Month: April 2012
China estimate of the day
Another study, by Andrew Batson and Janet Zhang at GK Dragonomics, a Beijing-based research firm, finds that China still has less than one-quarter as much capital per person as America had achieved in 1930, when it was at roughly the same level of development as China today.
Here is more, and I thank David Levey for the pointer. The post as a whole considers whether China is overinvesting and concludes maybe not. Here are further debates on how China is doing.
Assorted links
Six Rules for Dining Out
The Atlantic Monthly feature article from An Economist Gets Lunch is now on-line, excerpt:
When you enter a restaurant, you don’t want to see expressions of disgust on the diners’ faces, but you do want to see a certain seriousness of purpose. Pull out a mirror and try eating some really good food. How much are you smiling? Not as much as you might think. A small aside: in many restaurants, it is a propitious omen when the diners are screaming at each other. It’s a sign they are regular customers and feel at home. Many Chinese restaurants are full of screaming Chinese patrons. Don’t ask me if they’re fighting, I have no idea—but it is a sign that I want to be there too.
And:
If you’re asking Google, put a “smart” word into your search query. Best restaurants Washington will yield too much information, and will serve up a lot of bad restaurants, too. That’s a lowest-common-denominator search query. Google something more specific instead, like best Indian restaurants Washington, even if you don’t want Indian food. You’ll get to more reliable, more finely grained, and better-informed sources about food, and you can then peruse those sources for their non-Indian recommendations. Google Washington best cauliflower dish, even if you don’t want cauliflower. Get away from Google-for-the-masses.
Here is a good video bit of me exploring a new Vietnamese restaurant in Eden Center.
You can pre-order the book on Amazon here. For Barnes & Noble here. For Indiebound.org here.
Ahem…
The study, funded by the William and Flora Hewlett Foundation, compared the software-generated ratings given to more than 22,000 short essays, written by students in junior high schools and high school sophomores, to the ratings given to the same essays by trained human readers.
The differences, across a number of different brands of automated essay scoring software (AES) and essay types, were minute. “The results demonstrated that over all, automated essay scoring was capable of producing scores similar to human scores for extended-response writing items,” the Akron researchers write, “with equal performance for both source-based and traditional writing genre.”
“In terms of being able to replicate the mean [ratings] and standard deviation of human readers, the automated scoring engines did remarkably well,” Mark D. Shermis, the dean of the college of education at Akron and the study’s lead author, said in an interview.
Here is more.
Claims about Mexico
From John Paul Rathbone:
For the first time in a decade there are good reasons to be less bullish about China – and thus Brazil. There are also good reasons to be more bullish about the US – and thus Mexico. China has lost competitiveness because of rising wage and transport costs. North American corporate supply chains are already shortening. If the US economy recovers, Mexican manufacturers should do well.
Mexico has also become a global car producer. The industry generated $23bn of exports last year – more than oil or tourism. Nor are these cheapo maquiladora operations: Volkswagen and Nissan use Mexico’s web of trade agreements to export their cars to the whole world. As for Mexico’s “drugs war”, the once dizzying increase of violence has slowed and in some areas fallen. Why is not clear, but a 74 per cent increase in federal security spending will eventually make a difference, anywhere.
Read the whole thing, well argued throughout.
Further WSJ coverage of *An Economist Gets Lunch*
Recently he noted a jump in the quality of pizza and hamburger restaurants after his daughter dragged him to a Shake Shack restaurant.
“It took me a while to actually believe it. I had a bias,” Cowen said.
From Kristina Peterson, here is more. Here is the coverage from three days ago.
What if we live longer?
The IMF asks what would happen if life expectancy by 2050 turns out to be three years longer than current projected in government and private retirement plans: “[I]f individuals live three years longer than expected–in line with underestimations in the past–the already large costs of aging could increase by another 50 percent, representing an additional cost of 50 percent of 2010 GDP in advanced economies and 25 percent of 2010 GDP in emerging economies. … [F]or private pension plans in the United States, such an increase in longevity could add 9 percent to their pension liabilities. Because the stock of pension liabilities is large, corporate pension sponsors would need to make many multiples of typical annual pension contributions to match these extra liabilities.”
