Month: January 2007

Brad DeLong on inequality

by  Tyler Cowen in

…On the global level, it is difficult to argue that inequality is one
of the world’s major political-economic problems. It is hard, at least
for me, to envision alternative political arrangements or economic
policies during the past 50 years that would have transferred any
significant portion of the wealth of today’s rich nations to today’s
poor nations. I can easily envision alternatives, such as Communist
victories in post-World War II elections in Italy and France that would
have impoverished nations now in the rich North.

I can also envision alternatives that would have enriched poor
nations: Deng Xiaoping becoming China’s leader in 1956 rather than 1976
would have done the job there. But alternatives that would have made
the South richer at the price of reducing the wealth of the North would
require a wholesale revolution in human psychology.

Nor should we worry a great deal that some people are richer than
others. Some people work harder, apply their intelligence more
skillfully or simply have been lucky enough to be in the right place at
the right time. But I don’t see how alternative political-economic
arrangements could make individuals’ relative wealth closely correspond
to their relative moral or other merit. The problems that can be
addressed are those of poverty and social insurance-of providing a
safety net — not of inequality.

But on the level of individual societies, I believe that inequality
does loom as a serious political-economic problem. In the United
States, the average earnings premium received by those with four-year
college degrees over those with no college has gone from 30 percent to
90 percent over the past three decades, as the economy’s skill
requirements have outstripped the educational system’s ability to meet
them. Because the required skills acquired through formal education
have become relatively scarcer, the education premium has risen,
underpinning a more uneven distribution of income and wealth.

Ceci Rouse and Orley Ashenfelter of Princeton University report that
they find no signs that those who receive little education do so
because education does not pay off for them: If anything, the returns
to an extra year of schooling appear greater for those who get little
education than for those who get a lot.

A greater effort to raise the average level of education in America
would have made the country richer and produced a more even
distribution of income and wealth by making educated workers more
abundant and less-skilled workers harder to find — and thus worth more
on the market.

Likewise, America’s corporate CEOs and their near-peers earn 10
times more today than they did a generation ago. This is not because a
CEO’s work effort and negotiation and management skills are 10 times
more valuable nowadays, but because other corporate stakeholders have
become less able to constrain top managers and financiers from
capturing more of the value-added.

Similar patterns are found elsewhere. Within each country, the
increase in inequality that we have seen in the past generation is
predominantly a result of failures of social investment and changes in
regulations and expectations. It has not been accompanied by any
acceleration in the overall rate of economic growth. For the most part,
it looks like these changes in economy and society have not resulted in
more wealth, but only in an upward redistribution of wealth — a
successful right-wing class war.

Stories you won’t often hear

by  Tyler Cowen in

I believe we are programmed to favor political stories with relatively clear moral lessons, and stories which suggest we can improve the world as we might like to.  As a result, you won’t hear the following claims too many times:

1. We already have wrecked our environment with global warming; the truth is, it is simply too late to do anything about it.

2. The U.S. economy is being riveted by forces which will increase inequality dramatically.  These forces are so strong we had better surrender to them and learn how to live with that inequality.  This may involve less political power for the downtrodden.

3. A polity wracked with inequality can’t last very long as a free society.  Philosophic worries about inequality are mostly bunk, but we need to move toward greater equality to appease the masses and even to appease some of the elites.

Please note (all you blogs which quote selectively and out of context), none of those are my views.  But they are not less plausible than many of the other opinions thrown around in these debates.  Yet they remain, for obvious reasons I think, quite unpopular.

Can you think of other (plausible) stories which you don’t hear too often?

Why are men better chess players than women?

by  Tyler Cowen in

There is now a comprehensive study.  Two results struck me:

They found no greater variance in men than women.  It
had been suggested that since science selects for individuals at the
upper tail of the distribution, a higher variance in men than women
might explain their greater representation.  However, the researchers
found that — with respect to chess — if anything in most age groups
women had a higher variance then men.  Upper tail effects do not explain
the differences in the numbers of grandmasters…

And:

If you look at the participation rate of women and relate that
to performance, you find that in cases where the participation rate of
women and men is equal the disparity in ability vanishes. 
Basically, this means that in zip codes where there are equal numbers
of men and women players there is no great disparity between male and
female ability — and certainly not a disparity in ability large enough
to explain the difference in the numbers of grandmasters.

Chess players, of course, have clearly defined numerical performance ratings, which measure quality quite accurately.  The bottom line seems to be that men simply care more about doing well at chess, I might add that this speaks well for women.  Of course this preference-based explanation can be tested further; it implies that women should have greater relative chess strength in poorer countries, where they are more likely to play for a living and not just for fun.  I believe this to be true, most of all in China.

