As reported from Kids Prefer Cheese:
Me and Mrs. Angus have decided to get bloggy about development, growth & macro over at a new site, Cherokee Gothic. You can read about why it’s called that here. While it will mostly be us, we hope to enlist other OU faculty to contribute to the site as well.
I’ll still be blogging here with Mungo at KPC, bringing the crazy like nobody’s business, but please check us out, follow us, put us in your blogroll, and just generally show us some mad blogosphere love.
Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, by Erik Brynjolfsson and Andrew McAfeee.
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, by Abhijit Banerjee and Esther Duflo.
Both are about the randomized control movement in development economics. Here is my earlier post on RCTs in development economics.
The Bourgeois Virtues: Ethics for an Age of Commerce, by Deirdre McCloskey. Here is a related article. Here is the book’s home page.
The word “self-recommending” now takes on a stronger meaning yet, here is the review. Here are the closing two paragraphs:
It is a paradox of our time that the path to radical progress begins with moderation. Extreme optimism and fatalistic pessimism may seem to be stark opposites, but they both end in apathy. If things were sure to improve or bound to collapse, then our actions would not matter one way or the other.
Not only do our actions matter, I believe they matter eternally. If we do not find a way to take the narrow and moderate path, then we may find out that stagnation and decadence were all that kept immoderate men from stumbling into the apocalypse.
Self-recommending! Here is my own short and very positive review of Ross’s book.
Randy Shaw, Generation Priced Out: Who Gets to Live in the New Urban America. A YIMBY book, with good historical material on San Francisco, Los Angeles, and other locales involved in the struggle to build more.
Conor Daugherty, Golden Gates: Fighting for Housing in America. Coming out in February, this is a very good book about the YIMBY movement and its struggles, with a focus on contemporary California, written by a NYT correspondent.
Jennifer Delton, The Industrialists: How the National Association of Manufacturers Shaped American Capitalism. Why don’t more books fit this model: take one topic and explain it well?
Economists, Photographs by Mariana Cook, edited with an introduction by Robert M. Solow. Self-recommending. Interestingly, I recall an old University of Chicago calendar of economist photographs, still buried in my office somewhere, with pictures of Frank Hyneman Knight, Francis Ysidro Edgeworth, and others. At least in terms of personality types, as might be revealed through photographs, the older collection seems to me far more diverse. Or is the homogenization instead only in terms of photograph poses?
Michael E. O’Hanlon, The Senkaku Paradox: Risking Great Power War Over Small Stakes. A very useful practical book about what options a U.S. government would have — short of full war — to deal with international grabs by China or Russia. There should be thirty more books on this topic (#ProgressStudies).
Christopher Caldwell, The Age of Entitlement: America Since the Sixties. This is both a very old thesis, but these days quite new, namely the claim that 1965 and the Civil Rights movement created a “new constitution” for America, at variance with the old, and the two constitutions have been at war with each other ever since. It will be one of the influential books “on the Right” this year, I already linked to this Park MacDougald review of the book.
Robert H. Frank, Under the Influence: Putting Peer Pressure to Work. From the Princeton University Press catalog: “Psychologists have long understood that social environments profoundly shape our behavior, sometimes for the better, often for the worse. But social influence is a two-way street—our environments are themselves products of our behavior. Under the Influence explains how to unlock the latent power of social context. It reveals how our environments encourage smoking, bullying, tax cheating, sexual predation, problem drinking, and wasteful energy use. We are building bigger houses, driving heavier cars, and engaging in a host of other activities that threaten the planet—mainly because that’s what friends and neighbors do.”
3. Are investors confusing bitcoin and blockchain? Or is that confusion possibly not wrong?
5. N.K. Jemisin profile (New Yorker).
Self-recommending if there ever was such a thing, here is the audio and transcript. In addition to all of the expected topics, including gender in the economics profession, we even got around to Indian classical music and Bach cantatas (she prefers the latter). Excerpt:
COWEN: Do you worry much that the RCT method — it centralizes authority in too few institutions? You need a certain amount of money. You need some managerial ability. You need connections abroad. It’s not like running regressions — everyone can do it on their PC. Is that, in some way, going to slow down science? You get more reliable results, but there’s much less competition of ideas, it seems.
