Saturday assorted links

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3. and 5. I suspect that these two posts are addressing the same economic phenomena. By that I mean that both inequality and productivity are a function of the demand for labor relative to the supply of it. I'll comment on 5. first: as production was shifted to developing countries such as China from developed countries such as America, the former experienced sharp gains in productivity by the transfer of technology to China from America, but over time productivity gains in both China and America diminished, in China because the abundance of cheap labor discouraged investment in new labor saving technology, while in America because investment in productive capital was replaced with investment in "platforms" (Amazon, Facebook, etc.) and speculative (i.e., financial) assets, the platform economy not requiring nearly as much investment in labor saving technology. Now 3.: in China as the demand for labor increases relative to the supply of labor, wages will increase, thereby diminishing inequality (or the growth in inequality), the increase in wages providing an incentive for more investment in labor saving technology (the latter partially offsetting the former), while in America the continued investment in the platform economy and the growth and returns from finance being dependent on rising asset prices may continue to deliver the secular stagnation that many fear, unless and until Cowen's Great Reset causes a plunge in asset prices and a recalibration away from finance and the platform economy. So there's good news all around: diminishing inequality and rising productivity in China and the Great Reset in America (good news in the sense that Cowen's prediction comes true).

8. The Great Reset will take care of it.

This post by Dietrich Vollrath (https://growthecon.com/blog/Profit-Accounting/) confirmed what I long suspected: the current data for investment, capital, profits, income shares, etc. is inadequate for the type of economy we have today. How do economists expect to help make good policy when the information they have is inadequate.

'How do economists expect to help make good policy'

As long as the policy ensures that the rich are getting richer (in the eyes of the rich), that policy is by definition a good one in the eyes of economists like Prof. Cowen's.

China GOOOOD. America BAAAAAD.
Aieeeeeeee!!!!!!!

Inequality is higher in China than the USA.

Why don't you tell us something about the commies over there?

Revolutionary ideology is a farce because the revolutionaries never give up power?

Indeed. Mao said you need revolution every five years to keep things from rotting to the core. And then he set about making sure it could not happen.

(Over here, we just have elections, which is less bad than the other alternatives, as was famously said.)

America has a better soccer team though

6. The fact that bonded labor is now called slavery seems like re-defining slavery to suit the needs of human rights organizations who want to attract attention. I think chattel slavery, or true slavery, does not exist anymore anywhere.

de facto

There are big differences

If the slavery of the cotton-picking American south and the slavery of the Mamluks who could rise to position of generals while an Ottoman "slave" can both be considered as "slaves", I think it is quite reasonable.

Also, the article states very numerous times numerous precise details.

The position of Mamluk slave under the Ottomans was much freer than that of an indentured servant or bonded slave, etc. But I do not see anyone arguing that those Mamluk slaves were not slaves. In fact, someone will almost certainly come to highlight the worst known situations of any person that can be grouped into that category, mostly for the purpose of negative associations with Islam, while completely ignoring the IN FACT worse situation of many bonded servants who do not meet the most stringent definitions of what a "slave" is.

Working long hours for nothing.

No choice.

That is slavery.

You're using terms that impose a discrete model of a certain social science phenomena through the use of terms like "bonded" vs. "chattel" slavery, then mistaking this model for reality itself, and using the model as proof that the two things are different -- except that they are in your model by definition. It's completely tautological.

Of course perhaps your model really does map to reality. But does it? And even if it does, the assumption is the classification of "chattel slavery" is under all states of the world worse than "bonded labor" is that true?

Interestigly, in the American antebellum many pro slavery intellectuals argued that chattel slavery (I.e outright ownership) was more humane than the way the industrial working poor were treated. The idea being the working poor had distributed masters (capitalists), none of whom had an incentive to keep him alive. Whereas the owner slave had a master who had an incentive to keep the slave working and well.

Strange arguments from past times, but even if we disagree or think the argument is misguided (I do), it's not entirely nonsense either.

The difference between the two clearly can be subtle, and probably it's situationally dependent which is better or worse.

Yes, situationally dependent. Some bonded laborers will live better lives than some wage laborers. Vice versa. It's better to specify what experiences are happening that are directly bad. Obviously beatings are bad. Starving is also bad. Malnutrition rates in India are off the charts. Let's look at overall quality of life. Get the big picture.

