Month: March 2014

The Economic Origins of the Territorial State

by  Tyler Cowen

That is a recent paper by Scott Abramson of Princeton (headed to Rochester), here is the abstract:

This paper challenges the long standing belief that changes in patterns of war and war-making caused the emergence of large territorial states. Using new data describing the universe of European states between 1100 and 1790 I find that small political units continued to thrive well into the “age of the territorial state,” an era during which some argue changes in the production of violence led to the dominance of geographically large political units. In contrast, I find evidence that variation in patterns of economic development and urban growth caused fragmented political authority in some places and the construction of geographically large territorial states in others. Exploiting random climatic variation in the propensity of certain pieces of geography to support large populations, I show via an instrumental variables approach that the emergence of towns and cities caused the formation of small and independent states. Last, I explore how changes in economic forces interacted with patterns of war-making, demonstrating that the e ffect of urban development was greatest in periods associated with declines in the costs of producing large-scale military force.

Here is Abramson’s forthcoming book on that same topic., summarized here:

Under what conditions do some political units expand and others contract? Why do some fail and others persist? In which periods should we expect universal empires and why in others systems of states? My dissertation answers these questions by explaining variation in the number and size of the basic unit of political life, the state. Using a combination of formal, statistical, and historical methods, this book length project explores the origins of  the territorial state between 1100 and 1789. I first develop a game theoretic model of state formation that captures both war-making and economic constraints on state-makers. The theory’s implications are then empirically tested through a series of quasi-experimental research designs and historical case studies. While many macro-historical accounts highlight the consequences of changing patterns of war and war-making for processes of state formation, this book argues that these effects have been overstated. Rather, I show that changes in economic geography caused variation in the number and size of states across both time and space.

His introductory chapter you will find here (pdf).  For the pointers I thank Mark Koyama.

Profile of Satoshi Nakamoto, creator (?) of Bitcoin

by  Tyler Cowen in

Mitchell suspects Nakamoto’s initial interest in creating a digital currency that could be used anywhere in the world may have stemmed from his frustration with bank fees and high exchange rates when he was sending international wires to England to buy model trains. “He would always complain about that,” she says. “I would not say he writes flawless English. He will pick up words and mix the spellings.”

And he worked in secrecy:

Not even his family knew.

The full story is here, fascinating throughout.

Addendum: Andrea Castillo adds comment.

Strange sentences about Mexico and China (and other places too)

by  Tyler Cowen in

Mexican security officials this week launched a major crackdown on the cartel’s business smuggling iron ore to China, which another senior government figure confirmed had become more profitable for the Knights Templar than drug running.

There is an FT article here.  The smuggling accounted for 44 percent of the iron ore produced in Mexico.  And why smuggle iron ore?  The New York Times adds:

Chinese buyers, law enforcement officials have said, have been pressured into buying ore from the gang under threats.

Furthermore many of the mines were not legally registered or the iron ore was stolen.  There is more detail here, and here is another exotic sentence:

In a scene that could have been imagined by Gabriel García Márquez, last Christmas three Sinaloa drug cartel members were arrested in a cock fighting farm close to Manila.

The broader question here is whether “drug gangs” could find new outlets for their shenanigans, if drugs were to be legalized or decriminalized.  For more on that you can read this older MR post.

By the way, via Craig Richardson, here are photos of a Chinese ghost town in Angola.:

Kilamba is an enormous and largely empty housing development 30 km (18 miles) from Luanda,the capital city of Angola, designed to accommodate 500,000 people, with a dozen schools and other facilities. As of July 2012 only 212 houses had been sold, due to difficulties in obtaining mortgages. The cost is reported as US$3.5 billion, financed by a Chinese credit line and repaid by the Angolan government with oil.  The city of Kilamba is a government project that coincides with President Jose Eduardo dos Santos 2008 election pledge to build one million homes in four years. (He just didn’t promise people would live there.)

And what happened to Hong Kong and Tibet?

In with the new, out with the old [Il mio papa]

by  Tyler Cowen in

The 68-page Il Mio Papa (My Pope) will hit Italian newsstands on Ash Wednesday, offering a glossy medley of papal pronouncements and photographs, along with peeks into his personal life. Each weekly issue will also include a pullout centerfold of the pope, accompanied by a quote.

“It’s a sort of fanzine, but of course it can’t be like something you’d do for One Direction,” the popular boy band, said the magazine’s editor, Aldo Vitali. “We aim to be more respectful, more noble.”

There is more here.  It will sell for fifty cents, but there are intellectual property issues:

“Various magazines publish the pope’s teachings, but they have an accord with us,” said the Rev. Giuseppe Costa, the director of the Libreria Editrice Vaticana. A similar accord has not been signed with My Pope, he added, though the magazine should have known better “because we have a relationship with Mondadori.”

“In the case they publish the pope’s words, I will have to intervene,” Father Costa said.

Meanwhile, on the other side of the ledger:

Former Pope Benedict, in one of the few times he has broken his silence since stepping down nearly a year ago, has branded as “absurd” fresh media speculation that he was forced to quit.

And his world of scarcity continues:

Libero also suggested that Benedict chose to continue to wear white because he still felt like he was a pope.

Benedict, who lives in near-total isolation inside a former convent on the Vatican grounds, was also asked about this and responded:

“I continue to wear a white cassock and kept the name Benedict for purely practical reasons. At the moment of my resignation there were no other cloths available.