DUFLO: I think it would be the case if we had not been mindful of this problem from the beginning. And it might still be the case to some extent. But I actually think that we’ve put a lot of effort in avoiding it to be the case.
When you take an organization like J-PAL, just in India we have 200 staff members. And we have, at any given time, 1,000 people running surveys. I say we, but these people are not running my project. These people are running the projects of dozens and dozens of researchers. When I started, I couldn’t have started without having the backing of my team because it was such a risky proposition that you needed to be able to easy risk capital kind of things.
But at this point, because of the infrastructure, it’s much more normal sense. People can get in with no funding of their own, in part because one of the things we are doing as a network is raising a lot of money to redistribute to other people widely. J-PAL has 400 researchers that are affiliated to it, or invited researchers, many of them quite, quite junior.
So that sort of mixture — it was very important to us, and I think we’ve been quite successful at making the tool marginally available. It’s never going to be like running a regression from your computer. But my philosophy is that if you have the drive and you’re willing to put in your own sweat equity, you can do it. And our students and many other students who are not at top institutions are doing it.
COWEN: On the internet, there’s a photo of a teenage Esther Duflo — at least it looks like you — protesting against fascism in Russia on top of a tank, is it?
DUFLO: That was a bus, and it was me. It was me. So that was in 1991. This was not when I lived for one year there. I lived one year in ’93–’94. But this was in ’91. I had gone to Russia about every year since I was a teen to learn Russian. I happened to be there the summer where there was this putsch against Gorbachev. That summer…
And someone gave me that fashizm ne poletit placard and asked me to hold it. And I’m like, “Sure, I’m going to hold it.” So I’m holding my placard. We stayed there for a long time when things were happening. Next time I saw in the evening, my parents called me, “What are you doing?” Because it turned out that that image was on all the TVs in the world. [laughs] And that’s how I very briefly became the face of this revolution.
COWEN: Does child-rearing in France strike you as more sensible than child-rearing in the United States?
DUFLO: Oh very much so, very much so.
COWEN: And why?
DUFLO: You know that book, Bringing Up Bébé?
DUFLO: I think she picked up on something which rings so true to me, which maybe is a marginal point about the US versus France. In France people are reasonably content to just go with the flow and do what everybody does. Every kid eats the same thing at 4:30, has dinner at the same time, has gone through the same experiences, learned the same songs, and everybody thinks they are totally free. But in fact, they are all on this pretty sensible railroad. And also, they don’t agonize about it.
In the US, child-rearing is one more occasion to make a statement about your identity. You’re the kind of mother that carries the baby, or you’re the kind of mother that puts the baby in a stroller. And somehow it almost can predict what you’re going to think about Donald Trump. That’s crazy. Some people are so concerned about what they do. Not only they feel that they have to invest a ton in their children, and they feel inadequate if they are not able to, but also, exactly what they do creates them as people.
In France that’s not there, and I think that makes everybody so much more laid back, children and adults.
Self-recommending of course, most of all we talked about economic growth and development, and the history of liberty, with a bit on Turkey and Turkish culture (Turkish pizza!) as well. Here is the audio and transcript. Here is one excerpt, from the very opening:
COWEN: I have so many questions about economic growth. First, how much of the data on per capita income is explained just simply by one variable: distance from the equator? And how good a theory of the wealth of nations is that?
ACEMOGLU: I think it’s not a particularly good theory. If you look at the map of the world and color different countries according to their income per capita, you’ll see that a lot of low-income-per-capita countries are around the equator, and some of the richest countries are pretty far from the equator, in the temperate areas. So many people have jumped to conclusion that there must be a causal link.
But actually, I think geographic factors are not a great explanatory framework for understanding prosperity and poverty.
