That is the new IEA book from Nima Sanandaji, freely available here (pdf), introduction by Tom G. Palmer.  Here is one short bit:

The descendants of Scandinavian migrants in the US combine the high living standards of the US with the high levels of equality of Scandinavian countries. Median incomes of Scandinavian descendants are 20 per cent higher than average US incomes. It is true that poverty rates in Scandinavian countries are lower than in the US. However, the poverty rate among descendants of Nordic immigrants in the US today is half the average poverty rate of Americans – this has been a consistent finding for decades. In fact, Scandinavian Americans have lower poverty rates than Scandinavian citizens who have not emigrated. This suggests that pre-existing cultural norms are responsible for the low levels of poverty among Scandinavians rather than Nordic welfare states.

The book has many other points of interest.

What I’ve been reading

by on June 24, 2015 at 1:32 am in Books, Uncategorized | Permalink

1. David Graeber, The Utopia of Rules: on Technology, Stupidity, and the Secret Joys of Bureaucracy.  Don’t judge Graeber by his mistakes or by how he responds (doesn’t respond) to criticism.  This one is still more interesting to read than most books.  In fact, most of us quite like bureaucracy.

2. John Gray, The Soul of the Marionette: A Short Inquiry into Human Freedom.  The usual dose of pessimism, with a choppier argument and a slightly larger typeface than usual.  It induced me to order Mr. Weston’s Good Wine.  In any case, I’ll still buy the next one, engaging with John Gray if nothing else has become a ritual.  I once predicted to Jim Buchanan that John would end up converting to Catholicism, but I still am waiting.

3. Juan Goytisolo.  I’ve tried to read a bunch of his books, so far they all bore me, in both Spanish and English, the fault is probably mine.  Various sophisticates suggest he is great, should I keep on trying?

4. Oliver Burkeman, The Antidote: Happiness for People Who Can’t Stand Positive Thinking.  He is one of the best non-fiction essay writers, and he remains oddly underrated in the United States.  It is no mistake to simply buy his books sight unseen.  I think of this book as “happiness for grumps.”

5. Harry G. Gelber, The Dragon and the Foreign Devils: China and the World, 1100 B.C. to the Present.  No, this isn’t the best Chinese history book.  But it is the one most written in a way that you will remember its contents, and in this context that is worth a lot.

Arrived in my pile

by on June 23, 2015 at 2:01 pm in Books, Economics, History | Permalink

Eric Rauchway, The Money Makers: How Roosevelt and Keynes Ended the Depression, Defeated Fascism, and Secured a Prosperous Peace.

Due out this October.

China fact of the day

by on June 23, 2015 at 1:08 pm in Books, History, Political Science | Permalink

Qing Dynasty measured some 14.7 million square kilometers in 1790…The two biggest countries in western Europe were under 0.7 million in the late eighteenth century.

That is from Philip T. Hoffman’s new and interesting Why Did Europe Conquer the World?, here is the book’s home page.  Hoffman does note, however, that if we count empires the Spanish empire was during that time larger than China.

Paid by pages read? (model this)

by on June 22, 2015 at 2:32 am in Books, Economics | Permalink

Soon, the maker of the Kindle is going to flip the formula used for reimbursing some of the authors who depend on it for sales. Instead of paying these authors by the book, Amazon will soon start paying authors based on how many pages are read—not how many pages are downloaded, but how many pages are displayed on the screen long enough to be parsed. So much for the old publishing-industry cliche that it doesn’t matter how many people read your book, only how many buy it.

That is from Peter Wayner, via Craig Richardson.

Stein Ringen reviews The China Model, here is Gideon Rachmann.  He writes:

Daniel Bell, a Canadian political philosopher who has taught at Tsinghua University in Beijing for many years, is deeply influenced by this Chinese tradition. In his new book, he has set himself the ambitious task of making the case that Chinese-style meritocracy is, in important respects, a better system of governance than western liberal democracy.

I’ve been seeing a lot of emotional reactions to this book, here are a few points:

1. The United States probably should have less democracy along some margins, if only fewer referenda in California and no state and local elections of judges, dog catchers, and the like.  If a writer cites “democracy” as obviously and always good for all choices, that writer isn’t thinking clearly.

