Month: January 2005

Jared Diamond’s new book

Jared Diamond’s Collapse: How Societies Choose to Fail or Succeed came out this weekend.

In essence Diamond’s book consists of two parts.  The first and lengthiest part (416 of 525 text pages) examines how several past societies — including the Mayans and Easter Island — met their doom.  In every studied case deforestation and soil erosion played important roles.  This part of the book could have been published on a stand-alone basis with the title How Poor and Backward Societies Suffer From Deforestation and Ill-Defined Property Rights.  Specialists might carp that the material relies on secondary sources, but I found it to be stimulating and informative throughout.

The second part of the book is brief, and details major environmental problems faced today.  This includes overpopulation, vanishing energy supplies, the loss of biodiversity, and so on.  The material was well-presented but the overall level was not much above what you would find in a good magazine article.

The key to the "meta-book" is Diamond’s claim that part one — the history of deforestation — means we should worry more about part two, namely current environmental problems.  The meta-book fails.

Yes we should worry about the environment today, but largely because of current data and analysis, not because of past history.  If you look at the past, the single overwhelming fact is that all previous environmental problems, at the highest macro level, were overcome.  We moved from the squalor of year 1000 to the mixed but impressive successes of 2005, a huge step forward.  Environmental problems, however severe, did not prevent this progress.  We may not arrive in 3005 with equal ease, but if you are a pessimist you should be concerned with the uniqueness of the contemporary world, not its similarities to the past.

Today’s world is indeed different.  We are much wealthier, we have (partially) responsive democratic governments, reasonably effective government regulations, much higher population, an astonishing command over science, we are globally connected, and of course we use resources at a much higher clip.  Whether you are an optimist or pessimist about modernity, the history of Greenland or the Pitcairn Islands should not much revise your priors about our future.

Here is Diamond’s recent NYT Op-Ed; Cafe Hayek has a negative reaction.  Here is a quasi-review of the book from Matt Yglesias.  Here is Alex on a fishy fact in the book.  Here is my previous post on the book, which links to an interview with Diamond and a Malcolm Gladwell review.

The claim in the book I would most like to bet against:

"In the long run it is doubtful that Australia can even support its present population: the best estimate of a population sustainable at the present standard of living is 8 million people, less than half of the present population." 

Any takers?

Great economists by birthday

The list is arranged both by name and by date. 

Today, of course, is the birthday of Sir Isaac Newton.  Yes, he was also an economist.  Here are his writings on money, which were an offshoot of his work at the Royal Mint.  Newton promoted bimetallism and went to great lengths to fight counterfeiters.  This latter campaign included both new means of executing and torturing them, and dressing up in disguise and catching them in the street.

Haiti fact of the day

Experts estimate that Haiti needs 100,000 police officers…The current force numbers about 3,000, many of whom have little training and equipment.

In the town of Mirebalais, Haitian radio reported recently that rebel forces disarmed the Haitian police…

Two recent studies prepared by experts on Haiti for the United States Southern Command of the United States Army refer to "the now-discredited Latortue government" and recommend consideration of a plan to turn the country into an international protectorate, an idea openly debated in the Haitian media.

The New York Times offers more.

Everything you always wanted to know about the current account…

Read here, from the Cleveland Fed, the charts and graphs are useful as well.  It is the single best source I have seen on this issue.

The bottom line: (with which I agree)

I explain why growing current account deficits and expanding inflows of foreign savings are not indefinitely sustainable, and why big deficits imply big corrections. Throughout the trip, however, I emphasize that we simply have no basis for determining when, how fast, or how  jarring any adjustment might be. Those who claim a definitive word on that topic may just be spinning their wheels.

Thanks to the very useful Macroblog for the pointer.  And on a related note, Brad DeLong and Brad Setser discuss the difference between the trade deficit and the current account.

Addendum: Here is Brad Setser on why the dollar is not in free fall.

Are we spending our health care dollars effectively?

