Month: November 2017

The Growth of Marginal Revolution University

Tyler and I are always pleased to get emails like this:

Dear Prof Alex and Prof Tyler,

I write to express my profound gratitude to you and your team for putting those videos online for the benefit of mankind. I am currently running an Executive MBA at University of Ibadan School of Business in Nigeria. Your videos have been extremely useful to me and lots of my colleagues. Exam comes up tomorrow. I am revising with your videos again. Everything is made simple, easy to understand, remember and apply. I look forward to sharing my exam success story with you in addition to applying the principles to a personal business in the nearest future.

I can’t thank you enough.

Ibrahim HAMMED

And here are two from teachers of economics at high schools in the United States:

Dear Profs,

I’m an Economics teacher at a public charter school in Mesa, Arizona. I use your videos in my class on a regular basis. My students and I love you. Thank you for all that you do!

Ben Fenton

Gentlemen,

As a high school Economics teacher, I am constantly trying to make lessons interesting and relevant. Your video series is a terrific resource and I am thankful you have invested your time and resources into making these interesting, understandable, and relevant videos. Please pass along my thanks to anyone associated with your very useful site.

Many thanks,

Bruce Jones, Economics Teacher, Hiram High School

My visit to an Amazon bookstore

My commentary here is late to the party, but I had not visited a branch before.  Here are my impressions, derived from the Columbus Circle outlet in Manhattan:

1. It is a poorly designed store for me, most of all because it does not emphasize new releases.  I feel I am familiar with a lot of older titles, or I went through a more or less rational process of deciding not to become familiar with them.  Their current popularity, as measured say by Amazon rankings, does not cause me to reassess those judgments.  For me, aggregate Amazon popularity has no real predictive power, except perhaps I don’t want to buy books everyone liked.  “A really smart person says to consider this again,” however, would revise my prior estimates.

2. For me, the very best bookstore and bookstore layout is Daunt, in London, Marylebone High St.  You are hit by a blast of what is new, but also selected according to intellectual seriousness rather than popularity.  You can view many titles at the same time, because they use the “facing out” function just right for their new arrivals tables.  Some of the rest of the store is arranged “by country,” much preferable to having say China books in separate sections of history, travel, biography, and so on.

3. I am pleased that fiction is given so much space toward the front of the store.  I do not see this as good for me, but it is a worthwhile counterweight to the ongoing tendency of American book markets to reward non-fiction, or at least what is supposed to be non-fiction.

4. I have mixed feelings about the idea of all books facing outward.  On the positive side, books not facing outward tend to be ignored.  On the downside, this also limits the potential for hierarchicalization through visual display.  All books facing outwards is perhaps a bit too much like no books facing outwards.

Overall I am struck by how internet commerce is affecting Christie’s and Sotheby’s in a broadly similar fashion.  The auction houses used to put out different genres, such as Contemporary, European Painting, 20th Century, and so on, for 3-4 day windows, and then they would display virtually everything up for auction.  Now they have a single big display, with highlights from each area, and the rest viewable on-line.  That display then shows for about three weeks.  Like Amazon, they are opting to emphasize what is popular and to let on-line displays pick up the tails and niches.  In all cases, that means less turnover in the displays.  That is information-rich for infrequent visitors, who can take in more at once, but information-poor in relative terms for frequent visitors.  As a somewhat infrequent visitor to auction houses, I gain, but for bookstores I would prefer they cater to the relatively frequent patrons.

5. I am most worried by the prominent center table at the entrance, which presents “Books with 4.8 Amazon stars or higher.”  I saw a book on mixology, a picture book of Los Angeles, a Marvel comics encyclopedia, a book connected to the musical Hamilton, and a series of technique-oriented cookbooks, such as Harold McGee, a very good manual by the way.  Isabel Wilkerson was the closest they had to “my kind of intelligent non-fiction.”  Neil Hilbon represented poetry, of course his best-known book does have a five-star average, fortunately “…these poems are anything but saccharine.”

Unfortunately, the final message is that Amazon will work hard so that controversial books do not receive Amazon’s highest in-store promotions.  Why not use software to measure the quality of writing or maybe even thought in a book’s reviews, and thereby assign it a new grade?: “Here are the books the smart people chose to write about”?