2. More generally, the Western nations are relying on democracy less, as evidenced by the growing roles for central banks and also the European Union.  That may or may not be desirable, but it’s worth considering our own trends before putting the high hat on.

2. The key to long-term living standards is stability of growth, just look at Denmark.  There was never a heralded “Danish economic miracle,” but the country still has finished close to the top in terms of human welfare.  Whether ostensibly meritocratic non-democratic systems can deliver such outcomes remains very much up for grabs, and Bell’s book hasn’t convinced me any that they can.

3. Arguably a country’s best chance of achieving meritocracy is to have many smart individuals who are culturally central.  No system of government is going to overcome the lack of that.

4. Most humans in history seem to have favored meritocratic rule over democracy, and before the 19th century democracy was rare, even in the limited form of male-dominated or property owner-dominated republics.  It is possible that the current advantage of democracy is rooted in technology, or some other time-specific factor, which ultimately may prove temporary.  That said, I still observe plenty of democracies producing relatively well-run countries, so I don’t see significant evidence that a turning point against democracy has been reached.

5. To consider comparisons which hold a greater number of factors constant, I haven’t seen many (any?) serious people argue that Taiwan or South Korea would have done better to resist their processes of democratization.

Here you can buy The China Model: Political Meritocracy and the Limits of Democracy.

Words he successfully introduced into the English language:





According to the Oxford English Dictionary, Browne ranks 25th for the number of new words introduced into English, ahead of both Milton and Spenser.

Failed attempts:

tollutation [ambling]

axungious [lard-like]

deuteroscopy [the business of taking a second look]


I would someday like to read a Big Data paper on what predicts which neologisms will fail.  In any case, that information is from Hugh Aldersey-Williams’s new book The Adventures of Sir Thomas Browne in the 21st Century, for fans of Browne only but yes I am one.

Roth Cover

Al Roth’s Who Gets What and Why: The Hidden World of Matchmaking and Market Design is an excellent addition to the pantheon of popular economics books. It’s engagingly written, covers new material and will be of interest to professional economists as well as to the broader audience of intelligent readers.

review the book more extensively for the Wall Street Journal. (Google the title, Matchmaker, Make Me a Market to get beyond the paywall for non-subscribers). Roth is well known for helping to design kidney swaps–when donor A and patient A’ and donor B and patient B’ are mismatched it may yet be possible for A to give to B’ and B to give to A’.

Mr. Roth, however, wants to go further. The larger the database, the more lifesaving exchanges can be found. So why not open U.S. transplants to the world? Imagine that A and A´ are Nigerian while B and B´ are American. Nigeria has virtually no transplant surgery or dialysis available, so in Nigeria patient A’ will die for certain. But if we offered a free transplant to him, and received a kidney for an American patient in return, two lives would be saved.

The plan sounds noble but expensive. Yet remember, Mr. Roth says, “removing an American patient from dialysis saves Medicare a quarter of a million dollars. That’s more than enough to finance two kidney transplants.” So offering a free transplant to the Nigerian patient can save money and lives.

It’s hard to think of a better example of gains from trade (or a better PR coup for the U.S. on the world stage).

One of the most interesting aspects of the book is that Roth has created a new typology of market failure but a very different way of addressing such market failures. Read the whole review for more.

I ran across this intriguing passage:

The Chinese also rejected the telegraph at first, partly because of similar feng shui concerns, but mostly because they didn’t believe such an invention had any real benefits.  But once they learned that some wily Cantonese (a persistent regional Chinese stereotype) had enriched themselves by hearing the results of the triennial imperial exam in Beijing via telegraph weeks before everyone else, and then buying all the lottery tickets with the names of the top graduates, opposition to the telegraph crumbled.

No further information on those markets is offered, do any of you know more about this?  The passage is from Huan Hsu’s new and noteworthy The Porcelain Thief: Searching the Middle Kingdom for Buried China.  It’s not so much a book about porcelain, rather it is an excellent look at China and also the idea of a quest to discover one’s family history, recommended.