I think chattel slavery, or true slavery, does not exist anymore anywhere.
It exists in areas controlled by IS.

And it seems that something looking like chattel slavery still exists, to some extent, in Mauritania.

The article notes that many of the workers have been laboring for years to pay off debts that would have been paid off in 10 days at prevailing wages. The article also goes into some detail about how the workers are kept uneducated, lied to, and manipulated in order to believe they are under a continuing debt obligation.
If the workers were given regular statements accounting for their debt including the interest rates and sum of their wages, there would be a distinction. If the article is accurate though, it's hard to see that there really is one. It seems as if the "bonded" aspect of their condition is more like rhetorical window dressing for what is really just chattel slavery. The owners don't ever sum up the debts are release people when they are paid properly. They keep them working by lying and manipulating them into thinking they are still indebted.

2. Rapidly growing Florida will soon reach a critical point, the neglect of transportation and alternatives to the automobile choking both the area and economic growth. Just getting from Jacksonville to Tampa has become an ordeal, while those residing in Jacksonville or Tampa face the choice between long daily commutes or obscene housing prices. Of course, those who can afford the obscene housing prices (and reside close-in) have no interesting in paying the taxes necessary to invest in alternatives to the automobile, those who can't (and reside in the suburbs and exurbs) reluctant to support alternatives to the automobile because they know it would mean an increase in their local taxes even as they can barely pay their bills now (and with higher wages unlikely in an area with an abundance, and growing supply, of cheap labor).

For about 0.01% (annually) of the $1.07 trilion annual savings that could be had by changing the expensive and ineffective American health system towards the cheaper but higher average quality Canadian system, they could build a high speed rail between the two cities.

Or send everybody to India for treatment and save about 90% while still achieving world-class health outcomes.

http://www.annfammed.org/content/12/5/470.full

"learning while doing"

versus free trade logic

"higher average quality " BS

The roads and traffic in Florida aren't perfect. But they are of significantly higher quality than California or the Northeast Corridor. Even given the state's much higher growth rate. Of the ten metros with the longest commute times, five of ten are in the NE corridor, two are in CA, one is Chicago, one is Baltimore. Only one, Atlanta, is in a high growth or Sun Belt metro.

Average commute times in the Tampa Bay Area are at least 30% shorter than the San Francisco Bay Area. Florida ranks sixth in the nation for fewest roads in mediocre of poor condition (at 26%). In contrast California ranks 43rd (68%), New York ranks 37th (60%), New Jersey ranks 42nd (66%) and Connecticut 50th (73%).

Finally your assertion that car alternatives offer a superior commuting alternative does not hold water. The least car dependent metros, like NY, DC and Chicago, have by far the longest commute times. In New York average commute time for drivers is 29 minutes. For bus users it's 50 minutes. And for light rail it's a whooping 71 minutes. Public transportation has never in the history of the US offered a superior commuting alternative. The only solution to improve commuting is to increase road capacity to reduce congestion. And at new road construction at reasonable costs, the sunbelt states, particularly Florida and Texas, have proven remarkably more efficient than the Northeast and California.

http://fortune.com/2016/03/03/us-cities-average-commute-time/

https://www.transportation.gov/policy-initiatives/grow-america/road-and-bridge-data-state

http://www.governing.com/gov-data/transportation-infrastructure/commute-time-averages-drive-public-transportation-bus-rail-by-metro-area.html

THANK you, bru. The truth hurts (the new urbanist). They soo don't want it to be true that building new road capacity is the way forward.

That more lanes on more roads would mitigate the problem does not constitute evidence that more lanes on more roads is the best solution.

The proper comparison is probably Sunbelt today vs California 1950.

Greenfield construction is easy, especially compared to a sprawl containing 22 million people.

2. Well duh! Most people do not want to be isolated nor crowded, so suburbs are the obvious compromise. Rich people live in very low density suburbs because they can. Middle class people settle for more crowded suburbs because they can't afford to live in wealthy zip codes.

Do we really need economists to tell us what any idiot can plainly see? Yeah, I know 538 is not a den of economists. I do like to see data.

Anecdote: I have a friend and trch coworker who moved from a CA suburb to a tiny apt in London because he HAD to in order to get a job, not because he wanted to live in an expensive tiny apt. in a big city. That said, he and his family make the best of it by enjoying the benefits, such as they are. Of course, why not? Better that than mourn the loss of the good suburban life. He rents out the CA suburban house for the day they return.

