Category: Political Science

What should I ask Brian Winter?

Yes I will be doing a Conversation with him.  Here is his bio:

Brian Winter is the editor-in-chief of Americas Quarterly and a seasoned analyst of Latin American politics, with more than 20 years following the region’s ups and downs. He lived in Brazil, Argentina and Mexico as a correspondent for Reuters before taking on his current role in New York, where he is also the vice president of policy for the Americas Society and Council of the Americas. He has been called “the best foreign expert on Brazil of this moment” by GloboNews. Brian is the author of several books including Why Soccer Matters, New York Times bestseller he wrote with the Brazilian soccer legend Pelé; The Accidental President of Brazil, co-authored with President Fernando Henrique Cardoso; and Long After Midnight, a memoir about trying (and failing) to learn to tango in Argentina. He is a regular contributor to television and radio, the host of the Americas Quarterly Podcast and a prolific barbecuer and chefProficient in Spanish and Portuguese, Brian speaks frequently about Latin America’s past, present and future to investors and general-interest audiences. Follow him on Twitter @BrazilBrian

So what should I ask him?

My Conversation with Fareed Zakaria

Here is the audio, video, and transcript.  You can tell he knows what an interview is!  At the same time, he understands this differs from many of his other venues and he responds with flying colors.  Here is the episode summary:

Tyler sat down with Fareed to discuss what he learned from Khushwant Singh as a boy, what made his father lean towards socialism, why the Bengali intelligentsia is so left-wing, what’s stuck with him from his time at an Anglican school, what’s so special about visiting Amritsar, why he misses a more syncretic India, how his time at the Yale Political Union dissuaded him from politics, what he learned from Walter Isaacson and Sam Huntington, what put him off academia, how well some of his earlier writing as held up, why he’s become focused on classical liberal values, whether he had reservations about becoming a TV journalist, how he’s maintained a rich personal life, and more.

Here is one excerpt:

COWEN: Why couldn’t you talk Singh out of his Nehruvian socialism? He was a great liberal. He loved free speech, very broad-minded, as you know much better than I do. But he, on economics, was weak. Or no?

ZAKARIA: Oh, no, you’re entirely right. By the way, I would say the same is true of my father, with whom I had many, many such conversations. You’d find this interesting, Tyler. My father was a young Indian nationalist who — as he once put it to me — made the most important decision in his life, politically, when he was 13 or 14 years old, which was, as a young Indian Muslim, he chose Nehru’s vision of secular democracy as the foundation of a nation rather than Jinnah’s view of religious nationalism. He chose India rather than Pakistan as an Indian Muslim.

He was politically so interesting and forward-leaning, but he was a hopeless social — a sort of social democrat, but veering towards socialism. Both these guys were. Here’s why, I think. For that whole generation of people — by the way, my father got a scholarship to London University and went to study with Harold Laski, the great British socialist economist. Laski told him, “You are actually not an economist; you are a historian.” So, my father went on and got a PhD at London University in Indian history.

That whole generation of Indians who wanted independence were imbued with . . . There were two things going on. One, the only people in Britain who supported Indian independence were the Labour Party and the Fabian Socialists. All their allies were all socialists. There was a common cause and there was a symbiosis because these were your friends, these were your allies, these were the only people supporting you, the cause that mattered the most to you in your life.

The second part was, a lot of people who came out of third-world countries felt, “We are never going to catch up with the West if we just wait for the market to work its way over hundreds of years.” They looked at, in the ’30s, the Soviet Union and thought, “This is a way to accelerate modernization, industrialization.” They all were much more comfortable with the idea of something that sped up the historical process of modernization.

My own view was, that was a big mistake, though I do think there are elements of what the state was able to do that perhaps were better done in a place like South Korea than in India, but that really explains it.

My father was in Britain in ’45 as a student. As a British subject then, you got to vote in the election if you were in London, if you were in Britain. I said to him, “Who did you vote for in the 1945 election?” Remember, this is the famous election right after World War II, in which Churchill gets defeated, and he gets up the next morning and looks at the papers, and his wife says to him, “Darling, it’s a blessing in disguise.” He says, “Well, at the moment it seems very effectively disguised.”

My father voted in that election. I said to him, “You’re a huge fan of Churchill,” because I’d grown up around all the Churchill books, and my father could quote the speeches. I said, “Did you vote for Churchill?” He said, “Oh good lord, no.” I said, “Why? I thought you were a great admirer of his.” He said, “Look, on the issue that mattered most to me in life, he was an unreconstructed imperialist. A vote for Labour was a vote for Indian independence. A vote for Churchill was a vote for the continuation of the empire.” That, again, is why their friends were all socialists.

