History

Here is the academic paper, by William Easterly, and Laura Freschi, and Steven Pennings:

Economic development is usually analyzed at the national level, but the literature on creative destruction and misallocation suggests the importance of understanding what is happening at much smaller units. This paper does a development case study at an extreme micro level (one city block in New York City), but over a long period of time (four centuries). We find that (i) development involves many changes in production as comparative advantage evolves and (ii) most of these changes were unexpected (“surprises”). As one episode from the block’s history illustrates, it is difficult for prescriptive planners to anticipate changes in comparative advantage, and it is easy for regulations to stifle creative destruction and to create misallocation. If economic growth indeed has a large component for increases in productivity through reallocation and innovation, we argue that the micro-level is important for understanding development at the national level.

It is a block on Greene St., near NYU, and so a section of this paper focuses on whorehouses.  History made them do it.  Here is the interactive site.  I am in general a big believer in this kind of micro-history, which remains undervalued in the economics profession.

The pointer is from Kottke.

This is from a recent working paper (pdf) by Miguel Morin:

When the adoption of a new labor-saving technology increases labor productivity, it is an open question whether the economy adjusts in the medium-term by decreasing employment or increasing output. This paper studies the effects of cheaper electricity on the labor market during the Great Depression. The first-stage of the identification strategy uses geography as an instrument for changes in the price of electricity and the second-stage uses labor market outcomes from the concrete industry—a non-traded industry whose location decisions are independent of the instrument. The paper finds that electricity was an important labor-saving technology and caused an increase in capital intensity and labor productivity, as well as a decrease in the labor share of income. The paper also finds that firms adjusted to higher labor productivity by decreasing employment instead of increasing output, which supports the theory of technological unemployment.

You will note of course that the short-, medium- and long-run effects here are quite different, and of course electricity is a major boon to mankind.  Still, technological unemployment is not just the fantasy of people who have failed to study Ricardo.

Here is a short summary of the paper, via Romesh Vaitilingam.

This book already has done a good deal to raise the status of autistic people and also studies of autism.  Silberman is to be commended for extensive research into the lives of Hans Asperger and Leo Kanner and into the modern “neurodiversity” movement more broadly.  He has taken on a very difficult topic and turned it into what is likely to prove a commercially successful book.

That said, most reviews of this work, while positive, are not very assured.  It’s as if the reviewers know they are not well-informed about the topic and thus they stick to general praise, without delving into the details.  Or maybe they like the book’s conclusion and are reluctant to criticize the work as a whole.  I, in contrast, have a few more pointed remarks:

1. Leo Kanner, a co-discoverer of autism, is made out to be the bad guy, yet his writings are more subtle than Silberman indicates, even though one can pull some bad phrases and quotations.  Kanner in particular had a much stronger grasp of the diversity within autism (pdf) than Silberman grants.  It is hard, after reading that piece, to see how his conception of autism could be described as monolithic.

The contrast between Kanner and Asperger is much overdrawn.  The truth is closer to “they both had profound early insights and were unjustly neglected” rather than Silberman’s “sadly the Kanner approach to autism at first beat out the Asperger approach.”  The latter narrative is an over-dramatized storytelling convention of a popular book.  The real problem back then was how various minorities and “deviants” were treated, from gay individuals to lobotomized schizophrenics, rather than the dominant influence of Kanner’s ideas.

2. Silberman promotes an “along a spectrum (spectra?) model” rather than an “autistic yes or no” model.  Maybe so, but it is far from obvious that the “yes or no” model is false and in fact it explains some of the data better (pdf).  Silberman offers no scientific reason for his choice, and he doesn’t define the underlying concepts clearly enough to outline exactly what is at stake.  Silberman argues that the spectrum models are ethically superior and more humane, but that is an unjustified presumption and it also does not settle the substantive dispute.  In any case both models are capable of accommodating either respectful or disrespectful attitudes toward autistic people.

3. For a 534-pp.book on autism, there is oddly little discussion of what autism is or might be.  That is author’s prerogative of course, but it means the book doesn’t offer much of a framework for judging the research history of autism, as it attempts to do.

4. Silberman devotes an entire chapter to the movie “Rain Man,” and in part the movie’s main role model, namely Kim Peek.  Yet the text fails to note it eventually turned out that Peek was not in fact autistic but instead probably had FG syndrome.  This is another instance of the book’s tendency to prefer a good story over the facts.  And that Peek was so ingloriously railroaded into the autism category is part of the actual story there (Dustin Hoffman played a role in doing that), yet that is a mistake which Silberman himself essentially repeats.

