That is the excellent title they gave to my latest Bloomberg column.  The piece starts by offering a very simple theory of what statues are for, and then I shift to the perspective of a foreigner.  Here is one bit:

Or consider the debates in Macedonia. The city of Skopje went on a major statue-building binge several years ago, both as fiscal policy and to cement national identity. One of the resulting disputes is whether those statues should emphasize the country’s ancient Greek connections (e.g., Alexander the Great) or the Slavic heritage (e.g., Saints Cyril and Methodius). It’s a strange debate to an outsider, yet to many Macedonians and some of their Greek neighbors (who wish to claim Alexander as their own), it is one of the most fraught issues of the day.

Again, you won’t get too far on this one by debating the life and times of Alexander, whether he led aggressive or defensive wars, or by asking how many slaves he owned. It’s better to focus on which political faction you wish to see assume more authority in Macedonia, and then work backward to figure out your preferred statues.

Similarly, if Macedonians were asked to evaluate the relative moralities of historic American leaders, I hope they would consider a similar approach. I don’t find it so fruitful to debate how much Robert E. Lee does or does not have in common with George Washington  — arguably Washington was a traitor of sorts as well, against a relatively benign British ruler, and he fought against Native Americans and owned slaves. American treatment of Native Americans makes it hard to find many truly “good guys” from that period. Still, we can ask what role Washington statues play in today’s politics; few people are using them to lord over Native Americans.

And my conclusion:

So if you’re considering the worthiness of a particular statue, here are three pointers: Pretend you’re from some very distant foreign country and view the dispute through that more objective lens. Second, focus on the future, and third don’t be afraid to make some changes.

Do read the whole thing.

I will be doing a Conversation with Tyler with her.  On the off chance you don’t already know, here is a brief Wikipedia summary of her work:

Mary Roach is an American author, specializing in popular science and humor.[1] As of 2016, she has published seven books,: Stiff: The Curious Lives of Human Cadavers (2003), Spook: Science Tackles the Afterlife (2005) (published in some markets as Six Feet Over: Adventures in the Afterlife), Bonk: The Curious Coupling of Science and Sex (2008), Packing for Mars: The Curious Science of Life in the Void (2010), My Planet: Finding Humor in the Oddest Places, Gulp: Adventures on the Alimentary Canal (2013), and Grunt: The Curious Science of Humans at War (2016).

But there is much more to her than that.  Here is the full Wikipedia page.  Here is her own home page.

So what should I ask?  I thank you in advance for your inspiration.

Where to even begin enumerating the wealth of fruitful work — some of it highly critical — that continues to emerge from real engagement with Freud’s ideas? Consider Marina Warner’s musings on Freud’s mediation of Eastern and Western cultural tropes told through the story of his Oriental carpet-draped couch; Rubén Gallo’s panoramic exploration of the reception of Freud’s work in Mexico and the reciprocal influence of Mexican culture on Freud; and the rich medley of sociopolitical critiques grounded in Lacan’s reinterpretation of Freud’s thought.

The idea that large parts of our mental life remain obscure or even entirely mysterious to us; that we benefit from attending to the influence of these depths upon our surface selves, our behaviors, language, dreams and fantasies; that we can sometimes be consumed by our childhood familial roles and even find ourselves re-enacting them as adults; that our sexuality might be as ambiguous and multifaceted as our compendious emotional beings and individual histories — these core conceits, in the forms they circulate among us, are indebted to Freud’s writings. Now that we’ve effectively expelled Freud from the therapeutic clinic, have we become less neurotic? With that baneful “illusion” gone, and with all our psychopharmaceuticals and empirically grounded cognitive therapy techniques firmly in place, can we assert that we’ve advanced toward some more rational state of mental health than that enjoyed by our forebears in the heyday of analysis? Indeed, with a commander in chief who often seems to act entirely out of the depths of a dark unconscious, we might all do better to read more, not less, of Freud.

That is from an excellent NYT book review by George Prochnik.

Yana and I saw this Bruce Lee movie last night over Dan Klein’s house, for me it was my first viewing since my undergraduate days.  A few points struck me:

1. Hong Kong is portrayed as a poor, dumpy ghetto; this was 1973.  The Technicolor shots of the city are gorgeous.

2. Black Power, in the character of Williams [Jim Kelly], is shown to be a fundamentally moral and emancipatory force.  And as was so common in movies from the 1970s and 80s, the black guy “gets it.”

3. The main villain, Han, reminded me of Chairman Mao, except that the role of the West in the opium trade is inverted and placed on Mao [Han] himself.  It is no surprise that Mao’s China banned the movie.