Excellent throughout.  And don’t forget Fareed’s new book — discussed in the podcast — Age of Revolutions: Progress and Backlash from 1600 to the Present.

*Nuclear War: A Scenario*

By Annie Jacobsen, a very good book.  What would happen if a nuclear weapon actually were launched at the United States?  On the ground?  In the chain of command?  Organizationally and otherwise?  A good book, sadly still of relevance.  Full of drama throughout, and tactically astute.  Excerpt:

Ted Postol is blunt.  “Russian early-warning satellites don’t work accurately,” he says.  “As a country, Russia doesn’t have the technological know-how to build a system as good as we have in the United States.”  This means “their satellites can’t look straight down at the earth,” a technology known as look-down capability.  And as a result, Russia’s Tundra satellites “look sideways,” Postol warns, “which handicaps their ability to distinguish sunlight from, say, fire”

Notably troublesome is how Tundra sees clouds.

It was North Korea who started the whole thing, you can buy the book here.

Do current trends in drone technology favor offense or defense?

At first people thought that drones favored defense, since Ukraine, in its war against Russia, was defending successfully with drones.  But now Ukraine is using drones to attack Russia, and Russian oil refinery assets and warships.  It is less obvious that drones are defensive assets on net.  Furthermore, Russia is now using more electronic jamming, and more weapons that are drone-avoiding or drone-resistant, thereby limiting the defensive value of drones.

Overall, current drones seem to increase the vulnerability of fixed assets such as tanks or troop formations, or for that matter oil refineries or Moscow or Ukraine fixed landmarks.  A very large and sophisticated U.S. aircraft carrier might be able to repel the drones (albeit at high dollar cost), but a bunch of tanks in an open field will not have comparable protection.

In the abstract, “mid-valued assets become more vulnerable” could favor either offense or defense.

The more obvious trend is that it favors nations willing and able to lose lots of mid-sized assets.  That is either because a) the nation doesn’t care, because it is evil, or b) because the nation can replace them quickly, for instance by building more tanks or by drafting more soldiers.

So could it be that in the long run steady state (albeit not today) drones favor the more evil nations?  Factor a) is clearly a marker of evil, whereas factor b) might be modestly correlated with evil.  I consider this an unconfirmed hypothesis, but it reflects my thinking at the moment.

Indigenous Charter Cities

A charter city is a special zone with a charter granting significant autonomy from the host country’s regulations. Hong Kong, a succesful Chinese city operating under British law, was one early inspiration. Examples like this fueled criticisms that charter cities were “neo-colonial”. But Charter cities do not inherently require foreign legal frameworks. The fundamental purpose of a charter city is to serve as a discovery platform, a way to explore governance models allowing more people to select from the succesful.

An important case in point are the charter cities being created by indigenous Americans in Canada and the United States. In Vancouver, for example, indigenous people have asserted their rights under various treaties to control their own land.

Sen̓áḵw [an 11-tower development on 10 acres in heart of Vancouver, AT] is big, ambitious and undeniably urban—and undeniably Indigenous. It’s being built on reserve land owned by the Squamish First Nation, and it’s spearheaded by the Squamish Nation itself, in partnership with the private real estate developer Westbank. Because the project is on First Nations land, not city land, it’s under Squamish authority, free of Vancouver’s zoning rules. And the Nation has chosen to build bigger, denser and taller than any development on city property would be allowed.

Amusingly, some on the progressive left are crestfallen that the indigeneous are behaving like evil capitalist developers and not the back-to-the-land people they had imagined.

Predictably, not everyone has been happy about it. Critics have included local planners, politicians and, especially, residents of Kitsilano Point, a rarified beachfront neighbourhood bordering the reserve. And there’s been an extra edge to their critiques that’s gone beyond standard-issue NIMBYism about too-tall buildings and preserving neighbourhood character. There’s also been a persistent sense of disbelief that Indigenous people could be responsible for this futuristic version of urban living. In 2022, Gordon Price, a prominent Vancouver urban planner and a former city councillor, told Gitxsan reporter Angela Sterritt, “When you’re building 30, 40-storey high rises out of concrete, there’s a big gap between that and an Indigenous way of building.”

…. In 2022, city councillor Colleen Hardwick said of [a similar development], “How do you reconcile Indigenous ways of being with 18-storey high-rises?” (Hardwick, it goes without saying, is not Indigenous.)

