History

Here is the audio, video, and transcript.  Steven of course was in top form. We started with irregular verbs, and then moved on to Chomsky, theories of language, the mind and Jon Haidt’s modules, reason, what unifies the thought and work of Steven Pinker, rap music, William Shatner (underrated, “although maybe not his singing”), Sontag on photography, the future of world peace, and the Ed Sullivan show.

Here is one bit:

COWEN: Let me now put on my economist’s hat and ask you about this. As you know, in George Orwell’s 1984, the Party bans all irregular verbs. It’s a kind of excess regulation. But from a social point of view, are there too many or too few irregular verbs in English?

PINKER: [laughs] I like the irregular verbs. I’d like to see more of them.

…One distinction that is vanishing that I think is sad is the three-way distinction in verbs like sink, sank, sunk; stink, stank, stunk; shrink, shrank, shrunk; where the shrank and the stank are giving way to their participle forms shrunkand stunk.

COWEN: No shrank and stank.

PINKER: No shrank and stank. Admittedly it would have been hard to have a movie called Honey, I Shrank the Kids instead of Honey, I Shrunk the Kids. In my style manual, The Sense of Style, I recommend hanging on to them. I think they’re nice.

And on Chomsky:

PINKER: It’s a moving target. Also, as you say, it was neither specified in a precise way nor field‑tested against a dataset of language variation, which I think is unfortunate in terms of ordinary scientific practice.

On peace:

COWEN: Let me ask you a general question. Let’s say it were possible by spending $10,000 and devoting a few months of your life to it that any person on earth could blow up a significant part of a major city.

They could buy something, some kind of explosive. It would cost them $10,000. How long would it take before someone actually did this?

PINKER: I don’t know. My optimism doesn’t consist of prophecy in that sense. That is, my optimism consists of looking at what has happened and noting that, first of all, the pessimistic view is factually incorrect. Namely, people believe that we’re living in unusually violent times and we’re not.

How to project that into the future is a separate set of questions. There are many unknowns that I’m not arrogant enough to know the answer to. It’s something that we could debate. We could explore them. I am not an optimist in the sense of saying, “Well, let’s just extrapolate the curves in the future without asking questions like that.”

Self-recommending, to be sure…

In 1946 the University of Chicago economics department considered the following individuals for job offers: John Hicks, Paul Samuelson, Friedrich A. Hayek, Milton Friedman, Lionel Robbins, A. G. Hart, and George Stigler.

The names making the final vote were Hicks, Hart, Stigler, Friedman, and Samuelson.  The Borda point count method was used, and Hicks turned out to be the clear number one choice.  Neither Friedman nor Samuelson were the number one choices of any departmental voter, while Stigler won three first-choice votes (see Table one in the paper).

The voters themselves were quite prestigious, including Hazel Kyrk, Lloyd Mints, Jacob Marschak, Henry Simons, Tjalling Koopmans, H. Gregg Lewis, Frank Knight, and T.W. Schultz.  If you are wondering, Knight’s first choice was Stigler.  Friedman and Samuelson came in fourth and fifth, respectively, with Samuelson as a distant last place pick.  Schultz however put Friedman dead last.

The winner Hicks was not interested, and that year, Chicago ended up with Friedman and Roy Blough.  Here is the NYT obituary for Roy Blough:

Roy Blough, an economist who served in the Roosevelt and Truman administrations, died on Friday at a retirement home in Mitchellville, Md. He was 98.

From 1938 to 1946, Mr. Blough was director of tax research at the Treasury Department and assistant to the treasury secretary. From 1950 to 1952, he was a member of the president’s Council of Economic Advisers.

Later in the 1950’s, he was principal director of the economic affairs department at the United Nations. He also taught at several universities, including the University of Chicago, from 1946 to 1952, and Columbia University, from 1955 to 1970, when he retired.

He wrote several books, including ”The Federal Taxing Process” and ”International Business: Environment and Adaptation.”

That is all catalogued in this fascinating David Mitch piece, in the latest JPE.  Here are ungated copies and some related information.

