Month: August 2017

Are we just practicing “defensive innovation”?

That is the topic of my latest Bloomberg column.  Electric cars, insofar as they limit climate change, are an example of defensive innovation.  Here is further explanation:

Defensive innovation is when you create a new product or capability to protect yourself against an impending disaster, such as the worst scenarios for climate change. It’s important, of course, to practice defensive innovation, but don’t confuse it with progress. The defense only stops your living standards from falling.

The military response to foreign threats is another example of defensive innovation. The risk and potential costs of cyberwarfare are escalating rapidly, and terrorist threats seem worse than they did in the 1980s or 1990s. The best case scenario is that we come up with better means of tracking and hindering cyber and terrorist attacks — by cutting off funding or by tracing and halting potential perpetrators. Those too will be defensive innovations, aimed mostly at preserving capabilities we already have.

The American military might someday develop better protection against the new threat of North Korean intercontinental ballistic missiles, which might be capable of delivering nuclear weapons to U.S. cities, possibly even New York and Washington. Imagine something akin to Israel’s “Iron Dome,” but protecting a broader geographic area against a greater diversity of weapons. That would be an impressive achievement, but would be an essentially defensive innovation.

Here is the uh-oh sentences:

Note that in the earlier stages of economic growth, there is usually less defensive innovation, if only because there is less to defend.

Do read the whole thing.

My favorite things Austrian, part I writers

Yes, I am in Vienna, but I will take this country in discrete chunks because the contributions are so significant.  Today is literature, here are a few remarks:

1. Thomas Bernhard.  One of the very best post-war writers, obsessive and funny and extremely neurotic.  The Loser [Der Untegeher] is the one that works best in English, though his unique style is not at its most fevered pitch.  Wittgensteins Neffe [Wittgenstein’s Nephew] is my favorite, one of the smartest and funniest novels I know, close to perfect.  Das Kalkwerk is entrancing, though I suspect unreadable in English.  He remains grossly underrated in the English-speaking world, mostly for linguistic reasons but also he is a rebellion against the idea of a culture of entertainment.  In my personal canon he is one of the more significant writers.

2. Hermann BrochDeath of Virgil is a 20th century classic, again much under-read amongst the American educated classes.  Die Schlafwandler [The Sleepwalkers] is impressive, and perhaps seen as his major work, but it is more uneven in quality and eventually it falls apart.

3. Robert Musil. There are wonderful and historically significant major passages in The Man Without Qualities, but the drama loses its interest, the loose ends are not tied up, and ultimately I will call him overrated, especially compared to Bernhard or Broch.

4. Peter Handke.  In German only, I say, and in any case not my taste.  He is serious about politics in exactly the wrong way, and I hope future generations reject him.

5. Elfriede Jelinek.  Many were surprised when she won the 2014 Nobel Prize in literature, and you are most likely to know her for writing the book behind the movie The Piano Teacher.  Like Wagner, you could say her work is “better than it sounds,” but still it doesn’t sound that good.  I find it irritating and offensive, plus she is a communist.  Nonetheless, irritating fiction is better than boring fiction, see “Günter Wilhelm Grass.

6. Karl Kraus.  I used to think his work would eventually “come together” for me, but the more of it I read, and the more I read about him, I conclude he is a figure of historic interest only, and a good aphorist, but not an enduring literary artist.  He was a keen satirist of the mores and totalitarian tendencies of his time, and that is to be appreciated.  But if you try reading the rambling 500-page The Last Days of Mankind, in either English or German, you will conclude it was a work of its time only.

7. Arthur Schnitzler and Hugo Hofmannstahl.  Both remain underrated, and don’t forget Hofmannstahl’s libretti for Richard Strauss, including Der Rosenkavalier.

8. Christoph Ransmayr.  He is popular in contemporary Austrian literature.  I was not convinced, but will try again, if you love The Last World let me know.

9. Heimito von Doderer — I have not yet read him but am hopeful.

9b. Ingeborg Bachmann.  I just bought some this morning.

10. Johann Nestroy.  From the Enlightenment, mostly a playwright, worth spending some time with to get a perspective on Austrian literature before the 20th century.

11. Sigmund Freud and Ludwig Wittgenstein are both often best read as literature.

12. Stefan Zweig. The World of Yesterday is a favorite, sad and bittersweet, and it treats the European civilization that was passing away at the time of the Second World War, still relevant.  Zweig committed suicide in Brazil, here is an excellent biography.  The rest of his fiction still is read around much of the world (not so much America, famously in Russia), but I find it pretty ordinary and of its time.

I’m not counting Canetti, Kafka, and the like, who are not properly Austrian, though they lived in the Empire.  Rilke does not count either, though he is one of the greatest of poets.  Joseph Roth was born in Galicia, yet I think of him as an Austrian rather than Polish writer, again still somewhat neglected in the English-speaking world.  Try Radetzky MarchFranz Werfel I find ordinary, though I have not yet read Forty Days of Musa Dagh, for some his masterpiece, I did buy a copy of that one recently.

