## The Capitalist Kibbutz

The Israeli kibbutz have long been moving away from utopian socialism towards “renewing kibbutz”; a kind of cooperative in which member wages differ, consumption is unequal, many resources are privately owned but there is some mutual aid–a “safety net”–and some common ownership typically of land. Abramitzky et al. look at what happens to how kibbutz members vote as well as to their expressed preferences after a kibbutz votes to move from a traditional model to a reformed or renewed model. The answer is that preferences for the market economy increased the more kibbutz members were exposed to the market economy but support for some redistribution to the poor (which was now less costly as the society was wealthier) did not decrease.

We find that labor market liberalization [i.e. new kibbutz model, AT] led to increased support of open labor market policies such as competitive labor market mechanisms, increased pay for overtime work, and differential wages. It decreased support for socialist policies, such as the joint ownership of the means of production. Still, it did not affect beliefs in the Marxist principle “from each according to his ability, to each according to his needs”, a principle which stands at the core of socialist egalitarian perception. At the same time, the reform also led to increased support for the safety net.

…The effects we document appear to be driven by an increase in living standards and work ethics that resulted from the reform. Equal sharing in the traditional kibbutz encouraged shirking and free riding. While strong idealism among founders helped kibbutzim reduce these problems in the past, idealism declined over time, and the second and third generations became less idealistic than the founding generation (see Abramitzky 2018 for a discussion). By the 1990s, before reforms took place, members complained about shirkers. As reported by members in surveys, our findings provide quantitative evidence that the reform improved kibbutzim’s members’ economic conditions and work ethics. These improvements might have, in turn, contributed to the more favorable attitudes of kibbutz members towards open labor market policies. Such improved economic conditions and work ethics might explain why even groups that stood to lose in relative terms from the reform, such as older and less educated members, supported it. The improved economic conditions and work ethics meant that even if these groups experienced declines in their relative income (as they found themselves at the bottom of the kibbutz’s income distribution), they may not
have lost in terms of absolute income. Moreover, these groups may have concluded that a shift away from equal sharing was inevitable for the long-term survival of their kibbutz, and accordingly became more favorable to market mechanisms after the reform.

…We conclude that introducing market-based wages led to a shift in attitudes towards what we call a market economy with compassion, changing from their traditional democratic socialist model to a social democratic one. Although most kibbutz members support the differential pay reforms, they still want to maintain their core principle of mutual guarantee. When reflecting on how they want to live and build their society, most members want to live in neither a traditional socialist kibbutz nor a capitalist city. Most of them prefer something in the middle – a market economy within a compassionate society with a comprehensive safety net.

In short, the mixed economy is stable.

1. Maximize your baseline energy levels. There is the obvious stuff: figure out a personal exercise practice and do it at least five days a week (I like running). If you don’t, you’re just leaving a bunch of power on the table.

But there are also less intuitive truths here.

Energy compounds on itself. If you start the morning by getting something done (a workout, an important task, writing) then you’re going to have a higher baseline energy day overall. It’s as though the initial thing gives you a persistent ‘boost’ throughout the day. Doing additional things becomes easier. Without this boost, there’s a good chance I get nothing important done that day.

Most people’s mental models of energy are flawed: they think there’s a ‘tank’ of energy that gets depleted as you spend it. This may be roughly true for physical energy, but mental energy is different: spending mental energy on things that you consider productive or important gives you more mental energy for other things: a positive feedback loop. On the other hand, procrastinating, spending all day scrolling Twitter, or staying in bed all day reduces the amount of energy you have to spend; this means you are less likely to get anything done.

It’s common to get trapped in this negative energy feedback loop: you don’t feel like doing something, so you check Twitter for awhile, which reduces your energy levels, which makes you feel worse, but you try and do something anyway, but you’re even less energized now, so you decide to go to bed for a bit to rest, but the rest isn’t restful… etc.

The way to get out of these energy ruts is to just do something really small (empty the dishwasher! Write one sentence!) and get that tiny reward of accomplishment. This generates a little bit more energy. Use that spark to get something slightly bigger done, and so on.

Here are nine other pieces of advice.  Here is Nabeel on Twitter.

## Emergent Ventures winners, 21st cohort

Uzay Girit, 17, part Turkish part American, starting at MIT, general career support.

Hamidah Oderinwale, 17, Ontario with Nigerian origins, to sponsor an EA visit to Nigeria and also for general career support.

Yelim Kim, Champagne-Urbana, Illinois, 15 years old, for an algae/bio project and general career development.

An anonymous grant to central/eastern Europe.

Rhett Ellis, autistic entrepreneur in Brisbane, a deeptech replacement for the CV/Resume that measures the presence or absence of knowledge.

Oliver Kim, UC Berkeley economics graduate student, to research Chinese economic growth using light/satellite data for the period of critical reforms.

Luca Gattoni-Celli, founder YIMBYs of Northern Virginia.  Here is his Twitter.

Jamie Brandon, Vancouver area independent researcher, working on making databases easier to use.

Kamil Galeev, for a new foreign policy consultancy, including with a study of Russia, the Russian region, and China.

