It is in the new issue of the Times Literary Supplement (a wonderful periodical of course), right now this link is ungated, for how long I do not know.  I thought the book was very well-written and especially impressively researched.  But on the side of economics and conceptual framework, I found it too biased.  Here is one excerpt from my review:

In a book with almost 400 pages of text, it is striking that government fraud is not seriously discussed, with the exception of the critical take on the Comstock movement, under which the Post Office took up a moral crusade against mail fraud, directed by the evangelical Anthony Comstock. Yet if consumers are so impetuous and ill-informed as to be frequent victims of business fraud, might not voters and even activist citizens be prone to similar manipulations? Balleisen mentions that such a view was held by the nineteenth-century Spencerian Edward Youmans, but he doesn’t do much more than mock it and then move on. Yet arguably the biggest fraud of the early part of the twentieth century was the selling of the First World War to the American public on mostly false pretences. Progressives led this sales pitch, through spokesmen such as Herbert Croly, and of course the President Woodrow Wilson, telling the American people that war was a noble cause that would revitalize the nation and save the world.

In Balleisen’s narrative, however, the Progressives show up only as critics of fraud.

And is corporate fraud really going up these days?:

Take lives lost in the workplace. An employer more or less promises that a job is relatively safe, and if it turns out to be dangerous that may reflect a kind of fraud or at the very least a major disappointment. Yet jobs in America have never been as safe as today, and furthermore the rate at which job safety increases does not seem to have been affected by the creation of the Occupational Safety and Hazard Administration (OSHA). Or what about food poisoning, which you also might take as a sign of a fraudulent transaction? Again, overall, the opportunity to buy truly transparently safe food supplies seems greater than ever before, notwithstanding the fact that more consumers are voluntarily taking chances with sushi, non-pasteurized cheeses and home-made raw milk. The nice thing about mortality statistics is that a death pretty much always reflects a disappointment with the transaction, but for most metrics (opioid markets being one significant exception) mortality is down over the past few decades.

Do read the whole thing.

Hacking the Nazis

by on November 16, 2017 at 8:50 am in History, Web/Tech | Permalink

Some resisters fought the Nazis in the streets while others fought them from within by hacking some of the world’s first information technology systems. Ava Ex Machina has a fascinating post discussing some of these unheralded hackers. Here is one:

René Carmille — was a punch card computer expert and comptroller general of the French Army, who later would head up the Demographics Department of the French National Statistics Service. As quickly as IBM worked with the Nazis to enable them to use their punch card computer systems to update census data to find and round up Jewish citizens, Rene and his team of double-agents worked just as fast to manipulate their data to undermine their efforts.

The IEEE newspaper, The Institute, describes Carmille as being an early ethical hacker: “Over the course of two years, Carmille and his group purposely delayed the process by mishandling the punch cards. He also hacked his own machines, reprogramming them so that they’d never punch information from Column 11 [which indicated religion] onto any census card.” His work to identify and build in this exploit saved thousands of Jews from being rounded up and deported to death camps.

Rene was arrested in Lyon in 1944. He was interrogated for two days by Klaus Barbie, a cruel and brutal SS and Gestapo officer called “the Butcher of Lyon,” but he still did not break under torture. Rene was caught by the Nazis and sent to the Dachau concentration camp, where he died in 1945.

Hat tip: Tim Harford.

Samuel Bazzi, Martin Fiszbein, and Mesay Gebresilasse have a new NBER working paper on that theme, here is the abstract:

In a classic 1893 essay, Frederick Jackson Turner argued that the American frontier promoted individualism. We revisit the Frontier Thesis and examine its relevance at the subnational level. Using Census data and GIS techniques, we track the frontier throughout the 1790-1890 period and construct a novel, county-level measure of historical frontier experience. We document skewed sex ratios and other distinctive demographics of frontier locations, as well as their greater individualism (proxied by infrequent children names). Many decades after the closing of the frontier, counties with longer historical frontier experience exhibit more prevalent individualism and opposition to redistribution and regulation. We take several steps towards a causal interpretation, including an instrumental variables approach that exploits variation in the speed of westward expansion induced by national immigration inflows. Using linked historical Census data, we identify mechanisms giving rise to a persistent frontier culture. Selective migration contributed to greater individualism, and frontier conditions may have further shaped behavior and values. We provide evidence suggesting that rugged individualism may be rooted in its adaptive advantage on the frontier and the opportunities for upward mobility through effort.