I hate to rain on the parade of this book because a) I love the topic, b) the author’s research is impressive, and c) the book is genuinely humane and tolerant and it will have an almost entirely positive impact on popular discourse.  Still, I think that the original organizing themes in the work are mostly wrong.

And oddly, for all its praise of autism and autistic ways of thinking, the style of the book is remarkably non-autistic.  It’s full of long stories and blah blah blah, rather than getting to the point.

Here is a review from Nature.  Carl Zimmer interviews Silberman.  Here is The Economist review.  Here is a related podcast.  Here is the Jennifer Senior NYT review.  Here is Silberman’s LATimes piece.  Here is a Morton Ann Gernsbacher review.  Here is The Guardian.  Here is The Atlantic.  Here is a PLOS interview with Silberman.

It’s an interesting read, but I don’t think you can trust what’s in there.

One estimate is that China has been spending about $400 billion to prop up stock and currency prices, but with no success.  Might market-determined, flexible prices have some value today?

Cheng-chung Lai and Joshua Jr-Shiang Gau reiterate a well-known point about the 1930s:

It is often argued that the silver standard insulated the Chinese economy from the Great Depression that prevailed in the gold standard countries during the period 1929–1935. Using econometric testing and counterfactual simulations, this article shows that if China had been on the gold standard (or on the gold-exchange standard), the balance of trade of this semiclosed economy would have been ameliorated, but the general price level would have declined significantly. Due to limited statistics, two important variables (GDP and industrial production) are not included in the analysis, but the general argument that the silver standard was a lifeboat to the Chinese economy remains defensible.

China during the Great Depression remains very much an underexplored research topic.  Here is Loren Brandt and Thomas Sargent on China later going off the silver standard.  Here is Milton Friedman on the same (jstor).  The Chinese were not able to sustain that peg either.  So what should the smart money bet on today?

Here is Lars Christensen on the falling apart of the dollar bloc.

Food has replaced music at the heart of the cultural conversation for so many, and I wonder if it’s because food and dining still offer true scarcity whereas music is so freely available everywhere that it’s become a poor signaling mechanism for status and taste. If you’ve eaten at Noma, you’ve had an experience a very tiny fraction of the world will be lucky enough to experience, whereas if you name any musical artist, I can likely find their music and be listening to it within a few mouse clicks. Legally, too, which removes even more of the caché that came with illicit downloading, the thrill of being a digital bootlegger.

Once, it felt like watching music videos on MTV was a form of rebellion in plain sight. Nowadays, the channel doesn’t play any music videos. Instead, we have dozens of food and cooking shows, even entire channels like The Food Network dedicated to the topic. Chefs have become elevated to the status of master craftsmen, with names that have risen above the status of their restaurants, and diners revere someone like Jiro of Jiro Dreams of Sushi fame the way a previous generation worshipped the guitar sound of a rock god like Jimi Hendrix.

The food scene today offers a seemingly never-ending supply of scarce experiences, ingredients, and dishes. Cronuts you have to wait in line for a few hours to get your hands on. Pop-up restaurants that serve only on a few nights a week for a few weeks, then disappear forever. Restaurants that you have to sacrifice a goat to just to get a reservation, and then they’ll actually take that goat you killed and prepare your entire dinner from it, nose to tail. A white truffle add-on that tacks $80 on to a single piece of cured hamachi, and oh, the truffle is only available for four weeks a year and came over on a gondola from Alba, Italy, and the hamachi is one of the last of three members of its species so you know, you should probably try it before…oops, sorry, the chef says someone just ordered the last of it. Yep, it’s that couple at the corner table, and that’s the last plate that she’s Instagramming right now.

That is from Eugene Wei, with more of interest at the link, via Graham Rowe.

Nathan Smith has a very thoughtful speculative essay on that topic. Here is one interesting bit of many:

I would tentatively envision the US experience under open borders as resembling the British and Roman cases, inasmuch as the protocols and ideals of the US polity, as well as its merely ethnic characteristics, would persist in attenuated form, but governing a much larger population would necessitate improvisational and sometimes authoritarian expedients that would cumulatively transform the polity into something quite different, even as it claimed descent from the historic constitutional polity of the United States as we know it. The illusion of continuity would deceive the subjects of the new polity, native-born and immigrant, to a considerable extent, though on the other hand there would be a good deal of lamentation and triumphalism, and only after several generations would historians be able to look back and assess the bewildering transformation in a sober, balanced way.

Certain American ideals would die of their own increasing impracticality, e.g., “equality of opportunity,” the social safety net, one person, one vote, or non-discrimination in employment. Americans might continue to feel that these ideals were right long after they had ceased to be practiced, as the Romans seemed to feel that Rome ought to be governed by its Senate long after real governance had passed to the emperors. I don’t see how public schools could adapt to a far larger and more diverse student body.

