The best-laid plans…

by on November 27, 2014 at 11:32 am in History, Philosophy, Science, Travel | Permalink

Circa 1985:

Merkel, in her early thirties, was looking forward to 2014—when she would turn sixty, collect her state pension, and be allowed to travel to California.

That is from the George Packer profile of Angela Merkel, which I will recommend to you all once again, do note it starts a bit slowly but picks up.

If you are going to ask “when will China clean up its air?”, you might wish to look at South Korea, a country with a broadly similar industrial profile, although of course Korea is much further along in terms of economic development.

As of 2002, South Korea was ranked 120th of 122 countries for air quality by the World Economic Forum.  And at that time South Korea was pretty much a fully developed nation, economically speaking that is.  South Korea was also already a democracy, and we know from Casey Mulligan (with Gil and Sala-i-Martin) that democracies tend to have cleaner air than autocracies, ceteris paribus.

Might we consider the possibility that China won’t clean up its air anytime soon?  The good news, however, is that once Korea started its environmental clean-up, improvements came pretty rapidly.  More recently, they come in at #43 on a more general index of environmental quality.

That fact is from Dong-Young Kim, The Challenges of Consensus Building in a Consolidating Democracy.

Best non-fiction books of 2014

by on November 24, 2014 at 1:34 am in Books, Economics, History | Permalink

First there are the economics books, including books by people I know, including Piketty, The Second Machine Age, Tim Harford’s wonderful macro explainer, Megan McArdle’s The Up Side of Down, Lane Kenworthy on social democracy, The Fourth Revolution by John Micklethwait and Adrian Woolridge, Daniel Drezner The System Worked, and Frank Buckley on why the Canadian system of government is better.  And Russ Roberts, How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness.  We’ve already talked, written, and thought about those plenty, and they are not what this list is about, so I will set them aside.  Most of you are looking for excellent new books in addition to these, books you might not have heard about.

Here are the other non-fiction books of the year which took my fancy, mostly in the order I read them, noting that the link usually leads you to my previous review or comments:

Jürgen Osterhammel, The Transformation of the World: A Global History of the Nineteenth Century.  Long, exhausting, and wonderful.

Christopher Hale, Massacre in Malaya, a broader history than it at first sounds, fascinating from beginning to end.

Howard Eiland and Michael W. Jennings, Walter Benjamin: A Critical Life.

The Very Revd John Drury, Music at Midnight: The Life and Poetry of George Herbert.

John Keay, Midnight’s Descendants: A History of South Asia since Partition.  An excellent treatment of how much work remains to be done in the “nation building” enterprise in South Asia.

Alice Goffman, On the Run: Fugutive Life in an American City.  A sociology graduate student hangs out with lawbreakers and learns about police oppression, an excellent micro-study.  My column on her book is here.

Gendun Chopel, Grains of Gold: Tales of a Cosmopolitan Traveler, Tibetan scholar goes to India and records his impressions, unusual.

George Prochnik, The Impossible Exile: Stefan Zweig at the End of His World.  I loved this one.

I’ve only read the first half of the new Tom Holland translation of Herdotus’s Histories (I will get to the rest), but surely it deserves note.

Evan Osnos, Age of Ambition: Chasing Fortune, Truth, and Faith in the New China.  This book won the National Book Award for non-fiction.

David Eimer, The Emperor Far Away: Travels at the Edge of China.  A look at China’s outermost regions and their ethnic minorities.  Just imagine that, we had two excellent popular China books in the same year.

The Falling Sky: Words of a Yanomami Shaman, by Davi Kopenawa.  Repetitious in parts, sometimes incoherent too, but it offers a smart and unique perspective you won’t get from any of the other books on this list or any other.

Jonathan Rottenberg, The Depths: The Evolutionary Origins of the Depression Epidemic.  This treatment stresses the (partial) cognitive advantages of having a tendency toward depression.

Edward Hirsch, A Poet’s Glossary, assorted facts and insights about the English language, you don’t have to feel like reading a book about poetry to find this worthwhile.

David Sterling, Yucatán: Recipes from a Culinary Expedition, huge, expensive, wonderful, more than just a cookbook though it is that too.  I’ve spent some of the last few weeks learning these recipes and what makes them tick.

Walter Isaacson, The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution.  A good overview of how some of the main pieces of today’s information technology world fell into place, starting with the invention of the computer and running up through the end of the 1990s.

Arthur M. Melzer, Philosophy Between the Lines: The Lost History of Esoteric Writing.

Andrew Roberts, Napoleon: A Life.

Jan Swafford, Beethoven: Anguish and Triumph.  As good or better than the classic biographies of the composer.

