A live stream version is posted here, slide to 6:00 to start, YouTube and podcast and transcript versions are on their way.  I thought Jeff did just a tremendous job.  We covered the resource curse, why Russia failed and Poland succeeded, charter cities, his China optimism, how his recent book on JFK reflects the essence of his thought, why Paul Rosenstein-Rodan abandoned Austrian economics for “big push” ideas, whether Africa will be able to overcome the middle income trap, where he disagrees with Paul Krugman, his favorite novel (Doctor Zhivago, he tells us why too), premature deindustrialization, and how we should reform graduate economics education, among other topics.

You will find it here.  Here is one excerpt:

TYLER COWEN: New York City, overrated or underrated?

PETER THIEL: That’s massively overrated.


PETER THIEL: We had a 25-year boom in finance, from ’82 to ’07. I think that’s slowly ebbing, slowly abating. It’s going to be increasingly regulated, and so if you want a long/short blue state trade, you want to be long California, short New York. The long/short red state trade, by the way, is you want to be long Texas, short Virginia.

If you ask, what do Virginia and New York have in common, and what do Texas and California have in common? Both Texas and California are very inward-focused places. California, both the Hollywood version and the Silicon Valley version, are very focused in on themselves. Texas is also a very inward-focused place.

What Virginia and New York, or let’s say DC and New York City, have in common is that they’re centers of globalization. Finance is an industry that’s fundamentally leveraged to globalization, and DC is fundamentally leveraged to international geopolitics.

I would bet on globalization slowly being in abeyance. I think with the benefit of hindsight, we will realize that 2007 was not just the peak year of the finance boom, but also the peak year of globalization, like maybe 1913. Happily, it hasn’t resulted in a world war, at least not yet, but I think we are in this period where globalization is steadily pulling back.

And so you want to be in places or industries that are levered to things other than globalization.

Self-recommending…The YouTube and podcast versions are here.

My latest column for The Upshot, at the NYT, is here.  Here is one excerpt:

Data from the Economic Report of the President [p.34] suggests that if productivity growth had maintained its pre-1973 pace, the median or typical household would now earn about $30,000 more today. Those higher earnings would constitute a form of upward mobility. For purposes of comparison, if income inequality had maintained its pre-1973 trend, the gain for the median household would be about $9,000 in income this year, a much smaller figure.

Those changes in productivity and inequality trends aren’t entirely separate, but accelerating the growth of productivity has the potential to do more for upward economic mobility than redistributing money from the top 1 percent.

And this:

In the book “Equality for Inegalitarians,” George Sher, a professor of philosophy at Rice University, argues that the equality we should care most about is giving everyone a chance to “live effectively.” Most of all that means ensuring that people have enough for their daily needs. We can tolerate many of the inequalities that arise above this minimum income level, provided there is protection on the downside and plenty of opportunities for those who are economically ambitious.

Read Sher, Harry Frankfurt’s excellent forthcoming book On InequalityDerek Parfit on equality and priority (pdf) and Huemer on Parfit (pdf).  Read about prioritarianism more generally.  I come away from these writings with the view that the current moral focus on inequality is a flat-out mistake in moral philosophy, analogous to how the philosophers sometimes make mistakes in economics.  That’s right, not a difference in values but a mistake.  (The difference in values, to the extent there is one, should be over the strength of our obligations to those at the bottom.)

This discussion of education provides another good example of how all this matters: if we successfully elevate people at the bottom, we don’t have to “fix” inequality.

A number of Twitter (and other) responses to my column are confusing several kinds of mobility: a) how many people from the bottom are elevated by how much, with b) what is the chance of people rising further quintiles?, and c) what is the intergenerational transmission of income and other variables?  It’s a) that matters, as b) and c) run into many of the same problems that inequality notions do.

I also am not impressed by the “Gatsby Curve” observation that inequality and mobility (some kinds, some of the time) are correlated.  Lots of things are correlated, but the question is what matters practically and morally.

By the way, here are estimates on how immigration might affect the Gini coefficient (pdf).  I find that egalitarians have a hard time developing consistent intuitions about immigration.

Interfluidity offers a very different view from mine.  Alex has much to say as well.  Here is Schneider and Winship on the Gatsby Curve.

Here is my conclusion:

It is quite possible the future will bring higher levels of income inequality, which will undoubtedly distress many commentators. But we are likely to be better off if we keep our eye on the ball, identify what really helps people the most and do whatever we can to increase economic mobility. That is a practical program that we all should be able to endorse.

