History

Is there economic hope for men?

by on June 29, 2015 at 1:29 pm in Economics, History | Permalink

Allison Schrager has a new piece on that topic in Playboy, and with a new (old) idea, here is one part:

Harvard economist Lawrence Katz thinks that when the economy shifts, those who lose out experience “retroactive unemployment” in pursuit of jobs that no longer exist; however, he anticipates a bright future for men in the new economy. As an expert in the ways technology affects the middle class, Katz predicts the rise of the “new artisan” as a substantial trend in middle-class employment.

His theory holds that technology will commoditize and cheapen products in all industries but that artisanal workers will offer a superior interpersonal experience coupled with unique goods and services, commanding premium prices in turn. Men, he notes, are especially well suited to such roles. “These kinds of jobs go back to colonial times,” Katz says. “Individuals brought their own ingenuity and creativity to provide small-scale, high-quality products. In the 19th century they were displaced by mass production, but technology is already bringing a resurgence of this type of work.”

…If Katz’s prediction about new artisans comes to pass, the ways men and women fit into the economy will come to complement each other. Their roles will change, in some ways becoming more traditional and in others less: Women may be likelier to spend their careers in nine-to-five corporate positions, enjoying the regular hours, benefits and predictable pay those jobs entail. Forty-nine percent of women already work in firms with more than 500 employees, compared with 43 percent of men, and their share of the corporate pie is growing. That certainty will empower men to take on less predictable but possibly higher-paying work in self-employment.

A world in which men strive to learn new skills and take on riskier, entrepreneurial household roles may even prove more fulfilling than office work—but this requires changing our definition of a “good job.” Expecting men to be better-educated, office-work-oriented breadwinners is an outmoded idea. The artisan of the future will still be skilled and possess just as much potential to provide for his family. The technological revolution is yet another turn in the cycle of economic progress, and workers of both genders must learn to adapt. The end of men is not nigh; the end of our dated notion of work, however, is.

I believe the link would count as “safe for work,” but do note you may get a Playboy pop-up as I did, and there are sidebar ads, no full nudity but still this is Playboy beware if need be.

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.

Oddly, we probably owe the confederate flag removal to polarization. Could never get done when both sides competed for rural whites.

That is from @SeanTrende.

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.

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:

medical

electricity

hallucination

inconsistent

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]

unridiculous

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.

TPP

by on June 17, 2015 at 1:57 am in Current Affairs, Economics, History, Law, Political Science | Permalink

“If this [TPP] collapses, Pacific Rim countries will be aghast,” said Shunpei Takemori, a professor at Keio University in Japan, the largest economy in the would-be trade zone after the United States. “China is pushing, and if the U.S. just stands aside, it would be a tragedy.”

And:

“If you don’t do this deal, what are your levers of power?” Singapore’s foreign minister, K. Shanmugam, said in Washington on Monday. “The choice is a very stark one: Do you want to be part of the region, or do you want to be out of the region?”

He argued that “trade is strategy” and that without economic leverage, the United States was left with only military clout in Asia “and that’s not the lever you want to use.”

“It’s absolutely vital to get it done,” he added, referring to the bill’s passage.

The full article is here.  I find the willingness of progressiveness to toss this bill into the wind, for the purposes of indulging the usual memes, to be one of the most depressing features of American political life in years.

You will find an alternative perspective from David Henderson here: “If the U.S. government is a “less reliable ally,” that could be a good thing.”  I don’t think they feel that way in Singapore, South Korea, or Taiwan.

By the way, the fourth edition of Doug Irwin’s trade book is coming out.

Stephen Curry set a record In May of this year:

It took Reggie Miller 22 games to set an NBA playoff record of 58 three-pointers for the Indiana Pacers in the 2000 playoffs. Now, Stephen Curry has broken that mark in just 13 games.

He is now up in the 80s I believe.  Curry, by the way, is NBA MVP and his team is probably on the verge of winning the Finals.  The three-point strategy seems to be working: for Curry, for the Golden State Warriors, and also for last year’s champions, the San Antonio Spurs.

Yet the three-point shot has been in the NBA since 1979 (!), and for most of those years it was not a dominant weapon.

What took so long?  At first the shot was thought to be a cheesy gimmick.  Players had to master the longer shot, preferably from their earliest training.  Coaches had to figure out three-point strategies, which include rethinking the fast break and different methods of floor spacing and passing; players had to learn those techniques too.  The NBA had to change its rules to encourage more three-pointers (e.g., allowing zone defenses, discouraging isolation plays).  General managers had to realize that Rick Pitino, though perhaps a bad NBA coach, was not a total fool, and that the Phoenix Suns were not a fluke.  People had to ponder the expected value concept a little more carefully.  Line-ups had to be smaller.  And so on.  Most of all, coaches and general managers needed the vision to see how all these pieces could fit together — Arnold Kling’s patterns of sustainable trade and specialization.

In other words, this “technology” has been legal since 1979, yet only recently has it started to come into its own.  (Some teams still haven’t figured out how to use it properly.)  And what a simple technology it is: it involves only placing your feet on a different spot on the floor and then moving your arms and legs in a coordinated (one hopes) motion.  The incentives of money, fame, and sex to get this right have been high from the beginning, and there are plenty of different players and teams in the NBA, not to mention college or even high school ball, to figure it out.  There is plenty of objective data in basketball, most of all when it comes to scoring.