The bottom line: There are amazing wonders here, and yes “weird stuff.”  Most of the educated people I know are not clued into them.

Tuesday assorted links

1. Why did the Polish power grab backfire?

2. Why did Spotify dampen the loudness of its music?

3. University of Vermont medical school really is moving to zero lectures.  They claim a ten percent retention rate for the material in the lectures, and that is for a quite elite group of students.  What is the rate elsewhere?

4. Arnold Kling on the “safe asset shortage.”

5. Could 3000 Jedi beat 60,000 medieval foot soldiers?  A simulation.

The import of slavery for the South

The South’s enormous economic stake in slavery far outweighed the impact of protective tariffs on its income.  In 1860, the aggregate value of slaves as property was $3 billion, nearly 20 percent of the nation’s wealth.  The value of slaves was more than 50 percent greater than the capital invested in railroads and manufacturing combined, a calculation that excludes the value of land in southern plantations.  Slavery generated a stream of income that enable overall white per capita income in the south to approximate that of northern whites.  In the seven cotton states, nearly a third of white income came from slave labor.

That is from the new Douglas A. Irwin book on trade policy, Clashing Over Commerce: A History of US Trade Policy.

A Theory of the Size and Number of Nations

Gancia, Ponzetto, Ventura provide a precis to their very interesting theory about the size and number of nations.

Before 1950, more than one third of all territorial disputes were decided by war, while after that date diplomacy prevailed in almost 90% of cases.

Why did the first wave of globalisation lead to political concentration and conflict? Why did the second wave of globalisation lead instead to political fragmentation, resolved in a more peaceful way? To answer these questions, in a new paper we develop a model to study the interaction between globalisation and political structure (Gancia et al. 2017). A key premise of our theory is that borders hamper trade and globalisation make borders more costly. We show that political structure adapts to expanding trade opportunities in a non-monotonic way. In early stages, borders are removed by increasing the size of countries. In later stages, the cost of borders is removed by creating economic unions, and this leads to a reduction in the size of countries. Moreover, while the incentive to conquer markets through aggression increases with globalisation, international economic unions remove this incentive, thereby paving the way to the rule of diplomacy.

This point is very good:

Since the size of markets grows rapidly while political borders tend to change slowly, it suggests that globalisation is likely to put more pressure on the world’s political structure. Designing political institutions that can optimally adapt may become one of the major challenges faced by modern societies.

The full paper is here.

Theme-based crematorium markets in everything

Theme-based restaurants and parks are passé. A theme-based crematorium is the latest talk of the hour, both online and offline. Antim Udan Moksha Airport in Gujarat, the first of its kind in India, puts the departing souls of the dead cremated here on international flights to the heaven for ultimate salvation or moksha: freedom from the cycle of birth and death.

Located in Gujarat’s Bardoli on the banks of Mindhola River, the crematorium is modeled on an airport and equipped with two giant replicas of aircraft. The airplane replicas at Antim Udan Moksha Airport in Gujarat are named Moksha (salvation) airlines and Swarga (heaven) airlines which seem to transport the souls from the earth to the heaven on cremation of dead bodies here.

What’s the most interesting about Antim Udan Moksha Airport in Gujarat is the airport-like announcement which is made to guide funeral parties on entry into the crematorium and instruct them where to keep the body, how to proceed for cremation, etc. There is very little difference between the announcement made at the crematorium and that at airports as well as in planes.

What makes the crematorium more like an airport is the typical noise that an aircraft makes while taking off. A similar noise is created when dead bodies are placed in furnace at Antim Udan Moksha Airport in Gujarat. The atmosphere of the airport-themed crematorium is intended to soothe the mourning family members under the impression that the dead depart for salvation in the heaven.

Here is more, via the excellent Samir Varma.

Marijuana is bad for the grades of people studying in the Netherlands

According to a study recently published in The Review of Economic Studies, access to legal marijuana may significantly reduce academic performance.

The study took advantage of a natural experiment in the Dutch city of Maastricht. In 2011, the city sought to pull back some of the marijuana tourism going to its coffee shops, where marijuana sales are legally tolerated. So through the local association of cannabis shop owners, it banned some foreigners of certain nationalities from buying pot at these venues.

This let researchers Olivier Marie and Ulf Zölitz, in the cleverly titled “‘High’ Achievers? Cannabis Access and Academic Performance,” compare the academic outcomes of Maastricht University students with varying levels of access to legal pot.

What they found: The students who weren’t allowed to legally access marijuana saw their grades significantly improve, especially in classes that require numerical and mathematical skills.

Here is the full Vox story.  I strongly believe it is morally wrong to throw people in jail for smoking such substances, but still policy decisions have real consequences, we should know what those are, and I am not convinced that full availability of marijuana is the optimal approach.

Here are ungated copies, noting there have been significant revisions in the paper along the way.