Month: April 2017
Saturday assorted links
2. The RNA editing of the octopus. Recommended.
3. Cowen’s Second Law: optimal rat tickling edition.
4. Export price elasticity > tariff elasticity > exchange rate elasticity.
5. After the Storm is the best movie I’ve seen so far this year, it is a study in Japanese “complacency,” the reviews are positive but none are insightful.
6. The museum of failed innovations.
7. “Besides, he points out, Scotland is closer to Newfoundland than Hawaii is to California.“
Globalization is more robust and stable than you think
That is the topic of my latest Bloomberg column, here is one bit from it:
The most surprising result from the research on trade and distance is that the ability of trade patterns to surmount barriers of distance has not in fact increased over time. You might think that with the internet, highly efficient ports and powerful multinationals, geographic distance would predict trade patterns less well over time, but that has not been the case. As one study noted, according to a meta-analysis, “trade decreases with distance by at least the same amount today than thirty years ago.”
Again, to put that into concrete form, the tendency of the U.S. to trade with Canada or Mexico, relative to trading with Australia or Turkey, is at least as pronounced as it used to be.
And this:
The pessimistic reading of trade clustering is that human beings simply have not spread their wings very far. But these days, I find the gravity equation to be a comfort. Given that our ability to trade across great distances has not outraced our ability to trade nearby, I am not expecting any kind of a major trade snapback or correction. The evolution of trade, rather than throwing out fragile, delicate spokes, has instead made some fairly hardy connections, sturdy enough it seems to survive Trump’s rhetoric.
Do read the whole thing.
Moving to China and how to do it
I’m planning on…spending the summer in China before starting the program in Beijing in September…How much emphasis should I spend generally on language study vs. travel in China vs. reading in English about the country? For this summer, I was thinking of holing up in one city and finding tutors to do 10hrs/day of study, traveling around the country, or some combination of the two.Here’s how one blogger described what three months of intensive gave him: “My level of Chinese is sufficient to deal with most basic necessities of living, travel, make new friends and have interesting conversations entirely in Chinese. I can also read most of simple emails, menus and signs, although my reading still lags behind my speaking ability. I’m still not at a level where I could easily understand group conversations, movies, television or read books or newspapers.”Also, any cities in particular you’d like to spend three months in?What type/mix of books should I be reading over the next few months in the states to prep? Any particular titles come to mind?Ideas for Master theses in economics that would benefit from being in-country even with relatively limited language ability?
TC here: Tough questions! I would offer a few points:
1. You can’t study a foreign language for ten hours a day, as you need to intersperse more rewards to keep yourself motivated (like most things!). The best way to learn Chinese is how I learned German, namely through a romantic partner. That probably implies having a home base city for a big chunk of your time.
2. You need to ask how well you can handle air pollution, especially for the winter months. Overall, I prefer Western China, which also tends to be less polluted. Yunnan province is to me one of the very best visits in the world, and the environment there is downright pleasant, but everywhere I’ve gone in China was worth visiting. Of course Beijing, Shanghai, and Shenzhen are where much of the action is at, of those three I enjoy Beijing the most (by far) but would pick Shanghai to live, mostly because it has less air pollution.
3. It is hard to tackle China through books, and single titles don’t get you very far (but here are a few recommendations). Maybe start with John Keay for an overview, but finish up by reading it yet again. Along the way, pick a few particular pre-communist topics, such as the Taiping rebellion, the history of a part of the country, Christianity in China, the Great Divergence, or the Grand Canal (understudied!), rather than just pawing through dozens of basically similar books on “where China is at right now.” If I had to suggest one topic, maybe it would be “reading Chinese history through the lens of the state capacity idea,” as my colleague Mark Koyama has been working on.
4. The economic history of China is an area where economics research is making some very rapid advances from a pretty low base of knowledge.
5. Ask someone who has moved to China.
Kevin Hassett has been nominated to chair the Council of Economic Advisers
A very good pick, and I will remind you once again it is “Advisers” rather than “Advisors.”