When Lyndon Johnson hosted Lester Pearson in 1965, he hauled the Canadian prime minister up by his lapels and shouted, “you pissed on my rug” after his guest criticised the Vietnam war in a speech during his visit to the US. And when Prime Minister Pierre Trudeau learned that Richard Nixon had called him “an asshole”, he responded: “I’ve been called worse things by better people.”

From Demetri Sevastopulo, there is more here at the FT.  Alex and I, however, get along just great…

The YouTube version is here, the podcast version is here.

I was very happy with how it turned out, as I deliberately set out not to copy the content of any of Peter’s other dialogues.  You can learn how he thinks we will leave the “great stagnation,” whether the AI hype is justified, how he would boil his thought down to the smallest number of dimensions, whether NYC is over- or underrated, why globalization is likely to decline and what that means for different regions, the parts of the Bible which have influenced him most, “the Straussian Jesus,” to what age he thinks he will live, why Japan is special, how his German background matters, his favorite opening chess move, how and why company names matter, and even his favorite TV show, which he calls “schlocky.”

And much, much more, with commentary and questions from me throughout.  A transcript is being prepared as well.

It used to be that airliners broke up in the sky because of small cracks in the window frames. So we fixed that. It used to be that aircraft crashed because of outward opening doors. So we fixed that. Aircraft used to fall out of the sky from urine corrosion, so we fixed that with encapsulated plastic lavatories. The list goes on and on. And we fixed them all.

So what are we left with?

Sadly, we all know the answer to that question.

…And so, with more rules we have solved most of the problems in the world. That just leaves the weird events left like disappearing 777’s, freak storms and ISIS. It used to be that even minor storms would be a problem but we have building codes now (rules). Free of rules, we’d probably have dealt with ISIS by now too.

Ultimately, this is why the world is getting weirder, and will continue to do so. Now with global media you get to hear about it all.

That is from a very interesting mini-essay by Steve Coast, hat tip goes to The Browser.

Sentences to ponder

by on March 27, 2015 at 1:21 pm in Philosophy | Permalink

From Will Wilkinson:

Reminder: The much greater mystery is why people don’t go on shooting sprees or crash planes on purpose ALL THE TIME.

Here is one excerpt from his very interesting post:

I get and very much like the skeptical, anti-theoretical thrust of Strauss. I like his deep wariness of ideal theorizing, his exhortations to pay attention to the political life we are always already living. He’s right to see reasoning with others about about how to live as an inherently political activity. He’s right to insist on honoring the distinctive excellences of those sensitive to the texture of real political life and expert in its ceaseless negotations. He’s right that social scientific theories about politics are less politically valuable then good political judgment, and that people who think they’re going to govern “scientifically” are dangerously stupid. (Paraphrasing, here.) And, yes, when philosophy is merely a handmaiden to the dogmas of our age, pursued under the “ecumenical supervision” of the universities, it is profoundly compromised. To be a philosopher is not to have a job you clock in and out of. To be a philosopher is simply to be, philosophically, always. Right! But the Socratic life is the one very best life? The naturally right, life? Nope. Nope. I’ve read and read and never quite follow how we end up there. I mean, I think this is a great life, beyond wonderful. But nope.

Anyway, Strausseans are strangely obsessed with this idea that the philosophical life, so construed, is the best human life, full stop, and are therefore obsessed with the tension between the best life, which is in the business of exposing bullshit, and the political life, which is built on it.

I am very happy to order this book in advance, I hope Will lets me know when that is possible.

I was pleased to have been invited to deliver one of the comments at Elizabeth Anderson’s Tanner lectures at Princeton a few weeks ago.  I have put the comment on my home page here.  I introduce the topic in this manner:

I won’t summarize her views, but I will pull out one sentence to indicate her stance: “Here most of us are, toiling under the authority of communist dictators, and we don’t see the reality for what it is.” These communist dictators are, in her account, private business firms. That description may be deliberately hyperbolic, but nonetheless it reflects her attitude that capitalist companies exercise a kind of unaccountable, non-democratic power over the lives of their workers, in a manner which she thinks is deserving of moral outrage.

Here is one bit from my response:

This may sound counterintuitive or even horrible to many people, but the economist will ask whether workers might not enjoy “too much” tolerance and freedom in the workplace, at least relative to feasible alternatives. For every benefit there is a trade-off, and the broader employment offer as a whole might involve too little cash and too much freedom and tolerance. To oversimplify a bit, at the margin an employer can pay workers more either with money or with freedom and tolerance, which we more generally can label as perks. Money is taxed, often at fairly high rates, whereas the workplace perks are not; that’s one reason why a lot of Swedish offices are pretty nice. It’s simple economics to see that, as a result, the job ends up with too many perks and not enough pay, relative to a social optimum. I doubt if our response to this distorting tax wedge, which can be significant, should be to increase the perks of the workers rather than focusing on their pay.


