The Color of Law

by on September 19, 2017 at 7:25 am in Books, Economics, History, Law | Permalink

Richard Rothstein’s The Color of Law is a good history of government discrimination against African-Americans in the housing market. Most notably, the FHA and the VA refused to guarantee mortgage loans or loans to builders unless the neighborhood was segregated. Indeed, the FHA wouldn’t even insure a project if there were too many African Americans living nearby.

In 1940, for example, a Detroit builder was denied FHA insurance for a project that was near an African American neighborhood. He then constructed a half-mile concrete wall, six feed high and a foot thick, separating the two neighborhoods, and the FHA then approved the loan.

Rothstein is no libertarian but to his credit he does acknowledge that one of the few anti-segregation forces in the early twentieth century was the Lochner influenced reasoning of the Supreme Court. In Louisville, Kentucky, wealthy blacks began to buy houses in previously white neighborhoods. In response, the city passed an ordinance making it illegal for blacks to move into majority-white neighborhoods and vice-versa. The NAACP organized a test case. Warley, an African American, agreed to buy a house from Buchanan, if not prevented by law from doing so. Buchanan then argued that the law reduced the value of his house because he could not sell to Warley or other African-Americans. Thus, the ordinance was a taking which violated the 14th Amendment right not to be deprived of property without due process of law.

The State of Kentucky responded with a brief arguing that segregation was divinely ordained and that “negroes carry a blight with them wherever they go.” The racism was sickening but Kentucky also had the great mass of intellectuals behind it because they were asserting the progressive belief that the state’s police powers could and should overrule individual rights, especially property rights. Under Lochner, however, “unreasonable, unnecessary and arbitrary interference with the right and liberty of the individual to contract” violated the 14th Amendment. Rothstein writes:

“In 1917, the Supreme Court overturned the racial zoning ordinance of Louisville, Kentucky, where many neighborhoods included both races before twentieth-century segregation….The Court majority was enamored of the idea that the central purpose of the Fourteenth Amendment was not to protect the rights of freed slaves but a business rule: “freedom of contract.” Relying on this interpretation, the Court had struck down minimum wage and workplace safety laws on the grounds that they interfered with the right of workers and business owners to negotiate individual employment conditions without government interference. Similarly, the Court ruled that racial zoning ordinances interfered with the right of a property owner to sell to whomever he pleased.”

Sure, it’s a grudging acknowledgment, but most people don’t even do that so give Rothstein credit where credit is due.

Governments evolved other measures to promote segregation such as zoning laws and the white-subsidy systems of the FHA and VA. Nevertheless, Buchanan v. Warley was likely an very important decision. Bill Fischel goes so far as to argue that Buchanan v. Warley prevented apartheid in America.

Addendum: On segregation and Lochner, see David Bernstein’s excellent book Rehabilitating Lochner from which I have also drawn.

*The Color of Money*

by on September 18, 2017 at 2:08 pm in Books, Economics, History | Permalink

The author is Mehrsa Baradaran, and the subtitle is Black Banks and the Racial Wealth Gap.  Here is one excerpt:

Not only were black bankers stuck in a perpetual money pit, but they were often cast as the villains when thing went wrong.  That their loans went primarily to the black middle class and were out of reach of the majority of blacks sometimes made black banks the targets of criticism.  Abram Harris was one of these critics.  Harris was the first nationally renowned black economist and the first to do a comprehensive study of black banks, called The Negro as Capitalist (1936).  Harris headed the Howard economics department from 1936 to 1945, when he became the first black economist at the University of Chicago.  He was recruited there by Frank Knight…Harris had held Marxist sympathies while at Howard, but with his move to Chicago, his economic philosophy became more traditional.

Here is Wikipedia on Harris.  As for Baradaran, I found this to be “two books in one.”  First, it was an OK and useful but not original look at the evolution of the racial wealth gap.  Second, it was a very interesting but interspersed history of black banking in America.  Overall recommended.  Here is the book’s home page.

Reed Hastings, the Netflix CEO who co-founded the company long before “streaming” entered the popular lexicon, was born during a fairly remarkable year for film. 1960 was the year Alfred Hitchcock’s Psycho astounded and terrified audiences, influencing a half-century of horror to come. It was a year of outstanding comedies (Billy Wilder’s The Apartment), outstanding epics (Stanley Kubrick’s Spartacus) and outstandingly creepy thrillers (Michael Powell’s Peeping Tom—a close cousin of Psycho).

