Month: June 2015

Did schooling drive the Industrial Revolution?

Alexandra M. de Pleijt has a new paper on that topic (pdf):

Did human capital contribute to economic growth in England? In this paper the stock of total years of schooling present in the population between 1300 and 1900 is quantified. The stock incorporates extensive source material on literacy rates, the number of primary and secondary schools and enrollment figures. The trends in the data suggest that, whilst human capital facilitated pre-industrial economic development, it had no role to play during the Industrial Revolution itself: there was a strong decline in educational attainment between ca. 1750 and 1830. A time series analysis has been carried out that confirms this conclusion.

The reference there is from Ben Southwood.

Laugh Now (while you can)

Here’s a video of robots falling over on the first day of Darpa’s 2015 robot challenge, a challenge set up after Japan’s nuclear disaster at Fukushima in order to encourage development of robots capable of navigating a disaster area.

Keep in mind that the first Darpa Grand Challenge for driverless vehicles was held in 2004 and not a single vehicle came to close to finishing the course and most failed within a few hundred metres. Did I mention that was in 2004?

Should Harvard accept and enroll more students?

I don’t have a strong opinion on this topic, but I hear so much weak argumentation for the “yes” conclusion that the contrarian in me rebels.

Yes, I know it looks good and feels good that an exclusive institution for the wealthy might deign to confer some of its benefits on less wealthy (but still smart) students.  It sounds like a kind of Progressive dream.  How could you be for greater social justice and oppose opening the gates of Harvard to some more students, preferably lower income ones?

But why in fact should Harvard enroll more students?  That probably would mean a lowering of standards, maybe not for the students, but for the faculty who would be hired to teach them.  On average, those turned down for tenure at Harvard, or not considered, really are worse.   A bigger school is a less cohesive school with lower standards for faculty quality stretching into the indefinite future, or at least that likely would be the case with Harvard.

Academic research is often a superstars market, where a relatively small number of people at the very top produce a disproportionate share of the value.  We should keep their working conditions and environment as high quality as possible, no?  Above all, that should apply to Harvard, MIT, Stanford, Caltech, and a few others too.

One not always-admitted little secret of our world is that a small bit of elitism goes a long way toward supporting a large amount of egalitarianism elsewhere in the economy.

And what about Harvard’s obligations?  We would reject the premise that above-average institutions have an obligation to lower their quality to meet the average of a broader pool of institutions, simply to serve more students.  That would imply a race to the bottom.  I don’t have a clear account of why we should stop at one average-lowering decision margin and not another, but I suspect you don’t either.  So maybe Harvard is OK to stay put at its currently high level of average faculty quality.

Keep in mind that enrolling those students at some other institution is a relevant alternative.  If anyone should accept more students, it is the University of Virginia, no?  They have fewer research superstars and furthermore it is a public institution, supported by state funds.  And yet they turn away large numbers of Asians — among others — with very high test scores and apparently impeccable records.

Or look at it from an ethical point of view.  You might believe we owe the less fortunate a “good education,” but surely you don’t believe we owe them a “Harvard education.”  Or do you?

(NB: It is exactly the wrong response to simply blurt out:  “But they all should accept more students!”  It remains a question whether, under the preferred change, Harvard should be accepting any of the burden at all.)

Another policy alternative, which at least the committed egalitarian ought to consider, is to send that marginal Harvard student to the local community college rather than giving him or her an educational upgrade to Quincy Street.

Yes, I understand this is not the only side of the argument and yes I am undecided on this whole question.  But if you wish to convince me that Harvard should take in larger classes, you will do this best by a) refusing to appeal to emotional, mood-affiliated yet insincere attacks on elites and elitism, and b) considering the least favorable comparisons for your arguments, such as letting more students into UVA instead.  Surely the stellar faculty at Harvard have trained you to reason in exactly that manner…because they do it so well themselves…

Sunday assorted links

1. Using cell phone data to analyze unemployment.

2. Great architects defend ugly buildings (p.s. I like most of them).  And Singapore ghost towns (I like most of them).  And midtown Manhattan looks worse every year.

3. Russia and humiliation.

4. Under at least one specification, living near a Michelin-starred restaurant boosts real estate prices (FT).  Under at least one specification, legalized marijuana

5. The cost of sharing human DNA.

6. More on Alice Goffman.

Arbitrage, sort of

A student has changed his name by deed poll because it was cheaper than paying a “ridiculous” Ryanair charge for a booking error.

Adam Armstrong, 19, was presented with a £220 administration fee after his girlfriend’s stepfather mistakenly reserved a seat to Ibiza for him with the budget airline under the surname of West.

Armstrong, who is studying for a foundation degree in digital marketing at Leeds City College, changed his name to West for free and drove to Liverpool to rush through a new passport for £103.

Several airlines charge more than £100 to make minor changes to bookings as highlighted by the Guardian in the past.

The article is here, via Michael Rosenwald.

*Better Bankers, Better Banks*

That is the new and excellent book from Claire A. Hill and Richard W. Painter, here is one excerpt:

That banking involves constant reminders of money also may weaken “the pull of morality,” perhaps making some bankers more inclined to be unethical.  Some recent research suggests that banker identity itself encourages dishonesty.  In an experiment involving employees of a large international bank, the experimenters found evidence that when “their professional identities as bank employees [was] rendered salient to them” (they were asked questions about their professional background in the banking industry), more of them [became] dishonest, cheating in reporting the results of coin tosses so as to increase their monetary payoffs than was the case with people from various other professions — making those other professional identities salient did not increase dishonesty.  The experimenters also found that bankers whose banker identity had been made salient to them — and bankers most likely to have cheated — were more apt to agree that social status was “primarily determined by financial success.”

You can pre-order the book here, the book’s home page is here.

What if the Export-Import Bank expires?

Politico is now reporting this is very likely to happen.  That does not distress me, but if it bothers you I have a simple offset: a looser monetary policy.

The biggest recent “tax” on our exports has been the strong and rising U.S. dollar.  So a simple way to boost exports would be to depreciate the dollar.  Even a slight depreciation likely would offset the effects of Ex-Im expiration by more than a factor of one hundred, perhaps by more than a factor of one thousand.  Ex-Im is a relatively small program and it has nothing to do with more than 98 percent of American exports.  Many of its foreign beneficiaries, such as Pemex and Chinese state-owned enterprises, don’t need the subsidy to fund their imports.  Boeing is still reporting a robust demand for its planes.

Inflation has now undershot the Fed’s target for what — 36 months in a row now?  So a looser monetary policy will hardly bring hyperinflation down upon our heads.

Again, I am not saying we need to do this.  I am simply saying we could, and, if necessary, we could wash away all of your Ex-Im tears, just like that.

Saturday assorted links

1. Why are university endowments large and risky?

2. Who cooked Adam Smith’s dinner?

3. Why do people feel different when they switch languages?

4. More on the Alice Goffman saga.

5. Are mega-journals the future of science?  A good commentary here.  And what motivates dinosaur science?

6. An NYT take on Wisconsin and tenure.  I have read other materials as well and stand by my original judgment on this matter.  It’s like those Disney workers having to train their foreign replacements — people object to losing battles and then the subsequent/ongoing humiliation, and their bruised feelings induce them to overrate the import of an observed change.

7. Can Larry Ellison save American tennis?

AI Darwin

Wired: For the first time ever a computer has managed to develop a new scientific theory using only its artificial intelligence, and with no help from human beings.

Computer scientists and biologists from Tufts University programmed the computer so that it was able to develop a theory independently when it was faced with a scientific problem. The problem they chose was one that has been puzzling biologists for 120 years. The genes of sliced-up flatworms are capable of regenerating in order to form new organisms — this is a long-documented phenomenon, but scientists have been mystified for years over exactly what happens to the cells to make this possible.

The first sentences exaggerates (this is neither the first such discovery nor did the AI have no help from humans) but the discovery of how flatworms regenerate is real and unlike say proofs of the four-color theorem the theory is readily comprehensible to humans:

What the computer discovered was that the process requires three known molecules and two proteins that were previously unknown. This discovery, says Levin, “represents the most comprehensive model of planarian regeneration found to date”.

“One of the most remarkable aspects of the project was that the model it found was not a hopelessly-tangled network that no human could actually understand, but a reasonably simple model that people can readily comprehend,” he adds. All this suggests to me that artificial intelligence can help with every aspect of science, not only data mining but also inference of meaning of the data,”

AddendumOriginal paper and another useful discussion from Popular Mechanics.

Against photos (rant)

I’m getting to the point where I flat out hate images on the internet.  Every article, every web page, seems to be a little nest of crummy, boring, slow to load photos.  Some photos are very good, but most of the time there is nothing to see, nothing to look at, just more distractions paraded in front of the eyes.

“Every page a home page.”  Boo.  It’s as if someone woke up and realized that one page leads to another, one click leads to another, and very little other than the headlines is being read.

And every page is supposed to invite placement on Facebook and clicks from Facebook viewers; maybe that is what the photos are for.

How should I feel about this development?: “Seemingly overnight, video uploading and viewing have exploded on Facebook, where users now watch 4 billion video streams a day, quadruple what they watched a year ago.”  Video on mobile is just getting going.  I now dread clicking on the ESPN NBA links with the volume on.

From my admittedly atypical, hyperlexic point of view, the quality of the digital universe is deteriorating rather rapidly.

I am not suggesting any of this is market failure, rather it is the “readers” getting what they want, good and hard.

I wish to thank two MR readers for discussions related to this blog post.

Uber for private tutors

You do know that private tutors are the missing secret element in MOOCs, right?  All sorts of internet learning will go better when private tutors are available on demand.  Yet for the non-wealthy it does not always make sense to hire a private tutor on an ongoing basis.  Still, you might have a few questions which can be cleared up in fifteen minutes or so, if only the person were available on relatively short notice.

Let’s bring private tutors into the sharing economy.

Recently I heard of a new Dutch start-up,, which is trying to do exactly this.  I am hopeful.

ngdp minimalism

Could we circulate this as a petition and have the whole world sign it, paw prints and all?:

Ken Duda sent me some ideas that form a useful second step, still falling well short of NGDP targeting (an idea rapidly gaining popularity among the elite.)  Here’s Ken’s still extremely modest second set of steps:

1) publishing an NGDP forecast

2) publishing a forecast of how policy instrument settings would affect NGDP (“if we were to raise interest rates, we’d expect the NGDP level to be X% lower than if we hold interest rates at zero”).

3) forecasting what are desirable levels of NGDP, i.e., what NGDP level-path would be most consistent with the dual mandate, or what NGDP level-path would be consistent with what level of unemployment or inflation

4) operating a prediction market for any of the three above

I can’t even imagine how anyone could oppose any of those 4 steps, even if they were 100% opposed to NGDP targeting.  How would that information not be useful?

That is from Scott Sumner, the full post is here.