Religion

I very much enjoyed this Live Chat, and I thank the participants for all of their stimulating questions and remarks.  Here is one excerpt:

Ben Casnocha:

How do you think your career and life would have been different if blogging, twitter, and digital media had be ubiquitous in your teens and 20’s? Would you have still pursued an academic path or would you have become a full-time columnist/commentator/speaker earlier on? I seem to recall you saying at one point that you’re glad the internet didn’t exist early on in your life as it gave you the time to read the classics and develop a substantive base of knowledge.

Tyler Cowen:

I am glad I was forced to live in “book culture” and “meat space’ for my first forty years. Or maybe thirty-five years would have been enough. People these days have lost the sense of information being scarce, and counterintuitively that makes it harder for them to develop profound thoughts. It’s like practicing chess by asking the computer right away, all the time, what the right move is.

[and later] …contemporary academic is overly bureaucratized and there is a very good chance I would [if I were starting today] look for another model of success and contentment. It is an open question whether or not I could find one. Whatever its limitations, there is still a followable formula for academic success, which of course is part of the problem.

Other topics include when is the best age to live in various parts of the world, Alban Berg and Rilke, Marc Andreessen, my one hidden talent, Rene Girard, labor market networks, optimal travel into the past, and which is the most underrated or overrated wisdom tradition.  Do read the whole thing.

Observers seem to focus on the target event and not its complement.  Bagchi and Ince have a new paper on this question:

Consumers routinely rely on forecasters to make predictions about uncertain events (e.g., sporting contests, stock fluctuations). The authors demonstrate that when forecasts are higher versus lower (e.g., a 70% vs. 30% chance of team A winning a game) consumers infer that the forecaster is more confident in her prediction, has conducted more in-depth analyses, and is more trustworthy. The prediction is also judged as more accurate. This occurs because forecasts are evaluated based on how well they predict the target event occurring (team A winning). Higher forecasts indicate greater likelihood of the target event occurring, and signal a confident analyst, while lower forecasts indicate lower likelihood and lower confidence in the target event occurring. But because, with lower forecasts, consumers still focus on the target event (and not its complement), lower confidence in the target event occurring is erroneously interpreted as the forecaster being less confident in her overall prediction (instead of more confident in the complementary event occurring—team A losing). The authors identify boundary conditions, generalize to other prediction formats, and demonstrate consequences.

Of course this also has relevance for the evolutionary processes governing pundits.

Here is a related press release (pdf).  For the pointer I thank Charles Klingman.

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

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

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

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

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

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

China Star is situated next to the Ibn al-Khattab Mosque, and not long before the first call sounded for sunset prayer a sheikh arrived at the shop. He was tall and fat, with strong, dark features, and he wore a brilliant blue galabiya, a carefully wrapped turban, and a pair of heavy silk scarves. He was followed by two large women in niqabs. The sheikh planted himself at the entrance of the shop while the women searched purposefully through the racks and the rows of mannequins. Periodically, one of them would hold up an item, and the sheikh would register his opinion with a wave of his hand.

…The two women in niqabs quickly found two items that the sheikh approved of: matching sets of thongs and skimpy, transparent nightgowns, one in red and the other in blue.

An excellent piece from Peter Hessler in the New Yorker that begins with a teaser on how the Chinese pioneered the market for lingerie in Egypt and just expands from there. Lots of lessons on development economics, foreign policy and more.

Hat tip: David Zetland.

Murat Iyigun has a new book out titled War, Peace & Prosperity in the Name of God.  I haven’t read it yet, but Timur Kuran’s blurb seems helpful:

“Challenging many prominent theories of human history, this captivating book shows that competition among the world’s leading monotheistic religions was a more powerful driver of development than competition within them. Cogently argued, insightful, and entertaining throughout, it demonstrates that struggles between Islam and Christianity produced momentous transformations not only in Muslim-governed lands but also in Europe.”

The New England Conference of United Methodist Churches, a group of 600 churches, has issued a resolution calling for an end to the war on drugs. The resolution draws on ethical principles and also a remarkably astute reading of economics and social science:

Whereas: The public policy of prohibition of certain narcotics and psychoactive substances, sometimes called the “War on Drugs,” has failed to achieve the goal of eliminating, or even reducing, substance abuse and;

Whereas: There have been a large number of unintentional negative consequences as a result of this failed public policy and;

Whereas: One of those consequences is a huge and violent criminal enterprise that has sprung up surrounding the Underground Market dealing in these prohibited substances and;

Whereas: Many lives have been lost as a result of the violence surrounding this criminal enterprise, including innocent citizens and police officers and;

Whereas: Many more lives have been lost to overdose because there is no regulation of potency, purity or adulteration in the production of illicit drugs and;

Whereas: Our court system has been severely degraded due to the overload caused by prohibition cases and;

Whereas: Our prisons are overcrowded with persons, many of whom are non-violent, convicted of violation of the prohibition laws and;

Whereas: Many of our citizens now suffer from serious diseases, contracted through the use of unsanitary needles, which now threaten our population at large and;

Whereas: To people of color, the “War on Drugs” has arguably been the single most devastating, dysfunctional social policy since slavery and;

Whereas: Huge sums of our national treasury are wasted on this failed public policy and;

Whereas: Other countries, such as Portugal and Switzerland, have dramatically reduced the incidence of death, disease, crime, and addiction by utilizing means other than prohibition to address the problem of substance abuse and;

Whereas: The primary mission of our criminal justice system is to prevent violence to our citizens and their property, and to ensure their safety, therefore;

Be it Resolved: That the New England Annual Conference supports seeking means other than prohibition to address the problem of substance abuse; and is further resolved to support the mission of the international educational organization Law Enforcement Against Prohibition (LEAP) to reduce the multitude of unintended harmful consequences resulting from fighting the war on drugs and to lessen the incidence of death, disease, crime, and addiction by ending drug prohibition.