I am very much a proponent of this line of reasoning.

Acclaimed legal scholar, Harvard Professor, and New York Times bestselling author Cass R. Sunstein brings together a compelling collection of essays by our nation’s brightest minds across the political spectrum—including Eric Posner, Tyler Cowen, Noah Feldman, Jack Goldsmith, and Martha Minow—who ponder the question: Can authoritarianism take hold here?

With the election of Donald J. Trump, many people on both the left and right feared that America’s 240-year-old grand experiment in democracy was coming to an end, and that Sinclair Lewis’ satirical novel, It Can’t Happen Here, written during the dark days of the 1930s, could finally be coming true.

Is the democratic freedom that the United States symbolizes really secure? Can authoritarianism happen in America? Sunstein queried a number of the nation’s leading thinkers. In Can It Happen Here? he gathers together their diverse perspectives on these timely questions and more.

In this thought-provoking collection of essays, these distinguished thinkers and theorists explore the lessons of history, how democracies crumble, how propaganda works, and the role of the media, courts, elections, and “fake news” in the modern political landscape—and what the future of the United States may hold.

Due out in March, pre-order here.  The book also has Jon Elster, Timur Kuran, and Jonathan Haidt, dare I call it self-recommending?

Here is the transcript and podcast, I enjoyed this chat very much.  Here is part of the opening summary:

Sujatha Gidla was an untouchable in India, but moved to the United States at the age of 26 and is now the first Indian woman to be employed as a conductor on the New York City Subway. In her memoir Ants Among Elephants, she explores the antiquities of her mother, her uncles, and other members of her family against modern India’s landscape.

Our conversation considered the nature and persistence of caste, gender issues in India, her time as a revolutionary, New York City lifestyle and neighborhoods and dining, religion, living in America versus living in India, Bob Dylan and Dalit music, American identity politics, the nature of Marxism, Halldor Laxness, and why she left her job at the Bank of New York to become a New York City subway conductor, among other topics.

Here is one sequence:

GIDLA: Actually, the only relation I have with my family members is political views.


GIDLA: If we have to connect on familial links, we will always be fighting and killing each other. All that we talk about with my mother is politics and untouchability and caste and Modi and things like that.

It’s the same thing with my sister also. This is where we connect. Otherwise, we are like enemies. My brother, we’re completely alienated from each other, firstly because he goes to church now. We never used to go to church before. He’s into this Iacocca. Is there a name . . . ?

COWEN: Iacocca?

GIDLA: Yeah.

COWEN: Lee Iacocca?

GIDLA: Yeah.

COWEN: The former Chrysler chairman?

GIDLA: Yeah. He reads that kind of books.

COWEN: Management books.

GIDLA: He’s into that kind of stuff.

COWEN: You don’t?


GIDLA: He read Freakonomics and he liked it. I don’t relate to that stuff.

And this toward the end:

COWEN: Your most touching memory of your mother?

GIDLA: I don’t know. When I was arrested, she was very worried. She said, “I wish I could take you back into my womb.”

Strongly recommended.  I was pleased to see that Publisher’s Weekly named Sujatha Gidla’s book as one of the ten best of 2017, you can order it here.