4. Bruce takes on and defeats a whole group of unimpressive karate experts — was that intended as an anti-Japanese slam?

5. Angela Mao, who played Bruce Lee’s sister, steals the show.  She now lives in Flushing, Queens (NYT).

6. The American male heroes seem not to mind that the women they are given to sleep with are essentially slaves, held under coercion or otherwise dubious circumstances.  The movie seems not to mind that the male heroes do not mind.  And an analogous film today would not have nude scenes, for several reasons, one being the desire to sell it to…China.

6b. The politically incorrect ranking in terms of libido is black > white > Asian, without any apology or attempt at subtlety.

7. Many scenes reminded me of the James Bond flick You Only Live Twice, and also Dr. No.  It is a common theme in movies from that time that a hero can use a diversion to take over a command center; is that still done?  The final mirrors trick seemed to be taken from Orson Welles’s The Lady from Shanghai.  Yana remarked that many of the underground sets looked like they were borrowed from Star Trek, and that the “turn the corner” suspense scenes seem to have anticipated Star Wars.

8. “Jackie Chan appears as a guard during the underground lair battle scene and gets his neck snapped by Lee.”

9. The score by Lalo Schifrin remains compelling and Bruce dominates every scene he is in.

10. As was often the case in those times, the exposition is relatively slow, much of the action is saved for the last half hour, and finally the film just ends.

That is my latest column for Bloomberg, here is one bit from it:

In other words, a country can experience hundreds of years of bad events, but if it succeeds in attaching itself to a benevolent, moderately competent protector, it still can have a fantastic future of peace and prosperity, even if it does not stand on the global cutting edge.


If Macedonia doesn’t make it into the EU, it is not difficult to envision a future where the country ends up being picked apart by a variety of pressures from Russia, Serbia, Bulgaria, Albania and Greece, in some unknown combination. Keep in mind that an independent Macedonian nation has existed for only a few decades over the course of many centuries, and so its continuing existence cannot be taken for granted.


But when it comes to economic development, don’t just look at demographics or economic policy. Ponder the hegemon.

I wish to thank J. and P. for conversations that spurred some of these thoughts.

Skopje notes

by on August 11, 2017 at 12:11 am in Food and Drink, History, The Arts, Travels | Permalink

Skopje, capital city of Macedonia, is a dream world for lovers of concrete communist architecture.

Link here, photos recommended.  It seems it is also the roast pepper capital of the world, and this:

The city center holds concrete masterpieces sitting alongside every possible era of architecture from the last two millennium. An ancient Castle fortress looks down from one side, and the world’s biggest cross sits atop an inner city mountain on the other. On one side of the Vardar river that cuts through the city center, is a ancient neighbourhood that could be straight out of Istanbul. On the other, the city square with an enormous “Man On a Horse” statue (just don’t say it’s Alexander the Great, believe me) is a pleasurable and walk-able area normally bustling with activity. Connecting the two areas, is the Stone Bridge, built about 700 years ago – on top of much older Roman foundations. The layers and the contrast is unique for any city of this size.

Imagine a city that is part Habsburg in style, part Ottoman, part communist brutalism, and part Las Vegas/Venetian kitsch except it isn’t kitschy, and with a dash of 300 thrown in for good measure, distributed across dozens or is it hundreds of large statues?

The earthquake of 1963 is mentioned fairly often; it destroyed about 80 percent of the city.

Mother Teresa was born in Skopje, and there is a museum in her honor.  A good day trip from Skopje is the St. Jovan Bigorski monastery, some of the finest woodcarving I have seen.  It is striking to view the church in conjunction with the Saudi-financed mosque across the valley, thereby inducing one to ponder the use of stones to capture space in the game of Go.

I am told there are Macedonian enclaves in Totowa, Clifton, and Garfield, New Jersey.

The food is phenomenal, in addition to the roast peppers there are breads, baked pies, meats stewed with vegetables, white beans, stuffed peppers, trout, and Balkan cheeses, all with that farm to table touch.  Further to the south I recommend the garlic spread.

There is sexual dimorphism in Skopje, and I am told that Donald Trump is more popular in this country than in any other.

The major Macedonian exports are chemical goods, machinery, clothing, iron, and steel.  The measured unemployment rate is about 23 percent, and there is a comparative advantage in producing “fake news.”  There are varying estimates for per capita income, but about 13k (PPP) seems in the ballpark.

Politics was discussed and maps were shown.  To put a twist on the famous quotation about religion in India, when it comes to history, every Macedonian is a millionaire.

English proficiency is high, as Macedonian has only slightly more than 2 million inhabitants and none of the immediate neighbors has a language that is very useful elsewhere.  The people are very friendly and helpful, and it is quite safe here for a tourist.