Tom Bell, Chapman University, to produce a report In Search of the Best Policies for Translational Geroscience, with Kalon Boston.

## Peter Brook has passed away at age 97

Here is a NYT obituary, here is a Guardian appreciation.  Here is Brook’s Wikipedia page.  He was one of the very greatest talents of our time.  He was most of all a theatre director, and so most of his output I have never seen.  I can report that his filmed Mahabharata (5.5 hours on YouTube) is one of the great creations.  He and his co-workers spent eight years on the project.  I also give his King Lear, again on film, an A+.  At Lincoln Center I once saw his staging of The Magic Flute (in French!), again an A+.

RIP.

## What exactly is the problem these days?

In my latest Bloomberg column I tried to express the “model” in as few dimensions as possible.  Here is an excerpt:

I am increasingly worried that human success and failure are ruled by taste — the demand side, in economic terms. If there are fewer beautiful and charming residential post-World War II neighborhoods, it is because most people do not want to live in them. If there are fewer movies today with the dramatic impact and compositional rigor of “Citizen Kane,” it is because people do not very much want to see them. It is not that it is too difficult or expensive to make another “Citizen Kane.”

Again, this is not an argument for pessimism. Hollywood movies may be worse, but television programs are much better. Neighborhoods may look less interesting, but the insides of homes are more comfortable. For every potential lost Baroque concerto, there are gains in other areas of life.

Still, it is striking how much the quality of taste can decline — and stay there for long periods.

Social contagion plays a significant role in this process. That is, when some people become interested in a particular genre, many others may follow: Think of the rise of Beatlemania. The process also works the other way: Think of the decline of disco.

The question is why some particular tastes decline, and others rise. There are probably deep structural explanations, but for the most part those reasons are not transparent to our understanding. For all practical purposes, many shifts in cultural tastes are random.

It’s also important to realize that a lot of politics is about aesthetic tastes for a particular set of values, a particular set of people, a particular set of processes and outcomes. There was a series of democratic revolutions starting in the late 18th century, just as there were numerous fascist revolutions starting in the early 20th century and neoliberal revolutions in the 1990s. Social contagion can help explain those as well.

My fear, quite simply, is that we have entered an age in which the popular taste for good political outcomes, and fair political processes, is much weaker than it used to be. You might think that people would always want at least decent political outcomes, but that hypothesis has gotten increasingly hard to defend in the last 10 years, both in the US and globally. Attachment to democracy, for instance, seems significantly weaker, as does love for capitalism. People’s tastes are being pulled in different directions, whether it be the Proud Boys or the extremely woke.

All of which is to say, a rather simple and unglorified possibility is becoming more likely: People have stopped wanting good things to happen.

I realize this explanation is banal and does not hold much emotional appeal. Many people prefer conspiracy theories, or tightly structured theoretical hypotheses, or to pin the blame on some particular political faction, usually one they oppose. Or they focus on some very specific issue, such as climate change.

I view all of those problems, real though they may be, as downstream from the more fundamental issue: Why haven’t our systems of government responded better to whatever particular dilemmas concern us most?

Happy 4th!

## Mexican nearshoring is failing

Between 2018 and 2021 the proportion of manufactured goods imported into the US from Mexico barely changed according to data compiled by Kearney, the consultancy. Instead the rewards of the China boycott were reaped by low-cost Asian competitors including Vietnam and Taiwan. Asian countries other than China increased their share of US manufactured goods imports from 12.6 per cent to 17.4 per cent over the period.

And:

It is the only major Latin American economy whose output will still be below pre-pandemic levels by the end of this year, according to estimates from JPMorgan.

Here is more from the FT.  Note that Mexican immigration into the United States is rising again.

## The FDA is Increasing Skin Cancer

Americans who travel to the beaches in France, Spain, or Italy routinely do something that is illegal in the United States–they buy and use European sunscreens to protect themselves from sunburn and skin cancer. Suncreens in Europe and Asia are better than in the United States because more ingredients are allowed and these create more effective and more pleasing suncreens. I’ve been writing about this since 2013! My view hasn’t changed:

My rule is very simple. I don’t think the FDA is better than the EMA so if any drug or device is approved in Europe it ought to be available for purchase in the United States with a label saying “Approved by the EMA. Not approved by the FDA.” (By the way, we do have reciprocity type agreements with Canada and New Zealand for food so this would not be unprecedented.)

Here’s the latest from Amanda Mull writing in the Atlantic:

Newer, better UV-blocking agents have been in use in other countries for years. Why can’t we have them here?

In formal statements and position papers, doctors and cancer-prevention advocates express considerable interest in bringing new sunscreen ingredients to the American market, but not a lot of optimism that any will be available soon.

…In 2014, Congress passed a law attempting to speed access to sunscreen ingredients that have been in wide use in other countries for years, but it hasn’t really worked. “The FDA was supposed to be fast-tracking these ingredients for approval, because we have the safety data and safe history of usage from the European Union,” Dobos said. “But it seems to continually be stalled.” According to Courtney Rhodes, a spokesperson for the FDA, manufacturers have submitted eight new active ingredients for consideration. The agency has asked them to provide additional data in support of those applications, but none of them has yet satisfied the agency’s requirements.