In sum:

I think the most wild-eyed predictions of the open borders optimists will come true, and to spare, but I think a lot of the forebodings of the grimmest open border pessimists will also prove more than justified.

The article is interesting throughout, do read the whole thing.

Bowen and Casadevall have a new PNAS paper on this question:

The general public funds the vast majority of biomedical research and is also the major intended beneficiary of biomedical breakthroughs. We show that increasing research investments, resulting in an increasing knowledge base, have not yielded comparative gains in certain health outcomes over the last five decades. We demonstrate that monitoring scientific inputs, outputs, and outcomes can be used to estimate the productivity of the biomedical research enterprise and may be useful in assessing future reforms and policy changes. A wide variety of negative pressures on the scientific enterprise may be contributing to a relative slowing of biomedical therapeutic innovation. Slowed biomedical research outcomes have the potential to undermine confidence in science, with widespread implications for research funding and public health.

Carolyn Johnson summarizes the results of the paper:

Casadevall and graduate student Anthony Bowen used a pretty straightforward technique to try and answer the question. They compared the NIH budget, adjusted for inflation, with the number of new drugs approved by the Food and Drug Administration and the increases in life expectancy in the U.S. population over the same time period.

Those crude health measures didn’t keep pace with the research investment. Funding increased four-fold since 1965, but the number of drugs only doubled. Life expectancy increased steadily, by two months per year.

Johnson also covers some useful responses from the critics.  The result also may say more about the NIH than about progress per se.  And here is a more optimistic take from Allison Schraeger.

Russia fact of the day

by on August 20, 2015 at 3:04 pm in Books, Education, History | Permalink

In 1912 Russia had only 1.2 teachers per thousand people.

That is from the new and interesting The End of Tsarist Russia: The March to World War I & Revolution, by Dominic Lieven.  I liked the first sentence of the book:

As much as anything, World War I turned on the fate of Ukraine.

That is not, of course, a good news sentence.

Robert J. Stevens, et.al. have done a pretty serious study of this question, based on computer analysis of texts, and here is their key conclusion:

From about 1930 through 1960 or 1970, the cognitive demands of reading curricula changed little…

In the period of 1970 through 2000 we observed a fairly consistent increase in the difficulty of reading text and comprehension tasks, particularly at third grade.

For sixth graders, however, reading texts were somewhat more complex in the 1910-1930 period.

I also found this comparison interesting:

In the 1920s, 45% of all questions asked were explicit detail questions, whereas by 1990 and 2000 curricula, that had diminished to only 8% of the questions asked.

Alas I can no longer remember who deserves thanks for this pointer.  Here is an earlier Alex post about whether TV shows are becoming more complicated.

A few of you wrote in and asked me to match this Guardian list of the top one hundred English-language novels of all time.  (It is notable how many second-rate English novels made that list, and how few second-rate American ones did…)  Well, one hundred is too many but here is twenty, in no particular order:

James Joyce, Ulysses

Jonathan Swift, Gulliver’s Travels

Herman Melville, Moby Dick

Charles Dickens, Bleak House

Wuthering Heights

William Faulkner, Light in August, Absalom, Absalom, As I Lay Dying, The Sound and the Fury

Huck Finn

Joseph Conrad, Nostromo

Virginia Woolf, To the Lighthouse, The Waves, Mrs. Dalloway

Nabokov, Pale Fire

Henry James, The Golden Bowl

Thomas Hardy, Jude the Obscure

J.R.R. Tolkien, Lord of the Rings

Lewis Carroll, Alice in Wonderland

Sterne, Huxley, Lawrence, Beckett, and Wharton are all knocking on the door and probably would have rounded out a top twenty-five.  Scott and Trollope too, more Hardy.  I consider the omission of Austen to be my flaw, not hers, but I just don’t love them.

You’ll note I made no attempt to be “balanced.”  I gladly would have awarded all twenty spots to the same author, had such a choice been justified.  There is also no attempt at racial, ethnic, gender, or geographic balance, none whatsoever.  I simply picked what I think are the best books.

And if you think there are some obvious omissions, they probably are intentional.  There are plenty of fine books, but no I don’t put 1984 in the top twenty, and while America has many very good novels from the latter part of the twentieth century, only a few (V?)  would receive my serious consideration for a top thirty list or even top forty list.  Not many are better than Ford Madox Ford’s The Good Soldier, or for that matter John Galsworthy.