Here are previous MR entries on Kevin Hassett.
Friday assorted links
1. Ben Casnocha and Erik Torenberg are raising a $50 million investment fund.
2. Folsom River Blues/Pinball Wizard Mashup.
3. Krugman’s 1991 write-up on Icelandic exchange rate policy (pdf).
4. Is it better if no one walks on escalators? (NYT)
5. How well did Keynes’s art collection do as an investment?
The Uttar Pradesh Association of Dead People
The amazing story of Lal Bihari, founder of the Uttar Pradesh Association of Dead People, illustrates many of the issues I wrote about in my post on the chaos of land records in India.
When Lal Bihari first heard about his death, he thought it was a joke. He smiled at the lekhpal, the village officer responsible for land records. But there was no smile in return. “Lal Bihari died last year,” the lekhpal repeated. “I don’t know who you are.” That was when the 22-year-old from Amilo in Azamgarh, Uttar Pradesh (UP), realised something was amiss. He had come to his birthplace Khalilabad for residence, income and caste certificates. He needed them to get a bank loan for his handloom business.
“But I am here before you,” he said, puzzled. “You know me. I have met you before.” The lekhpal showed him the land record, a piece of paper, and read it out. It said that the previous year, 30 July 1976, after the death of Lal Bihari, his one bigha (one-fifth of an acre) of land had devolved to his cousins. He was officially dead.
Lal’s cousins had bribed a local official and declared him dead in order to take his land. One would think it a fairly easy procedure to prove that you aren’t dead but even in the United States this can take months. In India, it took 17 years.
“The price of my death was Rs 300,” says Lal Bihari. After he discovered he had ‘died’, Lal Bihari went to a lawyer, who said, “A dead man has come to me,” and laughed. Neighbours would mock him—“Look, there goes the ghost.” He felt humiliated. Since a court case could take decades, he visited various government departments. He beseeched and quarreled with officials. He filed complaints. In vain. “The enquiry would be conducted by the very officials who had listed me as dead,” he says.
Finding no help from officials, Lal began to engage in more and more desperate measures:
In 1985, he tried to get himself arrested. He kidnapped his cousin, a boy named Baburam in the fifth standard, whose family had shown him dead. But once he picked up Baburam from school, he didn’t know what to do. “I took him to a movie every day,” he says.
After five days, when the family did not file a police complaint, he decided to soak Baburam’s shirt in goat’s blood and send it over. “I thought it would scare them into going to the police,” he says. But the butcher he knew didn’t help and told him to go to the poultry seller. “The blood from a chicken was never going to be enough,” says Lal Bihari. He dropped the idea. The plan flopped, though Baburam got a new shirt.…He bribed a policeman Rs 500 to get a case registered against him and his cousin for rioting. The policeman returned the money when he discovered the motive. He applied for widow’s pension for his wife, Karami. “They would refuse because I was alive. This would be a record for me,” he says. But the government’s refusal made no mention of him.
Next, Lal Bihari sold his property to contest the 1988 Lok Sabha election from Allahabad against former Prime Minister VP Singh. Surprising even himself, he got about 1,600 votes.
Lal’s bizarre case began to get newspaper attention and finally in 1994 he was once again declared alive and his property restored. The story, however, doesn’t end there. In his adventures, Lal had befriended many dead people and so he founded the UP Mritak Sangh, the Uttar Pradesh Association of Dead People. The association organizes marches of the walking dead. In 2003 Lal Bihari won the IgNobel peace prize.
Lal Bihari continues to be very much alive.
Hat tip: Amit Varma.
*The Ideas Industry*, the new Dan Drezner book
The subtitle of this new and fascinating volume is How Pessimists, Partisans, and Plutocrats are Transforming the Marketplace of Ideas. Think of this as an update of Richard Posner’s work on public intellectuals, but explaining where a world of social media and higher income inequality and greater polarization has put us. Wisely, Drezner does not idealize the milieu of Susan Sontag and the Commentary crowd, but still some things have become worse, due largely to the lack of trusted gatekeepers. For one thing, current superstar status encourages shortcuts and pandering and the evolution of thoughtful “public intellectuals” into evangelizing “thought leaders.” On the macro level, we are in an equilibrium where every position is argued, verification in the eyes of the reader is doubtful, and the level of trust keeps falling. That in turn lowers quality, which causes trust to fall further yet, and that also has feedback onto the kind of superstars that rise and persist.