Politicians, economists, city planners, and environmentalists all want to stuff us into stacked boxes in crowded cities even as they live in low density suburbs and escape to rich rural getaways. F*%k them!

I think the market is more responsible for that situation that the people you blame.

And if those people you blame were less active on the front, for example with reduced building regulations (often promoted on this site), there would be smaller boxes in more crowded cities. And then they would tell us "the market has spoken - that is what people want". But it is precisely what you agitate against.

In the meantime, protecting what green spaces remain in urban centres will not help with respect to the concerns you raise, but something tells me that your friend in London appreciates the green spaces despite the additional 10m2 he might have afforded in a system which had developed every available green space.

(Ignoring pollution and health costs, of course ...)

If more building was allowed in urban areas, the boxes would get bigger not smaller. The boxes are getting smaller right now because people are splitting up the existing buildings into smaller units. If they could build upwards (not necessarily on green space) there would be more units available, and larger units being more desirable and prices being lower, the market would tend to trend towards bigger units. (Also it would allieviate the pressure to cram more units into the same existing structures).

People aren't moving to the suburbs because they really want a small place in the city but can't afford it. They move to the suburbs because they can't afford the *large* place in the city at the price point in the city for the size they want. Obviously, there is a trade off between size and location, and people, right now at current city prices, tend to opt for size over location. That's the market speaking. They aren't going to suddenly start opting for even smaller boxes in the city if more of them get built. (Again, if the price drops, they will opt for a larger place at the same price point, not a smaller place at a lower price point - as they are already opting for size over location).

Also the desire for reduced building restrictions really applies to entire metro areas, not just the dense urban part. People should be able to build up, and out, wherever the market demands. Some people want urban condos, lots of other people want more single family homes in areas with lots of green space. There are, pretty much by definition, NO urban areas composed of single family homes surrounded by greenspace. Those are called suburbs.

Single dwelling houses would be replaced by more apartments and condos if zoning restrictions were eased.

That means smaller units.

Whether that means one way or the other is good policy is open for debate, but don't try to tell me that units will get larger when developers can more easily bulldoze houses to build condos.

Yes, clearly in a profession where the work can be done from anywhere, they were zero open positions anywhere in the world except a European city that apparently has banned all commuting.

Yes, ironic isn't it? The competition for good jobs in high tech is fierce in Silicon Valley, and the commutes arduous. My former colleagues are dispersed throughout SV; Portland,, OR; Seattle, WA; and Austin, TX. I don't know anyone who has moved to Boston - my former home - or NY. Conversely, as a hiring manager it was almost impossible to entice employed candidates to move to California due to high state and local taxes and very expensive housing. The only people willing to move to California were immigrants, especially from India, and most of them were just neophytes or journeymen, not the superstars the media would have you believe.

Buying a cheaper home in a suburb and commuting to employment is rationalized in various ways but those ways are all bogus. The suburbanite probably spends less time out of doors than his urban cousin, who is a pedestrian on more occasions than the SUV driving cul-de-sac resident. Once in the shelter of the home, what difference does it now make where one lives? Once plopped down in front of the television, passed out on the couch or snuggled under the covers, it doesn't matter if you're in Manhattan, New York or Manhattan, Montana.

They do it for their families. They commute long hours but their kids ride bikes in the street, play in safe local parks, swim in unpolluted creeks, and go to nice schools that actually have theater, band, clubs, and sports and they don't have to worry about kids that think it's cool to bring a handgun to school.

Yes. Also, it's just bogus that suburbs don't have anything to do within walking distance. They tend to be full of parks and playgrounds and often have bike and jogging trails that connect you to local recreational facilities like the community pool, library, etc. It's just that they are kid-centered things and not cafes and restaurants and trendy shops.

Well, we now know now you spend your time. I spend my spare time doting on the wild native plants and watching the woodpecker family on my property, and that makes all the difference. My kids go to a wonderful school. I know all my neighbors by name, leave my car unlocked at night, bikes out in the yard unlocked, forget to bring in my tools, and have never had a property crime in 30 years. I have been to Brazil with my Afro-Brazilian wife many times and have seen, close up and personal, how an enormous underclass lives. Average may be over, but we're going to miss it.