Gifts of the Immigrants, Woes of the Natives: Lessons from the Age of Mass Migration (2017). JOB MARKET PAPER
Abstract: In this paper, I show that political opposition to immigration can arise even when immigrants bring significant economic prosperity to receiving areas. I exploit exogenous variation in European immigration to US cities between 1910 and 1930 induced by World War I and the Immigration Acts of the 1920s, and instrument immigrants’ location decision relying on pre-existing settlement patterns. Immigration increased natives’ employment and occupational standing, and fostered industrial production and capital utilization. However, it lowered tax rates, public spending, and the pro-immigration party’s (i.e., Democrats) vote share. The inflow of immigrants was also associated with the election of more conservative representatives, and with rising support for anti-immigration legislation. I provide evidence that political backlash was increasing in the cultural distance between immigrants and natives, suggesting that diversity might be economically beneficial but politically hard to manage.

That is from Marco Tabellini, job market candidate at MIT.

…sons crowd out human capital acquisition by daughters.  If all daughters of self-employed men experienced the “sisters-only” level of transmission, the overall gender gap in self-employment would be reduced by nearly 20 percent.

That is from Elizabeth Mishkin, on the job market from Harvard.

While we are on related topics:

I establish that women in U.S. counties with heavier casualties were more active in starting new businesses after the war [WWII] ended and this difference persists to this day. I also find that single women were more likely to start new businesses than war widows. Evidence in favor of the marriage market channel suggests that reducing opportunity cost is more effective in encouraging women to start new businesses than merely providing financial subsidies.

That is from Patrick Luo, also on the job market from Harvard.

The subtitle is Making Sense of the Syrian Tragedy, and the author is leading Syrian intellectual Yassin Al-Haj Saleh.  Imagine having a well-written book, totally conversant in the arguments of the social sciences, that set out to explain the Syrian tragedy to an intelligent reader.  Here is one typical bit:

The extremely decentralized nature of the Syrian revolution stemmed from nearly half a century of regime-enforced seclusion and isolation of Syrian society.  It was also occasioned by the regime’s forcible domination over all social interaction — and so a divide-and-conquer strategy was used by the Assadist oligarchy to confront the revolution right from the start.  Such strategies made any protest activities in central squares obviously impossible because this would have permitted the gathering of Syrian society’s diverse groups, and perhaps would have also allowed a degree of discussion, exchange of opinions, and general building of trust.  Keeping this in mind, it becomes clear that the extreme, forced fragmentation of the revolution’s activities is an additional factor that has facilitated the spread of the nihilist synthesis of complete distrust and a propensity for violence.

Where else can you find a book that compares and contrasts ISIS nihilism to 19th century Russian nihilism, or Sultanic principles in Syria vs. Lebanon?:

Lebanon is a neo-Sultanic state without a Sultan, and should either fill the gap and assign a Sultan with a well-developed general security shield, or turn the page of the sectarian patronage system and evolve toward a state of citizenship and equality.  In the context of present interconnections between the two Sultanates, Lebanon is the incomplete one with a large ‘security branch’ (i.e. Hezbollah) that is leaning more towards Sultanism, and the complete model is currently beset by a revolution.

Strongly recommended.  And as the author himself suggests in closing: “It is always necessary to demystify sectarian fraud…”

You can order the book here, though please note I do not sympathize with the author’s career or overall views in many respects.  He was a political prisoner from 1980-1996.  “Worthy of Gramsci…”  This book remains under-reviewed by mainstream outlets.

The estimable Chug asks me:

Curious what you consider the top classic movies and books about American politics and DC.

Today let’s do movies, the following come to mind:

1. All the President’s Men.

2. No Way Out: Gene Hackman at his peak.  The Conversation also might count as a DC movie.

3. The Exorcist, set in Georgetown.  Maybe The Omen too?

4. The Manchurian Candidate.

5. Wedding Crashers.

6. The Day the Earth Stood Still.

7. Born Yesterday.

8. Contact.

I don’t really like Independence Day, but it deserves some sort of mention.  The Oliver Stone Nixon movie I’ve yet to see.  I like Being There, and it is set in DC, but it doesn’t feel like a “Washington movie” to me.  Legally Blonde, Logan’s Run, and Minority Report are all worth ponders, and have their cinematic virtues, but I am not sure they are true to the spirit of the question.

