Andrew Batson thinks it is simpler than many people make it out to be:

…these analyses…fail to even mention the most straightforward and direct explanation of why China’s growth is much slower today than it was in say, 2010 or 2007. It’s not like it’s a secret. From about 2003 to about 2010 China had the biggest construction boom of modern times and probably in all of human history. Then in 2011-12 the construction boom ended. That’s it. Really, that’s all you need to know. Well, you might need one more fact: housing and construction account for as much of a third of China’s GDP, once all their indirect linkages to other sectors are considered. I think a housing downturn explains very well the timing, severity and distribution of the economic slowdown that has actually occurred.

Here is the full post, which also criticizes the idea of the middle income trap.  I would add two points, which may represent a deviation from Batson’s argument.  First, I don’t think the Chinese growth slowdown is as sudden as a culling of media reports might suggest.  Second, to the extent the contraction is sudden, it is perhaps Chinese investors have woken up to the idea of a risk premium, and realized there is no eternal ten or even seven percent growth to validate so-so quality investments.  The dynamics of information arrival can compress economic adjustments into “too short” a space, a common theme in business cycle theory and not an issue restricted to contemporary China.

Thursday assorted links

by on January 28, 2016 at 12:03 pm in Uncategorized | Permalink

1. What’s great about Goethe?

2. “There are funny imams and dour priests, and vice versa.”  And when did caste kick in?

3. Watching movies at 12x the intended speed.

4. Will capital controls work for China?

5. More detail on the collapse of shipping rates.  And here is a salmon-oil price comparison.

6. Move to Florida, wake up with a kinkajou on your chest.


The subtitle of Thomas Leonard’s new and excellent book is the apt Race, Eugenics & American Economics in the Progressive Era.

I take it you all know by now this is quite an ugly story, namely that both early progressives and late 19th century American economists were often quite appalling racists and eugenicists, and that such racism was built into the professional structure of economics in a fairly fundamental way, including but not restricted to the American Economics Association.

Kevin Drum had an interesting point in response (and do read his full post, there is more to it than this quick excerpt):

Early 20th century progressives supported eugenics out of a belief that it would improve society. Contemporary liberals support abortion rights and right-to-die laws out of a belief in individual rights that flowered in the 60s.

Most of all Drum is saying that the earlier history is not very illustrative of anything for today.

I view it this way.  Go back to Millian liberalism of the mid-19th century.  Had American or for that matter British Progressivism been infused with more of this philosophy, the eugenics debacle never would have happened.  For instance if you look at the British Parliamentary debates of 1912 over the Mental Deficiency Bill, the anti-eugenics forces drew heavily upon Mill for their inspiration.  This was standard stuff, but the Progressives of the time didn’t see much of a pro-liberty reason for being pushed into a Millian position, quite the contrary.

The claim is not that current Progressives are evil or racist, but rather they still don’t have nearly enough Mill in their thought, and not nearly enough emphasis on individual liberty.  Their continuing choice of label seems to indicate they are not much bothered by that, or maybe not even fully aware of that.  They probably admire Mill’s more practical reform progressivism quite strongly, or would if they gave it more thought, but they don’t seem to relate to the broader philosophy of individual liberty as it surfaced in the philosophy of Mill and others.  That’s a big, big drawback and the longer history of Progressivism and eugenics is perhaps the simplest and most vivid way to illuminate the point.  This is one reason why the commitment of the current Left to free speech just isn’t very strong.

I don’t mean to pick on Kevin, who is one of my favorite bloggers, but I disagree (and find indicative) another one of his claims, namely:

…eugenics died an unmourned death nearly a century ago.

To give one (not the only) example to the contrary, Swedish “progressive” sterilization persisted through the 1970s, as was true for Canada as well.  Eugenicist views toward autistic people, among others, remain common across the political spectrum (no special brickbat for Progressives here, but they are guilty too), and with CRISPR a lot of eugenicist debates are already making a comeback.

Do we really want to identify with a general philosophy which embraced eugenics for so many decades, when so many pro-liberty and also social democratic thinkers were in opposition?  I think Mill himself would say no.