Buying a cheaper home in a suburb and commuting to employment is rationalized in various ways but those ways are all bogus.

I notice in your vision of suburban life, the children are suspiciously non-existent. People are assumed to come home and immediately plop down on the couch to watch TV.

I'd agree that for childless professionals, suburban living doesn't make so much sense. But once you have kids, you suddenly start placing a high priority on things like the level of traffic in the street you live on, which bears a direct relationship to population density. Not to mention the amount of thru-traffic by non-residents. Cul-de-sacs are desirable because there is NO thru traffic - anyone parked there is either a reisdent or a visitor to a neighbor. And hence you can let the kids play street hockey and not worry about them being run over or abducted.

#3. Is capitalist growth pushing countries toward lower inequality again?

"Does capitalist economic growth lead to greater inequality, or less?"

Economists still can not definitively answer this basic question after 200 years ?
What is it that economist academics do for a living ?

Many economists of the sort that populate the GMU econ dept. refuse to accept what Marx wrote a century and a half ago - and they are well paid to do so.

I'm not an economist, just another bloviator on the Web.

I think the problem is that we do not carefully distinguish consumer-surplus-creating activity from rent-seeking. Indeed, an activity can be a mix of both. We just mark it "profit" and this leads us to be incoherent.

Marx was made out to be foolish by accident - he subsumed something akin to Malthus in his work and was just wrong enough to be dismissed. I'd say Otto von Bismarck took a basic Malthusian premise and went another way,and found more success. The Fabians had yet another heresy and found success. All roughly missed the effects of color chemistry on farming. You can still see the stain of Physiocrat thinking in USAian (and perhaps other) politics today.

Being paid isn't necessary to hold that opinion - I can't make the Marxist programme work in my head no matter what I do. I have information-theoretic biases against it. But I think a lot of people who share my opinion do so on a post-hoc rationalization basis. I do not think Tyler is one of those people. I tend to think of modern capitalism as rent-seek-ey and therefore "not true capitalism", which is fraught with "no true Scotsman" peril.

"What is it that economist academics do for a living?"

They teach future teachers of economists to teach future teachers of economists to teach...

Sometimes yes, sometimes no.

Can I have a Nobel for this? Or is it just common sense?

On #4 - when China runs out of farm kids, they may well become just as complacent as the US has. This transition happens exactly once.

#4 Meanwhile, "dynamic national spirit drives China's growth" and makes the countrysmtrong enough to destroy the white devils. Banzai! Banzai!

Banzai? They speak Chinese. And they call us yang gue zi- western or foreign ghosts or devils, even Brazilians.

"2. American suburbanization is continuing."

No surprise to anybody who's read Robert Bruegmann.

I'm a liberal moving away from the city core with all the liberals while also turning the city periphery congressional district into a Dem majority. No surprise to anyone who followed Barbara Comstock's influential decision to not vote for the AHCA. It'll only get worse for the GOP.

>It’ll only get worse for the GOP.

By definition - because they are on top.

Keep trying to make yourself feel better, big guy! Only 3.8 more years!!

(unless....)

If you've read Bruegmann's book, you also know that this isn't a U.S. thing or a red-team/blue-team thing. People have been sprawling since Roman times. They've been sprawling all over the world.

As for leftists moving to the leafy suburbs, my first thought is, "Yep, revealed preference". But the nice thing is that statists can't do nearly as much damage (at least on a local level) in smaller, lower-density communities. The scope just isn't there for grand schemes. And however lefty the population gets, the towns and school systems exist in a state of permanent competition with others nearby for people and businesses (and it's quick and easy to cross borders to work and shop), so crime, taxes and the cost of public-sector employees have to be kept under control. As a libertarian living in Ann Arbor, I know this from personal experience. The population couldn't get a whole lot more lefty (80% for Clinton) and city government does do some dumb things, but fortunately they tend to be more of the 'symbolic' than 'ruinously expensive' variety.

Good point.

"Statist" was a charge that could be used against anyone from state communists to moderate Republicans - as long as those "statists" were in charge. It doesn't seem especially useful this week.

Tyler retweets the observation that the Senate has made no move on healthcare either. They are caught between a real rock and a hard place. Any national health plan would be "statist" and bad, and any plan that removed "the state" would destroy lives.