The real question, in my mind, is which of these captures the unique way in which Washington is the world’s epicenter for extreme productivity (don’t laugh) in the areas of economics, public policy, law/lobbying.  What is special but also sometimes despicable about DC area culture?  Might this be a mix of Contact and No Way Out?  I’ve yet to see anyone fully explain the DC micro-culture, as extreme and hyper-specialized as that of say Hollywood or Silicon Valley.

By the way, all the movies you thought I forgot to mention I didn’t, rather I don’t like them.

Definitely recommended, the volume covers 1929-1941, I am now on p.234.  Here is one good “that was then, this is now” bit:

Stalin had fixed a covetous eye on Chinese Turkestan, or Xinjiang (“New Territory”).  From January through April 1934, he fought a small war there.  Renewal of a mass Muslim rebellion had spurred Comintern operatives to contemplate pushing for a socialist revolution, but Soviet military intelligence had pointed out that, even though the rebels commanded the loyalty of almost the entire Muslim population (90 percent), a successful Muslim independence struggle in Chinese Turkestan could inspire the Kazakhs and Kyrgyz in Soviet Turkestan or even the Mongols.  Stalin had decided to send about 7,000 OGPU and Red Army soldiers, as well as airplanes, artillery, mustard gas, and Soviet Uzbek Communists, to defend the Chinese warlord.  Remarkably, he allowed Soviet forces to combine with former White Army soldiers abroad, who were promised amnesty and Soviet citizenship.  A possible Muslim rebel victory turned into a defeat.  Unlike the Japanese in Manchuria, Stalin did not set up an independent state, but he solidified his informal hold on Xinjiang, setting up military bases, sending advisers, and gaining coal, oil, tungsten, and tin concessions.  Some 85 percent of Xinjiang’s trade was with the USSR….Chiang Kai-Shek became dependent on Soviet goodwill to communicate with Xinjiang’s capital, Urumqi.

Here is excellent New Yorker coverage of the book from Keith Gessen.  You can buy here on Amazon.

*The Wizard and the Prophet*

by on November 9, 2017 at 1:34 pm in Books, History, Science | Permalink

That is the new Charles C. Mann book, I pre-ordered long ago, here is the new Kirkus review:

A dual biography of two significant figures who “had little regard” for each other’s work but “were largely responsible for the creation of the basic intellectual blueprints that institutions around the world use today for understanding our environmental dilemmas.”

A thick book featuring two scientists unknown to most readers is a tough sell, but bestselling journalist and historian Mann (1493: Uncovering the New World Columbus Created, 2011, etc.), a correspondent for the Atlantic, Science, and Wired, turns in his usual masterful performance. Nobel Prize–winning agronomist Norman Borlaug (1914-2009) developed high-yield wheat varieties and championed agricultural techniques that led to the “Green Revolution,” vastly increasing world food production. Ornithologist William Vogt (1902-1968) studied the relationship between resources and population and wrote the 1948 bestseller Road to Survival, a founding document of modern environmentalism in which the author maintains that current trends will lead to overpopulation and mass hunger. Borlaug and Vogt represent two sides of a centurylong dispute between what Mann calls “wizards,” who believe that science will allow humans to continue prospering, and “prophets,” who predict disaster unless we accept that our planet’s resources are limited. Beginning with admiring biographies, the author moves on to the environmental challenges the two men symbolize. Agriculture will require a second green revolution by 2050 to feed an estimated 10 billion inhabitants. Only 1 percent of Earth’s water is fresh and accessible; three-quarters goes to agriculture, and shortages are already alarming. More than 1.2 billion people still lack electricity; whether to produce more or use less energy bitterly divides both sides. Neither denies that human activities are wreaking havoc with Earth’s climate. Mann’s most spectacular accomplishment is to take no sides. Readers will thrill to the wizards’ astounding advances and believe the prophets’ gloomy forecasts, and they will also discover that technological miracles produce nasty side effects and that self-sacrifice, as prophets urge, has proven contrary to human nature.