COWEN: But why does it have such a high R-squared? By one measure, the most antipodal 21 percent of the population produces 69 percent of the GDP, which is striking, right? Is that just an accident?
ACEMOGLU: Yeah, it’s a bit of an accident. Essentially, if you think of which are the countries around the equator that have such low income per capita, they are all former European colonies that have been colonized in a particular way.
COWEN: If we think about the USSR, which has terrible institutions for more than 70 years, an awful form of communism — it falls; there’s a bit of a collapse. Today, they seem to have a higher per capita income than you would expect a priori, if you, just as an economist, write about communism. Isn’t that mostly just because of what is now Russian, or Soviet, human capital?
ACEMOGLU: That’s an interesting question. I think the Russian story is complicated, and I think part of Russian income per capita today is because of natural resources. It’s always a problem for us to know exactly how natural resources should be handled because you can do a lot of things wrong and still get quite a lot of income per capita via natural resources.
COWEN: But if Russians come here, they almost immediately move into North American per capita income levels as immigrants, right? They’re not bringing any resources. They’re bringing their human capital. If people from Gabon come here, it takes them quite a while to get to the —
ACEMOGLU: No, absolutely, absolutely. There’s no doubt that Russians are bringing more human capital. If you look at the Russian educational system, especially during the Soviet time, there was a lot of emphasis on math and physics and some foundational areas.
And there’s a lot of selection among the Russians who come here…
The Conversation is Acemoglu throughout, you also get to hear me channeling Garett Jones. Again, here is Daron’s new book The Narrow Corridor: States, Societies, and the Fate of Liberty.
The authors are David M. Levy and Sandra J. Peart, and the subtitle is A Documentary History of the Early Virginia School. This is the true history, told by people who know, and with extensive citations from correspondence and primary documentation.
Beginning quite early and throughout his long career, Buchanan studied, endorsed, and extended the Smithian economics of natural equals.
You will find the correspondence of Buchanan and Rawls, the dealings of Buchanan with a skeptical Ford Foundation, the real story behind the Buchanan and G. Warren Nutter “Universal Education” voucher plan, what actually happened in Buchanan’s Chile visit, Chicago vs. Virginia disputes, the anti-democratic views of Murray Rothbard, and the contested history of neoliberalism. And much correspondence from Ronald Coase.
David Levy worked with Buchanan and Tullock from the late 1970s through their deaths, and he and Peart are extremely careful in their sourcing and quotation practices — get the picture?
Due out Februrary, leap year day, you can pre-order here.
It is the same material as already released by Facebook, here is our audio and transcript, you will find our transcript easier to read. Self-recommending!
1. The Danish negative interest rate mortgages are not exactly that. And yes, some Americans are trying to apply for them.
5. Paul Romer visits Burning Man (NYT feature article).
Here is the audio and transcript. We covered Ghana, Africa more generally, cosmopolitanism and the resurgence of nationalism, philosophy and Karl Popper, Lee Kuan Yew, the repatriation of cultural objects, Paul Simon, the smarts of Jodie Foster, sheep farming in New Jersey, and the value of giving personal advice.
Here is one excerpt:
COWEN: Take Pan-Africanism. Do you think, in the broader course of history, this will go down as merely a 20th-century idea? Or is Pan-Africanism alive and well today?
APPIAH: Pan-Africanism involves two different big strands. One is the diasporic strand. The word Pan-Africanism and the Pan-African Congresses were invented in the diaspora by people like Sylvester Williams in Jamaica and W. E. B. Du Bois from the United States and Padmore.
That idea of a diasporic African identity seems pretty lively in the world today, though it doesn’t produce much actual politics or policy, but the sense of solidarity of people of African descent, of the African diaspora seems pretty strong to me.
COWEN: But strongest outside of Africa in a way, right?
APPIAH: Yes, where it began. In Africa, I think, on the one hand, that most contemporary sub-Saharan Africans do have a sense of themselves as belonging to a kind of Black African world. But if you ask them to do something practical about it, like take down borders or do more political integration, I don’t know that that is going to go anywhere anytime soon, which I regret because I think, for lots of reasons, it would be . . .