From my inbox, from Bruce Caldwell:

The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics this summer, May 29-June 17. The three week program is sponsored by the National Endowment for the Humanities and is designed primarily for faculty members in economics, other social sciences, and the humanities, though three of the twenty-five slots are reserved for graduate students. Participants will be competitively selected and successful applicants will receive a $2700 stipend for attending, out of which they will pay for their own room and board. Our line-up of discussion leaders is quite impressive, and includes Maria Pia Paganelli, Nicholas Phillipson (author of Adam Smith: An Enlightened Life), Bart Wilson, Duncan Foley, Tim Leonard, Angus Burgin, Eddie Nik-Khah, and Steve Medema. The deadline for applying is March 1. A special bonus for those who attend: the History of Economics Society meetings will be held at Duke from June 17-20. Attendees who wish to do so can stay over for the HES meetings. 

More information on the Summer Institute is available at our website, 

Wednesday assorted links

by on January 27, 2016 at 2:27 pm in Uncategorized | Permalink

1. Academics are more likely to be gay.

2. Why are corporations hoarding trillions (NYT)?

3. “New Jersey’s Department of Agriculture declined to share them, citing the dolphin’s right to medical privacy.” Link here.

4. The Caplan forum and dialogue on ancestry, recommended post.

5. Have gas delivered to your parked car.  Palo Alto and Menlo Park only.

6. What are the recent Bitcoin disputes all about?

7. Stephen Wolfram remembers Marvin Minsky.

8. Beckworth and Ponnuru at the NYT on money and the Great Recession.

They have a new and excellent summary paper (pdf), and that is Gordon not Robin Hanson:

China’s emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and lab or economists.

This is some of the most important work done by economists in the last twenty years.

Tuesday assorted links

by on January 26, 2016 at 12:10 pm in Uncategorized | Permalink

1. Shypmate, a new African venture to carry your packages.

2. The problem with cash transfers: the people who don’t get them grow angry.

3. Unprovoked yoghurt attacks the culture that is Dorset.

4. North Korea exports epic art (NYT).

5. Media Metrics, interesting throughout.

6. Russ Roberts chats with James Heckman.

Monday assorted links

by on January 25, 2016 at 12:38 pm in Uncategorized | Permalink

1. Detroit still has higher levels of lead poisoning than does Flint.

2. Whale dialects and whale tribes and whale culture.

3. “The elfin Ms. Kondo, perhaps the world’s only decluttering celebrity…Now 31, KonMari, as she’s known, exhorts you to ask yourself, “Do your things spark joy?” If not, you must thank them for their service, and send them packing.” NYT link here.  Here is a behavioral economics analysis of Kondo.  I liked this NYT sentence: “It’s a liberating manifesto, though in practice it can take months.”

4. “I, ball point pen [China]”  And Michael Pettis is right about China: “Repaying debt simply means allocating debt-servicing costs, either directly or indirectly, to specific sectors within the economy.”

5. The changing economics of heavy metal.

6. Paul Krugman reviews Robert Gordon.

Shipping fact of the day

by on January 25, 2016 at 5:50 am in Uncategorized | Permalink

China’s slowing growth has crushed shipping rates to such an extent that hiring a 1,100-foot merchant vessel would set you back less than the price of renting a Ferrari for a day.

There is more here, via Jesse Colombo and Marc Andreessen.  And here is James Hamilton on how and whether low oil prices can cause a recession.  I’d like to see someone put this together with various (dubious) claims about “the macroeconomics of inequality.”

Google votes and liquid democracy

by on January 24, 2016 at 3:22 pm in Uncategorized | Permalink

Here is a recent paper about a recent experiment in democratic decision-making:

This paper introduces Google Votes, an experiment in liquid democracy built on Google’s internal corporate Google+ social network. Liquid democracy decision-making systems can scale to cover large groups by enabling voters to delegate their votes to other voters…Google Votes demonstrates how the use of social-networking technology can overcome these barriers…The case-study of Google Votes usage at Google over a 3 year timeframe is included, as well as a framework for evaluating vote visibility called the “Golden Rule of Liquid Democracy”.