What chafes critics, even those who might consider themselves progressive, is that they expect reconciliation to instead look like a kind of reversal, rewinding the tape of history to some museum-diorama past. Coalitions of neighbours near Iy̓álmexw and Sen̓áḵw have offered their own counter-proposals for developing the sites, featuring smaller, shorter buildings and other changes. At the January hearing for Iy̓álmexw, one resident called on the First Nations to build entirely with selectively logged B.C. timber, in accord with what she claimed were their cultural values…That attitude can cast Indigenous people in the role of glorified park rangers.

There are also some interesting developments in the United States. The Catawba Indian Nation, for example, established the Catawba Digital Economic Zone (CDEZ), where I serve as an advisor. The CDEZ is based on US law but tailored for digital entrepreneurs, freelancers, FinTech, digital assets, Web3, and other exponential digital technologies. The progressive left probably isn’t happy about that either. Personally I am delighted to support initiatives that empower indigenous communities through capitalist ventures. More broadly, however, I support the introduction of new governance models to encourage competition in governance—bring on a new era of discovery and Tiebout competition!

The Irish reject a “Woke” constitutional change

Ireland’s effort to remove old-fashioned family values from its constitution suffered a double defeat Saturday as voters rejected the amendments on offer as maddeningly vague and threatening to property rights…

In final results announced Saturday night, the amendment to change the constitutional definition of family was rejected by 67.7 percent of voters. The proposed changes on family care took an even harsher drubbing, with 73.9 percent against — the greatest defeat of an amendment in Irish constitutional history…

The outcome means that the 1937 constitution, the legal bedrock for the Irish state, will continue to declare marriage a requirement for any family, while women’s value to society comes from delivering “duties in the home.”

Those notions from a bygone era contrast starkly with the reality of Ireland today, where two-fifths of children are born out of wedlock and most women work outside the home.

The government, with support from all the main opposition parties, had wanted the public to accept two amendments.

Here is the full story, via Rich D.

In Conversation with Próspera CEO Erick Brimen & Vitalia Co-Founder Niklas Anzinger

During my visit to Prospera, one of Honduras’ private governments under the ZEDE law, I interviewed Prospera CEO Erick Brimen and Vitalia co-founder Niklas Anzinger. I learned a lot in the interview including the real history of the ZEDE movement (e.g. it didn’t begin with Paul Romer). I also had not fully appreciated the power of reciprocity stacking.

Companies in Prospera have the unique option to select their regulatory framework from any OECD country, among others. Erick Brimen elaborated in the podcast how this enables companies to do normal, OECD approved, things in Prospera which literally could not be done legally anywhere else in the world.

…so in the medical world for instance you have drugs that are approved in some countries but not others and you have medical practitioners that are licensed in some countries but not the others and you have medical devices approved in some countries but not others and there’s like a mismatch of things that are approved in OECD countries but there’s no one location where you can say hey if they’re approved in any country they’re approved here. That is what Prosper is….Our hypothesis is that just by doing that we can leapfrog to a certain extent and it’s got nothing to do with the wild west or doing weird things.

…so here so you can have a drug approved in the UK but not in the US with a doctor licensed in the US but not in the UK with a medical device created in Israel but not yet approved by the FDA following a procedure that has been say innovated in Canada, all of that coming together here in Prospera.

Small countries, big firms

That is the topic of my latest Bloomberg column, here is one excerpt:

From both a biomedical and economic point of view, the success of the new class of weight-loss drugs is something to behold. Not only are they a remarkable scientific achievement, but — in the case of Ozempic and Wegovy, both made by Novo Nordisk — they are a huge boon to the Danish economy. The Danish pharmaceutical industry kept Denmark from falling into a recession last year.

The dependence of some mid-sized economies on a single commodity, often related to oil or natural gas, is a familiar story. The new twist, which may become increasingly common, is a national economy dependent on a single company — not a natural resource. This will lead to some fundamentally new economic and political dynamics.

And:

Government attempts to manage a biomedical company, or a major AI company for that matter, would probably not work. Private-sector management thus becomes ever more important for the economic growth of these small to mid-sized countries.

And while it is better for a country to have one big, successful company than not, such a company — such as Nokia in Finland — does put the domestic economy in a somewhat precarious position. Politically as well, that company will have a fair amount of leverage over domestic decisions. It is noteworthy that Novo Nordisk has a very large philanthropic fund, worth more than $100 billion by one estimate. The mere option of spending some of that money in Denmark gives the company further influence over politics and public opinion.

The net result might be more “crony capitalism” — which, to be clear, is preferable to socialism — in mid-sized countries.