This is one reason (of several) why “doing fine against the baseline” does not much impress me as a fiscal standard. I hope to cover that broader topic soon.
Assorted links
1. World’s first commercial 3-D chocolate printer, story here, beware noisy video at that link.
2. Cardboard arcade made by a nine-year-old boy, hat tip to Karina and Chad.
3. Tightening antibiotic use for livestock; let’s hope it works, a partial but not complete Coasian trade says it won’t, in a pinch farmers will buy vets. More here.
Publication day for *An Economist Gets Lunch*
Adam Ozimek writes:
Cowen’s history of how American food came to be so mediocre is a strong counterargument to those who look to blame the phenomenon on commercialization, capitalism, and excess of choice. In contrast to the usual narrative, Cowen tells us how bad laws have played an important role in shaping our food ecosystem for the worse over time. This includes prohibition’s negative and long lasting impact on restaurants, and the government aggressively limiting one of our greatest sources of culinary innovation: immigration. This is not to lay the blame entirely on the government. Television and a culture that panders to the desires of children have also incentivized poor culinary trends.
The book contains many other other important arguments against popular food ideas, including defenses of technology and agriculture commercialization against critiques of locavores, slow foodies, and environmentalists. For example, if you live in an area where it takes a lot of energy and resources to grow food — like the desert — the most environmentally friendly way may be to grow it somewhere else and ship it. An apple grown locally may be refrigerated for months, which consumes a lot of energy, whereas it may be both fresher and better for the environment to grow it elsewhere and ship it in from afar by boat. He also defends genetically modified crops as the likely cures to the biggest food problem we have today, which is not obesity but malnutrition.
But Cowen is not an apologist, and he doesn’t argue that we can just deregulate our way to a better food system. In fact he has many words of support for policies and values often supported by progressives.
…If there is one overarching lesson it is that looking at food through the framework of supply and demand can help you both understand our food system better, and also help you be a smarter consumer and get more out of every meal.
You can pre-order the book on Amazon here. For Barnes & Noble here. For Indiebound.org here.
The Chicago School
In Launching the Innovation Renaissance I wrote:
In the United States, “vocational” programs are often thought of as programs for at-risk students, but that’s because they are taught in high schools with little connection to real workplaces. European programs are typically rigorous because the training is paid for by employers who consider apprentices an important part of their current and future work force. Apprentices are therefore given high-skill technical training that combines theory with practice—and the students are paid!
In the United States there are some experimental programs moving in this direction. One of the most interesting is being pushed by Chicago mayor Rahm Emanuel:
Chicago Public Schools (CPS) students will have the opportunity to attend five Early College STEM Schools (ECSS) that focus on technology skills and career readiness – as well as earn college credits– under a partnership agreement with five technology companies, CPS and City Colleges of Chicago, Mayor Rahm Emanuel announced…
The five technology companies, IBM, Cisco, Microsoft Corporation, Motorola Solutions and Verizon Wireless, will help develop a unique curriculum at each new school to teach students the skills required in that marketplace, as well as provide mentors and internships. Upon graduating from these tailored programs, the students will be prepared for careers in science and technology.
…All of the new schools will open in September 2012 with a class of ninth graders. Each student will be able to graduate in four-years with a high school diploma with college credits, with a goal of graduating within six years with an Associate of Science (AS) degree in Computer Science or an Associate in Applied Science (AAS) in Information Technology. The college courses will be taught by professors from CCC.
Emanuel is also redesigning the City Colleges of Chicago along similar lines:
Rahm fired almost all the college presidents, hired replacements after a national search, and decreed that six of the seven city-run colleges would have a special concentration. Corporations pledging to hire graduates will have a big hand in designing and implementing curricula. “You’re not going for four years, and you’re not going for a Nobel Prize or a research breakthrough,” he says. “This is about dealing with the nursing shortage, the lab-tech shortage. Hotels and restaurants will take over the curriculum for culinary and hospitality training.” Already AAR, a company that has 600 job openings for welders and mechanics, is partnering with Olive-Harvey College; Northwestern Memorial Hospital is designing job training in health care for Malcolm X College.