And yes, individual offenders are named! (You’ll have to buy the book for that.)
In my conversation with Dan yesterday, we pondered whether a high water mark of sorts, for the quality of public intellectual discussion, might have been reached in the late 1980s (e.g., Fukuyama, Nye, Huntington, Friedman, but just a hypothesis, I am not attributing this view to him). Ultimately I still prefer the present day, having become addicted to freedom of entry and large audiences and a higher percentage of weirdos on the content side. Yet the larger audiences (yes, you!) are a mixed blessing, and the desire to pander to them, and to give them a voice on social media, ultimately may lead to lower quality feedback being passed along to elites. The ongoing polarization and exaggeration of discussion is hard to stop, for instance one of the most famous and highest status public intellectuals covered by Dan — Paul Krugman — only a few days ago on Twitter called Trump a “corrupt Russian puppet.” Krugman is not even one of the figures Dan criticizes.
Going back to Dan’s book, what he prefers is — to summarize it bluntly — TED talks with rebuttals and referee reports. I am fine with the idea, but I wonder if it doesn’t just cement in the outcome where all comments and positions are staked out with both a vehemence and a lack of resolution. And as Dan himself points out in other contexts, criticism itself cements in the superstar status of the targets in most cases, and a reasonable consensus may be as likely to recede as anything else. Ideally Dan wishes to ease “idea exit” rather than restrict “idea entry,” but I am not sure you can have the former without some version of the latter.
There is a very interesting chapter on how this new world has boosted the relative status of economists amongst the social sciences, for instance relative to political scientists. The first person observations about Dan’s own career are extensive and fascinating.
My take on all this is to prefer a higher-trust-in-experts equilibrium for its practical properties, yet without believing the trust actually is deserved, giving me again a slight affinity with Strauss. Is there an equilibrium where a high level of trust can be maintained more or less forever? Or is it like an optimal resource extraction problem, namely that most kinds of trust end up being cashed in, you just hope it was for some good purpose (public support for the bailouts to avoid another 1929?, to cite another of Dan’s books.)
Two topics I wish were discussed more were a) the corrupting influence of consulting, and b) the unwillingness of many intellectuals to address particular issues at all, rather than bias in what they do say. Of course in both cases accountability is harder to enforce; on the former there are typically no public records, and on the latter it is rarely the responsibility of any particular individual to speak up (“I will pontificate on all sorts of things, but I don’t work on that topic.”) The resulting lack of transparent, identifiable violations can make these problems all the more insidious.
Over coffee, or rather mineral water for me, I challenged Dan on the notion that social trust actually has gone down — not in businesses, I would say — and offered contrarian takes on Jared Kushner and the trajectory of American power, maybe you will hear more about those soon. In the meantime, this is one of the thought-provoking books of the year, most of all for those who seek to better understand the world we are all swimming in.
What can we learn from the history of The Machinery Question?
Recently I read was Peter Gaskell’s Artisans and Machinery, from 1836 (later reprinted).
So much of his discussion of handloom weavers could come out of an Atlantic Monthly article from 2015, albeit with different historical references. However today’s stories typically claim that automation favors tech skills, whereas Gaskell argues power weaving put the skilled workers out of jobs and empowered the less skilled machine supervisors.
Just as Bill Gates called for the taxing of robots, back in the early 19th century many people called for the taxing of machinery. Gaskell believes this would help labor in the short run but in the longer run actually stimulate more innovation — to avoid some of the tax by lowering capital costs — eventually making labor’s lot all the worse.