Addendum, via Doug Irwin:

Arnold Harberger on Roy Blough: “he came to Chicago and he was a very boring professor. He didn’t inspire anybody to do anything, and he didn’t do very much himself. And he was a little pompous, but nice, a decent analyst, not very deep analytically, didn’t really command the theory of the subject. Then he was named a member of the Council of Economic Advisors and he left Chicago. And all the colleagues sighed a sigh of relief and said, “Gee, we found a way to get rid of him.”

http://www.cmmayo.com/interview-ARNOLD-C-HARBERGER.html

To replace Blough, they hired Arnold Harberger, I am told.

I can’t seem to find much on this topic, could it be a violation of Cowen’s Second Law?  Here is one passage from Beverly Gate from 2012 (pdf):

Hoover’s bureaucratic skills gave him remarkable control over the FBI’s internal culture and policies. And yet his strategies for achieving that autonomy were often in conflict with each other. Autonomy was not a one-time event; it required constant care and rebalancing. In Hoover’s case, the impulse to maintain the FBI’s professional, nonpartisan image was frequently at odds with efforts to exert popular political and ideological influence. Throughout his career, Hoover’s cozy relationships with congressmen and presidents constantly threatened to undermine the Bureau’s reputation as a nonpartisan agency, divorced from the spoils system and power politics. Similarly, his outspoken anticommunist crusades—a key source of FBI cultural authority—were often in tension with his description of the FBI as purely reactive investigative agency.

The simplest model has the FBI as a bit like the Fed: seeking to promote some policy goals but also jealous of its independence and autonomy.  Doing good policy work often promotes independence but not always, and the agency is not well set up to deal with instances where the two objectives conflict.  Organizations of this kind also tend to be relatively underdeveloped when it comes to skills of media management and public relations, since they are counting on results and political support to do the job for them.  In fact, if they tried to actively manage their PR well on a daily basis, they might find it hard to stay out of politics, as they would end up doing too much “day specific” posturing and not enough “general mood affiliation” posturing.

Hasn’t someone written a piece called something like “A Public Choice Theory of the FBI”?  (Bob Tollison, our nation turns its lonely eyes to you…)  Can anyone help with reading suggestions, comments of course are open.

Addendum: Here is analysis from David Warsh.

The Steven Pinker podcast and transcript will be ready next week, November 7 is a live event with Joseph Henrich, a Conversation with Tyler, Arlington campus 6 p.m.  If you don’t already know, here is Joseph Henrich:

Joseph Henrich…[is]…an expert on the evolution of human cooperation and culture…

Henrich’s research has challenged the typical narrative about human evolution to show how our collective brains – our ability to socially interconnect and learn from one another – is the driving factor behind our evolutionary success. Henrich presents these compelling arguments in his latest book, The Secret of Our Success: How Culture is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter (2015).

Co-author of Why Humans Cooperate: A Cultural and Evolutionary Explanation (2007), Henrich’s research seeks to discover the role of culture in shaping our evolution; how evolutionary theory can help us understand how we learn and transmit culture; the role of war and conflict in the evolution of cooperation and sociality; what factors drive innovation and cultural evolution; and ultimately what has allowed humankind to flourish over other species.

Henrich earned his MA and PhD in anthropology from University of California at Los Angeles. He currently teaches at Harvard University as a professor of human evolutionary biology.

So what should I ask Joseph Henrich?

Prior to 1968, membership in the Cleveland Orchestra was a part-time job. When he joined the orchestra, the regular season was just 30 weeks long, with lower pay for summer concerts. In 1952, the base salary was $3,240—$29,231 in today’s dollars. By 1967, it had only gone up to $11,700. (The current base salary is $120,000.) The U.S. median household income in 1967, by contrast, was $7,970. According to a 1952 survey, 60% of the players moonlighted in nonmusical jobs, and many of them did so until 1968, when Cleveland, in keeping with other top-tier American orchestras, finally lengthened its season to 52 weeks.

Here is Terry Teachout on today’s orchestral strikes. How much are the striking musicians paid, and are they as good as the former Cleveland players?:

Suffice it to say that the annual base salary is $107,000 in Pittsburgh and $128,000 in Philadelphia. (At the New York Philharmonic, it’s $146,848.) In Fort Worth, the average salary is $61,000. The music directors of those orchestras may make 10 to 20 times what players do, and managerial salaries are also higher. Allison Vulgamore, president and CEO of the Philadelphia Orchestra, is said to be paid roughly $725,000 a year.

Something fundamental has changed about social expectations, yes?