Stephen Kotkin, Stalin, vol. 1.  This one I have only read a part of (maybe 150 pp.?), it is very long and does not fit my current reading interests, but it seems very good and impressive and also has received strong reviews.  So I feel I should include it.

Hal Whitehead and Luke Rendell, The Cultural Lives of Whales and Dolphins.

So who wins?  If I had to pick a #1, it would be The Very Revd John Drury, Music at Midnight: The Life and Poetry of George Herbert, not the kind of book I would be expecting to coronate, which is a testament to the magnetic force it has exercised over my imagination.

Then I would pick Alice Goffman, On the Run: Fugutive Life in an American City and David Sterling, Yucatán: Recipes from a Culinary Expedition as the runners-up.

My fiction picks were here.  There are still some wonderful books to come out this year, and already-published books I will still read, especially after mining other “best of” lists, so around Dec.31 or so I’ll post an updated account of what I would add to this list.

THREE times in the last 35 years, Russian military forces have crossed international borders – in Afghanistan in 1979, Georgia in 2008 and the Crimea earlier this year. As Simon Derrick, the currency strategist at BNY Mellon points out, each occasion coincided with a peak in the oil price. And each incursion was followed by a very sharp fall in the price of crude (see chart).

…If the previous episodes are any guide, oil has a fair way to fall.

That is from Buttonwood at The Economist, file under “speculative”…

China estimate of the day

by on November 23, 2014 at 3:53 am in Economics, History | Permalink

…the evidence suggests that China was larger (in terms of purchasing power parity) than any other economy in the world until around 1889, when the US eclipsed it. Now, 125 years later, the rankings have reversed again, following decades of rapid economic development in China.

That is from Jeffrey Sachs, there is more here.

…cetacean brain size, relative to body size, increased substantially about thirty-eight mill years ago when the odontocetes evolved from the ancient archaeocetes…

What drove these changes? It does not seem to have been the transition to an aquatic existence itself as that occurred about fifty-five million years ago and brains stayed at roughly the same relatively small size relative to body weigt as the archaeocetes made their gradual entry into the ocean.  A better hypothesis is that the increased brain size of the odontocetes thirty-eight million years ago was driven by the evolution of echolocation.  The early odontocetes had inner ear bones that were good at picking up high frequency sound, which suggests that they had developed a form of sonar.  Lori Marino thinks “that echolocation came on line and then got co-opted for social communicative purposes.”  In this scenario, the odontocete brains increased in relative size to deal with the acoustic information itself, as well as, perhaps, a new perceptual system based on the data from the returning echoes.  But…the change may have been even more profound: “This may indicate that the large brains of early odontocetes were used, at least partly, for processing this entirely new sensory mode [echolocation] that evolved at the same time as these anatomical changes and perhaps for integrating this new mode into an increasingly complex behavioral ecological system.”

That is from the new and notable The Cultural Lives of Whales and Dolphins, by Hal Whitehead and Luke Rendell, previously covered on MR here.  And here is my earlier post on the economics of dolphins.

Brazil (China) fact of the day

by on November 22, 2014 at 2:04 pm in Economics, History | Permalink

From 1967 to 1980, Brazil grew at an average annual rate of 5.2 per cent. Few would have predicted, then, that for the next 22 years per capita income would grow at precisely zero.

That is from David Pilling at the FT, who considers China as well.  And here is part of the first comment on the article, from Danny Quah:

Success, by definition, means being different from the mean. For economic growth the quantitative implications of such success (or even apparent failure) are laid out in http://blogs.worldbank.org/futuredevelopment/chinese-lessons-singapore-s-epic-regression-mean. Sure China’s continued growth faces manifold obstacles but many of those problems are not insurmountable http://www.boaoreview.com/perspective/2013/1115/296.html

The pointer here is from Helmut Reisen.

You will find it here (pdf), forthcoming in the Erasmus Journal of Philosophy and Economics.

For the pointer I thank Ray Lopez, who in turn drew upon Patrick R. Sullivan, a commentator at The Money Illusion.

Jonathan Chapman, a job market candidate at CalTech, has a new paper (pdf) which suggests that was the case:

Many theories of democratization suggest that extending the right to vote will lead to increased government expenditure (e.g. Meltzer and Richard, 1981; Lizzeri and Persico, 2004; Acemoglu and Robinson, 2000). However, these models frequently assume that government can engage in transfer expenditure, which is often not true for local governments. This paper presents and tests a model in which government expenditure is limited to the provision of public goods. The model predicts that the poor and the rich desire lower public goods expenditure than the middle class: the rich  because of the relatively high tax burden, and the poor because of a high marginal utility of consumption. Consequently extensions of the franchise to the poor can be associated with declines in government expenditure on public goods. This prediction is tested using a new dataset of local  government financial accounts in England between 1867 and 1900, which captures government expenditure on key infrastructure projects that are not included in many studies of national democratic reform. The empirical analysis exploits plausibly exogenous variation in the extent of the franchise to identify the effects of extending voting rights to the poor. The results show strong support for the theoretical prediction: expenditure increased following relatively small extensions of the franchise, but fell following extensions of the franchise beyond around 50% of the adult male population.