6. I consider myself quite pro-Amazon, still to me it feels dystopic when an attractive young saleswoman says so cheerily to (some) customers: “Thank you for being Prime!”

7. I suspect the entire store is a front to display and sell gadgets, at least I hope it is.

8. I didn’t buy anything.

Assorted gated and ungated links

1. NYT profile of Stephen Dubner.  And WSJ profile of Dubner: “Sitting in New York’s Central Park, he sees two tennis players nearby and wonders, “Why is the average age of top-tier tennis players going up and the average age of golfers going down?””

2. Claudia Goldin on gender pay gaps (NYT).

3. Arizona as the new mecca for testing self-driving cars (NYT).

4. The politics of sex abuse in sacred hierarchies (ungated).

5. “35-year-old Ben Sansum of Cambridgeshire, England has chosen to completely immerse himself in the year 1946.”  Neatorama is ungated.  More photos here.

The culture of harassment in Washington, D.C.

The sexual-harassment revolution is coming more slowly to Washington. Even the four female lawmakers who recently told the Associated Press of sexual harassment they faced from their male co-workers didn’t feel comfortable sharing the names of their harassers. “I’m not sure women in D.C. would be rewarded for their bravery [if they came forward], it’s just a different business,” Ellen says. “The thing about this town is that everyone is connected. The people who get ahead keep the peace and angle everything to their advantage.”

Add to that the tribal nature of politics: Most aides are terrified of doing anything that might bring bad press for their boss, or their side. “There’s an anti-snitch sorta thing — you don’t air your dirty laundry,” says Anne Gregory Teicher, a Democratic campaign manager. “It gives the other side power.”

And it doesn’t stop when the campaign is over. “Staffers are told from day one that they do not talk to press, full stop,” says Travis Moore, a former legislative director for the now-retired representative Henry Waxman, a California Democrat. As a Waxman aide, he says, “I spoke to a reporter once, on background, and I was incredibly nervous going into it … people are socialized not to ever talk about what’s wrong in the institution because it could reflect poorly on their member of Congress. There’s a culture that doesn’t accept criticism unless you’re talking about partisanship. It’s really bad for the institution.”

I heard similar rationales from the other women I reached out to. “We’re all a bit more scared. We don’t have platforms like big-name actresses do…”

Here is the full piece by Marin Cogan.

Sunday assorted links

1. Has Germany returned to ultra-romanticism?

2. Has Betsy DeVos made any kind of progress?

3. Sex toy company admits to recording users’ remote sessions.

4. “Overall, we conclude that state taxes have a significant effect on the location of star scientists.

5. “Wainwright survived on a diet consisting almost exclusively of fish and chips…

6. Selection-distortion effects.

Further claims about Saudi

Here is Ali Shihabi:

In the short term, these detentions will lead, directly and indirectly (i.e., by example of what can happen to those who do not cooperate), to the recovery of substantial ill-gotten assets from many members of the elite, including, in all probability, vast tracts of urban land that were “acquired” by senior royals in decades past. The monopolization of this resource limited the amount of urban land available to the masses, pushing up land and home prices, which contributed to massive land and home shortages. Remedying this situation will reduce the cost of home ownership, thereby alleviating a major source of grievance among middle- and lower-class Saudis.

And:

More importantly, in a country beset by an extremely wide political spectrum ranging from the extreme religious right to the liberal left, achieving consensus on key issues is virtually impossible. Hence, if any reform is to take place within a reasonable time frame, it will have to be autocratically managed. Reforms such as removing the prohibition on women’s driving, combating extremism, and curbing elite entitlements would have been impossible to accomplish through deliberation and consensus. Coercive action and an authoritarian hand, rather than endless debate, discussion, and negotiation with thousands of royals and political, economic, and religious elites, was needed to drive home to these individuals that the monarchy is serious about fundamental reform and that the “old guard” needs to get with the program or face dire consequences.

Previous attempts to negotiate elite entitlements achieved negligible results. To cite just one example, relentless pushback and delay tactics scuttled a recent initiative that would have forced elites to pay full utility costs and newly introduced property taxes on undeveloped land. Arresting high-profile household names, people long considered to be untouchable, was the best way for the King and the Crown Prince to deliver the shock needed to recalibrate the behavior and expectations of the elite class.