I don’t quite mean “the best novel,” rather I mean “the best novel as a novel of bureaucracy.”

There is Franz Kafka, but I find his writings more theological and fantastic than insightful about bureaucracy per se.  Besides, his short stories are his best work and the novels do not have proper endings.

There are post-war Eastern European novels galore, where to start?  In the First Circle?  Still, communist bureaucracies are no longer so typical, so I am not ready to award any of these novels first prize.  Gogol’s earlier Dead Souls also stands out as a Russian candidate.

Joseph Heller’s Catch-22 is in the running, as are John Le Carre, Thomas Pynchon and David Foster Wallace.  Here is a discussion of Dickens, Orwell, and other classics.  Here is a jstor-gated survey of the topic.  There are plenty of novels about universities, very few of which I can endure.

The Chinese have an entire genre of “bureaucracy literature.”  And perhaps bureaucracy in science fiction is deserving of its own post.

In any case, my clear first choice pick is Anthony Trollope’s Barchester Towers, which I started reading a few days ago.  Here is the first sentence of the review:

This 1857 sequel to The Warden wryly chronicles the struggle for control of the English diocese of Barchester. The evangelical but not particularly competent new bishop is Dr. Proudie, who with his awful wife and oily curate, Slope, maneuver for power.

So far I am finding that just about every page has insight about bureaucracy.  Trollope, by the way, had extensive experience working for the Post Office in England and Ireland, and furthermore he missed out on a major promotion.

What else am I forgetting?

Ursula K. Le Guin’s poorly-argued and evidence-free rant against Amazon is more about her hatred of capitalism than about Amazon’s actual effect on the market for books. Here’s Le Guin:

[Amazon’s] ideal book is a safe commodity, a commercial product written to the specifications of the current market, that will hit the BS list, get to the top, and vanish. Sell it fast, sell it cheap, dump it, sell the next thing. No book has value in itself, only as it makes profit. Quick obsolescence, disposability — the creation of trash — is an essential element of the BS machine. Amazon exploits the cycle of instant satisfaction/endless dissatisfaction. Every book purchase made from Amazon is a vote for a culture without content and without contentment.

The same argument was made in the late 1990s against chain bookstores like Border’s. It wasn’t a good argument then (see Tyler’s masterpiece, In Praise of Commercial Culture) but at least at that time it was debatable. Le Guin’s attempt to resurrect the argument today is bizarre. Does anyone doubt that it is easier to buy a niche book today than it ever has been in the entire history of the world? Indeed, does anyone doubt that it is easier to buy a Ursula K. Le Guin book today than it ever has been in the entire history of the world?

Larger markets support greater variety. A bookstore that only sells locally can’t stock many books. It’s the smaller store that fears taking a risk because the opportunity cost of shelf space is so high. Amazon lowers the cost of stocking books through efficient logistics and by warehousing in relatively low-cost areas (subject to being close to markets). The fixed costs of distribution are then spread over a much larger (inter)-national market so it pays to stock many more books.

Amazon makes a lot of money selling niche books. The precise numbers are debatable because Amazon doesn’t release much data but Brynjolfsson, Hu and Smith estimated that the long-tail accounted for nearly 40% of Amazon sales in 2008, a number that had risen over time. Indeed, since costs aren’t that different it’s not obvious that Amazon makes much more from selling a million copies of a single book than from 10 copies of each of 100,000 books (especially if they are ebooks).

Ebooks take this argument to the limit and the data show greater diversity in who publishes books than ever before. According to a recent Author Earnings report:

…indie self-published authors and their ebooks were outearning all authors published by the Big Five publishers combined

Perhaps what pushes Le Guin onto the wrong track is that there are more (inter)-national blockbusters than ever before which gives some people the impression that variety is declining. It’s not a contradiction, however, that niche products can become more easily available even as there are more blockbusters–as Paul Krugman explained the two phenomena are part and parcel of the same logic of larger markets. It’s important, however, to keep one’s eye on the variety available to individuals. Variety has gone up for every person even as some measures of geographic variety have gone down.