But in the vast world of Netflix streaming, 1960 doesn’t exist. There’s one movie from 1961 available to watch (the original Parent Trap) and one selection from 1959 (Compulsion), but not a single film from 1960. It’s like it never happened. There aren’t any movies from 1963 either. Or 1968, 1955 or 1948. There are no Hitchcock films on Netflix. No classics from Sergio Leone or François Truffaut. When Debbie Reynolds died last Christmas week, grieving fans had to turn to Amazon Video for Singin’ in the Rain and Susan Slept Here. You could fill a large film studies textbook with what’s not available on Netflix.

Netflix’s selection of classic cinema is abominable—and it seems to shrink more every year or so. As of this month, the streaming platform offers just 43 movies made before 1970, and fewer than 25 from the pre-1950 era (several of which are World War II documentaries). It’s the sort of classics selection you’d expect to find in a decrepit video store in 1993, not on a leading entertainment platform that serves some 100 million global subscribers.

The bottom line is that streaming rights are expensive, whereas for shipping around DVDs the company can simply buy a disc.  Alternatively, you could say that the law for tangible media — such as discs — is less infested with special interests than the law for digital rights?  What does that say about our future?

Here is the article, via Ted Gioia.

Via Ben Schmidt, the term becomes common only in the 1970s:

I’d like to see a detailed look at actual journal practices, but my personal sense is that editorial review was the norm until fairly recently, not review by a team of outside referees.  In 1956, for instance, the American Historical Review asked for only one submission copy, and it seems the same was true as late as 1970.  I doubt they made the photocopies themselves. Schmidt seems to suggest that the practices of government funders nudged the academic professions into more formal peer review with multiple referee reports.

Further research is needed (how about we ask some really old people?), at least if peer review decides it is worthy of publication.  Frankly I suspect such work would stand a better chance under editorial review.

In the meantime, here is a tweet from the I didn’t know she was on Twitter Judy Chevalier:

I have just produced a 28-page “responses to reviewer and editor questions” for a 39-page paper.

I’d rather have another paper from Judy.

By the way, scientific papers are getting less readable.

Here are the Teaching Company courses that I feel I have benefited most from:

Rufus J. Fears, Famous Greeks

Rufus J. Fears, Famous Romans

Bart D. Ehrman, The New Testament

Seth Lerer, The History of the English Language

Andrew C. Fix, The Renaissance, the Reformation, and the Rise of Nations

Brad S. Gregory, The History of Christianity in the Reformation Era

Robert Bucholz, The History of England from the Tudors to the Stuarts

Dale Hoak, The Age of Henry VIII

Peter C. Mancall, Origins and Ideologies of the American Revolution

Thomas L. Pangle, The Great Debate: Advocates and Opponents of the American Constitution

Patrick N. Allitt, The Rise and Fall of the British Empire

Patrick N. Allitt, The Conservative Tradition

Frederick Gregory, The Darwinian Revolution

Which do you all recommend?  Here is a Quora forum on the same issue.

*Gorbachev: His Life and Times*

by on September 12, 2017 at 12:48 am in Books, History, Uncategorized | Permalink

That is the new biography by William Taubmann, who won a Pulitzer for his Khruschev book.  At first I didn’t want to read it, feeling I was already too familiar with the topic, but it was a fascinating treatment throughout, with many revelations.  It is perhaps the best overall treatment of how the Soviet Union collapsed, and the parts on Gorbachev’s early career provide a superior look at how Soviet bureaucracy and the Communist Party actually functioned.

Here is one bit:

In retrospect, his best chance to prevent Communism from collapsing, taking with it the whole Soviet alliance system in Europe, would have been to encourage reformers like himself to take command of their countries with the support of their people.  Instead, he gave every appearance in his public meetings with the old guard [Honecker, Husák, Zhivkov] of backing them…

One of the best parts of the book is when Taubmann shows how Gorbachev’s treatment of the Nagorno-Karabakh Armenian-Azerbaijani conflict reflected both Gorby’s strengths and weaknesses early on.

Here is another bit:

“She [Raisa Gorbachev] displayed an extraordinary knowledge of British history and philosophy,” then British ambassador to Moscow Bryan Cartledge remembered.  “When she came across a portrait of David Hume, she knew all about him.”