Renminbi vs. yuan

by on October 25, 2016 at 12:44 am in Economics, History, Uncategorized | Permalink

The style guide of The Economist magazine, after explaining the difference between the two terms, leaves no ambiguity about what its reporters should use: “Renminbi, which means the people’s currency, is the description of the yuan, as sterling is the description of the pound.  Use yuan.”  The Financial Times favors the use of renminbi over yuan by a six-to-one ratio.  But Financial Times reporters seem to believe its readers are sophisticated enough to be able to shift back and forth between the two terms without further explanation.

That is from new and useful Gaining Currency: The Rise of the Renminbi, by Eswar S. Prasad.

And here is the BBC:

“Renminbi” is the official name of the currency introduced by the Communist People’s Republic of China at the time of its foundation in 1949. It means “the people’s currency”.

“Yuan” is the name of a unit of the renminbi currency. Something may cost one yuan or 10 yuan. It would not be correct to say that it cost 10 renminbi.

I did not know this:

The word “yuan” goes back further than “renminbi”. It is the Chinese word for dollar – the silver coin, mostly minted in the Spanish empire, used by foreign merchants in China for some four centuries.

If you wish to pursue it further:

As it happens, Chinese people rarely talk about renminbi or yuan.

The word they use is “kuai”, which literally means “piece”, and is the word used historically for coins made of silver or copper.

And so on…

The author is Julian Gewirtz and the subtitle is Chinese Reformers, Western Economists, and the Making of Global China.  I loved this book.  It is a tour de force on China, the theory of policy advising, and the history of economic thought, all rolled into one.  Here is one bit:

The Chinese side, meanwhile, had learned the hard way about Friedman’s dual persona and that his expertise on inflation could not be separated from his ideological intensity [TC: circa 1980]…Yang Peixin remembered Friedman as “extraordinarily stubborn,” someone who “thinks the world socialist experiment has failed,” and “would not speak politely no matter how high your position.”

It turns out that Wlodzimierz Brus and Ota Šik were two of the most important economists of the twentieth century, mostly because of their influence on China.  Both came from Eastern Europe and centrally planned economies, but urged China to find a workable mixed model.  Šik was a proponent of the ideas of Oskar Lange.

From this book you also will learn about the significant roles of Gregory Chow, James Tobin, and Janos Kornai, all explained with intelligence and lucidity.  I enjoyed this bit:

To the Chinese participants [in the seminar], Tobin’s presentation had an almost theatrical power — after all, they had never before seen an economist in action in this way.  One participant recalled that Tobin’s seemingly magical ability to make policy recommendations from quickly looking at a set of high-level data astonished him and his peers.

At one point during Tobin’s talk, the interpreter burst into tears.  The more influential Kornai instead said this:

“I had in a sense two different faces, one face for Hungary and one face for China.”

More concretely, he was recommending shock therapy for Hungary but not for China.  Friedman, by the way, had more influence when he returned to China for a Cato conference in 1988.  But still the Chinese thought Friedman did not sufficiently understand the special characteristics of the Chinese economy.

Strongly recommended, due out early next year.  Gewirtz, by the way, is a Rhodes Scholar and still has not finished his Ph.d.  I eagerly await his next work.  You can follow him on Twitter here.  He is also well-known as a poet.

I’ll be interviewing Mark soon, at a private venue, no public event, but for eventual release in the Conversations with Tyler series.  Here is a short bio of Mark.  He is credited as being the founder of modern Southwestern cuisine, and he was the driving force behind Coyote Cafe in Santa Fe and Red Sage in Washington, D.C.  He has written numerous books on food, including the very best books on chilies.  He is a supertaster, and more generally one of the world’s great food minds and a truly curious and generous soul.  He also has a background in anthropology, cooked for Chez Panisse in its early days, and is one of the best-traveled people I know.  Do you want to know what is/was special about chiles in Syria, or how many varieties of soy sauce you can find in one part of Hokkaido?  Mark is the guy to ask.

So what should I ask him?

…the most important technological change for the transportation of heavy goods in nineteenth-century India was not the arrival of the quick, expensive railway: it was the move from pack animals to carts pulled by two or four beasts in the first half of the century.  This was the process historian Amalendu Guha calls ‘the bullock cart revolution’.  Throughout the 1860s and 1870s railways found it impossible to compete not only with bullock carts, but also with human-powered river transport.  Rowing boats along the Ganges and Jamuna won a price war with the railways over the cost of transporting heavy goods.  Vessels powered by human beings were able to undercut steam vessels elsewhere.