Gaskell dives into sociology and suggests that the earlier, less technology-intensive workers were more religious, more devout, and less likely to make political trouble. Distinctions of rank were in fuller force, and children were less likely to be pressured to work outside the home. Insofar as the man worked inside the cottage as a sole proprietor, this encouraged an ethic of individual responsibility. Society was truly decentralized, and those were “the golden times” of manufactures. The downside is that such individuals were less likely to be literate, and of course output was lower, including food output, and prices were higher.
Since women and children also could work the new power looms, that increased the supply of labor and put downward pressure on wages and on male wages in particular. Collectively speaking, it would have been better to preserve division of labor within the household, and keep male wages relatively high, and female household production relatively high.
One of the more charming sections of this book was the chapter on how factories spur too much of the animal passions, as men and women are working together long hours and will eventually…dine with Mike Pence. Furthermore, factory work leads to new norms where women can have premarital sex and still expect to marry someone else later on, without much fear of a reputational penalty. Premarital sex then rises all the more, and then the looser norms are passed down to the children, worsening the problem all the more. Eventually England will end up with the sexual norms found in the “warmer climates.”
Overall, Gaskell paints a picture of a world where there are positive social externalities from having individual males tied to pieces of land. Along those lines, he offers a kind of Georgist critique of the countryside, where too much land has been tied up in speculative enclosures.
Given ongoing mechanization, only in the long run can a society find a “healthy and permanent tone” once again. He is optimistic about the long run, but not about the transition.
I don’t exactly agree with all of these perspectives, but I was impressed by the intricacy and also clarity of the analysis in this book, which usually does not receive significant mention in the history of economic thought.
Here are various copies of the book. Even Maxine Berg doesn’t cover Gaskell much.
Voluntary dining in hospitals
Label this not The Department of Why Not but rather The Department of Why?
The Howsers are far from the only regulars at the Castle Creek Cafe, located inside Aspen Valley Hospital. It’s a popular breakfast spot for city workers. It also feeds people on both sides of the law; police officers visit daily, and the cafe delivers to inmates at the local jail 7 days a week. The cafe makes a point of welcoming community members with no hospital affiliation. And its menus, made available to view a month at a time, include items like herbed farro pilaf, corn soufflé, and panko crusted cod. We’re a long way away from institutional slop. [TC: speak for yourself, buster!]
The Howsers discovered the cafe, which Mary calls “the best kept secret in Aspen,” after having some tests done in the hospital. She says, “Never in my wildest dreams did I think hospital food could be tasty!” The experience has even inspired them to check out restaurants at other hospitals.
One Colorado hospital restaurant that should be next on their list is Manna, within Castle Rock Adventist Hospital.
I am sorry people, but I am going to stick with theory on this one. No data will be sampled, unless you count this enthusiastic description from Tim Davis as evidence of sorts:
“Their menu has real gourmet style food you would expect from a high priced restaurant, but sold to you at a much more affordable price,” he says. One dish is maple glazed duck confit, consisting of a maple glazed duck leg served with swiss chard and spätzle, for $9. The grilled Thai cabbage steak, with marinated cabbage, spicy lime dressing, and shishito pepper, is even cheaper. Their burger buns even come adorned with a monogrammed M.
A further advantage is that the staff don’t push you out the door to leave, in addition the dining rooms are spacious and somber.
Mises was right about the a priori!
Here is the article, with further testimonials, and for the hat tip I thank Steve Rossi.
Thursday assorted links
1. The rising popularity of Indian food in Britain, circa 1957.
2. How do you eat your chocolate bunny? (Cowen’s Second Law) “Vast majority prefer to start with the ears.” Here is the original research.
3. I have seen the homeless in San Francisco do far worse than this. And bring back the granny flat.
Alcohol Bans in India and the United States
The Indian Supreme Court has just banned sales of alcohol within 500 meters of a national highway. The ban affects not just liquor stores but tens of thousands of restaurants and hotels. In response, the Rajasthan Public Works Department announced that they would now recategorize highways in urban areas as roads! Other states may follow suit. (David Keohane at the FT has further background on the India ban.)