Dell Curry, Stephen’s father, was in his time also known as a three-point shooter in the NBA.  But he didn’t come close to his son’s later three-point performance.

So how long do ordinary scientific inventions need to serve up their fruits?  I am a big fan of Stephen Curry, but in fact his family tale is ultimately a sobering one.

Addendum: Tom Haberstroh fills in the history.

Cameron Campbell writes to me:

There was indeed betting on the outcomes of the examinations, at least in Guangdong province in the 19th century.  At least one form of betting was on the surnames that would be represented in the pool of successful candidates. Such betting was quite widespread, so for example, there were publications dedicated to providing punters with background on exam takers.

It also seems that a Professor Haifeng Liu at Xiamen University last year gave a talk titled 闈姓賭博:清代廣東與澳門的科舉習俗, or “Examination hall surname gambling: Qing Guangdong and Macao examination customs.” (Cowen’s Second Law, though perhaps he still needs to write it up)

Here is my previous post on this topic.  Here is Campbell’s blog.  Campbell is still trying to find out whether the telegraph story cited in my earlier post can be verified, I thank him for his efforts, Robin Hanson will be happy.

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.

Brad DeLong writes:

And as Matt [Rognlie] also stressed, the secondary big news in his numbers is the pre-1990 fall in the net capital share, a fall driven by a very real rise in depreciation is real. Our capital stock has seen the replacement of long-lasting machines to perform Wellman-Lord desulfurization reactions with video editing machines rapidly obsoleted by Moore’s Law.

But it is puzzling that the pre-1990 fall in the net capital share not matched by a decline in the relative capitalization of the corporate sector. Matt points out a steady rise in capitalization up to the late 1960s, followed in the 1970s by a “negative bubble”–truly absurdly high earnings yields on equities–that lasts well into the 1980s. Then we see a bubbly rise in the relative capitalization of the corporate sector since the start of the 1990s–a rise that persists in spite of sub-par business-cycle performance. Very puzzling.

The post is of interest more generally,

Paul Krugman describes their policies as a mix of “debt repudiation, capital controls, and massive devaluation.”  Matt Yglesias refers to putting some of their bankers in jail.  But I say there is not a generalizable formula here.

Neither mentions that a major part of the Icelandic recipe was letting foreign deposit holders twist in the wind.  That’s a transfer of wealth to the domestic economy and furthermore it was politically palatable; it is also a choice which won’t much help any larger country where most of the deposit holders are domestic.  It is noteworthy that this kind of choice loomed large for Cyprus, another small country with a lot of foreign depositors.

Iceland is also so small that cutting off these creditors won’t much damage the broader global economy or lead to significant contagion.  Today, in a much safer macroeconomic environment, we’re not even sure the same could be said for Grexit, and Greece is a pretty small country in economic terms.

On top of all that, not paying back the foreign depositors was a transfer to Iceland.  It is easy enough to see why Icelanders might like that idea, but the objective foreign analyst, who ought not favor the more Nordic peoples above the others, also should consider the loss side of the ledger, namely in the UK and Netherlands.

What else?

Don’t forget that the value of the Icelandic stock exchange fell by 90% – how many other countries could endure that or would accept it?  That is easier to pull off when there are only six stocks trading on your exchange and those equities are not central to your savings.

Capital controls are also not an option for many economies, including those that are serious about being financial centers or having reserve currencies.  More to the point, the flight of foreign capital is very often not a problem in the first place.  And we have plenty of experience with capital controls and the overall record is at best mixed; this is hardly a neglected heterodox innovation.  The imposition of Icelandic capital controls may well discourage foreign investment looking forward, and so the “record to date” will be misleading in this regard.  This is again a way in which Iceland has transferred the costs of its adjustment into the future.  On top of that, we still don’t yet know how well the Icelandic removal of capital controls will go.

I’m all for devaluing and accepting higher inflation in a lot of crisis situations.  This part of the Icelandic recipe is generalizable.  It’s worth noting, however, that the devaluation (especially with capital controls) imposed a harsh and immediate “austerity” on the Icelandic people, namely it was very hard to buy foreign goods for a while.  In other words, rapid real wage cuts were imposed on just about everybody.  If your country can do that, great, but it needs to be outlined how most economies will manage that trick.  See also Scott Sumner’s remarks on whether Iceland avoided traditional fiscal austerity.

Given some very tough circumstances, Iceland also did a reasonable job of “ring-fencing” its banks and separating the good from bad assets.  That may be generalizable too, although it doesn’t have the polemic punch of some of their other policy choices.

Overall, the experience from Iceland, upon closer inspection, is not very easily generalizable.  I suspect it receives much of its praise for reasons of mood affiliation — what could sound tougher than putting bankers in jail?  But overall, Iceland faced very different constraints and opportunities, relative to other countries in the financial crisis.

Addendum: Here are some relevant earlier posts.

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 Amazon.com 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?

Alexandra M. de Pleijt has a new paper on that topic (pdf):

Did human capital contribute to economic growth in England? In this paper the stock of total years of schooling present in the population between 1300 and 1900 is quantified. The stock incorporates extensive source material on literacy rates, the number of primary and secondary schools and enrollment figures. The trends in the data suggest that, whilst human capital facilitated pre-industrial economic development, it had no role to play during the Industrial Revolution itself: there was a strong decline in educational attainment between ca. 1750 and 1830. A time series analysis has been carried out that confirms this conclusion.

The reference there is from Ben Southwood.