It is perhaps too quick a jump from 19th century England to contemporary advanced economies.  Still, it is an interesting hypothesis that the current thinning out of the middle class will decrease the political support for infrastructure investment.

The story is here, his book is Age of Ambition: Chasing Fortune, Truth, and Faith in the New China.  Previous MR coverage is here, it was one of my favorite non-fiction books of the year.

In my article for a Cato Symposium I cite foreign policy:

It is possible that we are still living inside the biggest bubble of them all and that is called “the peace bubble.” I’ve also heard this described as the bubble of “Pax Americana,” although that is a more partisan take on the role of America in global peace. You might think the chance of this being a “peace bubble” is say only five or ten percent. Maybe so, but still in expected value terms that is still the most important issue to worry about. The breaking of that peace bubble on a larger scale could endanger all of the progress and accumulated well-being of the human race, including the United States.

Let’s not forget that over the next one hundred years, if the world remains relatively peaceful, it is unlikely that most global innovation will come from the United States. China in particular may assume a major role as a generator of new ideas, just as the United States supplied a wide variety of useful innovations to Great Britain starting in the mid to late 19th century. Even if a “Fortress America” could survive geopolitical turmoil in the broader world, it would be a much poorer place. We rely on the rest of the world for inspiration, for creation, for appreciation, for increasing market size and thus the spurring of American innovations, and of course we rely on the rest of the world for innovations more directly. A future America in a chaotic world is much, much poorer and riskier than a future America in a peaceful world.

I should note that I am indebted to John Nye and Garry Kasparov for this notion of Pax Americana as the biggest bubble of them all.  There are several other arguments in the piece, for instance:

When electing a President or a Congress, foreign policy should be by far our number one concern. That said, I don’t think there is any simple formula for getting foreign policy right. Unlike many libertarians, I do not adhere to a strictly non-interventionist stance on foreign policy. I believe in alliances among the world’s relatively free and (one hopes) peaceful nations. I believe that American intervention has at some critical times led to much greater freedom and prosperity. Without the current and past American security umbrella, for instance, I believe much of Asia would be a far less free place than it is today, starting but not ending with Taiwan and South Korea.

I am, however, also skeptical of conservative or hawkish claims that we simply need to get tough with the bad guys in the world. A market-oriented economist, as I view myself, should be well aware of the general arguments about the difficulty of government planning and the importance of unforeseen, unintended consequences from government action. Furthermore government policies, once they get underway, are often hijacked by special interest groups or by voters who are uninformed, misinformed, or who react emotionally rather than analytically. We should not be especially optimistic about the ability of our government to pull off successful foreign interventions.

Daniel Larison comments on me here (when I write “For better or worse,” that means I am not judging a possible Syria intervention, contra Larison.  Otherwise the popularity of drones is a good example of American squeamishness, another example being our early withdrawal from Iraq.)  The broader symposium is here, it has many quality contributors.  Here is Eli Dourado on incentive pay for Congress.

Addendum: Arnold Kling comments.

This passage is from Gao Wenqian’s Zhou Enlai: The Last Perfect Revolutionary:

Doctors in China could not conduct major medical procedures on top leaders without the approval of the Politburo Standing Committee.  Such was the long-standing rule.  Thus, in 1975, Deng Ziaoping and Marshal Ye Jianying, leaders among the old CCP cadres who had generally despised the Cultural Revolution and had shown little enthusiasm for the political style of the mercurial Jiang Qing, now had to negotiate emergency surgery for Zhou Enlai with her allies Wang Hongwen and Zhang Chunqiao.  For once, these tough political adversaries managed to see eye-to-eye.  They all gave their consent to surgery and sent their decision to Mao, who always had the final say.

Zhou Enlai had four operations before dying of cancer.  For the last two operations, however, Mao instructed the doctors to tell Zhou that in fact he was being cured and the tumors were removed.  He ceased to believe that when the unbearable pain arrived.