An insightful, highly significant account that makes no predictions but lays out the critical environmental problems already upon us.

You can pre-order here.

War dissolves customs

by on November 9, 2017 at 4:39 am in Books, History, Religion, Uncategorized | Permalink

…the role of wars in dealing the coup de grace to lingering customs is quite remarkable.  Contemporary observers noted this development without comment or simply attributed it directly to the catastrophe.  But war was less a cause of change than a precipitant of changes already under way.  Edgar Morin makes precisely this point when he writes that in the parish of Plodémet “the war of 1914 accelerated and amplified most of the processes set off in 1880-1900.”  Like the Great Revolution in peasant parlance, the Great War became a symbolic dividing line between what once was and what is, so that informants in a survey used terms like jadis and avant de guerre interchangeably.  Yet wars are not watersheds for customs, but difficult times in which people are forced to focus on essential matters and come to see things differently.  Many festive customs were not necessarily suspended by the Great War.  In the countryside, mourning was almost as universal as hardship; two years for parents, one for siblings.  There were few pigs to slaughter, no festive family meals, no public festivities.  And after the war there was the great influenza epidemic.  By 1919 the old customs were no longer part of people’s lives.  Some were restored to their prewar prominence, but many were quietly forgotten.

That is from Eugen Weber’s classic Peasants into Frenchmen: The Modernization of Rural France, 1870-1914.

Indiana Jones, Economist?!

by on November 7, 2017 at 7:25 am in Economics, History | Permalink

In a stunningly original paper Gojko Barjamovic, Thomas Chaney, Kerem A. Coşar, and Ali Hortaçsu use the gravity model of trade to infer the location of lost cities from Bronze age Assyria! The simplest gravity model makes predictions about trade flows based on the sizes of cities and the distances between them. More complicated models add costs based on geographic barriers. The authors have data from ancient texts on trade flows between all the cities, they know the locations of some of the cities, and they know the geography of the region. Using this data they can invert the gravity model and, triangulating from the known cities, find the lost cities that would best “fit” the model. In other words, by assuming the model is true the authors can predict where the lost cities should be located. To test the idea the authors pretend that some known cities are lost and amazingly the model is able to accurately rediscover those cities.

Here from the paper is more detail. Each step is an accomplishment and the final product is something completely unexpected. Bravo!

Our first contribution is to extract systematic information on commercial linkages between cities
from ancient texts. To do so, we leverage the fact that the ancient records we study can be transcribed
into the Latin alphabet, allowing all texts to be digitized and parsed. We automatically
isolate, across all records, the tablets which jointly mention at least two cities. We then systematically
read those texts, which requires an intimate knowledge of the cuneiform script and Old
Assyrian dialect of the ancient Akkadian language that the records are written in. Taking individual
source context into account, this analysis relies exclusively upon a subset of records that
explicitly refer to journeys between cities and distinguishes whether the specific journey was undertaken
for the purpose of moving cargo, return journeys, or journeys undertaken for other reasons
(legal, private, etc.).

Our second contribution is to estimate a structural gravity model of ancient trade. We build
a simple Ricardian model of trade. Further imposing that bilateral trade frictions can be summarized
by a power function of geographic distance, our model makes predictions on the number of
transactions between city pairs, which is observed in our data. The model can be estimated solely
on bilateral trade flows and on the geographic location of at least some cities.