Mrs. Thatcher was stunned, and later Nancy Reagan was envious and tried to keep up.  As for Ronald Reagan, to prepare for his meetings with Gorbachev, for a while he was receiving several two-hour tutoring sessions a week from Russian historians and other experts.

Perhaps the most startling part of the book is when the reader learns that even during the height of the Eastern Europe crisis, foreign policy received no more than five or six percent of the time of Gorbachev and the Politburo; the focus instead was on domestic issues and reforms.

Strongly recommended, this will be one of the two or three best books of the year, compulsively readable, fun, and informative all at once.  Here is a rave New York Times review.  You can order it here.


by on September 8, 2017 at 12:19 pm in Economics, History, Medicine, Science | Permalink

Long ago, in the ancient city of Cyrene, there was a herb called silphium. It didn’t look like much – with stout roots, stumpy leaves and bunches of small yellow flowers – but it oozed with an odiferous sap that was so delicious and useful, the plant was eventually worth its weight in gold.

Image result for silphiumThat’s the opening to an excellent story about silphium, a herb widely-used and loved by the Romans but that hasn’t been seen for nearly two thousand years. Part of the problem was biological, the plant grew only in a tiny region of modern day Libya:

Its entire range consisted of a narrow strip of land about 125 miles (201km) by 35 miles (40km).

Try as they might, neither the Greeks or the Romans could work out how to farm it in captivity. Instead silphium was collected from the wild, and though there were strict rules about how much could be harvested, there was a thriving black market.

Even today there are plants, like huckleberry which resist all efforts to farm them. (Ala Jared Diamond’s Guns, Germs and Steel). Part of the problem was also economic–a tragedy of the commons–as prices shot up and property rights weren’t strong enough to prevent over-farming.

And might silphium still be found somewhere in remote regions of Libya? Read the whole thing.

The post is interesting throughout, here are the closing paragraphs:

The left is more okay with people forming distinct subgroups, even as it thinks more in terms of treating everyone equally, even across very wide scopes, and including wide scopes in more divisive debates. The right wants to make redistribution more conditional, more wants to punish free riders, and wants norm violators to be more consistently punished. The left tends to presume large scale cooperation is feasible, while right tends to presume competition more. The left hopes for big gains from change while the right worries about change damaging things that now work.

Views tend to drift leftward as nations and the world gets richer. Left versus right isn’t very useful for prediction individual behavior outside of politics, even as it is the main parameter that robustly determines large scale political ciliations. People tend to think differently about politics on what they see as the largest scales; for example, there are whole separate fields of political science and political philosophy, which don’t overlap much with fields dealing with smaller scale politics, such as in clubs and firms.

I shouldn’t need to say it but I will anyway: it is obvious that a safe playful talky collective isn’t always the best way to deal with things. Its value varies with context. So sometimes those who are more reluctant to invoke it are right to be wary, while at other times those who are eager to apply it are right to push for it. It is not obvious, at least to me, whether on average the instincts of the left or the right are more helpful.

Do read the whole thing.

So many religious facts have a very long half-life for their relevance.  Say you learn about how the four Gospels differ — that’s still relevant for understanding Christian divisions or Christian theology today.  Reading about the Reformation?  The chance of that still being relevant is much higher than if you were reading about purely secular divisions in internal German or Swiss politics in those same centuries.

Jews, Buddhists, Hindus, Sikhs, or Muslims?  Facts from many centuries ago still might matter.  And the odds are that people a few centuries from now still ought to read about the origins of Mormonism.

In few other areas do past facts stand such a high chance of remaining relevant for so long.

As an empirical matter, “rationalists” tend not to read so much about religion, but that is precisely the unreasonable thing to do.

If you’d like to see a potential counter, here is some poll evidence that many people don’t care so much about the divisions of the Reformation any more.  It still matters a great deal whether you are in Catholic, Protestant, Orthodox, or “mixed” Europe.

I am indebted to a conversation with Bryan Caplan for the main point, though he is not liable for my formulation.

Here is the amazing fact: today, 16 of France’s 20 largest cities are located on or near a Roman town, while only 2 of Britain’s 20 largest are. This difference existed even back in the Middle Ages. So who cares? Well, Britain’s cities in the middle ages are two and a half times more likely to have coastal access than France’s cities, so that in 1700, when sea trade was hugely important, 56% of urban French lived in towns with sea access while 87% of urban Brits did. This is even though, in both countries, cities with sea access grew faster and huge sums of money were put into building artificial canals. Even at a very local level, the France/Britain distinction holds: when Roman cities were within 25km of the ocean or a navigable river, they tended not to move in France, while in Britain they tended to reappear nearer to the water. The fundamental factor for the shift in both places was that developments in shipbuilding in the early middle ages made the sea much more suitable for trade and military transport than the famous Roman Roads which previously played that role.