Stephen Hawking fears that “the development of full artificial intelligence could spell the end of the human race.” Elon Musk and Bill Gates offer similar warnings. Many researchers in artificial intelligence are less concerned primarily because they think that the technology is not advancing as quickly as doom scenarios imagine, as Ramez Naam discussed. I have a different objection.

Why should we be worried about the end of the human race? Oh sure, there are some Terminator like scenarios in which many future-people die in horrible ways and I’d feel good if we avoided those scenarios. The more likely scenario, however, is a glide path to extinction in which most people adopt a variety of bionic and germ-line modifications that over-time evolve them into post-human cyborgs. A few holdouts to the old ways would remain but birth rates would be low and the non-adapted would be regarded as quaint, as we regard the Amish today. Eventually the last humans would go extinct and 46andMe customers would kid each other over how much of their DNA was of the primitive kind while holo-commercials advertised products “so easy a homo sapiens could do it”.  I see nothing objectionable in this scenario.

Aside from greater plausibility, a glide path means that dealing with the Terminator scenario is easier. In the Terminator scenario, humans must continually be on guard. In the glide path scenario we only have to avoid the Terminator until we become them and then the problem is resolved with little fuss. No human race but no mass murder either.

More generally, what’s so great about the human race? I agree, there are lots of great things to point to such as the works of Shakespeare, Mozart, and Grothendieck. We should revere the greatness of the works, however, not the substrate on which the works were created. If what is great about humanity is the great things that we have done then the future may hold greater things yet. If we work to pass on our best values and aspirations to our technological progeny then we can be proud of future generations even if they differ from us in some ways. I delight to think of the marvels that future generations may produce. But I see no reason to hope that such marvels will be produced by beings indistinguishable from myself, indeed that would seem rather disappointing.

Supposedly they were built to guard the tomb of an emperor:

terracotta-army-pit1-l

So what’s up?

1. The emperor had a state-dependent utility function (e.g., money is worth less when you are dead), and this was the ancient equivalent of cryonics.  If there was a chance you might be called back to life, spend a lot of resources protecting your corpse and its burial site.

2. The emperor was signaling (sorry Noah!) his ability to assemble such an impressive row of life-size figures, and of course the original had many more than what has been restored to date.

3. This was a form of fiscal policy, to stimulate the economy in slow times, by employing craftsmen.

4. The guild of said craftsmen was an influential interest group.

5. It was intended as a gift to a distant future; what else could they have done that would be of more value to us today?

6. Because the emperor could.

What else?

Wealthy Hindu temples such as this one are repositories for much of the $1 trillion worth of privately held gold in India — about 22,000 tons, according to an estimate from the World Gold Council. In 2011, one temple in south India was found to have more than $22 billion in gold hidden away in locked rooms rumored to be filled with snakes. Another has enough gold to rival the riches stashed at the Vatican, experts say.

There is more here, the main theme of the article is that some are calling for the gold reserves to be mobilized, a running theme in economic debate since Keynes and earlier in the nineteenth century as well.

After the pagan fighters left their stronghold, a crowd of  Christian Alexandrians and soldiers swarmed the hill.  One of them took an axe and with all his strength struck the jaw of the monumental statue of Serapis…The crowd then hacked the rest of the statue into pieces and dragged the fragments off to each of the city’s regions to be burned.

…The destruction of the Serapeum [A.D. 392] was a momentous event, second perhaps only to the Gothic sack of Rome in 410 for the amount of attention it received from contemporary sources.

That is from the new and excellent book The Final Pagan Generation, by Edward J. Watts.  Watts tries to reconstruct the worldviews and impressions of the pagans who witnessed the onset of Roman state-sanctioned Christianity; an underlying theme of the work is how weak a sense we have of what is truly significant in our time, or not.  I often find Roman histories to be difficult to parse, but this one is a model of lucidity.

Here is Wikipedia on that temple and its destruction.  Here is another discussion.

Serapeum

 

Fans of Game of Thrones know that “a Lannister always pays his debts.” So too do nearly all alumni from Notre Dame, Vassar, Harvey Mudd, and Brigham Young, at least when it comes to federal student loans.

There is more here, from Brookings, via Matthew C. Klein.  Ahem…and for whatever reason, students from St. Johns do well too…

You will find it here.  Here is one excerpt:

TYLER COWEN: New York City, overrated or underrated?

PETER THIEL: That’s massively overrated.

TYLER COWEN: Why?

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.

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.

Headlines to ponder

by on March 30, 2015 at 2:36 pm in Current Affairs, Economics, Law, Religion | Permalink

Bank of Bird-in-Hand is the only new bank to open in the U.S. since 2010, when the Dodd-Frank law was passed

The WSJ story is here, via Binyamin Appelbaum.

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