“In the medical community, there is a significant frustration about the lack of availability of some of the sunscreen active ingredients,” Henry Lim, a dermatologist at Henry Ford Health, in Michigan, told me. The more filters are available to formulators, the more they can be mixed and matched in new ways, which stands to improve not just the efficacy of the final product, but how it feels and looks on your skin, and how easy it is to apply. On a very real level, making sunscreen less onerous to use can make it more effective. “The best sunscreen is going to be the one you’re going to use often and according to the directions,” Dobos said. Skin cancer is the most common type of cancer in the United States, and by one estimate, one in five Americans will develop it in their lifetime.

Hat tip: Joe.

## Is The Army racially egalitarian? (model this)

This paper links the universe of Army applicants between 1990 and 2011 to their federal tax records and other administrative data and uses two eligibility thresholds in the Armed Forces Qualification Test (AFQT) in a regression discontinuity design to estimate the effects of Army enlistment on earnings and related outcomes. In the 19 years following application, Army service increases average annual earnings by over $$4,000 at both cutoffs. However, whether service increases long-run earnings varies significantly by race. Black servicemembers experience annual gains of$$5,500 to 15,000 11–19 years after applying while White servicemembers do not experience significant changes. By providing Black servicemembers a stable and well-paying Army job and by opening doors to higher-paid postservice employment, the Army significantly closes the Black-White earnings gap in our sample.

Here is the full paper by Kyle Greenberg, et.al., via the excellent Kevin Lewis.

## Marijuana Legalization and Fertility

State-level marijuana legalization has unintended consequences, including its effect on fertility. Marijuana use is associated with behaviors that increase fertility as well as physical changes that lower fertility. In this paper, I use a difference-in-differences design that exploits variation in medical and recreational marijuana legalization across states and over time to study the effects of marijuana legalization on fertility. This paper is the first to study the effects of recreational marijuana legalization on fertility. I find that legalizing recreational marijuana decreases a state’s birth rate by an average of 2.78% while increasing the probability that an individual is sexually active by 3.6 percentage points. [emphasis added by TC] Together, my findings show that the physical effects of marijuana use have the dominant effect on fertility. By contrast with the existing literature, I find that medical marijuana legalization does not affect the birth rate, although it increases the frequency of sexual activity by 1.6 sexual encounters per month. Neither type of marijuana legalization affects male gonorrhea cases or the probability of having sex with a stranger.

That is from a new paper by Sarah Papich, via the excellent Kevin Lewis.  And note that in this paper marijuana legalization predicts lower auto insurance premia.

## *Empires of Ideas*

The author is William C. Kirby and the subtitle is Creating the Modern University from Germany to America to China.  The shocker is that this is actually a good book.  In contrast, hardly any books on these topics are good.  This book is substantive on virtually every page, the author actually understands how universities work, and, get this…you have to read the book to know what is inside it.  The material covers why early German universities became so successful, why they declined and stayed low quality, why they revived somewhat in more recent times, which American universities have gotten better and richer and why (with respect to their governance), and what is going on with Chinese universities and their rise to eminence.  The latter part does feel a bit out of date, but overall an impressive performance.  Perhaps the sum total of all this work is a bit more desultory than what the author intends, but I will take desultory substance any day of the week.  Especially in such a “crummy book area” as this one.  The author by the way is a China specialist (good background for understanding universities!) and a former Dean at Harvard.

## Institutional Review Boards Should be Curtailed

A good piece on IRBs from CSPI by Willy Chertman:

Institutional Review Boards (IRBs) are ethics committees, ideally composed of scientific peers and lay community members, that review research before it can be conducted. Their ostensible purpose is to protect research subjects from research harms. But oftentimes, IRBs are costly, slow, and do more harm than good. They censor controversial research, invent harms where none exist, and by designating certain categories of subjects as “vulnerable,” cause a corresponding diminishment in research on those subjects. There is even a plausible legal argument that they violate researchers’ First Amendment rights. Because previous attempts to spur the responsible federal executive agencies into streamlining IRBs have been unsuccessful or only had limited success, a targeted legislative solution that does not depend on bureaucratic implementation is needed.

Chertman has a number of suggestions for reform. At the very least social science should not be under the purview of IRBs at all.

…a more sweeping approach would be removing social science from IRB jurisdiction altogether. Historian Zachary Schrag, who worked intensely to lobby federal agencies on the Common Rule revisions from 2009-2017, proposes this in his book, Ethical Imperialism. As he documents, the Belmont Report, and subsequent regulatory developments, were not designed with social science in mind. Congress could fix this historical oversight by changing the wording of HHS regulations. This would free IRBs to focus on truly high-risk research instead of wasting time on low-risk social science research. Since social science more often touches on political questions, this would also extricate government-mandated oversight boards (IRBs) from the delicate position of regulating politically charged research.

Removing IRBs from social science research is particulary important now because politically sensitive research can be crushed under the pretense that it could “harm” participants.