These days, the French model is looking somewhat better, as Toulouse has held its ground more readily than has Liverpool.

That is from A Fine Theorem, discussing a recent paper by Guy Michaels and Ferdinand Rauch.

And then, [James] Buchanan offers a brief comment on his views on education and school vouchers. Critically, he voices reservations about the introduction of vouchers. Why? Because, as he writes, he is concerned “somehow, to avoid the evils of race-class-cultural segregation that an unregulated voucher scheme might introduce.” Buchanan then goes on to express support for introducing competition in the provision of education, but notes that this should be done in a way that serves “at the same time, to secure the potential benefits of commonly shared experiences, including exposure to other races, classes, and cultures.” In short, though brief, Buchanan’s letter eloquently expresses a vision of education that champions the value of diversity, explicitly condemns “the evils of race-class-cultural segregation,” and notes his reservations about school vouchers if they threaten these values.

That is from Georg Vanberg, and this is fully consistent with the twenty or so years I had of frank conversations with the man.  Here is the letter itself (pdf).

The formal title of this important paper is “The Wind of Change: Maritime Technology , Trade , and Economic Development.”  One of the major findings is that if you consider 1850-1905, using conservative estimates, the introduction of the faster and more reliable steam ships was responsible for least half of the world trade boom during those years.

That was just published in the AER by Luigi Pascali.  Here is the abstract:

The 1870–1913 period marked the birth of the first era of trade globalization. How did this tremendous increase in trade affect economic development? This work isolates a causality channel by exploiting the fact that the introduction of the steamship in the shipping industry produced an asymmetric change in trade distances among countries. Before this invention, trade routes depended on wind patterns. The steamship reduced shipping costs and time in a disproportionate manner across countries and trade routes. Using this source of variation and novel data on shipping, trade, and development, I find that (i) the adoption of the steamship had a major impact on patterns of trade worldwide; (ii) only a small number of countries, characterized by more inclusive institutions, benefited from trade integration; and (iii) globalization was the major driver of the economic divergence between the rich and the poor portions of the world in the years 1850–1900.

Here are ungated copies.

A lot of nonsense has been written about the causes of flooding in Houston. Anti-immigration people blame immigration. Anti-development people blame development. Anti-Trump people blame Republicans.

The truth, however, is that Houston has flooded regularly since it was founded. Moreover, unlike Katrina, the flood systems have mostly worked as they are supposed to–diverting water to the highways, for example. The problem has been that there is just a lot of water.

In a superb post, Phil Magness has the details. From here on in this is Magness. I won’t indent.


We’ve seen a flurry of commentators in the past few days attributing Houston’s flooding to a litany of pet political causes. Aside from the normal carping about “climate change”… several pundits and journalists have opportunistically seized upon Houston’s famously lax zoning and land use regulations to blame Harvey’s destruction on “sprawl” and call for “SmartGrowth” policies that restrict and heavily regulate future construction in the city.

According to this argument, Harvey’s floods are a byproduct of unrestricted suburban development in the north and west of the city at the expense of prairies that would supposedly absorb rainwater at sufficient rates to prevent natural disasters and that supposedly served this purpose “naturally” in the past.

There are multiple problems with this line of argument that suggest it is rooted in naked political opportunism rather than actual concern for Houston’s flooding problems.

First, as we’ve established in the preceding history lesson, flooding has been a regular feature of Houston’s landscape since the beginning of recorded history in the region. And catastrophic flooding – including multiple storms in the 19th century and the well-documented flood of December 1935 – predates any of the “sprawl” that has provoked these armchair urban designers’ ire.

Second, the flooding we saw in Harvey is largely a result of creeks and bayous backlogging and spilling over their banks as more water rushes in from upstream. While parking lot and roadway runoff from “sprawl” certainly makes its way into these streams, it is hardly the source of the problem. The slow-moving and windy Brazos river reached record levels as a result of Harvey and spilled over its banks, despite being nowhere near the city’s “sprawl.” The mostly-rural prairie along Interstate 10 to the extreme west of the city recorded some of the worst flooding in terms of water volume due to the Brazos overflow, although fortunately property damage here will be much lower due to being rural.