On the television I watched the first quarter of “NBA Team Africa vs. NBA Rest of the World,” Serge Ibaka vs. Dirk Nowitzki, etc., a real game with refs and a crowd, does the NBA even tell the American market about contests such as this?

If food, architecture, and history interest you, visit the fresh and vibrant Skopje.

There’s no point in doing a complete survey, but here are a few observations and suggestions:

1. I am not intrigued by much Mozart written before K330 or so.  Piano Concerto #9 is one exception to this.  But Toscanini was right to claim that too much of it sounds the same.

2. The string quintets are the best Mozart pieces you might not know, but skip K174.

3. The string quartets and Requiem might be the most overrated Mozart, though the latter would be wonderful if he could have finished it.  It is better to listen to the fragmented version, without the artificial Süssmayr ending.

4. The Milos Forman Mozart movie is worth a viewing, if you don’t already know it.  I thought I would hate it, but didn’t.  Don’t try to learn history from it, however.

5. Clive Geoffrey, The Romantic Enlightenment, has my favorite essay on Mozart.  A reasonably priced reissue is needed.  The standard biographies are very good, also read Mozart’s letters.

6. The operas reign supreme.  Try Currentzis or Colin Davis for Don Giovanni, Haitink or Klemperer for The Magic Flute, Boehm for Cosi Fan Tutte, Giulini for Figaro, and Rene Jacobs for Idomeneo.  I don’t know of a definitive version of Abduction from the Seraglio, but Beecham and Krips are good and Harnoncourt does the overture best, as he never lets up on the rambunctious in it.  If I had to choose the operas, or all the rest of Mozart put together, I would go for the operas.

Too many people think of him as ordinary and earthy, compared to Mozart or Beethoven.  Yet he composed amazing amounts of pathbreaking, first-rate music, and it wears remarkably well upon repeated listenings.

My approach to Haydn is pretty simple:

1. Some of the early piano music is boring, but a simple availability metric will point you to the best material.  The deepest are the six last sonatas, and most well-known performances are quite good.  Ax, McCabe, Kalish, Richter, and Brendel are among the first choices, Jando (Naxos) and Buchbinder are good enough to listen to but not preferred.  By the way, piano > pianoforte, there was no great stagnation.

2. Listen to as many of the string quartets as you can, with preference given to Opus 76.  On average, the later opus numbers are better, yet Op.9 and Op.20 still are worthwhile.

3. Listen to the London Symphonies.  Again and again.  All of them, Dorati being one option for conductor.

That’s hardly the only wonderful Haydn, but those are the pieces that work best through recordings.  See the choral and vocal music live.  Most of the concerti bore me, as do the piano trios.  Many of the earlier symphonies are good, including the Paris set and the “Sturm und Drang” period, but unless you have lots and lots of time I say focus on the London ones for now.

As the years or decades pass, you will realize you have been underrating Haydn.

…most important of all was the gulf between the man and the national media, who could not understand each other — Romney’s billboards in New Hampshire read THE WAY TO STOP CRIME IS TO STOP MORAL DECAY; he could not understand why newsmen found the slogan funny; and they could not understand what he meant by moral decay.

That is from the still-engaging Theodore H. White The Making of the President 1968.  And here is Rod Dreher on crime and morality.

Why their sudden inward turn, and why the Chinese state’s abandonment of the oceans?  Some historians, like Bruce Swanson, cite a power struggle within the bureaucracy between eunuchs and conservative neo-Confucians, dubbed “continentalists,” with the eunuchs ultimately losing out.  Another important factor was probably China’s reopening of its enlarged and completely renovated Grand Canal, an extraordinary feat of engineering that connected northern China to the increasingly populous breadbasket of the south.  At eleven hundred miles long, the canal was controlled by numerous locks, much like New York’s Erie Canal, which measures only one-third its length and was not built until four hundred years later.  In 1415 the state banned the shipment of grain to the north by sea to compel use of the canal, for which thousands of barges were built.  Such a decision would have dramatically reduced the need for shipping, and hence shipbuilding and the maintenance of fleets, leading to the halting of oceangoing ship construction altogether by Yongle’s successor in 1436.

That is from the new and interesting Everything Under the Heavens: How the Past Helps Shape China’s Push for Global Power, by Howard W. French.  I believe the definitive economic history of the Grand Canal remains to be written, it will be a major achievement when it happens.

In 2005, I thought housing prices were rising above the fundamentals and I said so. In 2008, as the fall in housing prices was well under way, I wrote a blog post and later a NYTimes op-ed saying that the housing price bubble was not nearly as big as people thought. I wrote:

I think that housing prices went beyond the fundamentals sometime around 2004…but 2004 levels are still well above long run trend.