It’s too early to judge these developments but Emanuel’s op-ed on this subject was surprisingly good. The key question, which I haven’t yet seen answered, is whether the the companies will have real skin in the game, which I see as critical to success.
Hat tip: Ben Casnocha.
Exponential economist meets Physicist
Here is an imaginary dialogue between a physicist and an economist who is not Georgescu-Roegen. The physicist is skeptical about the prospect for continued exponential growth, excerpt:
Physicist: Well, we could (and do, somewhat) beam non-thermal radiation into space, like light, lasers, radio waves, etc. But the problem is that these “sources” are forms of high-grade, low-entropy energy. Instead, we’re talking about getting rid of the waste heat from all the processes by which we use energy. This energy is thermal in nature. We might be able to scoop up some of this to do useful “work,” but at very low thermodynamic efficiency. If you want to use high-grade energy in the first place, having high-entropy waste heat is pretty inescapable.
…we’re too close to an astounding point for me to leave it unspoken. At that 2.3% growth rate, we would be using energy at a rate corresponding to the total solar input striking Earth in a little over 400 years. We would consume something comparable to the entire sun in 1400 years from now. By 2500 years, we would use energy at the rate of the entire Milky Way galaxy—100 billion stars! I think you can see the absurdity of continued energy growth. 2500 years is not that long, from a historical perspective. We know what we were doing 2500 years ago. I think I know what we’re not going to be doing 2500 years hence.
For the pointer I thank Sam Penrose, Jim Nichols, Jason Ketola, and Mark Weaver. It is interesting throughout, though I expect war to intervene at some point to break the exponential growth.
Addendum: Here is a related paper by Robin Hanson.
The continuing course of Canadian monetary innovation
Canadian money authorities just can’t sit still. Like a hyperactive kid, they have revamped Canadian cash, first introducing plastic bills and then killing the penny. Now they want people to play with glow-in-the-dark quarters.
The Royal Canadian Mint’s latest collectible coin features a dinosaur whose skeleton shines at night from beneath its scaly hide.
It’s actually two images on one face, which could be a world’s first. The other side depicts Queen Elizabeth. Her Majesty does not glow in the dark.
Made of cupronickel, the coin has a face value of 25 cents but is much larger than a regular Canuck quarter.
Here is more, and for the pointer I thank Eva Vivalt.
Assorted links
1. Is a Canadian BitCoin on the way?
3. Biggest second week album sales drop in history; can you guess the artist?
4. How to spend/not spend your book advance.
5. How beer created Belgium (pdf).
Mysteries of growth
Matt writes:
To me the most pointed contrast is between the Soviet Bloc and pre-reform China. Why was East Germany so much poorer than West Germany? That’s easy—Communism! And that’s why North Korea is poorer than South Korea. It’s also why Taiwan is richer than China. But Communism hardly explains why the Soviet Union was always much richer than China. But it was a lot richer despite broadly similar political systems and ideological commitments, and the human suffering involved in the PRC’s failure to implement Communism as successfully as the USSR was enormous.
I would say this: Stalin favored industrialization (albeit of a strange sort) more than did the Chinese communists, China had a more damaging heritage of conquest and civil war, Russia was far more urbanized, Russia had greater access to European ideas (some of them bad of course), and the Russian experience of nation-building was mostly behind them, whereas China is still going through this process. For Russia/Soviet Union, the major structures of 20th century European growth were largely in place, though “liberal institutions” were rejected. Russia had an advanced European educational system in place, albeit not for everyone. If you look at the economic history of the more Asiatic “Stans,” which of course were part of the Soviet Union communist experience, the importance of already-industrializing and European connections looks all the more stronger. The relative prosperity of Estonia also bears out this thesis, though it would be interesting to ponder Kaliningrad/Königsberg in this regard.