Third, the very notion that Houston is a giant concrete-laden water retention pond is itself a pernicious myth peddled by unscrupulous urban planning activists and media outlets. In total acres, Houston has more parkland and green space than any other large city in America and ranks third overall to San Diego in park acreage per capita.*

But even more telling is a 2011 study by the Houston-Galveston Area Council that actually measured the ratio of impervious-to-pervious land cover within the city limits (basically the amount of water-blocking concrete vs. water-absorbing green land). The study used an index scale to measure water-absorption land uses. A low score (defined as less than 2.0 on the scale) indicates a high presence of green relative to concrete. A high score (defined as greater than 5.0) indicates high concrete and low levels of greenery and other water-absorbing cover. The result are in the map below, showing the city limits. Gray corresponds to high levels of pervious surfaces (or greenery). Black corresponds to high impervious surface use (basically either concrete or lakes that collect runoff). As the map shows, over 90% of the land in the city limits is gray, indicating more greenery and higher water absorption. Although they did not measure unincorporated Harris County, it also tends to be substantially less dense than the city itself.

Does this mean that impervious land uses are not a problem and do not contribute to floods in any way? No. But to cite them as a principle cause of the destruction witnessed in Harvey is purely a political move aimed at generating support for a long list of intrusive regulatory policies.

Houston’s flood problems are a distinctive feature of its topography and geography, and they long predate any “sprawl.” While steps have been taken over the years to mitigate them and reduce the severity of flooding, a rare but catastrophic event will unavoidably overwhelm even the most sophisticated flood control systems. Harvey was one such event – certainly the highest floodwater event to hit Houston in over 80 years, and possibly the worst deluge in its recorded history. But it is entirely consistent with almost 2 centuries of recorded historical patterns. In the grander scheme of causes for Harvey’s flooding, “sprawl” does not even meaningfully register.

Read the whole thing for more historical background.

*  Earlier version said second which was a typo as source reports third; other sources can differ depending on year and what exactly is counted.

Flooded Cities

by on September 1, 2017 at 12:35 am in Data Source, History, Science, Uncategorized | Permalink

That is the title of a recent research paper (pdf) by Adriana Kocornik-Mina, Thomas K.J. McDermott, Guy Michaels, and Ferdinand Rauch.  Here is the abstract:

Does economic activity relocate away from areas that are at high risk of recurring shocks? We examine this question in the context of floods, which are among the costliest and most common natural disasters. Over the past thirty years, floods worldwide killed more than 500,000 people and displaced over 650,000,000 people. This paper analyzes the effect of large scale floods, which displaced at least 100,000 people each, in over 1,800 cities in 40 countries, from 2003-2008. We conduct our analysis using spatially detailed inundation maps and night lights data spanning the globe’s urban areas. We find that low elevation areas are about 3-4 times more likely to be hit by large floods than other areas, and yet they concentrate more economic activity per square kilometer. When cities are hit by large floods, the low elevation areas also sustain more damage, but like the rest of the flooded cities they recover rapidly, and economic activity does not move to safer areas. Only in more recently populated urban areas, flooded areas show a larger and more persistent decline in economic activity. Our findings have important policy implications for aid, development and urban planning in a world with rapid urbanization and rising sea levels.

One possible implication of these strong results is that, better pricing of flood insurance, which I favor, still probably won’t get most population centers out of those low-lying, relatively vulnerable areas.

Jakob B. Madsen and Fabrice Murtin have a newly published paper on this topic:

This paper constructs an original database on physical capital, labor, education, GDP, innovations, technology spillovers, and institutions to analyze the proximate determinants of British economic growth since 1270. Several approaches are taken in the paper to tackle endogeneity. We show that education has been the most important driver of income growth during the period 1270–2010, followed by knowledge stock and fixed capital, while institutions have not been robust determinants of growth. The contribution of education has been equally important before and after the first Industrial Revolution. Overall, the results give strong support to the predictions of Unified Growth Theories.

I would note two things.  First, the growth equations do at some points rely on long and (possibly arbitrary?) lags.  Second, often literacy is proxying for education, so this is more a paper about the origins of growth and the role of science, and less a study of whether formal education is about signaling or actual learning.

For the pointer I thank the excellent Kevin Lewis.