Lost in the shenanigans is that even if the ban were implemented perfectly it’s not at all obvious that it would reduce traffic accidents. Alcohol can be easily stored and if you are thirsty driving 500 meters doesn’t seem like very far to go to buy alcohol.
Entire counties in the United States have banned alcohol but that doesn’t seem to have reduced traffic fatalities. It may even have increased fatalities because residents of dry counties drive to a wet county to find a bar and then they drive drunk for longer distances as they head home.
The surveillance culture that is Sweden
The syringe slides in between the thumb and index finger. Then, with a click, a microchip is injected in the employee’s hand. Another “cyborg” is created.
What could pass for a dystopian vision of the workplace is almost routine at the Swedish startup hub Epicenter. The company offers to implant its workers and startup members with microchips the size of grains of rice that function as swipe cards: to open doors, operate printers, or buy smoothies with a wave of the hand.
The injections have become so popular that workers at Epicenter hold parties for those willing to get implanted.
“The biggest benefit I think is convenience,” said Patrick Mesterton, co-founder and CEO of Epicenter. As a demonstration, he unlocks a door by merely waving near it. “It basically replaces a lot of things you have, other communication devices, whether it be credit cards or keys.”
Here is more, via Samir Varma. Personally, I would rather sponsor a few seats at that crucifixion in Manchester…or better yet sit next to the bishop.
Thwarted Manchestertum markets in everything
A fundraising plan to hold a mock crucifixion of members of the public in Manchester city centre has been cancelled after Church of England clergy raised concerns it was blasphemous and unsafe.
Organisers of the Manchester Passion Play, which will tell the story of Christ’s crucifixion in the city’s Cathedral Gardens on Saturday, offered “the full crucifixion experience” for £750.
The offer, posted on the Manchester Passion 2017 Crowdfunder site, was removed after members of the play’s organising committee, which includes C of E clergy, expressed concerns it was potentially dangerous and blasphemous.
Reverend Falak Sher, a canon at Manchester Cathedral and chairman of the organising committee, said he vetoed the idea when it came to light.
He said: “When I saw it I did not like it, I thought it was disgraceful. The whole message of the cross is hope and love. When I saw this I was not very happy and asked the committee to take this one down.
“We didn’t like promoting the event in this way for £750. I thought it was not a very positive message when dealing with a message of love and hope.”
And yet the article gets better, and indeed draws upon economic analysis:
Stewart-Clark, who runs a business importing timber, said that the event had grown since it was first conceived to include a cast of 120, and 80 stewards. “The whole thing just got bigger and bigger and, of course, with that comes the infrastructure cost,” he said.
“Instead of being a £20,000 play it became a £55,000 play and the burden on raising money then falls on us. We were trying to think up some ideas, just bouncing around what would be good, and someone came up with the idea of letting people be crucified for £750.”
Stewart-Clark said that he did not think the idea was blasphemous, but that it was on “the grey line” and tasteless. “You have clergy wanting to play it safe and businessmen like me trying to raise the funding,” said Stewart-Clark. “There was a difference of opinion and what was a small disagreement has got out of all proportion.”
I enjoyed this sentence:
He said that he had never known anyone to fall off such a cross.
And this one:
Stewart-Clark said there were plenty of other bad fundraising ideas that were scrapped, including charging people a fee to sit next to the bishop to watch the play.
Here is the full article, interesting throughout, and with a photo of the initial fundraising ad. For the pointer I thank John B.
*Corruption: What Everyone Needs to Know*
That is by Ray Fisman and Miriam A. Golden, an excellent book, the subtitle says it all. And yes it does also cover how to stop or at least limit corruption.
Wednesday assorted links
1. Are rents in high-productivity cities actually starting to fall? And the dark side of cities? (speculative)
2. One way, using book recommendations, to understand who is on Quora.
3. In which regions are Americans most likely to wear seat belts? And does the Alt Right love single payer health care?
4. Bryan Caplan on the rationality community. I don’t think he agrees with this framing, but I read him as more critical of their rationality than I am.
5. Why new foods taste better when you’re on vacation. And sex differences in the human brain.