We’ve now seen a good twenty-five years of autocrats backing down, ceding power, and refusing to escalate, starting  around 1989 if not earlier.  Arguably North Korea and Saddam Hussein have been partial exceptions, but even there North Korea has stayed in its shell and Saddam had in fact largely disarmed his WMD.  We also see many autocrats — most notably those of China — who pursue remarkably sophisticated courses of action.  Just think how much more deftly they handled Occupy Hong Kong than the Ferguson police dealt with their situation.  Even the Iranian leaders seem quite sophisticated, even though most of us do not share their goals or endorse their means.

I call it The Great Autocrat Moderation.

If we look back in history, are autocrats generally this rational and conciliatory?  I am struck reading the new Andrew Roberts biography of Napoleon how he grew drunk with success and overreached and of course eventually failed (twice).  Mussolini, Hitler, Stalin, and Mao are some additional obvious examples of autocrats who, in terms of procedural rationality, simply collapsed at some point and very dramatically overreached.

Of course these are tricky examples.  The most famous autocrats are arguably going to be more subject to overreach, which in part drives their fame (infamy), and so if we consult our historical memories we may be selecting for overreach.  Your typical earlier autocrat may have been more rational than this list of ambitious tyrants might imply.  Was the typical dictator of Paraguay, historically speaking, really so irrational?  Still, it does seem that autocrats have been relatively benign as of late.

So how about Putin?  Is he like the autocrats of the last twenty-five years, or he is more like Napoleon and Mussolini with regard to his long-term procedural rationality?

I do not myself expect The Great Autocrat Moderation to continue for much longer. Let us not forget that some autocratic “tournaments” select for overreach, namely the autocrat had to think he could, against long odds, rise to the top and stay there.

I am indebted to a conversation with John Nye about the topics of this blog post.

Over the more than four centuries from the time of Ivan the Terrible, Russia expanded an average of fifty square miles per day.

That is from the extraordinary new Stephen Kotkin biography of Stalin, titled Stalin.  The first volume of 949 pp. brings the reader up only until 1928.  A lot still happened after that.

No one knows for sure, you will find a brief survey of some estimates here.  Let’s start with a few simpler points, however.

First, China is notorious for making announcements about air pollution and then not implementing them.  This is only partially a matter of lying, in part the government literally does not have the ability to keep its word.  They have a great deal of coal capacity coming on-line and they can’t just turn that switch off.  They’re also driving more cars, too.

Second, China falsifies estimates of the current level of air pollution, so as to make it look like the problem is improving when it is not.  Worse yet, during the APEC summit the Chinese government blocked the more or less correct estimates coming from U.S. Embassy data, which are usually transmitted through an app.  A nice first step to the “deal” with the United States would have been to allow publication (through the app) of the correct numbers.  But they didn’t.  What does that say about what one might call…”the monitoring end”…of this new deal?

Third, a lot of the relevant Chinese regulatory apparatus is at the local not federal level (in fact it should be more centrally done, even if not fully federalized in every case).  There are plenty of current local laws against air pollution which are simply not enforced, often because of corruption, and often that pollution is emanating from locally well-connected, job-creating state-owned enterprises.  Often the pollution comes from one locality and victimizes another, especially in the north of the country.   Those are not good local regulatory incentives and it will take a long time to correct them.  Right now for instance Beijing imports a lot of its pollution from nearby, poorer regions which simply wish to keep churning the stuff out.  The Chinese also do not have anything close to a consistently well-staffed environmental bureaucracy.

Fourth, if you look at the history of air pollution, countries clean up the most visible and also the most domestically dangerous problems first, and often decades before solving the tougher issues.  For China that highly visible, deadly pollutant would be Total Particulate Matter, which kills people in a rather direct way, and in large numbers, and is also relatively easy to take care of.  (Mexico for instance has been getting that one under control for some time now.)  The Chinese people (and government) are much more worried about TPM than about carbon emissions, which is seen as something foreigners complain about.  Yet TPM is still getting worse in China, and if it is (possibly) flat-lining this year that is only because of the economic slowdown, not because of better policy.

When will China cap carbon emissions?  “Fix TPM and get back to me in twenty years” is still probably an underestimate.  Don’t forget that by best estimates CO2 emissions were up last year in China by more than four percent.  How many wealthier countries have made real progress on carbon emissions?  Even Denmark has simply flattened them out, not pulled them back.

The Chinese really are making a big and genuine effort when it comes to renewables, it is just that such an effort is dwarfed by the problems mentioned above.

The media coverage I have seen of the U.S.-China emissions “deal” has not been exactly forthcoming in presenting these rather basic points.  It’s almost as if no one studies the history of air pollution anymore.

I understand why a lot of reporters want to “clutch at straws” — it’s good for both clicks and the conscience — but a dose of realism is required as well.  The announced deal is little more than a well-timed, well-orchestrated press release.