk.
Women tell me they don’t wanna marry because men are acting too much like boys and just wanting to play video games all the time.
Another thing to consider is the legal definition of marriage and how it affects young dual-earners without kids. I’ve been told that marriage is between two individuals and god (or something like that). But legally, it is between us, the tax man, the congressmen making up retirement account regulations, and a whole bunch of other government institutions. And for dual-earners (with employer-provided healthcare) the disadvantages outweigh the advantages. Let’s see, pay extra $$$ in taxes per year and no longer able to contribute to a Roth IRA? What do I get for this? It looks like I’ll be living in a “non-family” household for a long time.
Ironically, domestic partners, at least in CA, appear to get most of the advantages of marriage (shared health insurance, parental rights, etc) without the IRS-related downsides. I should look at what is required to legally change my sex.
First of all, why would anyone care how many Puerto Ricans are playing major league baseball? Big league players come from all over the world now, since baseball statistics reduce subjectivity in player evaluations the sport is more of a meritocracy than most. At one time there were probably very few native Puerto Ricans in baseball, then there were many, that’s just the way things go. Once there were no Australians or Koreans in the game, now the number is growing. As an aside, there are probably more ethnic Puerto Ricans living on the mainland than the island itself, how many of them are in the big leagues?
It is very interesting for what is says about Puerto Rico’s relationship to the metropole, in the past it had the advantages of being treated like the Dominican Republic but simultaneously being part of the US, now it must compete with the full states, its disadvantages in educational attainment harm it. The question is how does PR compete in baseball when compared to a comprable population in the 50 states? Of course there is no possible comparison because Puerto Rico is an ill governed backwater.
#2 seems to be stating the obvious. I don’t think anybody was operating under the assumption that non-family households are at the root of declining household formation. I don’t know what the author’s standards for evidence regarding causality are but you’d have to be living under a rock to miss all the anecdotal evidence of the young either going back to school or moving in with their parents.
#2: From the article: “The chart below (last 20 years) shows that non-family households have generally been growing in line with the US population and although dipped in 2008, have since recovered.”
Actually, based on the associated graph, population increased at 22% over the period; non-family households increased by 40%–so nearly twice as much as overall population growth. This is one of the “lying with statistics” things. If you have right hand and left hand scale, you can make the slope the same by adjusting one of the scales. The author is, however, trying to make a visual point tied to the yet another graph below. Notwithstanding, it leaves the impression that non-family households are holding a pro rata share. They are actually increasing much faster.
1. I think it will happen slowly, and then all at once. But I think the timing of the second part is not predictable.
2. I can offer a little bit of anecdotal data here — my wife and I are strongly considering inviting her mother to live with us after our child is born, to help take care of him so my wife can go back to work. Since her mother earns about 1/10th what my wife does, this is value-added. We would be fine without my wife’s income (we save considerably more than what my wife makes), but we are very leery of giving up an income stream at a time like this. I imagine others are in similar positions.
BTW I should, it’s not just unemployment, it’s also the low rates of return and deflation — cash flow becomes much more important.
I think example is instructive. Until recently, I doubt that older people moving in with their grown children were broadly viewed as adding value to their children’s household. In many cases, the older parents moved in due to illness or disability. Now that many of these older people are in good health, have pension income (or at least SS income), and can contribute their labor to their children’s household, they can add tremendous value while saving total housing expenses.
It is also the case that grown children in their twenties and thirties have experienced significantly reduced economic circumstances combined with very high housing costs. The natural solution to both of these is to live with other people, in many cases mom and dad.
Given that both of these are long-term trends, I don’t expect to see any great change. In Europe, it is fairly typical for children to stick around or float back and forth for long periods of time. We are just getting where Europe has been for a long time.
#1. A claim that China will democratize, and soon.
Perhaps, but the more important questions are will the process be relatively peaceful and will the final result be more like South Korea or more like Russia?
I would bet Russia.
South Korean society was torn down by the Japanese occupation, and when the U.S. landed one of the first things they instituted was freedom of press. They suffered a few autocrats but they had a good basis from which to build social capital.
Around the same time, China was implementing the Great Leap Forward, which involved various insane things like having people smelt steel at home. They will be many generations recovering.
“Around the same time, China was implementing the Great Leap Forward, which involved various insane things like having people smelt steel at home.”
Out of all the insane things from the “Great Leap Forward”, I would not have classified smelting steel at home as one of them. Stupid, yes. Insane, no. At least not given a lot of the other policies.
the bit on South Korea is comically ill informed.
2: The sexual revolution caused divorce to be an acceptable outcome, which caused rates to skyrocket. Since then the educated upperclass has figured out how to make marriage work despite the ease of divorce, and the lower classes haven’t. Inequality in self-knowledge: http://veratevelde.blogspot.com/2010/12/inequality-in-self-knowledge.html
As Kaplan says, the elite have the answers that the masses need, and blames the elite for not sharing them. But I wonder if there is such a growing cultural gap between those groups that the elite’s answers arent even relevant or desired by lower-lowerclass. A 15-year-old teen mom with 2 illegitimate kids living with her grandmother can’t look to a stable suburban household for guidance; the circumstances are too different.
“Since then the educated upperclass has figured out how to make marriage work despite the ease of divorce, and the lower classes haven’t.”
This seems wrong to me. I would think that the educated upper class have a very high financial interest in making marriage work. Whereas, the lower class will often financially benefit from not being married.
No one at the low end is worried about not getting the marriage deduction on their taxes or having to break up 2 401K’s and sell a large house. Furthermore, at the low end there may well be higher benefits to an unmarried mother of two living with her boyfriend who makes $30K per year that will disappear if they marry.
It seems to me that people are rationally responding to the societal incentives.
Sure, some on the lower end are responding rationally, but my experiences suggest that most do not. They may happen to be utilizing the most rational path, but out of circumstance, not choice.
“… but out of circumstance, not choice.”
This statement really makes no sense in context. Of course they have a choice. The choice is get married and take a financial penalty or stay single and get a financial reward. To argue that “circumstances” cause one to seek a financial reward is irrelevant, since all things being equal all rationale actors will choose the financially rewarding path.
“1. Contrary to popular perception, American elites still embody the Founding Virtues.” Then I tremble for the poor bloody Injuns.
Where have communists ever willingly given up power?
Comments on this entry are closed.
Previous post: Not Catching Up: Affirmative Action at Duke University
Next post: Some food notes from Mexico City
Email Tyler Cowen
Follow Tyler on Twitter
Email Alex Tabarrok
Follow Alex on Twitter
Subscribe in a reader
Follow Us on Twitter
Marginal Revolution on Twitter Counter.com
Get smart with the Thesis WordPress Theme from DIYthemes.