The pointer is from Daniel Strauss Vasques.  On related issues, here is my earlier paper, "Why Women Succeed, and Fail, in the Arts."

Measuring the social impact of corporate behavior

by  Tyler Cowen in

The latest?  Do The Right Thing…a community driven site that collects information about the social impact of a company’s behavior…

How it works: Company names are submitted by users for a 60 day evaluation period, similar to an IPO evaluation.  During this stage the crowd pulls any information, historical or current, relevant to a company’s social performance.  At the end of that open period – a social performance score is created.  Right now there are 54 days left on the evaluation period for Starbucks, Wal-Mart and Whole Foods Market.  And after the 60-day initial rating a company’s score can always change as new information is collected.

Here is more.  My fear is that this will favor corporations with good public relations, damage corporations which benefit foreigners and the (non-Internet connected) poor, and damage corporations whose benefits are not especially visible to the public eye.  How many people will post "I bought my rubber ducky at Wal-Mart and saved thirty-four cents, thereby helping to employ numerous poor Chinese and lower global inequality"?

Here is one critical posting on the site itself.  Here is another.

The Life and Times of Thomas Schelling

by  Tyler Cowen in

His typist also worked for Agatha Christie and, during the time she was typing Schelling’s works on conflict resolution, she was also typing Christie’s classic play The Mousetrap.

That is from Robert Didge’s The Strategist: The Life and Times of Thomas Schelling.  This book is fun, fun, fun.  Rather than trying to signal his abilities as a "serious biographer," Didge gives the reader insight into Schelling and his times.  Yes it does cover both his career as a military advisor and his personal life.  The new Milton Friedman biography was a bore, this is a delight.

How bad is McDonald’s?

by  Tyler Cowen in

Not as bad as some people say:

A Swedish researcher put 18 volunteers on the same diet that filmmaker Morgan Spurlock went on while filming "Super Size Me."

The result?

While
one volunteer gained 15 percent body weight after following the
high-choleric diet for a month, several others experienced only minimal
weight gain.  [He] was thus forced to conclude that "some people are
just more susceptible to obesity than others."

Also: The 12 men and six women were banned from exercising.

While all gained weight, none reported mood swings or liver damage like Spurlock did in the movie.

Were Nazi jokes funny?

by  Tyler Cowen in

I have read much of the book, but I’ve yet to find a good chuckle.  This narrative is typical:

Waehrend der Eingeborenenaufstaende in Deutsch-Ostafrika erlaesst das Kaiserliche Ministerium in Berlin folgende Anweisung an die zustaendigen Stellen: "Die Eingeborenen sind dahingehend zu instruieren, dass sie under Androhung schwerer Strafen jeden Aufstand sechs Wochen vor Ausbruch schriftlich anzumelden haben!"

Translation drains away the "humor," but it uses awkward bureaucratic language to report that "the natives" in East Africa have been told that if they wish to revolt, they must first submit six weeks written notice.  If there is anything vaguely funny about this, it concerns how the German language can formalize even very brutal topics, alternatively a simple German street sign can become ridiculous through long constructions and the use of the passive voice.  But I don’t think that was the point of the joke, which I take to be mocking the German bureaucracy.

Moral issues aside, I believe the Nazi jokes are not funny because of their monotone nature, their lack of irony, and the lack of reflective humor behind the putdowns.  A victimized group will be mentioned, and put immediately in a subordinate position, but only rarely is that group the direct butt of the joke.  The oppressed group is there en passant, so to speak.  The resulting incongruity is scary rather than funny and I suspect this would remain the case even if we were not well-informed about what the Nazis did.

Charlie Chaplin’s The Great Dictator, while scary, is also funny in parts.  It mocks the ridiculous element in Hitler.  The Nazi jokes have a huge and ridiculous elephant(s) in the room, so to speak, but by refusing to mock those beasts the rest of the joke almost certainly cannot be funny.

The chapter on the Holocaust is of course chilling.

It can be argued that no one should write a book "reselling" and thus profiting from Nazi jokes (or for that matter blogging them).  I take this point of view seriously, though ultimately I believe the story should be told.

The tough part is that good humor is often brutal rather than morally pure, so the question remains what exactly distinguishes funny brutality from unfunny brutality.

Social scientists do not devote enough attention to the phenomenon of humor, and I found this book one of the better places to start.

Here is an article on the book.  Here is a new book on tourism to Nazi Germany.