Assorted links

1. There is still some low-hanging fruit.

2. Download many silent films here.

3. It turns out that Randall Dale Adams sued Errol Morris, for telling his life story in The Thin Blue Line (and thereby vindicating him and getting him out of jail).  And is Egalia funded by Swedish educational vouchers?

4. Edward Hugh on Spain.

5. Milton Friedman and the financial crisis.

6. David Henderson writes a critique of TGS.  He doesn’t contest that median income is nearly stagnant and that TFP is dramatically down since 1973; in the latter case, which clearly establishes the core point of the book, rather than admitting the conclusion he shifts the talk to the difficulties of predicting the future (though I stress that TGS will indeed end at some currently unknown point in time).  Both facts are prima facie evidence that innovations are not doing much to improve the standard of living of the typical person, especially compared to some earlier periods of time.  David is simply backwards concerning the argument on land; it’s not that land today is too expensive, it’s that extra land (we still have plenty of it in Nevada or for that matter Virginia) doesn’t have the marginal economic import it used to, most of all because of modern agriculture.  His numbers on land strongly support my point rather than refuting it.   The measured consumer surplus from the internet is small, not large.  The evidence that more education would yield a high return is quite strong, see the earlier post today.  I’ve written about the benefits of deregulation in plenty of other places but in this book I wanted people to focus on technological rather than political issues.

Comments

Germany also has a voucher system that allows payments to private schools. My german friends are usually surprised that the U.S. discourages private schools by not transfering the funding with the student. When I have had this discussion with voucher opponents in the U.S., the most common response is "that's okay there because they don't have so many religious people".

It's sort of a legitimate point though, isn't it? In Sweden you (might) get 33 slightly fucked up kids because their parents wanted a unigender education. In the U.S. you're more likely to get a million kids getting taught how evolution is false.

That seems unlikely as that would tend to fail accreditation. I think at most they're taught ID as an "alternative theory" which is a waste of time but no more egregious than Earth Day and the various multi-culti social mush.

I think voucher opponents are much more afraid kids might be taught Hayek and Friedman.

"Christian"* schools do tend to teach creationism and even young Earth creationism, along with other dubious religious dogma.
One rather obvious remedy: privatize the school system in its entirety, but do not allow public money to fund sectarian schools, only non-religious ones.

* Quoites due to he fact that there are many Christian schools which are noty guilty of these things, i.e., the entire Roman catholic system whose academic standards are excellent and which do not pick theological bones with science.

Yes, but evolution is but a few hours of education. Hardly something to make or break an education system. And evangelicals - like my friends and family - are not going to believe in evolution no matter what you teach. Americans always overestimate the impact of education on children and underestimate it on working adults.

Well, the voucher-based system in Sweden has also led to religious independent/private schools - mostly Muslim schools: with some, it has been discovered, recieving extra funding from wealthy Saudis with the aim of spreading wahhabism. Quite sad side-effects of an otherwise quite popular reform.

I'm generally open to the idea of voucherizing education--assuming it can be done well. Society--which is to say government--guarantees a basic education to every child, but we separate the guarantee from from the actual delivery. My concerns about such a system would be practical, not philosophical.

Lots of people get hung up on the issue of evolution, but I really don't. I mean, yes, evolution is pretty firmly established as scientific "fact," (acknowledging the problematic nature of that word as applied to science) but so are lots of things that don't make it into the high school curriculum. I had a pretty solid high school education, and yet it didn't include general relativity or orbital mechanics. Why is it so important to us that evolution be a part of every high schooler's core education? I rather suspect it is precisely because it pisses off all the right people.

I was struck by Henderson's devotion to dimishing marginal returns when it comes to expanding the role of government. I wonder: does he retain this affection when it comes to progressivity in the tax code?

I'm fascinated by the rise of a new meme -- the notion that education is almost always wasted on its recipients and is certainly a bad investment for society as a whole. Granted that so many economists are embracing this idea, it must be true, but ..... the future it points toward is not an an attractive one.

A future where we waste less time in school and spend more time living? Where ability must be demonstrated rather than certified by archaic paper credentials? Why is that "unattractive"?

Noah_Yetter wins the thread.

For the past 200 years or so it's been the common wisdom that the next generation needs more education -- and until now that common wisdom has always been right. A society where everyone had primary education works better than a society where most people were illiterate. A society full of secondary school grads is better than a society of people with 4-5 years education. It was assumed, I guess, that this model would continue ad inifinitum. We're realizing that's not true.

The point is not so much that education sucks, it's that ever-increasing amounts of education costs more and gives you less. Increasing societal education gets progressively more expensive for two reasons -- first, there is no more low hanging fruit of students who are talented, want education, but just don't have the opportunity. These people are cheap to educate, once they get the chance. It's much harder and therefore more expensive to force someone to learn if he has no aptitude for it and hates it, buts that's precisely what we do. Second, for those who are talented and want lots of education, the kind of people who two generations ago would've topped out at a BS now feel the need to get a 7 year phd. Very expensive.

On the other side of the scale, the benefits of increased education generally decline with every additional year. It's like the halfway paradox. My first year of law school I learned half of what there was to know about law. The second year, I learned half of what was left. Third year, half of that. You get less and less out for the same amount you put in.

Now my wife gets upset when I say things like this. Education, she says, is valuable for its own sake, and even trying to put a price on it, or analyze it through cost/benefit, misses the entire point. But that's easy for her to say because she got scholarships; someone else paid her way through college and grad school. She's never had to try to put a monetary price on those things. As a society we do.