My sister and her husband live in Lagos. If they want to go to Accra by road, they have to cross the border between Nigeria and Benin, the border between Benin and Togo, the border between Togo and Ghana. And at each of those borders, they probably have to interact with people who are going to try and extract an illegal tax on them.
COWEN: Easier to fly to London, right?
APPIAH: Much easier to fly to London and back to Accra. That’s crazy. And we’ve had these weird things. On the one hand, there’s probably a million Ghanaians in Nigeria, living Ghanaian citizens.
COWEN: Is cosmopolitanism not only compatible with nationalism, but in a way quite parasitic upon it? And in a sense, the parasite is being ejected a bit? Think back to your boyhood in Kumasi. You have all these different groups, and you’re trading with them. You see them every day, and that works great, but there’s some central coherence to Ghana underlying that.
You go to Lebanon today — that central coherence seems to have been gone for some time. You could call Lebanon a cosmopolitan place, but it’s not really an advertisement for Lebanon the way it’s worked out. Are we just moving to a new equilibrium, where the parasitism of cosmopolitanism is now being recognized for what it really is?
APPIAH: I don’t like the metaphor of the parasite.
APPIAH: But yes, I do want to insist that cosmopolitanism . . . Look, cosmopolitanism, as I said, does not only require, or the right kind of cosmopolitan requires a kind of rootedness, but its point, precisely, is that we are celebrating connections among different places, each of which is rooted in its own something, each of which has its distinctive virtues and interest, each of which has its own history. And we’re making connections with people for whom that place is their first place, just as I am in a place which is my first place.
So yes, cosmopolitanism requires, I think, a national sense of solidarities that are not global. That’s why, as I say, you can be a cosmopolitan patriot. Now, if the nationalist says, “Okay, but why do we need anything beyond national citizenship?” The answer is, we have a world to manage. The economy works better if we integrate.
There is much, much more at the link, self-recommending…
Definitely recommended, talking to strangers is one of the most important things you do and it can even save your life. This book is the very best entry point for thinking about this topic. Here is a summary excerpt:
We have strategies for dealing with strangers that are deeply flawed, but they are also socially necessary. We need the criminal justice system and the hiring process and the selection of babysitters to be human. But the requirement of humanity means that we have to tolerate an enormous amount of error. That is the paradox of talking to strangers. We need to talk to them. But we’re terrible at it — and, as we’ll see in the next two chapters, we’re not always honest with each other about just how terrible at it we are.
One recurring theme is just how bad we are at spotting liars. On another note, I found this interesting:
…the heavy drinkers of today drink far more than the heavy drinkers of 50 years ago. “When you talk to students [today] about four drinks or five drinks, they just sort of go, “Pft, that’s just getting started,'” the alcohol researcher Kim Fromme says. She says that the heavy binge drinking category now routinely includes people who have had twenty drinks in a sitting. Blackouts, once rare, have become common. Aaron White recently surveyed more than 700 students at Duke University. Of the drinkers in the group, over half had suffered a blackout at some point in their lives, 40 percent had had a blackout in the previous year, and almost one in ten had had a blackout in the previous two weeks.
Poets die young. That is not just a cliche. The life expectancy of poets, as a group, trails playwrights, novelists, and non-fiction writers by a considerable margin. They have higher rates of “emotional disorders” than actors, musicians, composers, and novelists. And of every occupational category, they have far and away the highest suicide rates — as much as five times higher than the general population.
It also turns out that the immediate availability of particular methods of suicide significantly raises the suicide rate; it is not the case that an individual is committed to suicide regardless of the means available at hand.
Returning to the theme of talking with strangers, one approach I recommend is to apply a much higher degree of arbitrary specificity, when relating facts and details, than you would with someone you know.
In any case, self-recommending, this book shows that Malcolm Gladwell remains on an upward trajectory. You can pre-order it here.