Abroad, as the demand for these weight-loss drugs continues to grow, people may start identifying Denmark with pharmaceuticals — just as many people identify France with wine or cheese. The longer-run image of Denmark may shift at home as well, perhaps in a manner that encourages further successes in the biomedical sector.

Worth a ponder, there is more at the link.

Hiring on general talent makes more sense in high-trust environments

This article argues that a society’s level of social trust influences employers’ hiring strategies. Employers can focus either on applicants’ potential and select on foundational skills (e.g., social skills, math skills) or on their readiness and select on more-advanced skills (e.g., pricing a derivative). The higher (lower) the social trust—people’s trust in their fellow members of society—the more (less) employers are willing to invest in employees and grant them role flexibility. Employers in higher-trust societies are therefore more attentive to applicants’ potential, focusing more on foundational skills than on advanced skills. We empirically test this theory by using a novel dataset of more than 50 million job postings from the 28 European Union countries. We find that the higher a country’s social trust, the more its employers require foundational skills instead of advanced skills. Our identification strategy takes advantage of multinational firms in our sample and uses measures of bilateral (country-to-country) trust to predict job requirements, while including an instrumental variable and fixed effects on country, year, employer, and occupation. These findings suggest a novel pathway by which social trust shapes employment practices and organizational strategies.

That is from a new article by Letian Zhang and Shinan Wang, via the excellent Kevin Lewis.

Kind of like the NBA All-Star game

In the NBA All-Star game, no one is playing defense any more, and so the score was a ridiculous 211-186, something which would never happen in a regular season game.  (Note that some of the league’s finer defenders were on the floor, though Joel Embiid, the reigning MVP and an intimidating defender, was sidelined due to injury.)  Some part of the ethic of (defensive) service has disappeared, though the players are still happy to shoot and score.  And they certainly will play defense hard when the playoffs roll around.

I’ve never seen papers on the labor supply of royal families (Cowen’s Second Law?), but I do wonder what it varies with.  It is hard to use one’s royal position to influence politics, at least in the UK.  And certainly you are not paid more if you work harder.  The King or Queen nominally owns a lot of land and art, but in practice one cannot pull income streams from those assets.  You can have a Michelangelo drawing hung in your bedroom, but that if anything is a reason not to go out in public.

You can use a royal family position to meet with lots of important people, but toward what end?  Raising money for your next start-up?  Alternatively, you can work harder to raise your stature and influence with the other royal family members (now we’re getting somewhere).  But what if that equilibrium falls apart, if only because of one or two initial defections, or in the case of the King an illness?  What external force would keep the whole struggle for royal family influence going?  Is this a case of multiple competitive equilibria, and now we (they?) are stuck in the low effort corner?  Can Lina Khan work on this?

What if they are all just pissed off with the lot of us?  In that case, what is our next move in this von Stackelberg game?  Should America reapply to the Empire with some trembling hand probability?  Would it suffice to give them Newfoundland back?  Take Northern Ireland off their hands?  Do they want us to send more or fewer tourists to London?  Should one of them marry Taylor Swift, or at least date her, to remain in the public eye?

If the NBA All-Star game is to improve, perhaps viewer censure (or mockery) for the non-cooperators is the primary way forward?

Do high interest rates get people down?

Unemployment is low and inflation is falling, but consumer sentiment remains depressed. This has confounded economists, who historically rely on these two variables to gauge how consumers feel about the economy. We propose that borrowing costs, which have grown at rates they had not reached in decades, do much to explain this gap. The cost of money is not currently included in traditional price indexes, indicating a disconnect between the measures favored by economists and the effective costs borne by consumers. We show that the lows in US consumer sentiment that cannot be explained by unemployment and official inflation are strongly correlated with borrowing costs and consumer credit supply. Concerns over borrowing costs, which have historically tracked the cost of money, are at their highest levels since the Volcker-era. We then develop alternative measures of inflation that include borrowing costs and can account for almost three quarters of the gap in US consumer sentiment in 2023. Global evidence shows that consumer sentiment gaps across countries are also strongly correlated with changes in interest rates. Proposed U.S.-specific factors do not find much supportive evidence abroad.

That is from a new NBER working paper by Marijn A. Bolhuis, Judd N.L. Cramer, Karl Oskar Schulz, and Lawrence H. Summers.

What international issues become national interests worth fighting for, and why?