A harsh reality for folk who enjoyed the freedom that came with no responsibility. You can't just shout "statist" and say you've done your job for the day.

...AHCA...

As Reagan said, "the closest thing to eteral life is a government program". Indeed, such programs create permanent constituencies, whi h is why the dems rushed a poorly designed program into a partisan vote before Brown came into office. As Pelosi blurted, "We have to vote for it to find out what's in it." Surprise! AHA is unlikely to be repealed, the media human interest stories will ensure it's survival.

The big question remains. Can the new normal survive in a democratic republic? Will the 90% passively accept the end of the middle class and accept the new aristocracy? Is Walter Scheidel correct? Is Mark Blyth correct when he says "the Hamptons are not a defensible position"? If Trump fails - and I think he will - what's next?

"...and what rough beast, it's hour come round at last, slouches toward Bethlehem to be born..." - W. B. Yeats

1. Holy uncanny valley, batman. That chatbot will haunt your prostate.

#4 China has significant complacency from the intellectual student class. There are cut throat competitions at the fringes but it appears that the intellectual student class simply quietly coasting through high schools and universities. The squeaky wheels get all the attention. And those that cannot hack the competitions study in US. China has international travel controls and it is unlikely that they will allow their very top students to study overseas unless they are from important families that will ensure the return of their children. A Stanford study of the Chinese university students,

https://www.nytimes.com/2016/07/31/world/asia/china-college-education-quality.html

Chinese freshmen in computer science and engineering programs began college with critical thinking skills about two to three years ahead of their peers in the United States and Russia. Those skills included the ability to identify assumptions, test hypotheses and draw relationships between variables. ... After two years of college, though, the Chinese students showed virtually no improvement while the Russians made substantial progress, though not enough to catch up. ... testing for the United States is not yet available.

When students reach college, the pressure vanishes. “You get a degree whether you study or not, so why bother studying?” said Wang Qi, 24, a graduate student in environmental engineering in Beijing.

Though the data for US is not yet available, I speculated from the distribution dynamics of the National Merit Scholarship semi-finalists there will be east coast complacency and west coast striving. The system dynamics for California are open ended with groups reaching much higher and lower performances and with a region with strange attractor between them so that it might be possible for a point at the low end to statistically sling shot to the top. For NewYork the dynamics are that they are practically closed and complacently regressed to two seperate means (strange attractors) with a barrier (region with strange repeller) between them. This is further reinforced from the results from the NatureIndex.com survey that the research performance of Harvard has been dropping for the past three years and that for Stanford it has been rising steadily and catching up with Harvard.

1. Australian government creates advanced chatbot, fails to provide large portion of population with access to enough bandwidth to play a youtube video in real time. C'est la vie.

I didn't know Angus Deaton was an idiot. Wait until the end when he favors socialized medicine not because he likes socialized medicine but to break up pharmaceutical fortunes. Idiot laureate.

"wealth inequality was indeed low in the 18th century, but the crucial point is that early America was an agrarian society of cultivators with an open frontier. No one needed to be poor when land was available in the West."

There were plenty of poor people in the West but they weren't as poor as the natives shot full of bullet holes by Sheridan's troopers and dispossessed of their land to make room for immigrants whose departure from Europe put a band-aid on some of the social problems there.

2. At what point does a 'higher-density suburb' become a 'lower-density city', or at least a 'moderately-dense, expansive town'? I grew up with 'suburb' meaning single-family houses with proportionally large yards, poorly developed and scattered retail, no real center, and few meaningful nodal points (except maybe the larger high schools). You had to do some driving to get into the city.

I'm curious if these definitions are relative, and if they've changed over the decades? These higher-density suburbs don't look like the suburbs of the 1960s and '70s. Perhaps that's why the cited article starts by talking about cities and suburbs, but then shifts to just talking about 'metro areas.'

They vary from place to place. Some suburbs are rural towns that have been absorbed into the metro area (ex. Leesburg, Virginia). Some are completely new subdivisions crafted out of whole cloth and zoned exclusively residential - the traditional suburbs you are thinking of. Some are new developments with fakey "Town Center" areas and mixed-use zoning - a more recent development that started happening when people realized how stupid it was to zone large areas exclusively residential. The ones which are former small towns that got eaten tend to be more authentic and walkable, IMO.

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