I would strongly advise you not to debate your wife on the topics like this one.

your first year of law school, you learned maybe 10% of what there is to know about the law. i mean, seriously, first year law students can barely read cases (you tell them the answer is in a given paragraph, they still can't find it, might as well be latin/greek/whatever to them). it may be true that the subsequent years of law school weren't so valuable as the first, but the notion that you learned 75% of what there is to know about the law once done as a 2L is just silly, even if you're overstating for effect.

I have to agree with those arguing the rise of the welfare state may be a large factor. (And don't get me wrong -- I think the welfare state is great. The poor are obese instead of starving. If you're disabled or make it to 65, you get room, board, and medical care off the taxpayer for the rest of your life instead of begging in the gutter.) But nothing that good comes for free. I don't think we can idle (or at least greatly reduce the marginal propensity to produce) a vast swathe of the population with no effect.

Similarly, the rise of low-cost entertainment like TV, movies, etc, where utility increases but is difficult to measure. Is World of Warcraft not vastly superior to "Ozzie and Harriett"? And don't even get me started on the wondrous gift of CGI. It might even be arguable that the graph mainly represents an increasing failure of econometrics.

67. To get full retirement benefits at age 65, you needed to have been born in 1937. Medicare does kick in at 65, but you're paying for part of it.
http://www.ssa.gov/retire2/retirechart.htm

The welfare state has declined for the last 30 years, so why isn't the economy doing well?

Think I'll name my new wine FREE LUNCH.

median income is nearly stagnant and that TFP is dramatically down since 1973

That's because in 1973, WASPs lost:

https://www.kuro5hin.org/story/2003/11/27/143743/49

He doesn’t contest that median income is nearly stagnant and that TFP is dramatically down since 1973; in the latter case, which clearly establishes the core point of the book, rather than admitting the conclusion he shifts the talk to the difficulties of predicting the future (though I stress that TGS will indeed end at some currently unknown point in time). Both facts are prima facie evidence that innovations are not doing much to improve the standard of living of the typical person, especially compared to some earlier periods of time.

There are two ways to fight inflation:

1. Decrease the supply of money.
2. Increase the supply of goods/services.

The main proximal cause of civilization's decline may be just this sort of choice increasingly falling into the hands of men who can choose 1 but can't choose 2.

It really is rather straight-forward to increase the supply of goods/services: Shift the tax base off of economic activity (income, capital gains, sales, value added, etc.) and onto net assets (just assessing tax things for which legal records are kept) exempting subsistence assets (as do bankruptcy procedings) from which armies are raised during emergencies.

The reason civilizations in decline never choose to do the right thing with tax policy is those with high asset concentrations gain control of tax policy and seek to secure their relative wealth within the society -- try to maintain their social status advantage which ultimately is simply a sexual selection advantage.

The last time this happened, the peak of the baby boomer females were reaching the age of first marriage as fixed 30 year mortgage rates hit 19%. The World Trade Center and places like it had been built to absorb the resulting sexual selection advantage -- offering young women a place to sell their fertility without consciously being prostitutes.

Sociobiology works in not-so-mysterious ways.

6: Did we read the same review? Henderson pretty specifically contested exactly those things you say he accepted: that the official income levels don'f reflect the gains in consumer surpluses, which are equivalent to gain in the kind of income we are interested in.

Oh, you link back to your flaky, throwaway, heavily-debunked claim that the internet adds little consumer surprus? Well, golly, sorry I brought this up! It's clear you're a serious scholar willing to admit when the data doesn't fit your "oh-so-provcative!" theories...

What a phony.

Wow, Tyler. This is one of the worst critiques you have written. I invite readers to read my whole review and not just the short segment I highlighted in the post that you link to. Check it out here:
http://www.cato.org/pubs/regulation/regv34n2/regv34n2-9.pdf#page=4 and scroll down.
I'm unwilling to say, with Silas Barta, that you're "a phony." That's not even close. You're a human and you're still my friend. I think that, like most humans, you get invested in certain views, something your colleague Robin Hanson has written a lot about.

If you wish, respond on the numbers. Or the argument about land.

I hope your readers don't blame internet and blogging for your poor judgement. Another example of the old saying: Guns don't kill people, people do it.
Hasta la vista, Professor Cowen.

I encourage readers to read the entire review as well. I admit I haven't yet read Great Stagnation, but David put a lot of time into a carefully considered, well researched and well written review of the book. David's notion that the internet is more important as a production input makes sense. After all, we don't count the number of employees at the local power plant as an indication of its scant impact on the economy if it were to go away. In addition, David raises a good question about why GDP per capita would rise whereas median income would not. Any answer about stagnation should address both trends, and if not, explain why not. Maybe one of the advantages of issuing something as an e-book is that the conclusions can change more cheaply when new information arises.. :).

"TFP is dramatically down since 1973" Don't you mean "TFP *growth* is dramatically down since 1973"?

On the land issue, every economist knows that the value of land increases if it is improved with infrastructure. Eisenhower's interstate highway program began in 1956 and was mostly completed by 1972. Over the same period the price of new cars and trucks was falling. Building the interstates was Cowen's low-hanging fruit, unlocking vast increases in productivity. It seems an obvious decision now; but it didn't at the time.

America hasn't embarked on a similar nationwide infrastructure-building exercise for a long time now. How much more economic gain could be wrought if there was a national electricity grid (see UK)? A national broadband network (see Australia, South Korea, etc.)? Less congestion on existing highways (either by building more or charging more)? There is low hanging fruit out there, in infrastructure and in land taxation to pay for it.

#5: I hope Nelson and Hummel hash out their implicit disagreement on What Would Friedman Do.

Speaking of low hanging fruit, I heard Greek bonds are offering a 25% return backed by the full faith and confidence of the EU1 or 2.

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