In the past small sci-fi booksellers in out-of-the-way places (link to my youth) barely eked out a living from selling books. Precisely because they didn’t make a lot of money, however, the independents signaled their worthy devotion to the revered authors. Today, Amazon sells more Le Guin books than any independent ever did. But Bezos doesn’t revere Le Guin, he treats her books as a commodity. That may distress Le Guin but for readers, book capitalism is a wonder, books and books and books available on our devices within seconds, more books than we could ever read; a veritable fountain, no a firehose, no an Amazon of books.

That is the new and excellent book from Claire A. Hill and Richard W. Painter, here is one excerpt:

That banking involves constant reminders of money also may weaken “the pull of morality,” perhaps making some bankers more inclined to be unethical.  Some recent research suggests that banker identity itself encourages dishonesty.  In an experiment involving employees of a large international bank, the experimenters found evidence that when “their professional identities as bank employees [was] rendered salient to them” (they were asked questions about their professional background in the banking industry), more of them [became] dishonest, cheating in reporting the results of coin tosses so as to increase their monetary payoffs than was the case with people from various other professions — making those other professional identities salient did not increase dishonesty.  The experimenters also found that bankers whose banker identity had been made salient to them — and bankers most likely to have cheated — were more apt to agree that social status was “primarily determined by financial success.”

You can pre-order the book here, the book’s home page is here.

Thrive: How Better Mental Health Care Transforms Lives and Saves Money, by Richard Layard & David M. Clark.

Mental illness is a leading cause of suffering in the modern world. In sheer numbers, it afflicts at least 20 percent of people in developed countries. It reduces life expectancy as much as smoking does, accounts for nearly half of all disability claims, is behind half of all worker sick days, and affects educational achievement and income. There are effective tools for alleviating mental illness, but most sufferers remain untreated or undertreated. What should be done to change this? In Thrive, Richard Layard and David Clark argue for fresh policy approaches to how we think about and deal with mental illness, and they explore effective solutions to its miseries and injustices.

Layard and Clark show that modern psychological therapies are highly effective and could potentially turn around the lives of millions of people at little or no cost. This is because treating psychological problems generates huge savings on physical health care, as well as massive economic savings through more people working. So psychological therapies would effectively pay for themselves, generating potential savings for nations the world over. Layard and Clark describe how various successful psychological treatments have been developed and explain what works best for whom. They also discuss how mental illness can be prevented through better schools and a better society, and the urgency of doing so.

My earlier post on mental illness is here, and so I am not sure I will agree with this book — we will see.   Here is a related recent publication by Layard.

From Around the World in Eighty Days:

Everybody knows that England is the world of betting men, who are of a higher class than mere gamblers; to bet is in the English temperament.  Not only the members of the Reform, but the general public, made heavy wagers for or against Phileas Fogg, who was set down in the betting books as if he were a race-horse.  Bonds were issued, and made their appearance on ‘Change; Phileas Fogg bonds” were offered at par or at a premium, and a great business was done in them.  But five days after the article in the bulletin of the Geographical Society appeared, the demand began to subside: “Phileas Fogg” declined.  They were offered by packages, at first of five, then of ten, until at last nobody would take less than twenty, fifty, a hundred!

Lord Albemarle, an elderly paralytic gentleman, was now the only advocate of Phileas Fogg left.

I should add that it is quite easy to read this novel as a critique of the “death of distance” view, and other forms of hyperbole about globalization.

*From the Earth to the Moon*

by on June 2, 2015 at 8:04 am in Books, History, Science | Permalink

I read this 1865 Jules Verne book lately and very much enjoyed it.  It’s a poke at scientific rationalists and project-happy obsessives, and humorous throughout.  It mocks those who wish to bet on ideas, compares the American and French versions of excess grandiosity, and asks in subtle ways what are the limits of progress.  It reminded me of John Gray far more than I had been expecting.  And it’s about an America with no NIMBY, where everyone wants the projects right in their backyard.  The space program in fact sets off a rivalry between Texas and Florida to house the first moon shot…and it is to be done with a very large gun.

Definitely recommended, here is the book’s Wikipedia page.