That is by Steve Hardt and Lia C. A. Lopes.

Imagine this in place for a normal democratic election, what would we expect?  Groups unwilling to vote might be willing to donate their votes, so in essence the cost of voting has fallen.  Would they donate to those who:

a) best reflect their views? That probably helps the Democrats, since non-voters probably are more likely to go Democratic.

b) Those who can reach them most easily? That helps the party with the most money and best ground operation and most credibility with the donating groups.

c) Those who best reflect some of their (potentially non-electoral) expressive sympathies?  Imagine for instance a disabled person donating a vote to a charity or cause for the disabled.  They may wish to boost the lobby, without necessarily agreeing with the electoral choice of that lobby.  I find this to be the most interesting option.

For the pointer I thank D.S.

Sunday assorted links

by on January 24, 2016 at 12:50 pm in Uncategorized | Permalink

1. Which are the most successful “textbooks”?: Strunk and White are first, Plato is second…

2. American vs. German health care systems.

3. Ambrose Evans-Pritchard: good take on China.

4. Bernie Sanders supporters: Here is Corey Robin, here is Jedediah Purdy.  It is always worth trying to figure out how and why other people think the way they do.

5. The news here is the Kiwi car chase, not the sheep blocking passage.

6. The Great Skyscraper Stagnation.

Saturday assorted links

by on January 23, 2016 at 12:25 pm in Uncategorized | Permalink

1. In which ways do poor people make better financial decisions?

2. Clark Johnson reviews the new Scott Sumner book.  A good summary of much of the argument.

3. Historian Forrest McDonald has passed away.

4. Amanda Hess Slate piece (serious, safe for work) on VR porn.

5. Can the betting odds alone identify a tennis fix?

6. Are bank heists a thing of the past?

7. Redux on my earlier post The President who owns foreign capital.

Friday assorted links

by on January 22, 2016 at 11:15 am in Uncategorized | Permalink

1. NYT Adam Shatz profile of Kamasi Washington.

2. Ryan Avent on how ideological are economists?

3. Excellent TNR review on Tim Leonard’s excellent new book on eugenics and the history of progressive economic thought.

4. The demands made at Oberlin; the president says no to them by the way.

5. “We conclude that the overall economic consequences of the Chavez administration were bleak.

6. One (American) couple lived off food waste for six months.

We discussed this at lunch yesterday, here are my predictions:

1. Singapore will have driverless or near driverless neighborhoods in less than five years.  But it will look more like mass transit than many aficionados are expecting.

2. The American courts and regulators will not pin too much liability on the car companies or software architects.  That said, the regulators will move slowly, and for some time will require a human driver stay at the wheel, even though this seems to be more dangerous.

3. Mapping the territory, reliably, will remain the key problem.  Until that is solved, driverless cars will be a form of mass transit — except without the mass — along predesignated routes.

4. A Chinese city will do it before America does, but Singapore first of all.

5. In less than two or three years, you will see some American car dealership advertising “driverless cars,” but in a gimmicky way.  You’ll still have to sit at the wheel and…drive them.  But they’ll park themselves and have super-duper cruise control and the like.

6. The big gains come from everyone having driverless cars and that is more than twenty years away, but well under fifty years away.

Here is a related NYT article.  I thank Megan McArdle, Robin Hanson, Alex, and others for their contributions to this conversation.

Addendum: We also talked about whether “Virtual Reality” will be a revolutionary technology.  It will have its fans, but I don’t see it as a major breakthrough.  It makes too many people dizzy, and doesn’t really have a killer app; perhaps it will change sex however.

Thursday assorted links

by on January 21, 2016 at 12:31 pm in Uncategorized | Permalink

1. The Council of Psychological Advisers.

2. Do not put Q-tips in your ears.

3. Thrillers and noir novels with economics.

4. Caveat emptor:  Glenn Loury, Ann Althouse, and Donald Trump.

5. Michel Tournier has passed away, NYT hereFriday was my favorite novel of his, and it was his first novel which he published at the age of 43.

6. Who advises the various candidates?