I am not convinced by the conclusion, but here goes:

Paradoxically, the Saudi “purge” may very well secure the future of Saudi elites as a class, and even the future of the very elites who were arrested. In Dubai, the crackdown ended when convicted elites were quietly released after they had returned looted state assets. It is probable that the Kingdom will follow a similar path. For Saudi elites, succumbing to a “revolution” from above that requires them to forfeit some of their extreme wealth and privilege is still preferable to a real populist revolution from below, which would wipe them out completely and destroy the country.

Pointer is from Ahmed Al Omran.  And here is coverage from Reuters.  Here is Ian Bremmer.

The new political culture that is American Thanksgiving

Using smartphone-tracking data and precinct-level voting, we show that politically divided families shortened Thanksgiving dinners by 20-30 minutes following the divisive 2016 election. This decline survives comparisons with 2015 and extensive demographic and spatial controls, and more than doubles in media markets with heavy political advertising. These effects appear asymmetric: while Democratic voters traveled less in 2016, political differences shortened Thanksgiving dinners more among Republican voters, especially where political advertising was heaviest. Partisan polarization may degrade close family ties with large aggregate implications; we estimate 27 million person-hours of cross-partisan Thanksgiving discourse were lost in 2016 to ad-fueled partisan effects.

That is from a new paper by M. Keith Chen and Ryne Rohla, via the excellent Kevin Lewis.

Won’t Get Foiled Again

The Trump administration has just put crippling tariffs (97-162%) on the import of aluminium foil from China. Making America great again? It’s doubtful. Far more American firms use aluminium foil than make it. Indeed, only two US-based firms make it and one of them is owned by Swedes. Virginia Postrel has the details:

Only two companies have U.S. mills making the thin-gauge foil affected by the duties. The ones owned by Sweden-based Gränges are already selling all they can produce; the company has announced plans to expand capacity at its Tennessee mill by 2019. Converters say that JW Aluminum Co., the Mt. Holly, South Carolina-based company that lobbied strongly for the duties, isn’t offering them much, if any, additional supply.

Most of the ex-Chinese sales won’t even go to US firms but to firms in countries not affected by the tariffs, including Russia, Bulgaria, South Korea and Taiwan. Yes, Russia.

Conspiracy or coincidence? I want to say coincidence. On the other hand:

Donald Trump’s former national security adviser, Michael Flynn, is under investigation for involvement in an alleged plot to kidnap a Turkish dissident cleric living in the US and fly him to an island prison in Turkey in return for $15m, it was reported on Friday.

So who can say anymore? Excuse me while I go put on my hat.

The top classic movies and books about American politics and DC.

The estimable Chug asks me:

Curious what you consider the top classic movies and books about American politics and DC.

Today let’s do movies, the following come to mind:

1. All the President’s Men.

2. No Way Out: Gene Hackman at his peak.  The Conversation also might count as a DC movie.

3. The Exorcist, set in Georgetown.  Maybe The Omen too?

4. The Manchurian Candidate.

5. Wedding Crashers.

6. The Day the Earth Stood Still.

7. Born Yesterday.

8. Contact.

I don’t really like Independence Day, but it deserves some sort of mention.  The Oliver Stone Nixon movie I’ve yet to see.  I like Being There, and it is set in DC, but it doesn’t feel like a “Washington movie” to me.  Legally Blonde, Logan’s Run, and Minority Report are all worth ponders, and have their cinematic virtues, but I am not sure they are true to the spirit of the question.

The real question, in my mind, is which of these captures the unique way in which Washington is the world’s epicenter for extreme productivity (don’t laugh) in the areas of economics, public policy, law/lobbying.  What is special but also sometimes despicable about DC area culture?  Might this be a mix of Contact and No Way Out?  I’ve yet to see anyone fully explain the DC micro-culture, as extreme and hyper-specialized as that of say Hollywood or Silicon Valley.

By the way, all the movies you thought I forgot to mention I didn’t, rather I don’t like them.