Our third contribution is to use our structural gravity model to estimate the geographic location
of lost cities. While some cities in which the Assyrian merchants traded have been located
and excavated by historians and archaeologists, other cities mentioned in the records can not be
definitively associated with a place on the map and are now lost to us. Analyzing the records
for descriptions of trade and routes connecting the cities and the landscapes surrounding them,
historians have developed qualitative conjectures about potential locations of several of these lost
cities. We propose an alternative, quantitative method based on maximizing the fit of the gravity
equation. As long as we have data on trade between known and lost cities, with sufficiently many
known compared to lost cities, a structural gravity model is able to estimate the likely geographic
coordinates of lost cities. Our framework not only provides point estimates for the location of lost
cities, but also confidence regions around those point estimates. For a majority of the lost cities, our
quantitative estimates come remarkably close to the qualitative conjectures produced by historians,
corroborating both such historical models and our purely quantitative method. Moreover, in some
cases where historians disagree on the likely location of a lost city, our quantitative method supports
the conjecture of some historians and rejects that of others.

You might wish to read James T. Quinlavin from 1999 (pdf), who also covers Syria and Iraq, here is one bit:

While observers have pointed to the apparent fragility of this balance for decades, the longevity of the balancing act is both a tribute to the Saudi rulers and evidence that their tools are more effective than generally recognized.

Ibn Saud’s personal conquest of Arabia, supported by a community of trust of about sixty men willing to fight against the odds, began with the recapture of the family seat in Riyadh. From there Ibn Saud went on to conquer the Nejd, the traditional heartland of Arabia, relying on both war and marriage to personalize his alliances and conquests. Marriage, even to bereaved relatives of defeated opponents, provided Ibn Saud an effective means of monitoring his enemies. The tribes of the Nejd made up the human core of Saudi Arabia, while Ibn Saud’s numerous progeny comprised the dynasty’s human core. Today the al-Sauds rule from a base within a family group that is not monolithic. Bonds of personal loyalty rather than of an “abstract notion of citizenship” extend from the family to the tribal groups. Only nontribal Saudis define their relation to the Saudi rulers in the latter terms.

Here is another:

To varying degrees, Saudi Arabia, Iraq, and Syria have come to concentrate key capabilities of offense and defense in parallel military forces. The total military power of the state is reduced, however, when these forces are not made available when needed.

Ahmed Al Omran on Twitter, a former WSJ correspondent, is monitoring current developments.  If you are wondering, Saudi stocks have rebounded.

Due to popular demand, we are releasing a transcript of the Conversation with Lindsey and Teles.

We talk about liberaltarianism, how bad is crony capitalism really, whether government affects the distribution of wealth much, universities as part of the problem, whether IP law is too lax or too tough, why Steve didn’t do better in high school, the British system of government, Charles Murray, the Federalist Society, Karl Marx, Thailand, the Coase Theorem, and Star Trek, among other topics.  Here is one bit:

COWEN: What’s the most important idea in the book that you understand better than he [Brink Lindsey] does?

TELES: Well, so there is a division of labor here. Brink did a lot more work on the cases than I did, although we talked about them all and I did a lot more work on the political analysis. We draw a lot on great, really seminal article by Rick Hall at University of Michigan called “Lobbying as Legislative Subsidy.” And I think that idea is dramatically under appreciated. The idea that what lobbyists are essentially doing is providing information, that information is scarce, it is a source of power. And one thing that we add is, if the state isn’t providing information itself, it essentially has to get it from outside. And when they get it from outside, it imports the overall inequality and information gathering and processing that’s in civil society. And that can be a very strong source of inequality in policy outcomes. I think Brink understands that, but this is my wheelhouse so I think probably if you were gonna push me, I’d say I understood it better that he did.

And this:

LINDSEY: One can see the whole sort of second wave feminist movement since the 60s as an anti rent-seeking movement, that white men were accumulating a lot of rents because of the way society was structured, that they were the breadwinner and there was a sexual division of labor, and they received higher pay than they would have otherwise because they were assumed to be the breadwinner, and women were just sort of kept out of the workforce in direct competition with men in many roles. The last half century has been an ongoing anti rent-seeking campaign and the dissipation of those rents especially by less skilled white men has been a cause of a great deal of angst and frustration and political acting out in recent years.

Here is a link to the podcast version of the chat, plus further explanation of my interview method for the two.  Better yet, you can order their new book The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality.