Thursday assorted links


Who would have thought that George Carlin or Ringo Starr would've been good choices to tell children stories about anthropomorphic trains either.

5. Cowen has the better case, but not for reasons he has expressed (on this blog). Shifting production (and the income derived from it) from countries with relatively high consumption rates (and relatively low savings rates) to countries with relatively (and absolutely) high savings rates (and relatively low consumption rates) is not sustainable. It's equivalent to sending part of global GDP into a black hole. Shifting production to China seemed like a good idea (when it was producing enormous wealth for the beneficiaries) until it didn't (when the global economy sank into secular stagnation). Repeating the shift (to Vietnam or wherever) and expecting a different result would be a sign of insanity.

Ever heard of the principle that trade can be non-zero sum? To describe the rapid development and growth in China as a black hole of GDP is risible, if nothing else the US shale industry was possible because of it, plus a myriad of other resource projects. And even if it were true that China's rise in living standards was at the expense of growth in the developed world (which it wasn't) it was still a huge benefit to mankind unless you are some kind of nationalistic jerk that thinks only the welfare of people of your nationality are important.

I am a Sinophile, so you don't need to lecture me about China. But I'm aware that China has a 50% savings rate and a very high level of inequality (much higher than in the US). Moving $9 trillion per year in global GDP (from 2006 to 2016) from places with a high consumption rate and low savings rate to a place with just the opposite and not expecting a global shock suggest one of two things: ideological blinders or wishful thinking. China will do just fine since China has a very high level of investment in productive capital (including infrastructure). Unlike in the US where investment in productive capital (including infrastructure) has collapsed.

Thank you for the kind words. Coming from you makes it so special. Now please explain why my comment makes me an idiot.

Still a large number of misunderstandings in your second comment. China's consumer demand has grown immensely during the period you describe. And you still don't describe your alternative. Are you suggesting that somehow the US should have prevented China from growing?

Given that Cowen works with Caplan, I'm surprised he places so much emphasis on expanding education. The latter has noted that countries tend to get richer before they get more educated, and national investment in education seems to pay no dividends (although there is a private return to being more educated than your peers).

There were no miracles. Let's say someone's legs are chained up so they can't run. You take the chains off and now they can run. That's not a miracle.

This is just pessimistic mood affiliation. Once again, Tyler is flapping in the wind.

2a) Yeah, sure. Families shape destinies everywhere, but rich societies decide to what degree they want to ameliorate unfortunate or unlucky outcomes. As a nation Denmark has a World Bank Gini coefficient of 29.1. The US has 41.1. Lower is often considered better.

2b) When I visited Denmark as a ten year old I discovered that kids comic books had topless women. I was impressed.

"As a nation Denmark has a World Bank Gini coefficient of 29.1. The US has 41.1. Lower is often considered better."

a. So what? and b. Why?

I think Mr. Kumar may be understating the performance of the Indian economy a bit. I checked the Fred data series (RGDPCHINA625NUPN — Purchasing Power Parity Converted GDP Per Capita (Chain Series) for India). The Fred data appears to show accelerating economic growth in India for the last few decades. Here is the per-capita GDP growth data for each decade.


The Fred series for India stops in 2010. However, a different Fred series (NYGDPPCAPKDIND — Constant GDP per capita for India) goes through 2015 and has similar (but not identical) numbers. Note that I agree with his assessment of Vietnam. All of the data for Vietnam appears to be highly positive. I have no information (either way) about Bangladesh.

You know, MR is a partner's blog, and they certainly should discuss whatever strikes their fancy. That said, I think the Danish focus is funny. Or should I say the anti-Danish focus?

Standing in the political middle of the United States in 2016 we can face two ways. On one side yes, we had the surprising success of Bernie Sanders, self-described Socialist and admirer of Denmark. On the other we have Donald Trump, and his newly revealed Ailes/Bannon alliances. Of outstanding threats to the American Way, I'd still rank the second first. I'm not sure I'd waste too much time worrying that Bernie-Danish-Socialism will be a high Clinton priority.

That said, I think a case can be made for Danish perspective. Even if you don't want to tax at Danish levels, it is perhaps a realism to say that if Americans really want level X of services, and won't back down, then yes you should tax at the same level X to pay for them. And then talk about whether tax and service levels of X-1 or X+1 would improve our lives. That's just sensible, and that's the way you do it if you don't want to play American style games pretending that tax and spending levels should be disconnected.

I think it's because Prof. Cowen is currently in Denmark.

He should seek asylum.

Anyone who thinks the level of government and services that characterizes Denmark (5.6 million) could be copied to a nation of more than 300 million is simply delusional.

What it would look like is a cross between Detroit and Chicago. All across the country. Not Copenhagen.

I will call you out on that. You start with a theoretical sounding argument on size and scaling, but then just reveal yourself by naming "black" cities. As the resident Dane (are there more?) and moderate (more?), I'll say the thing that actually makes it work is that you don't say "oh no, we can't include black people."

Example: How A Danish Town Helped Young Muslims Turn Away From ISIS

Ridiculously stupid. What makes it work is that Denmark has the most free economy in the world. 90% Danish ethnicity doesn't hurt either.

"...but then just reveal yourself by naming “black” cities."

Chicago is not a "black" city.

"The racial makeup of the city in 2010 was 32% black, 45.3% white (31.7% non-Hispanic white), 5% Asian , and 3% from two or more races. "

Chicago certainly is a black city. 32% of the city is, by virtue of Chicago having the third largest population in America, one of the largest black populations of any city in America.

Heh. You are very amusing.

Whether Detroit and Chicago are black or not is immaterial. They are what they are and represent the corruption and self dealing nature of big government in a country where there are no natural connections between groups of people. Chicago is a great example. There are sectors of the economy that are thriving, there is a vigorous education sector, and the net result is one of the most dangerously segregated cities in the country. The number of murders is shameful, the levels of corruption are shameful, the political dysfunction is shameful.

And that is my point. If the Danish system was transplanted into the US, it would end up looking like Chicago, not Copenhagen.

And part of the reason is blitheringly stupid people like you who are so blinded by the desire to fit things into nice little boxes that you can't see reality for what it is.

When I think of Detroit, by the way, I don't think black. I think the center of US industry turned into a hell hole. Shame.

You've had two swings @ the plate, with no logic nor even narrative flowing from 'Copenhagen' to 'Chicago'.

Two words: mood affiliation.

That's your point.

derek explained himself well. What did you not understand?


Tino and Nima Sanandaji (brothers) have published numerous reports about immigration, Scandinavia, and the welfare state. What do they all say? People matter. The welfare state that works well for Scandinavian natives fails for immigrants in the same countries. The welfare state that works well for Scandinavian natives fails in Southern Europe.

From " Sweden’s ugly immigration problem" by Margaret Wente in The Globe and Mail

"So how are things working out in the most immigration-friendly country on the planet?

Not so well, says Tino Sanandaji. Mr. Sanandaji is himself an immigrant, a Kurdish-Swedish economist who was born in Iran and moved to Sweden when he was 10. He has a doctorate in economics from the University of Chicago and specializes in immigration issues. This week I spoke with him by Skype.

“There has been a lack of integration among non-European refugees,” he told me. Forty-eight per cent of immigrants of working age don’t work, he said. Even after 15 years in Sweden, their employment rates reach only about 60 per cent. Sweden has the biggest employment gap in Europe between natives and non-natives.

In Sweden, where equality is revered, inequality is now entrenched. Forty-two per cent of the long-term unemployed are immigrants, Mr. Sanandaji said. Fifty-eight per cent of welfare payments go to immigrants. Forty-five per cent of children with low test scores are immigrants. Immigrants on average earn less than 40 per cent of Swedes. The majority of people charged with murder, rape and robbery are either first- or second-generation immigrants. “Since the 1980s, Sweden has had the largest increase in inequality of any country in the OECD,” Mr. Sanandaji said.

It’s not for lack of trying. Sweden is tops in Europe for its immigration efforts. Nor is it the newcomers’ fault. Sweden’s labour market is highly skills-intensive, and even low-skilled Swedes can’t get work. “So what chance is there for a 40-year-old woman from Africa?” Mr. Sandaji wondered."


"Sweden’s fantasy is that if you socialize the children of immigrants and refugees correctly, they’ll grow up to be just like native Swedes. But it hasn’t worked out that way. Much of the second generation lives in nice Swedish welfare ghettos. The social strains – white flight, a general decline in trust – are growing worse. The immigrant-heavy city of Malmo, just across the bridge from Denmark, is an economic and social basket case."

See "The American Left’s Two Europes Problem" by Tino Sanandaji

"The American Left is far more interested in northern Europe than it is in southern Europe, despite the fact that southern Europe constitutes the majority of the population of the core 15 European Union members. Why?"

"The American Left has convinced itself that the relative success of the welfare state in northern Europe happened in a cultural vacuum and can be replicated anywhere, anytime. Yet numerous European countries that attempted to replicate Nordic policies without having uniquely Nordic levels of social capital and population homogeneity have so far failed. This suggests that more factors determine outcomes than economic policy alone, and that similar policies can have different outcomes in different countries. If America follows Europe in building a full-scale welfare state, we have no idea if the results will be closer to “Sweden and Denmark,” southern Europe, or (as is most likely) somewhere in between.

For all their fascination with Europe, southern Europe doesn’t loom large for the American Left. But France, Italy, Spain, Belgium, Portugal and Greece are more representative of European outcomes than Sweden, Denmark, and Finland, and have equally sized welfare states. Their failure should not be ignored in the American debate."

I think it is well known that many European nations bit off more than they can chew, integration wise. That and many had a wrong turn with a form of multiculturalism that did not really try integration. That said, a Kurd who arrives at 10 and earns a PhD shows that it is not always failure.

In terms of what the US can do, my comment above was to be honest about the services we want, and pay for them with tax. I certainly did not claim that Americans really want today Danish levels or tax and services. My X+1, X-1 was about small changes, a little more, a little less.

To keep my eye on my ball, we are in the midst of another Presidential campaign in which tax and spending plans are offered on different days. This is seriously broken, and the day after fact checkers that say how off everyone is aren't really helping.


"That said, a Kurd who arrives at 10 and earns a PhD shows that it is not always failure."

Both Tino and Nima Sanandaji have PhD's (Public Policy and Biotechnology). Why don't you ask them about the likely prospects for the latest wave of immigrants. They are not hard to find on the Internet. You can even ask in Danish.

The question is not whether American want the Danish welfare state and should be willing to pay for it? The question is whether it would work? The evidence from Scandinavia and Southern Europe is that it would work well for Scandinavian-Americans and fail otherwise.

Southern Europe now has a Northern European welfare state. Strangely enough, this hasn't brought Northern European economic and political success to the South.

I think your argument depends on your opponent having an imprudent plan, a wholesale leap to an idea of what Nordic Socialism would look like in the United States. If the only people talking about that are far from majority and far from the corridors of power, why are you even worried? As a separate issue, yes the Scandinavians will have to make a new reality with a shock of immigration, but that too may pass.

On the other hand, as I say, understanding our own level of services, and paying for them, seems just the way you do business. Or government.


"I think your argument depends on your opponent having an imprudent plan"

Not exactly. Nordic socialism appears to work for Scandinavians in Scandinavia. It doesn't appear to work for non-Europeans in Scandinavia. It doesn't appear to work in Southern Europe.

The issue isn't one of prudence versus imprudence, but one of what works and why? The idea that the same ideas and policies will yield the same results everywhere is a blank-slate article of faith. That doesn't make it true.

The issue is that the group that wants Danish level of services is not the group that would be paying for it. The group that does not is.

#4. Neo-Fisherism is all wet. Embarrassing. And to think Cochrane is referring Friedman there. Friedman's actual view is along the lines of "Low rates indicate money has been tight in the past."

I think the reason we haven't seen inflation is that the Fed instituted IOR, so banks are happy to leave all that new money as voluntary reserves at the Fed earning a pittance (but > 0) and slowly rebuilding their balance sheets.

If you want credit expansion and inflation, end IOR. Time to wake up the banks.

That doesn't make sense to me. The current rate on IOER is 50 bps. Banks could earn far more in their lending portfolio if they had willing borrowers. At this juncture, they could even earn more in the CP market as 3 month LIBOR has jumped over the last several weeks.

50 cents is not a high enough rate to incentivize banks to keep their loanable funds in excess reserves.

Not sure I understand it myself, but banks are currently voluntarily holding $2.5 trillion in excess reserves at the Fed. I'm interested in anyone who understands monetary policy correcting me, but it seems to me that the Fed has been able to use these reserves in lieu of printing new money to implement a big chunk of QE.

5) High IQ East Asians who were held back by fascism/communism experience a miracle when released from those governments.

India experience a "near-miracle" because its upper castes are high IQ but its lower castes are low IQ.

Mid IQ countries like South America constantly remain stuck in the middle. Low IQ countries like Africa were actually better off under colonialism.

No other explanation is need here. We aren't going to liberate a few billion East Asians from Maoism anytime soon. No more miracles.

Why waste any words on what we already know.

Unfortunately, this is neither sarcasm nor farce.

Troll me,

If you think the comments are wrong, why don't you put together a cogent argument contrariwise?

Peter is accepting at face value that Indian Caste is an IQ division?

A quick Google shows that Indians don't think that way, it is an American alt-right invention. Stormfront: "Brahmins are of the richest and highest caste in India AND have a lot of White blood."

You can't make that stuff up.

Here's the crazy-ass Stormfront link you were thinking about:


"Peter is accepting at face value that Indian Caste is an IQ division?"

Not at all. I am challenging "Troll me" to produce some actual facts, logic, and data to refute "asdf".

However, you are naive about India and genetics.

See "Genetic Evidence on the Origins of Indian Caste Populations" from US National Library of Medicine - National Institutes of Health

"The origins and affinities of the ∼1 billion people living on the subcontinent of India have long been contested. This is owing, in part, to the many different waves of immigrants that have influenced the genetic structure of India. In the most recent of these waves, Indo-European-speaking people from West Eurasia entered India from the Northwest and diffused throughout the subcontinent. They purportedly admixed with or displaced indigenous Dravidic-speaking populations. Subsequently they may have established the Hindu caste system and placed themselves primarily in castes of higher rank. To explore the impact of West Eurasians on contemporary Indian caste populations, we compared mtDNA (400 bp of hypervariable region 1 and 14 restriction site polymorphisms) and Y-chromosome (20 biallelic polymorphisms and 5 short tandem repeats) variation in ∼265 males from eight castes of different rank to ∼750 Africans, Asians, Europeans, and other Indians. For maternally inherited mtDNA, each caste is most similar to Asians. However, 20%–30% of Indian mtDNA haplotypes belong to West Eurasian haplogroups, and the frequency of these haplotypes is proportional to caste rank, the highest frequency of West Eurasian haplotypes being found in the upper castes. In contrast, for paternally inherited Y-chromosome variation each caste is more similar to Europeans than to Asians. Moreover, the affinity to Europeans is proportionate to caste rank, the upper castes being most similar to Europeans, particularly East Europeans. These findings are consistent with greater West Eurasian male admixture with castes of higher rank. Nevertheless, the mitochondrial genome and the Y chromosome each represents only a single haploid locus and is more susceptible to large stochastic variation, bottlenecks, and selective sweeps. Thus, to increase the power of our analysis, we assayed 40 independent, biparentally inherited autosomal loci (1 LINE-1 and 39 Alu elements) in all of the caste and continental populations (∼600 individuals). Analysis of these data demonstrated that the upper castes have a higher affinity to Europeans than to Asians, and the upper castes are significantly more similar to Europeans than are the lower castes. Collectively, all five datasets show a trend toward upper castes being more similar to Europeans, whereas lower castes are more similar to Asians. We conclude that Indian castes are most likely to be of proto-Asian origin with West Eurasian admixture resulting in rank-related and sex-specific differences in the genetic affinities of castes to Asians and Europeans."

Brian, that page talks about neither IQ nor intelligence. Are shocked that long caste division would create a measurable genetic difference, that's actually a different question. But you know, congrats on linking yourself in to the Stormfront position, without actual evidence.

Peter, you too seem shocked that Indians have genetics. Congrats to you too, to not have the critical reading skills necessary, and the lack of restraint to also join Stormfront.

I think today was the day Tyler just decided to feed his racist ant farm.

I'm going to take off now, but this was a kind of interesting moment. If you hear "higher castes are higher IQ" I think your friendliness the the idea might be based on your core, subconscious, racism. Because believing it without evidence is based on an assumption that when people split populations, judge populations, it is by reasonable division. That is, by real worth. On the other hand you think "who knows who got stuck in what caste" you might have a distrust of historic social sorting as it pertains to merit, genetic or otherwise. You might have an assumption that historic division was more often cruel and arbitrary.


You wrote "Brahmins are of the richest and highest caste in India AND have a lot of White blood" and asserted that this was an alt-Right - Stormfront invention.

Other folks have (trivially) produced data to show that it is factually based. The question of whether caste and IQ are genetically related is a separate one. However, you made a easily falsifiable assertion that Indian caste was unrelated to genetics (a supposed invention of the alt-Right and Stormfront).

Wiggle wiggle.

The Stormfront assertion is absolutely about a White Race, and the not exactly genetic idea that high Caste Indians are better because they have White Blood.

Are you seriously trying to straddle that? You believe White Blood is a thing, and genetic affinity to Europeans, specifically Eastern Europeans, gives White Blood?

Are you asking me to also believe that this belief in "genetic affinity" as "White Blood" is purely absrtract and not pejorative?


My position is that “Reality is that which, when you stop believing in it, doesn't go away" (Philip Dick). You claimed that the notion of genetic variation by caste in India was an alt-Right/Stormfront invention. Quote from "anon"

"A quick Google shows that Indians don’t think that way, it is an American alt-right invention. Stormfront: “Brahmins are of the richest and highest caste in India AND have a lot of White blood.”"

The DNA data says you are wrong. The DNA data doesn't confer any suggestion of "better" or "worse" (except perhaps for you). It simply provides insights into what is actually true, versus what you might like to believe is true. The DNA data appears to show long-term endogamy (people marrying in the same caste) and different founder groups.

These are just facts. They don't establish relative worth and they don't demonstrate that one group has a higher IQ (based on genetics) than another group. However, they are facts. Blaming them on an alt-Right invention and/or Stormfront doesn't change them.

So, straddle it is. I am pretty sure that an egalitarian would not step forward to slice off a bit of Stormfront to support. Especially not when skipping all these opportunities to say "racists are nuts but .."

In fact, I am pretty sure you did the opposite, you endorsed their truths without reservation.


I take science seriously whether I like the results or not. Reality is something that exists irrespective or my biases or yours. Science provides a basis for truth whether Church likes it (Galileo), you like it, Stormfront likes it, or I like it. In my view that is the only tenable position. You appear to believe that truth is subject to some "guilt by association" test.

"Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence." - John Adams

"When the facts change I change my mind. What do you do, sir? - John Maynard Keynes

“Reality is that which, when you stop believing in it, doesn't go away" - Philip K. Dick

We could start with the stunning reality that standardized test scores differ between poorly educated malnourished children and well nourished children with access to decent education.

There. That's already 1000% more sensible than anything our esteemed high-IQ friend has to share.

Troll me,

"We could start with the stunning reality that standardized test scores differ between poorly educated malnourished children and well nourished children with access to decent education."

Probably true but irrelevant. Useful quote

"As a group, America's poor are far from being chronically undernourished. The average consumption of protein, vitamins, and minerals is virtually the same for poor and middle class children and, in most cases, is well above recommended norms. Poor children actually consume more meat than do higher income children and have average protein intakes 100 percent above recommended levels. Most poor children today are, in fact, supernourished and grow up to be, on average, one inch taller and 10 pounds heavier that the GIs who stormed the beaches of Normandy in World War II."


"Obesity rates increased by 10 percent for all U.S. children 10- to 17-years old between 2003 and 2007, but by 23 percent during the same time period for low-income children (Singh et al., 2010a). This national study of more than 40,000 children also found that in 2007, children from lower income households had more than two times higher odds of being obese than children from higher income households."

Obesity and higher meat consumption don't exactly support the "malnourished children" trope.

You're changing the subject Peter. We were talking about the theory that low caste and IQ are tightly related in a causal manner as a result of genetic and not cultural/social factors, and other such theories.

If you want to discuss the American education system, perhaps you would like to start a new thread?

Troll me,

If you are asserting that IQ - caste linkages are a consequence of nutritional differences in India, I have no data (either way) and hence no opinion. I rather specifically wrote (about caste and IQ in India)

"They don’t establish relative worth and they don’t demonstrate that one group has a higher IQ (based on genetics) than another group."

My response was in the U.S. context, where the data does not show that educational outcomes correlate with nutrition. I interpreted (perhaps incorrectly) in the U.S. context and replied (perhaps incorrectly) accordingly.

If someone has some facts or coherent logic to introduce on the matter, feel free to start.

Observations that poorly educated people get lower scores on standardized tests than well educated people are not exactly impressive, except in the stunning ability to draw the conclusions you do.

My point was not that he was incorrect. That is besides the point. The point is that a decent share of people, upon reading such a comment, might be quite unsure as to whether it makes fun of people who actually think that or if it's someone straight up saying it. I happen to know it is the second case.

Troll me,

"Observations that poorly educated people get lower scores on standardized tests than well educated people are not exactly impressive, except in the stunning ability to draw the conclusions you do."

If the only context was adults, you might have a point. However, the same deltas show up in children.

From "Liberty Street Economics - Human Capital and Education in Puerto Rico"

"In fourth-grade math, Alabama and New Mexico are the lowest scoring states as measured by this indicator, with 26 percent and 27 percent of their students, respectively, scoring at or above proficient. In contrast, this number is 0 percent in Puerto Rico. In eighth-grade math, Alabama and Louisiana were the lowest scoring at 17 percent and 18 percent respectively. In contrast, no sampled Puerto Rican eighth-grader scored in the proficient category."

Yes, unfortunately equality of inputs will never yield equality of outcomes.

Intelligence is mostly genetic, and mean intelligence varies among population groups. The data is there and in five years the mechanism will be known as well, and this debate will be over.

" five years..."

Umm, no.

China is investing in Africa. Look for Djibouti to be the Hong Kong and Ethiopia to be the factory location.

So, more miracles might happen.

#3 Has a funny smell to it. Are we actually talking about the Roman economy, or are we taking the polemics of current politics and projecting them back onto Rome? Are we trying to understand Rome, or are we just using Rome to say something about today?

By the way, I am currently reading Cyril Mango's "Byzantium", which deals with some of the same issues, and the impression that I get is that there are so many external influences in the Eastern Empire - repeated plagues, Islamic invasions, civil wars, de-population of cities and then repopulation, decline of the Imperial system and then its revival, destruction of old families and rise of new ones - that it would be a very brave man indeed who attributed primary importance to a dispute over Keynesian stimulus.

yeah that open borders stuff didn't work out well for the romans. Pretty well for everyone else. (Belgians, Anglo-saxons, Franks, Visigoths, Bulgarians, Slavs, etc)

More than a funny smell. The author is assuming that in the absence of the roman state people would just peacefully co-exist and trade in a free market rather than rob and kill each other until there is nothing worth stealing. The author appears to have no understanding of what makes a modern state/economy work, nor understand much about history.

"It is symptomatic in this connection that political scientists have increasingly taken to describing themselves as “normal scientists.” The phrase is Kuhn’s and he used it to designate a type of scientist whose vocation is not to create theories or even to criticize them but to accept the dominant theory approved by the scientific community and to put it to work. But if we ask, what is the dominant theoretical paradigm of our normal (political) scientists, the answer is that, in Kuhn’s sense, there is none." (Political Theory as a Vocation by Sheldon Wolin)

Political science ranges from questions like:

a) "this, uh, space, in front of me, that I can jump into and wiggle around in, but which I may or may not have the right to exclude others from using, and through which, in part, my social and economic realities are manifest ... so, WTF is "space" in the social sense, what does it even mean...?" (so, what about property theories?)

b) So, what's the deal with despots and tyrants, philosophers and scientists, armies and guilds, inventors and lawyers, labourers, and all the rest ... how does this all boil down into something that kinda works? What is the goal? How to reconcile between different interests? What is the role of ethical values? Where is the line beyond which representing one's self interest goes too far? How do all these and other groups come together, speak together, negotiate together in their parts of society, and together in the broader sense? (Or, are many excluded from processes?)

c) Surveying and polling methods, empirical analysis, trying to explain certain changes as a function of other changes. (This is where you'll tend to get more thinking about the "scientific method", but if it ever makes the news, results have likely been simplified to the point that the headline does not even remotely stand up to scientific scrutiny.)

And lots of others. If there's a simple division, it's political theory (philosophy) and the empirical stuff (whether based on case study analysis from historical events, brute force with numbers, etc).

Perhaps a useful paradigm would be "everything is political". But that doesn't really narrow things down much. A physicist might say the same

Everyhing is the James's squirrel.

5b - was I supposed to have a pre-existing expectation about the relative oddity of Danish children's television?

#3: the argument being criticized sounds sort of like a reverse Laffer Curve. IE, the less you tax the peasantry, the more they lower their economic output. To me, this argument seems plausible if taxes were assessed irrespective of income and they flog or crucify or enslave you if you don't pay. If that were the case, then you could imagine peasants would probably increase output of market goods and shift away from leisure or from production of non-market goods. It isn't discussed one way or the other in the article, though, and anyway I agree with the author that the effect probably couldn't have been all that large. The idea seems suffused by what Arnold Kling calls Folk Keynesianism.

Let's say you make $3k a year on your family farm. The emperor decides that everyone's going to pay 1000kg of wheat in tax per year. Punishment for non-payment is severe, but you're not that hard to find (it's hard to hide a farm) so basically getting found out is quite likely and it rarely proceeds to anything terrible.

Do you work more, the same or less, in this situation?

Sometimes is could be justified on the basis of market access, etc., but I think in those days it was more about the ability to get the army somewhere quick (so taxes to feed them helps) and commercial benefits I assume to have been considered as quite secondary.

Let’s say you make $3k a year on your family farm. The emperor decides that everyone’s going to pay 1000kg of wheat in tax per year. Punishment for non-payment is severe, but you’re not that hard to find (it’s hard to hide a farm) so basically getting found out is quite likely and it rarely proceeds to anything terrible.

Do you work more, the same or less, in this situation?

Than what? You didn't present an alternative scenario to compare to.

I'm not sure how people in the Roman world in any analogous such situation might have managed to create alternative scenarios for themselves. If you're farmed in some valley for 10 generations and the situation goes that way, how would it enter into their imagination that they might find some other place where the empire would not find them?

Sure, they can migrate, but Rome rules everywhere for weeks or months journey (completely unaffordable) in any direction for most people.

The tax-induced positive labour effect is sure to have been relevant in various times and places in history, but I'm skeptical about where all he goes with it.

The tax-induced positive labour effect is sure to have been relevant in various times and places in history, but I’m skeptical about where all he goes with it.

That's exactly what I said, too, so thanks for agreeing with me in a very circuitous, confused fashion.

Remember that one of our working assumptions is that the state has a very tiny bureaucracy. Assuming that you can enforce punitive levels of taxes across the board is not that easy.

#3: I think the charitable interpretation of Brown's claim is that the Late Roman government was holding the Empire's economy together with duct tape, so to speak, propping up certain patterns of production that made sense in a local optimization type of way. And when they let go, the initial collapse turned out to be fatal given the external pressures from invaders. Kind of like an ancient version of the collapse of the post-Soviet economies.

The less charitable interpretation is the much more confused fiscal multiplier one.

Koyama is picking on Brown here but in my experience academic historians as a group are shockingly weak and confused on economics. I often find myself reading claims and thinking, "That's.......not how that works."

Also the change in narrative from "collapse of the Empire" to "transition to the early medieval period" makes me chuckle. Who would have thought that Germans would become the beneficiaries of political correctness?

Indeed, I don't buy the premise that the view he is critiquing is the "current consensus among historians." I'm no expert, but the first two factors that come to my mind are 1) depopulation due to epidemics and 2) the unsustainability of the slave economy, once expansion stopped.

3. Lack of authority to enforce property rights.

The Romans never discovered negative numbers, so the Empire was trapped at the zero bound.

All wealthy economies have always been held together by states.

Not a very useful statement, considering that whatever might be meant by "state" effectively means pretty different things over times and places.

It's useful in the context of a debate about the collapse of a state causing the collapse of an economy. Another state or states forming in the wake of a collapsed state might avoid the collapse of an economy, but a collapse itself has never lead to any improvement in an economy, as the article refered to assumes is the default case that needs to be disproved. The default case is tribes throwing spears at each other, not a modern free market economy.

1. I predict that in a few years the World`s fastest human will be a CRISPR-enhanced Chinese man

Yep, no great stagnation! Onward!

"In a few years"? LOL...don't the CRISPR enhanced Speedy Gaochaos have to grow up first? Also, it's fun you think they know enough to build supermen yet.

My 1997 article "Track & Battlefield" explained why the gender gap in Olympic running was not shrinking, as everybody believed back then, but was growing:

#4...And I would argue that you can alter the risk premium using QE plus a Reinforcing Stimulus as put forth in the Chicago Plan of 1933. It was done. You will get forward looking inflation fears raising the price of long term bonds. However, as the economy grows, the rising rate of inflation will be due, not to increasing government debt, but a growing economy. As the economy gains steam, government programs will decrease due to less need of financial aid to citizens, and, simultaneously, people will be paying higher taxes. Debt will be replaced by growth.

Samuel Brittan FT December 5, 2008 2:00 am 'A framework for economic stability'

Inflation fears don't raise the price of long-term bonds. They lower them.

"Insofar as long rates are rising because of inflationary expectations, this is especially bullish."