…Prices will probably drop some more but personally I don’t expect to ever again see index values around 110.  Do you?  If we don’t see the massive drop back to “normal” levels then the run up in prices should be described as a shift to a new equilibrium…[with some overshooting, rather than as a bubble.]

To put it mildly, not everyone agreed with my argument. I certainly got the timing wrong–I didn’t think the recession would be as long or as deep as it was. Nevertheless, some people are coming round to my point of view. Karl Smith, for example, has a new post Was There Ever a Bubble in Housing Prices? which concludes more or less, as I did nearly ten years earlier, that the answer is no. What happened was greater liquidity which made housing prices gyrate more like stock prices but “the fundamental driver isn’t irrational bubble behavior. It is competition over a scarce resource.”

Let’s go back to the Shiller graph, now updated to 2017. Over the entire 20th century real home prices averaged an index value of about 110 (and were quite close to this value over the the entire 1950-1997 period). Over the entire 20th century, housing prices never once roce above 131, the 1989 peak. But beginning around 2000 house prices seemed to reach for an entirely new equilibrium. In fact, even given the financial crisis, prices since 2000 fell below the 20th century peak for only a few months in late 2011. Real prices today are now back to 2004 levels and rising. As I predicted in 2008, prices never returned to their long-run 20th century levels.

Now one might argue that there is still a bubble or perhaps another bubble in housing prices. But the United States does not look anomalous compared to other countries. In fact, in many other countries prices have risen more than in the United States. Here is the Economist’s Global Price Index of real house prices for a variety of countries. (Do note that some countries not shown, such as Germany, haven’t seen big increases in prices.) Are all these countries experiencing bubbles? Or has the equilibrium changed?

Understanding why the equilibrium has changed is a fundamental issue that I don’t think we yet have a good handle on. My view, is that it’s a combination of expected long-run lower interest rates, greater liquidity, and supply constraints on land. Lower interest rates, for example, mean that durable assets increase sharply in price, all the more so if the rates are expected to stay low. Combine this with greater liquidity (see Smith’s post) and supply restrictions and you can explain most of what is going on in the United States. What I don’t know is if the same explanations work worldwide and can the same factors also be used to explain why land prices haven’t risen in Germany, Japan or Switzerland?

Hat tip: Nathaniel Bechhofer.

That is the topic of my latest Bloomberg column.  Electric cars, insofar as they limit climate change, are an example of defensive innovation.  Here is further explanation:

Defensive innovation is when you create a new product or capability to protect yourself against an impending disaster, such as the worst scenarios for climate change. It’s important, of course, to practice defensive innovation, but don’t confuse it with progress. The defense only stops your living standards from falling.

The military response to foreign threats is another example of defensive innovation. The risk and potential costs of cyberwarfare are escalating rapidly, and terrorist threats seem worse than they did in the 1980s or 1990s. The best case scenario is that we come up with better means of tracking and hindering cyber and terrorist attacks — by cutting off funding or by tracing and halting potential perpetrators. Those too will be defensive innovations, aimed mostly at preserving capabilities we already have.

The American military might someday develop better protection against the new threat of North Korean intercontinental ballistic missiles, which might be capable of delivering nuclear weapons to U.S. cities, possibly even New York and Washington. Imagine something akin to Israel’s “Iron Dome,” but protecting a broader geographic area against a greater diversity of weapons. That would be an impressive achievement, but would be an essentially defensive innovation.

Here is the uh-oh sentences:

Note that in the earlier stages of economic growth, there is usually less defensive innovation, if only because there is less to defend.

Do read the whole thing.

Yes, I am in Vienna, but I will take this country in discrete chunks because the contributions are so significant.  Today is literature, here are a few remarks:

1. Thomas Bernhard.  One of the very best post-war writers, obsessive and funny and extremely neurotic.  The Loser [Der Untegeher] is the one that works best in English, though his unique style is not at its most fevered pitch.  Wittgensteins Neffe [Wittgenstein’s Nephew] is my favorite, one of the smartest and funniest novels I know, close to perfect.  Das Kalkwerk is entrancing, though I suspect unreadable in English.  He remains grossly underrated in the English-speaking world, mostly for linguistic reasons but also he is a rebellion against the idea of a culture of entertainment.  In my personal canon he is one of the more significant writers.

2. Hermann BrochDeath of Virgil is a 20th century classic, again much under-read amongst the American educated classes.  Die Schlafwandler [The Sleepwalkers] is impressive, and perhaps seen as his major work, but it is more uneven in quality and eventually it falls apart.