Markets in Everything: Prostitution for Beginners

by  Alex Tabarrok in

The Guardian: An enterprising association of sex workers in Barcelona has angered some of Spain’s most prominent feminists by offering an “intro to prostitution” course in response to what its members say is a growing number of women turning to sex work in the wake of Spain’s financial crisis.

…Four hours was too little time, she said, to cover a list of topics such as dealing with the stigma of prostitution, sex tricks, filing tax returns and marketing. A second day will be held this month because of high demand. “Nobody else can teach these things,” said Borrell. “Not psychologists, anthropologists or political scientists – only prostitutes.”

In related stories, this piece on the legal, mega-brothels of Germany is well produced.

Can too much cultural similarity cause war?

by  Tyler Cowen in

Akos Lada has a new research paper (pdf) on this question:

Does sharing the same religion, civilization or racial proximity lead to more peaceful relations between countries? This paper argues that cultural similarity can actually cause wars, which occur to combat diffusion. This new theory of war combines the models of Acemoglu and Robinson (2006) and Fearon (1995), and shows that cultural similarity can lead to more warfare when old elites are afraid of losing their position to a newly inspired citizenry, as these elites try to destroy the external source of inspiration. The microfoundation for inspiration is derived from revealed information about the income level under given institutions, which are assumed to have positive correlation with cultural proximity. On the empirical side, I present case studies on the 1848 Revolutions, the 2013 Korean Crisis (using content analysis of official North Korean articles) and on the First World War, as well as statistical analysis on all the wars of the last two centuries.

Here is Lada’s blog post on Ukraine and Russia.  Excerpt:

Perhaps because a more democratic Ukrainian government may serve as an example to Russian citizens of how culturally-similar people can be alternatively governed. As history shows, a dictator with an army does not wait for this to happen.

Robert Ashley has passed away at age 83

by  Tyler Cowen in

The great Robert Ashley, one of the musical geniuses of the last forty years, has passed away.  He is one of the few who did something truly new in music.  Here is NPR on Ashley.  Here is the opera Perfect Lives, perhaps his greatest contribution.  Here are parts of that opera on YouTube.  Here is Ashley on Wikipedia.

Sadly, Sherwin Nuland has passed away too.  His How We Die: Reflections of Life’s Final Chapter is one of my favorite books, recommended to all.

The new Paul Ryan report on poverty and safety net programs

by  Tyler Cowen in

I read much of the document last night, here are a few comments:

1. The so-called “war on poverty” has gone better than most of this document would appear to suggest, although this ends up being acknowledged in the appendix on poverty measures.

2. High implicit marginal tax rates are a problem for poor families, but they receive too much attention in this report.  Those same high implicit rates never stopped higher earners, who at some point were (often) much poorer themselves.  Furthermore, without some assumption of dysfunctional behavior, high implicit marginal tax rates will hurt society but should not hurt lower earners per se.

3. There is an implicit ranking of programs as good or bad.  If a program is ranked as bad, there is a cataloging of its cost, but this is not compared to potential benefits, even granting that net cost is positive.

4. Two things that work to cure poverty are immigration and cash transfers.  These points should be stressed more.  More generally, not much of an analytical framework is imposed on the material.  And the discussion of barriers to advancement is extremely thin.  Collapsing families surely constitute an important issue, but reading the discussion of that topic yields precious little knowledge, not even “false knowledge.”

5. Reading through the long list — the too-long list I would say– of programs, one really does get the feeling that a lot of them ought to be replaced by cash grants or pro-employment cash incentives, such as EITC.  But what else should we be doing differently?  If one insists that the point of the document is simply to list extant programs, so be it.  But what is the point of that exercise?  Why not introduce some material on the causes of dysfunctional health care, educational, and rental sectors?

Overall this needed to be a lot better than it was.  The document has almost no vision, only a marginal command of the scholarly literature, and it is a good example of how the conservative movement is still allowing the poverty issue to defeat it and tie it up in knots.

There are further criticisms here, not all of them convincing.  Paul Krugman had a few posts on the document too.

I am tonight doing an event on poverty with Neera Tanden, Steve Pearlstein, and Reihan Salam, and a few others on the Arlington campus of GMU.

The most human-like computer poem?

by  Tyler Cowen in

Try this:

Long years have passed.

I think of goodbye.

Locked tight in the night

I think of passion;

Drawn to for blue, the night

During the page

My shattered pieces of life

watching the joy

shattered pieces of love

My shattered pieces of love

gone stale.

Here is (supposedly) the most computer-like human poem, “Cut Opinions,” by Deanna Ferguson:

cut opinions tear tasteful

hungers huge ground swell

partisan have-not thought

green opinions hidden slide

hub from sprung in

weather yah

bold erect tender

perfect term transparent till

I two minute topless formed

A necessarily sorry sloppy strands

hot opinions oh like an apple

a lie, a liar kick back

filial oh well hybrid opinions happen

not stopped

Here are related rankings and explanation (sort of).  Was this poem written by a human or a computer?  I have no idea.

Should we extend EITC to childless workers?

by  Tyler Cowen in

Jason Furmans says yes, here is one bit:

Looking back at the history of poverty and the tax code in the last several decades reveals some important lessons for expanding opportunity and combating poverty going forward, including the value of having a pro-work, pro-family tax code. The most important new prospect in this area is expanding such an approach for households without children, a proposal that President Obama included in his 2015 budget, and an idea that is also being advanced across the political spectrum, from Senator Marco Rubio to Bush Administration economist Glenn Hubbard to Isabel Sawhill at the Brookings Institution.

It becomes more analytical after that.  Here are some further basic facts about EITC extension.  Here is a 2009 study (pdf).