That is from Jon Wilson, The Chaos of Empire: The British Raj and the Conquest of India, a new and excellent book that stresses how much British rule of India was rooted in chaos and violence, rather than the smooth operation of a colonial elite.

Philippine President Rodrigo Duterte announced his “separation” from the United States on Thursday, declaring that it had “lost” and he had realigned with China as the two agreed to resolve their South China Sea dispute through talks.

Duterte made his comments in China, where he is visiting with at least 200 business people to pave the way for what he calls a new commercial alliance as relations with longtime ally the United States deteriorate.

His trade secretary, Ramon Lopez, said $13.5 billion in deals would be signed

Duterte’s efforts to engage China, months after a tribunal ruling in the Hague over South China Sea disputes in favor of the Philippines, marks a reversal in foreign policy since the 71-year-old former mayor took office on June 30.

“America has lost now,” Duterte told Chinese and Philippine business people at a forum in the Great Hall of the People, attended by Chinese Vice Premier Zhang Gaoli.

“I’ve realigned myself in your ideological flow and maybe I will also go to Russia to talk to (President Vladimir) Putin and tell him that there are three of us against the world – China, Philippines and Russia. It’s the only way,” he added.

“With that, in this venue, your honors, in this venue, I announce my separation from the United States,” Duterte said to applause. “I have separated from them. So I will be dependent on you for all time. But do not worry. We will also help as you help us.”

Here is the Reuters story.

It is tempting, among those of us who would be appalled by a Trump victory, to try to sway undecided voters by equating voting for Trump with racism full-stop. That’s a bad idea. If it becomes the mainstream view that Trump voters are simply racists, it leaves those who are already committed, those who are unwilling to abandon Trump or to stomach Clinton, little choice but to own what they’ve been accused of. Racist is the new queer. The same daring, transgressional psychology that, for gay people, converted an insult into a durable token of identity may persuade a mass of people who otherwise would not have challenged the social taboo surrounding racism to accept the epithet with defiant equanimity or even to embrace it. The assertion that Trump’s supporters are all racists has, I think, become partially self-fulfilling. In and of itself, that will make America’s already deeply ugly racial politics uglier. It will help justify the further pathologization of the emerging white underclass while doing nothing at all to help communities of color except, conveniently for some, to set the groups at one another’s throats so they cannot make common cause. It will become yet another excuse for beneficiaries of economic stratification to blame its victims. Things were bad before this election. They are worse now, and we should be very careful about how we carry this experience forward. These are frightening times.

Here is more, interesting throughout.

Sebastian Galiana and Gustavo Torrens have a new NBER paper on this underappreciated question:

Why did the most prosperous colonies in the British Empire mount a rebellion? Even more puzzling, why didn’t the British agree to have American representation in Parliament and quickly settle the dispute peacefully? At first glance, it would appear that a deal could have been reached to share the costs of the global public goods provided by the Empire in exchange for political power and representation for the colonies. (At least, this was the view of men of the time such as Lord Chapman, Thomas Pownall and Adam Smith.) We argue, however, that the incumbent government in Great Britain, controlled by the landed gentry, feared that allowing Americans to be represented in Parliament would undermine the position of the dominant coalition, strengthen the incipient democratic movement, and intensify social pressures for the reform of a political system based on land ownership. Since American elites could not credibly commit to refuse to form a coalition with the British opposition, the only realistic options were to maintain the original colonial status or fight a full-scale war of independence.

You may recall that Adam Smith wanted to see a continuing empire, but with North America as essentially the more powerful partner, though he did not quite use those words.

Haven’t you been wondering that lately?  Tridimas has a paper (link here scroll down) on that question, here is one empirical observation:

During the period 1957-2006, out of a total of 43 integration referenda, 23 were not constitutionally required but were called at the discretion of the incumbent government; 18 of these 23 resulted in a pro-integration vote as the incumbent government had sought. France has held three EU-related non-required referenda, all initiated by the President of the Republic. The UK approved EEC membership in 1975 in a non-required referendum, the only national UK referendum thus far. In 2003, seven of the nine referenda held by the new entrants to approve membership were not required. Again, none of the four referenda held in 2005 by Spain, France, the Netherlands, and Luxembourg to ratify the EU Constitutional Treaty were constitutionally mandated.