Yes, I call it the paradox of Julian Simon.  He is right about resource prices falling mostly when his optimism about emerging economies is wrong, and vice versa.  The Ultimate Resource was published in 1981, much of the resource price spike didn’t start until the early 1990s, and when Simon published the emerging economies hadn’t yet done so much to emerge.  The world where Simon is wrong about resource prices — think Chinese peak growth years — is probably the more optimistic scenario.  Another way to put this is that manufactured goods are more likely subject to increasing returns to scale than is resource production.

The Bloomberg news report on oil is here.

Assuming a continuation of current policies, the paper predicts the Chinese economy will expand by 7-8 per cent for the next 10 years or so, with growth slowing to 5.2 per cent on average between 2024 and 2036 and then a rate of just 3.6 per cent between 2036 and 2050.

That is actually slower than the growth rate of 3.9 per cent it predicts between 2036 and 2050 if China were to return to Maoist policies introduced in the aftermath of the disastrous Great Leap Forward, in which between 30m and 40m died in a famine that was largely the result of economic mismanagement.

The authors of the paper were focused only on economic factors and did not consider the impact of individual policies or the enormous social costs of Mao’s “brutal” political movements and purges, which left many millions dead, ostracised or imprisoned in gulags.

Putting Mao aside, the 7-8% prediction already is clearly wrong and this is a July 2015 working paper.  By the way, the four economists who wrote the paper (NBER) are working at “…the Federal Reserve Bank of Dallas, Princeton, Yale and Sciences Po in Paris.”  And get this:

They concluded that the abolition of the private sector in China and the return to a command economy would yield an annual average GDP growth rate of 4 to 5 per cent between now and 2050.

The journalist who wrote the FT piece is the very good Jamal Anderlini, who understands the Chinese economy, and perhaps the limits of growth models, better than these researchers do.  That’s the actual fact here which we don’t take seriously enough.

Belgrade notes

by on August 9, 2015 at 1:20 am in Food and Drink, History, Travel | Permalink

Belgrade

Upon arrival, the taxi driver was a lumbering hulk with a huge back, but his cab radio spewed out Engelbert Humperdinck songs.

Communism as an economic system is gone, and the government is democratic, but still the place seems to have the character types and status markers of a communist society.

Neither Americanization nor Europeanization seems to have progressed very far here; with respect to the latter category, I think of Belgrade as the anti-Barcelona.  Nothing here is very attractive, yet in a quite charming way.  The place conjures up, still, some of the better sides of 1920s Europe and also 1980s communism.  That said, infrastructure and services are quite acceptable.  Prices are reasonable.

The food is good but not so varied or original and it seems like a waste of time to look for true peaks.  There are no noteworthy or signature sights.  Museums still refer to “the former Republic of Yugoslavia” and the Serbs seem to be searching for a new identity.  There is lots of talk about the past.  The country is stuck in the middle income trap.

I recommend this place for all those who feel they are sick of Europe, but actually are not, but who would be, unless they came here.  That includes me.

The author is Michael Booth and the subtitle is Behind the Myth of the Scandinavian Utopia; please note the book is (at times) as much tribute as critique.  I found it interesting and informative throughout, here a few passages:

Right now, the Danes are especially preoccupied with role playing — dressing up like Gandalf or elves and acting out violent narratives deep in the woods with their foam “boffers” (the name given to role-play weapons).  There are also 219 folk dancing clubs in Denmark, but do not worry, as with the pigs, you very rarely see them.

Here is a not funny to outsider satiric video about the Danish language, cited by the book, which refers to its “declining intelligibility.”  The video has about five million views.

On Finland:

You have got to love a country that enters Lordi into the Eurovision Song Contest and wins, which consumes more ice cream per capita than any other European country (14 litres a year), and has more tango dancers than Argentina.

I enjoyed this fragment of a sentence:

The Finns’ obmutescence seemed especially to go hand in hand with that other most famous Finnish characteristic…

On economic issues, the author thinks Denmark in particular is overextended and in denial about the need for reform.  Overall I found the Danish sections to be the most interesting and detailed, the chapters on Sweden to be the least deep, and the Iceland and Finland sections to have the most new information.

Recommended, it is fun plus you will learn something.  Imagine “Bill Bryson goes to Scandinavia,” as The Christian Science Monitor put it.

America fact of the day

by on August 6, 2015 at 1:51 pm in Education, History | Permalink

Today, the most studied language in U.S. higher education, behind Spanish and French, is a homegrown one: American Sign Language.

The study of Spanish, by the way, is slightly in decline.

That is all from Charles King, “The Decline of International Studies: Why Flying Blind is Dangerous.