3. Robert Musil. There are wonderful and historically significant major passages in The Man Without Qualities, but the drama loses its interest, the loose ends are not tied up, and ultimately I will call him overrated, especially compared to Bernhard or Broch.

4. Peter Handke.  In German only, I say, and in any case not my taste.  He is serious about politics in exactly the wrong way, and I hope future generations reject him.

5. Elfriede Jelinek.  Many were surprised when she won the 2014 Nobel Prize in literature, and you are most likely to know her for writing the book behind the movie The Piano Teacher.  Like Wagner, you could say her work is “better than it sounds,” but still it doesn’t sound that good.  I find it irritating and offensive, plus she is a communist.  Nonetheless, irritating fiction is better than boring fiction, see “Günter Wilhelm Grass.

6. Karl Kraus.  I used to think his work would eventually “come together” for me, but the more of it I read, and the more I read about him, I conclude he is a figure of historic interest only, and a good aphorist, but not an enduring literary artist.  He was a keen satirist of the mores and totalitarian tendencies of his time, and that is to be appreciated.  But if you try reading the rambling 500-page The Last Days of Mankind, in either English or German, you will conclude it was a work of its time only.

7. Arthur Schnitzler and Hugo Hofmannstahl.  Both remain underrated, and don’t forget Hofmannstahl’s libretti for Richard Strauss, including Der Rosenkavalier.

8. Christoph Ransmayr.  He is popular in contemporary Austrian literature.  I was not convinced, but will try again, if you love The Last World let me know.

9. Heimito von Doderer — I have not yet read him but am hopeful.

9b. Ingeborg Bachmann.  I just bought some this morning.

10. Johann Nestroy.  From the Enlightenment, mostly a playwright, worth spending some time with to get a perspective on Austrian literature before the 20th century.

11. Sigmund Freud and Ludwig Wittgenstein are both often best read as literature.

12. Stefan Zweig. The World of Yesterday is a favorite, sad and bittersweet, and it treats the European civilization that was passing away at the time of the Second World War, still relevant.  Zweig committed suicide in Brazil, here is an excellent biography.  The rest of his fiction still is read around much of the world (not so much America, famously in Russia), but I find it pretty ordinary and of its time.

I’m not counting Canetti, Kafka, and the like, who are not properly Austrian, though they lived in the Empire.  Rilke does not count either, though he is one of the greatest of poets.  Joseph Roth was born in Galicia, yet I think of him as an Austrian rather than Polish writer, again still somewhat neglected in the English-speaking world.  Try Radetzky MarchFranz Werfel I find ordinary, though I have not yet read Forty Days of Musa Dagh, for some his masterpiece, I did buy a copy of that one recently.

The bottom line: There are amazing wonders here, and yes “weird stuff.”  Most of the educated people I know are not clued into them.

The South’s enormous economic stake in slavery far outweighed the impact of protective tariffs on its income.  In 1860, the aggregate value of slaves as property was $3 billion, nearly 20 percent of the nation’s wealth.  The value of slaves was more than 50 percent greater than the capital invested in railroads and manufacturing combined, a calculation that excludes the value of land in southern plantations.  Slavery generated a stream of income that enable overall white per capita income in the south to approximate that of northern whites.  In the seven cotton states, nearly a third of white income came from slave labor.

That is from the new Douglas A. Irwin book on trade policy, Clashing Over Commerce: A History of US Trade Policy.

Gancia, Ponzetto, Ventura provide a precis to their very interesting theory about the size and number of nations.

Before 1950, more than one third of all territorial disputes were decided by war, while after that date diplomacy prevailed in almost 90% of cases.

Why did the first wave of globalisation lead to political concentration and conflict? Why did the second wave of globalisation lead instead to political fragmentation, resolved in a more peaceful way? To answer these questions, in a new paper we develop a model to study the interaction between globalisation and political structure (Gancia et al. 2017). A key premise of our theory is that borders hamper trade and globalisation make borders more costly. We show that political structure adapts to expanding trade opportunities in a non-monotonic way. In early stages, borders are removed by increasing the size of countries. In later stages, the cost of borders is removed by creating economic unions, and this leads to a reduction in the size of countries. Moreover, while the incentive to conquer markets through aggression increases with globalisation, international economic unions remove this incentive, thereby paving the way to the rule of diplomacy.

This point is very good:

Since the size of markets grows rapidly while political borders tend to change slowly, it suggests that globalisation is likely to put more pressure on the world’s political structure. Designing political institutions that can optimally adapt may become one of the major challenges faced by modern societies.

The full paper is here.