And the theory?:

In politics, some issues cause deep intra-party splits between the elected representatives of the same party rather than inter-party divisions among different parties. Constitutional issues, which concern questions of governance and national sovereignty of a state, are a prime example. It is then unlikely that the standard system of parliamentary politics will be able to resolve all those issues. On the contrary, it is more likely that the leader of the party in office will call a referendum to decide them. Ratifying changes to constitutional arrangements in a referendum confers legitimacy to their adoption (or rejection) by taking the decision away from parochial parliamentary majorities and putting it into the hands of the citizenry.

Ah, but there is risk!  Still, it is not crazy to call the referendum, even though you might rationally prefer that the whole issue disappear.

I would add a further point to that model.  Let’s say you think the core issue won’t go away of its own accord, arguably the case with both Brexit and the failed Colombian peace agreement.  The choice is not “referendum vs. no referendum,” but rather “referendum today vs. giving my successors an option on future referenda.”  And since a referendum can strengthen an incumbent, you realize that some future government might call one for self-interested reasons.  In which case you might consider risking disaster now, responding to a kind of collective action problem through time.  You may even fear that one of your successors will be irrational.  And so some moment will feel like an optimal trigger point, though of course that will involve risk and probably more risk than is socially optimal.  But is there not a preferred time to make your leap from the burning building?  The pain of landing on your arm rather than your butt is not per se an argument for nixing the choice altogether.

Alternatively, consider the Italian referendum on reforming the Senate, due in December.  The incumbent government may well lose the vote, but precisely because this is not a fundamental issue I predict they can simply continue in power, noting they didn’t have a strong mandate for change in the first place.

Here is Carlos Closa on when to call referenda.

That is the next Conversation with Tyler, October 24th, at George Mason in Arlington, you can register here.

What should I ask him?  I thank you all in advance.

The very beginning is a little slow, but I thought Ezra was one of the very best guests.  The topics include the nature and future of media, including virtual reality, the nature of leadership (including Ezra’s own), how running a project shapes your political views, a wee bit on health care, what he thinks are the Obama and Clinton models of the world, Robert Putnam’s research on the costs of diversity, the proper role of shame in society, animal welfare, and of course Ezra’s underrated and overrated, with takes on Bob Dylan, The Matrix, William F. Buckley, Joe Biden, and more.  There is no video but here is the podcast and transcript.  Here is one excerpt:

COWEN: …Now Putman, let me ask you about Putnam, and how Putnam relates to Donald Trump. As you know, Robert Putnam at Harvard, he has some work showing that when ethnic diversity goes up that there’s less trust, less cooperation, less social capital.

If you think of yourself in the role of an editor, so you have an American society, diversity has gone up, and a lot of people have reacted to this I would say rather badly — and I think you would agree with me they’ve reacted rather badly — but there’s still a way in which the issue could be framed that while diversity is actually a problem, we can’t handle diversity.

Putnam almost says as such, and do you think there’s currently a language in the media where you have readers who are themselves diverse, where it’s possible not to just be blaming the bigots, but to actually present the positive view, “Look, people are imperfect. A society can only handle so much diversity, and we need to learn this.” What’s your take on that?

KLEIN: I strongly agree. We do not have a language for demographic anxiety that is not a language that is about racism. And we need one. I really believe this, and I believe it’s been a problem, particularly this year. It is clear, the evidence is clear. Donald Trump is not about “economic anxiety.”

COWEN: A bit, but not mainly, I agree.

KLEIN: That said, I think that the way it’s presented is a choice between economic anxiety and racism. And one I don’t think that’s quite right, and two I don’t think that’s a productive way of having that conversation.

COWEN: Why don’t we have that language? Where did it go, or did we ever have it?

And:

COWEN: You see this with Medicaid. A lot of people don’t sign up. They don’t have addresses. You can’t even get them, whatever.

KLEIN: They don’t like doctors. They’re afraid of doctors.

COWEN: This is me.

KLEIN: You’re afraid of doctors?

COWEN: “Afraid” isn’t the word.

KLEIN: Averse. [laughs]

COWEN: Maybe dislike. Averse. [laughs] They should be afraid of me, perhaps.

Definitely recommended.  The same dialogue, with a different introduction, is included in The Ezra Klein Show podcast.