Who’s complacent? Nutella edition

Nutella fans are outraged after it was revealed the recipe for the chocolate spread is changing – making it lighter and sweeter.

The makers of the popular spread, Italian food company Ferrero, admitted it is adjusting the recipe after the slight changes were noticed by German consumer group Hamburg Consumer Protection Centre.

The new recipe contains 8.7 per cent powdered skimmed milk, compared with the previous quantity of 7.5 per cent. And sugar content has risen from 55.9 per cent to 56.3 per cent.

Furious Nutella lovers took to Twitter to hit back at the changes using the hashtag #boycottNutella.

Here is the full story.

Friday assorted links

1. North Korean snacks.

2. Why non-complacency is hard, Trump and Native Americans edition.

3. Ways in which computers are getting worse.

4. “You Can Rent a (Grounded) Private Jet Just to Take Instagram Photos In.

5. Helen Dale’s libertarian novel about Christ and Roman law.

6. “…there’s nothing more offshore than a yacht.”  And then: “Otherwise, the Paradise Papers seem to be “dull reading,” and they describe plans that are “mostly, if not totally, legal” — “Some are not even questionable from a legitimacy point of view.””

Might tech super-firms mean the Great Stagnation is over?

I am now giving this a chance of somewhat over 50 (!) percent, and that is the topic of my latest Bloomberg column.  Here is one bit:

Gross domestic product growth for the last two quarters was over 3 percent, even in light of hurricane damage in August and September, and middle-class income growth has resumed. You might think that would mean high price inflation from credit growth and “overheating,” but the 12-month change in core prices for personal consumption expenditures has fallen to 1.3 percent.

And:

Low rates of inflation, however, reflect productivity gains that already are here. The tech giants — Google, Amazon.com Inc., Facebook Inc. and Apple Inc. — have become major managers of our information, our businesses and our lives. They’re meeting political resistance, but whatever you think of those complaints, they are signs the major tech companies are having transformative effects. I used to say that we are overrating what tech has done for us to date, and underrating what it will do in the future. Perhaps reality has caught up with that prognostication.

And:

The major tech companies are growing their platforms quickly, supporting low prices with scale, product diversity, data ownership and superior service. Hardly anyone today worries about the eventual disappearance of competition and monopoly prices from Amazon or the other major tech companies. Do you really think Amazon is going to double book prices five years from now?…The tech companies have shown that their radical model of low price, high market share, high quality rapid expansion will keep them profitable for a long time to come.

Big if true, as they say…do read the whole thing.  The still-remaining negative possibility, of course, is that the current positive wave is like 1995-1998, and we will sink back to less positive economic times, as we did back then.

*Stalin*, by Stephen Kotkin

Definitely recommended, the volume covers 1929-1941, I am now on p.234.  Here is one good “that was then, this is now” bit:

Stalin had fixed a covetous eye on Chinese Turkestan, or Xinjiang (“New Territory”).  From January through April 1934, he fought a small war there.  Renewal of a mass Muslim rebellion had spurred Comintern operatives to contemplate pushing for a socialist revolution, but Soviet military intelligence had pointed out that, even though the rebels commanded the loyalty of almost the entire Muslim population (90 percent), a successful Muslim independence struggle in Chinese Turkestan could inspire the Kazakhs and Kyrgyz in Soviet Turkestan or even the Mongols.  Stalin had decided to send about 7,000 OGPU and Red Army soldiers, as well as airplanes, artillery, mustard gas, and Soviet Uzbek Communists, to defend the Chinese warlord.  Remarkably, he allowed Soviet forces to combine with former White Army soldiers abroad, who were promised amnesty and Soviet citizenship.  A possible Muslim rebel victory turned into a defeat.  Unlike the Japanese in Manchuria, Stalin did not set up an independent state, but he solidified his informal hold on Xinjiang, setting up military bases, sending advisers, and gaining coal, oil, tungsten, and tin concessions.  Some 85 percent of Xinjiang’s trade was with the USSR….Chiang Kai-Shek became dependent on Soviet goodwill to communicate with Xinjiang’s capital, Urumqi.

Here is excellent New Yorker coverage of the book from Keith Gessen.  You can buy here on Amazon.