(I am quoting from Randall’s email here, Typepad won’t let me indent beneath the fold…)

"A) For anyone who is dying the lack of FDA approval should not prevent the use of a treatment.
   While I would favor complete revocation of FDA ability to keep drugs off the market that is not going to fly politically. But selling a more limited change where those with, say, a projected 12 month or 24 month life expectancy get a basic "I’m free of the FDA tyranny" card would accelerate drug development. Phase I and Phase II drugs would be more widely available….

D) The coercive power of the state should force a percentage of all income to go into medical spending accounts.
   The goal here is two fold:
      – Decrease the number of people who need state medical funding.
      – Also, increase the amount of medical treatment purchases that are paid directly by patients. That will increase market forces in medicine.

E) Self-employed people should be able to buy medical insurance pre-tax.

F) People should be able to make tax deductable donations into medical spending accounts for their future children before the children are conceived. Then the money should be usable to buy medical catastrophe insurance against the possibility of birth defects and also for more mundane medical care.

G) People should be able to bring their own medical insurance policies with them to a job and have their employers pay on those policies rather than on the employer’s group policy.
   That way a person could move around between jobs and never reach a state where their COBRA runs out and a pre-existing condition makes them uninsurable (assuming they can even afford to make COBRA payments while unemployed). The way things stand now the tax law forces people to go uninsured between jobs. When you have no income coming in you suddenly have to try to get coverage. That problem must be fixed.

H) Medical records should be made electronic and more widely shareable by researchers that most medical patients effectively become enrolled in "virtual" medical trials."

A profile of Malcolm Gladwell

Author of The Tipping Point, and the forthcoming Blink, Malcolm Gladwell is one of the most influential economic (and social) journalists today.  Whatever I see by him I read immediately; I enjoyed this profile as well.  Learn why he receives $40,000 per lecture.  And if you don’t know Gladwell’s work, here is an archive of his articles.

Thanks to for the pointer.

The future of on-line television

If enough people start getting their TV online, it will drastically change the nature of the medium. Normally, the buzz for a show builds gradually; it takes a few weeks or even a whole season for a loyal viewership to lock in. But in a BitTorrented broadcast world, things are more volatile. Once a show becomes slightly popular – or once it has a handful of well-connected proselytizers – multiplier effects will take over, and it could become insanely popular overnight. The pass-around effect of blogs, email, and RSS creates a roving, instant audience for a hot show or segment. The whole concept of must-see TV changes from being something you stop and watch every Thursday to something you gotta check out right now, dude. Just click here.

What exactly would a next-generation broadcaster look like? The VCs at Union Square Ventures don’t know, though they’d love to invest in one. They suspect the network of the future will resemble Yahoo! or – an aggregator that finds shows, distributes them in P2P video torrents, and sells ads or subscriptions to its portal. The real value of the so-called BitTorrent broadcaster would be in highlighting the good stuff, much as the collaborative filtering of Amazon and TiVo helps people pick good material. Eric Garland, CEO of the P2P analysis firm BigChampagne, says, "the real work isn’t acquisition. It’s good, reliable filtering. We’ll have more video than we’ll know what to do with. A next-gen broadcaster will say, ‘Look, there are 2,500 shows out there, but here are the few that you’re really going to like.’ We’ll be willing to pay someone to hold back the tide."

And how is this for an application of the Alchian and Allen theorem?

"Blogs reduced the newspaper to the post. In TV, it’ll go from the network to the show," says Jeff Jarvis, president of the Internet strategy company and founder of Entertainment Weekly. ( is owned by Advance Magazine Group, which also owns Wired‘s parent company, Condé Nast.) Burnham goes one step further. He thinks TV-viewing habits are becoming even more atomized. People won’t watch entire shows; they’ll just watch the parts they care about.

Read the whole thing, which focuses on how BitTorrent is revolutionizing the delivery of media and the enforceability of copyright.  Of course we are still waiting to hear where the revenue will come from…