by Tyler Cowen
on May 21, 2013 at 12:11 pm
1. Is Bernanke right about the great stagnation?
2. Stanislaw Lem’s major non-fiction work is now in English, Amazon link is here. I have ordered it of course.
3. Find your sheep more easily.
4. More on the guy who bridged the prime gap, and more here, and here.
5. Why do rational people buy into conspiracy theories?
6. Spending on pets. And the most expensive pigeon in the world.
7. Pessimistic claims about Russia.
“Why do rational people buy into conspiracy theories?”
Because the price is so low.
3. Now we’ll never get to sleep.
re# 1. Great quote from Keynes, 1931: “It is common to hear people say that the epoch of enormous economic progress which characterised the 19th century is over;”
I had no idea Keynes was a boot-licker for robber barons. Also, his failure to recognize the central importance of progressive social movements is disappointing. These facts alone prove the nonsense of talking about “19th centruty progress.”
“his failure to recognize the central importance of progressive social movements is disappointing.”
Bessemer and Tesla were each far more important to improvements in the lot of ordinary men than all the progressive social movements put together.
Keynes was not referring to the U.S., which was not yet a world spanning empire, nor a country considered to be particularly advanced nor progressive. Instead, he was talking about the world spanning empire he actually was a part of.
A quick overview is available here -http://www.historyhome.co.uk/peel/politics/reform.htm
Speaking of non-US, would we still be talking about the Great Stagnation if we applied the 50-yr test to Asia? Arguably, life in many Asian countries has improved much more between 1962 and 2012 than between 1912 and 1962, perhaps even more so if one compares the last 30 years to the 30 years before that.
Even in the US, GDP per capita increased by about 2.6 times between 1962 and 2012 and by about 2.7 times between 1912 and 1962 [http://www.quandl.com/MWORTH-MeasuringWorth/0_5-United-States-Real-GDP-per-capita]. So, objectively measurable economic improvement over the two periods was roughly the same.
Maybe, both of these cases indicate that there has been significant “hidden” innovation over the last 50 years. In the case of the US, these innovations may have been so-called business process or business model innovations. In the case of Asia, perhaps there have been innovations in terms of figuring out how to implement better trade, economic, and social policies, “policy innovation” or “social innovation” if you will. Although these innovations may not be as easily indentifiable as, say, the refrigerator, they may have had just as much objectively measurable impact.
It is arguable that the last 20 years saw the greatest increase in living standards for the greatest number of people globally in any historical 20-year period. The 10% of the planet in the rich world didn’t notice.
Oh ah. I think by 1931, the US was not a backwater. Also, are you suggesting that the 19th century saw enormous economic progress in Europe while the US languished?
I’ma file your comment under ‘irrelevant nit-pick.’
Pet spending exceeds spending on mens and boys clothing. I can believe it. We buy decent clothes for the older boy and the younger gets hand-me-downs. But I exceed the average spend on “reading material” (~150$) by at least a factor of ten.
Expensive Pigeon: those are pricey wings…
Do you really think Michael Jordan voluntarily quit basketball for 2 years – at his absolute prime – to schlep around on a bus playing double-A baseball, when he couldn’t hit a curve ball to save his life?
Michael Jordan was a pretty freaking good baseball player, considering. Double-A is a very high level, many players make the jump to the big leagues straight from AA ball. AAA is more a reservoir of fringe-MLB talent like journeymen rather than top prospects. He had pretty good and improving stats, considering his complete lack of experience.
Um… the fact that he played AA ball is meaningless in assessing his talent considering he didn’t earn his position on the team because of his (baseball) playing ability. If he wasn’t Michael Jordan, he wouldn’t have been given the opportunity. Look at what he actually did. In 497 plate appearances, he managed to hit .202 (with a .556 OPS). That’s pathetic. And he was a dreadful fielder. He more or less made a fool of himself. I mean, was Eddie Gaedel a “pretty freaking good baseball player, considering”? Forget AA, there’s a guy that actually played in the majors.
For a guy who hadn’t played baseball in how many years, that’s astonishingly good. For an AA player, it’s pretty terrible.
#6 The average US pet lives on a wage higher than the World Bank’s poverty baseline. Yet we are not as rich as we thought we were?
Can you believe he used to work at Subway in China before one of his students who had come to the U.S. was able to also bring him over?
I think this is a nice little head nod to Bryan Caplan’s open borders idea.
Based on recent events, I thought the answer to #5 would be, “Because they are true.”