In fact there are some reasons why labor-managed firms may give their workers less personal freedom. The old-style investment banking and legal partnerships expected their owner-members to adhere to some fairly strict social and professional codes, even outside the workplace. More generally, when workers are motivated to monitor each other, through the holding of equity shares, monitoring becomes easier and so corporations engage in more of it. Again, the main issue is not controlling bosses vs. freedom-seeking workers.

Do read the whole thing.

I may not follow any of your suggestions, but just thought I should ask for advice, for my dialogue with Peter next week.  I am the interviewer, he is the interviewee, more or less.  #CowenThiel

The grand confluence of Protestantism has dwindled to a trickle over the past thirty years, and the Great Church of America has come to an end.

…The death of Mainline Protestantism is, as we’ve noted, the central historical fact of our time: the event that distinguishes the past several decades from every other period in American history.  Almost every one of our current political and cultural oddities, our contradictions and obscurities, derives from this fact: Mainline Protestantism has lost the capacity to set, or even significantly influence, the national vocabulary or the national self-understanding.

That is from Joseph Bottum, An Anxious Age: The Post-Protestant Ethic and the Spirit of America.

The Tea Party, the great stagnation, etc., maybe you can find it all right here.

Don’t worry people, just joking on that one…

Corey Robin has a useful survey of responses from the Left, some of which include repudiations of Zionism, in addition to claims that the current Israeli policies simply have to unravel, to the detriment of virtually everybody.  Think of the latter as a prediction of comeuppance, much like how inequality critics sometimes predict eventual doom for the wealthy if they do not redistribute their wealth.

From a separate direction, economist Glen Weyl explains on Facebook why he is now supporting the BDS movement.

I’m not interested in debating the normative side of the election, or various peace plans, right now.  What I find striking is how unready many critics are to confront what has happened, not just in the “Plan B” sense but also rhetorically.  The possibility that civil rights progress, peace progress, and self-governance and democratic progress simply have stopped, and won’t be back any time soon, is before us.  If anything, matters might become worse yet, especially once you contemplate Gaza.  Yet Western commentators don’t know where to turn, because the prevailing progressive narrative is one, not surprisingly, of progress.  The common progressive remedy is one of moral exhortation, but at this point it doesn’t seem like another lecture to Israeli voters is going to do the trick.

Such stagnation and possibly retrogression in outcomes is hardly novel at the global level, and even within Israel/Palestine proper it’s far from clear there has been much actual news from the Israeli election (i.e., the two-state solution has been failing for some while now).  Still, Israel attracts enough attention, and loyalty, that this is producing an intellectual crisis for many.  Some people feel they have been made fools of, and they are no longer happy playing along with the fantasy of an eventual peace deal based on ideals of democracy and rule of law.  They wish to recast their mood affiliations, but where really to turn?

By the way, the world has been getting more violent since 2007.

Our social and political life is awash in unconsciously held Christian ideas broken from the theology that gave them meaning, and it’s hungry for the identification of sinners—the better to prove the virtue of the accusers and, perhaps especially, to demonstrate the sociopolitical power of the accusers.

That is from Joseph Bottum, via PW.

You can sign up for rsvp or the live stream here, the chat with Peter Thiel is March 31, 2-3:30 p.m. EST, held at the Arlington campus of George Mason University.  It is part of a new event series Conversations with Tyler.

The chat with Jeffrey Sachs is April 7, 3:30 to 5 p.m., again EST in Arlington.  There will be more to come in the Fall.

I will host and talk with guests, but without formalities.  I won’t ask “So tell us about your new book,” or any of the usual soporific chit-chatty questions.  I will try to replicate the conversations I would have with these same individuals in a private setting, except that you all get to listen.  That means launching into substance immediately and seeing how far the back and forth can be pushed.  It also means asking questions that not everyone listening will understand and willing to let parts of the audience suffer in their confusion.  I want these dialogues to be as smart as possible, based on the premise that each guest, no matter how renowned he or she may be, is nonetheless a radically underrated thinker.

The goal is to be never hostile or combative, but always probing.  I’m aiming for the chat to be 1/3 me vs. 2/3 guest, more or less, but about the ideas and contributions of the guest most of all.

There is a new version of the Mahabharata, in blank verse rather than prose, translated/created by Carole Satyamurti.  I’ve only read an initial sliver of it, but dramatically and linguistically it is very effective.  This is a beautiful edition, and deserves serious consideration as a purchase for just about every library.  I have yet to see any significant reviews of the work.