3. On the other hand, anthropologist Joseph Tainter, in his book The Collapse of Complex Societies attributes the extinction of once dominant societies, including the Romans, to increasing complexity. Life becomes so complicated that normal humans just won't deal with it any longer.

I didn't think that was quite his theory. It involved diminishing returns, although the more difficult-to-swallow bit for me was that they would go all the way to negative returns. I wrote about his book here.

'they would go all the way to negative returns'

The Soviet Union could be considered an example, though possibly one with complicating factors - for example, being so extremely resource rich allowed the Soviet Union to mask weaknesses which arose in other areas. Nonetheless, the return on Soviet tanks, artillery, warships, submarines, etc. turned out to be negative in the end.

On the matter of the Roman state, I see no mention of what were clearly two of its most important functions, which fell apart as the Roman state fell apart, making it impossible for both the empire to hold together and for its cities to function. One was highways and the other was sewers. When the Ostrogoths conquered Ravenna, first they did was try to fix up the sewers, which had not been worked on properly since the time of Trajan. As it is, in Rome itself, the 2500 cloaca maxima, the old central sewer line, is still functioning and can be seen in the Roman Forum. But elsewhere, failure to keep up the roads weakened trade relations, and sewer breakdowns led to disease. Something about the importance of infrastructure and all that, not just the military.

Too much spending on bread and circuses crowds out spending on roads and sewers.

Decaying infrastructure as a cause and not a symptom of decline is a new one.

4. Cochrane is certainly creative: if policies (and ideology) he has promoted all these years produce poor resorts, rather than question the policies (or the ideology) invert the world, so up is down and down is up, and low interest rates cause deflation. Cochrane could be right. Fat is skinny. Poor is rich. Stupid is smart. Bizarro World!

The real reason the Roman Empire fell is because Donald Trump wasn't around to be emperor. He would have made The Empire great again!

Turtledove should get right on it with a new book.

"When the Latins and the Etruscans send us people, they are not sending their best. Their troops are an embarrassment. They should pay us for our protection. Make Rome great again!"

Did the Picts pay any of the costs involved in the building of Hadrian's Wall? Or was that Hadrian guy all bluster?

#4...And John should not have said this:

"Almost all economics, Keynesian, Monetarist and all the official forecast said in 2008 that after the recession, we will have a very quick bounce back, just as we did in the early 1980s. Once the banks were settled in March of 2009, everybody thought: “Good, we will bounce back up to where we were!” The puzzle is we never actually bounce back.

I think that this illuminates theories. The theory that bites the dust here is traditional Keynesian. It makes explicit predictions that just failed pretty dramatically in the last 8 years."

Don didn't think that, based upon Fisher, Simons, Knight, and Viner...

"Don the libertarian Democrat said...
"Even though the US government is doing other things as well -fiscal stimulus, quantitative easing, and other uses of bailout funds - it is not doing everything it should."

I'll give credit to De Long for seeing that PPIP has an effect on QE, and is one of its benefits.

"Unemployment is currently rising like a rocket"

This is the real problem. If you follow a version of Fisher's Debt-Deflation model, we are currently in it. The unemployment figures are the result of a Proactivity Run, in which employers lay workers off in anticipation of worse times to come. In other words, they are laid off even faster than demand drops. In order to get out of this trap, we need to induce inflation. Inflation will end the Debt-Deflation and ease the laying off of workers. Models describing some natural level of downward spiral are fine, but are inconsistent with a Debt-Deflationary Spiral, precisely because no one knows or can predict its stopping point. This is not simply a lack of knowledge, but part of the inherent nature of Debt-Deflation.

Reply Tuesday, March 31, 2009 at 02:22 PM"

#3. Any analysis limited to economics is incomplete. Victor Davis Hanson made the interesting observation that the Roman Republic lasted 500 years but the Roman Empire on lasted 200 years thanks in no small part to trying to make the empire more diverse and incorporating more peoples into the empire. The Holy Roman Empire lasted a 1,000 years not by trying to bring in Moslems but by letting the different regions of the empire control their own government.

#3 The fiscal system of the late Roman empire is part of a linked cultural, political and economic package. In order to maintain security and infrastructure, in the absence of a flow of tribute or booty, taxation was required. Assessing and effectively collecting land tax across such broad area required an extensive, literate bureaucracy - hence a culture that valued literary abilities and created a civilian elite. Which in turn fed into consumption demand for varied and sophisticated goods. So yes taxation was critical to the system and not due to any kind of "Keynesian" reasoning.

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