If he was going to get detailed, he could have cited the Moore’s Law-like improvement in solar panel PV to boost the case for clean-energy technology that has both surprised in its rapid advancement, and had real-world effects beyond most long-term forecasts.
Moore’s Law has to do with the increase of transistors for a given size on an integrated circuit. It has nothing to do with solar panel pv and calling it Moore’s Law-like is silly. Solar PV cells are constrained by operational conversion efficiency (in the 10-30% range) and the cost of the raw materials. Solar cells can not go above 100% efficiency, they are strictly limited to roughly 3 times the current best designs. Costs can of course drop, but that’s limited by the cost of the raw materials, which is a significant input, and the underlying intermittency of solar power.
I think there is a case to be made that solar power is doing much better than anyone expected. Here’s an article from MIT Technology Review about a potential design that will deliver about 50% efficiency: http://www.technologyreview.com/featuredstory/513671/ultra-efficient-solar-power/
Also, I’ve recently had on my desk a proposal to put solar panels on my home’s roof that would yield about 7% return over the next 25 years, which is a lot better than I get at the bank. You may need to rethink what you understand about the solar industry. It appears to be growing very fast.
Back to Bernancke’s article: My question is if we live in a world of robots that can do just about everything a human can, then what’s the point of being human? What role do humans play in a world where we are not needed for production of our daily bread? Don’t we all become superfluous? So maybe what we are seeing is not the great stagnation as much as the great obsolescing of humans?
If humans cannot econcomically contribute to earning their daily bread, then there is no economic need for humans. We can see this in the current recession. Middle class and lower class humans earn less because they are less needed for production. Since they earn less, they spend less and then even less production is required. What’s wrong with this picture? We are in a great stagnation become labor has been devalued.
There are lots of things “in the works” that never pan out. If you pay attention to solar power news you’ve seen that story a thousand times, only the names are changed.
PVs will probably see consistent improvement each year, but only a few per cent, not 50%.
#5 seems related to the main idea in
#5: I think it’s more interesting to ask why “conspiracy theory” has a bad name. After all, there are lots of major historical events that are generally agreed to have involved secret, high-level conspiracies – e.g. the assassination of Julius Caesar, the Glorious Revolution, the Suez Crisis, etc. And indeed, if there’s a coup in a banana republic or a journalist dies in police custody in a dictatorship, people would call you very naive if you believed that government’s official version of the facts. Yet none of this stuff gets CALLED a conspiracy theory, even though it very clearly is.
For example, the (unproven) claim that Yasser Arafat was secretly poisoned by foreign state agents is considered a conspiracy theory. The (also unproven) claim that Alexander Litvinenko was secretly poisoned by foreign state agents is not, even though they are clearly the same TYPE of theory. This leads to my view that “conspiracy theory” is merely a negative label that gets attached to some explanations in order to lower their status.
All that said, modern western governments are so porous that major state conspiracies are extremely unlikely.
That, of course, is what they want you to believe.
I appreciate the primary message of #6 (we are indeed very very rich), but I’m tired of people using pet spending as a metric to show how rich we are. Spending on pets lags well behind spending on as-of-yet non-sentient, unfeeling, consumer electronics. I would hope we’d spend money on pets if we’re going to keep them for companionship.
#5: ” a conspiracy theory isn’t so much a response to a single event as it is an expression of an overarching worldview. ”
My understanding is conspiracy theories about 9-11 helped underpin the actions of the Boston marathon bombings.
Guess I’m a bit more cynical. Always considered conspiracy theories to be a reflection of the theorizers’ own ambitions.
ARGH, I hate FT links.
I agree, I’ve complained before that blogs should warn when links are paywalled.
@ Salem: why “conspiracy theory” has a bad name
It’s something like ‘propoganda’ which was originally referred to style (playing up one side while playing down or ignoring the other) but over time began to refer to the _content_ as a shorthand way of dismissing it. “Oh, that’s just propoganda!”
“Conspiracy theory” has undergone a similar metamorphosis so that it refers less to the content of second hand theorizing as to why something happened (and what might happen next) to a shorthand dismissal of the content.
Yet, every single version about what happened on 9/11 (including the official narrative) is a conspiracy theory.
Conspiracy theories don’t really refer to claims that the version of event the government and official o rmainstream media sources is putting out is incorrect, or that secret plots exist and impact history. Most adults realize that governments and media sources lie quite often and that secret plots are pretty common.
The term is properly applied to claims that certain governments are lyining and that particular elites are plotting.
5. Because they are more plausible than the “official” lies that government is telling us.
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