That sentence starts the abstract, here is the rest of it:

Contrary to conventional wisdom, I argue that issues without clear economic value, such as barren lands, are more likely to be perceived as national interests because they do not benefit any single domestic group. Since who benefits is unclear, politicians have an easier time framing such issues as benefiting the whole nation. I test this argument using survey experiments on the American public. The results show that first, issues providing diffuse benefits to citizens are more likely to be considered national interests than issues providing concentrated benefits to certain domestic groups. Second, issues with clearer economic value are harder to frame as having diffuse benefits because they are more easily associated with specific beneficiaries. This study proposes a new theory of national interest and offers a potential explanation for why people frequently support conflict over issues without obvious benefits.

That is from a new paper by Soyoung Lee, via the excellent Kevin Lewis.

What should I ask Fareed Zakaria?

Here is Fareed’s home page, here is Wikipedia:

Fareed Rafiq Zakaria…is an Indian-American journalist, political commentator, and author. He is the host of CNN‘s Fareed Zakaria GPS and writes a weekly paid column for The Washington Post. He has been a columnist for Newsweek, editor of Newsweek International, and an editor at large of Time.

He was managing editor of Foreign Affairs at age 28, briefly a wine columnist for Slate, and much more.  His new book Age of Revolutions: Progress and Backlash from 1600 to the Present is very classically liberal, and in my terms “Progress Studies”-oriented.

So what should I ask him?

Why don’t nations buy and sell territory more?

Egypt has agreed to a $35bn deal with the United Arab Emirates to develop the town of Ras el-Hekma town on its northwestern coast, Egyptian Prime Minister Mostafa Madbouly announced on Friday after weeks of speculations.

Madbouly said at a news conference, which was attended by Egyptian and Emirati officials, that Egypt will receive an advance amount of $15bn in the coming week, and another $20bn within two months.

The deal is the largest foreign direct investment in an urban development project in the country’s modern history, the prime minister said. It is a partnership between the Egyptian government and an Emirati consortium led by ADQ, he said.

Here is the full story, Nuuk here we come…

Shruti Rajagopalan interviews Doug Irwin

Doug of course is one of the top trade economists.  Here is the audio, video, and transcript, from the same wonderful Mercatus team that brings you CWT.  Here is one excerpt:

RAJAGOPALAN: I have a different question on Adam Smith. We’re all taught Adam Smith’s division of labor, specialization, economies of scale, the cliff notes version of that. Then, we learn about absolute advantage in about five minutes. Then, we set it aside and start thinking about comparative advantage.The first question I have is does Adam Smith’s basic model of division of labor, specialization, and economies of scale anticipate the comparative advantage trade models, or does it actually undermine the comparative advantage trade models in the way that Krugman wrote about or something else?IRWIN: I think that Adam Smith has a broader view of trade, a much richer view of trade than what I would think is of the narrower David Ricardo theory of comparative advantage. If you have to read one of the two, read Adam Smith because it’s much more fun to read. Reading David Ricardo is more like reading a textbook in the sense that he doesn’t have this broad historical sense and these new rich ideas and how they’re interacting that leaves a lot to the imagination and leaves a lot to future research to flesh out.He’s saying, “England can produce wine and cloth. Here are the labor coefficients, and we’re going to do this static comparison between England and Portugal.” That’s a very narrow way of thinking about trade.RAJAGOPALAN: So badly written, you want the wine by the end of it.IRWIN: There’s a wonderful quote by George Stigler saying: “the only thing that someone will take away from reading Ricardo’s theory of comparative advantage is that they need a bottle of wine to get through it,” or something along those lines.RAJAGOPALAN: I agree.IRWIN: Adam Smith isn’t technically as sophisticated if you will, but in terms of the ideas, they’re very sophisticated. Obviously, he wasn’t thinking in terms of an economic model directly, but it’s a much richer overall discussion of trade that I think you can learn a lot from, even reading today.RAJAGOPALAN: When you see the world today, what do you think the world looks like more? Does it look more like Ricardian comparative advantage and the more recent models like Heckscher–Ohlin, and those things that came about? Do you think it really looks like the Adam Smith story, which is much more nuanced, pay attention to what’s happening in the domestic economy in terms of division of labor, specialization, and that is the lead-in to foreign trade, which is so deeply entangled with domestic trade?IRWIN: Well, I hate to waffle, but I think you need a little bit of both. It depends on the question, depends on the country, depends on the issue that you’re examining. These are just tools that you draw to help out your understanding of a particular situation. I will confess I’m a little bit more in favor of Adam Smith. I’ve always said that his theory of trade, and in particular his analysis of trade policy, which I think is underrated, is very sophisticated, and very wise, and has a lot to say to us today.RAJAGOPALAN: Beautifully written, if I may add.

There are now 100 episodes of Ideas of India, here is a link to all of them.  And here is my own earlier CWT with Doug.