Month: January 2018

Wednesday assorted links

My Conversation with Charles C. Mann

Here is the audio and transcript, Charles was in superb form.  We talked about air pollution (carbon and otherwise), environmental pessimism, whether millions will ever starve and are there ultimate limits to growth, how the Spaniards took over the Aztecs, where is the best food in Mexico, whether hunter-gatherer society is overrated, Jackie Chan, topsoil, Emily Dickinson, James C. Scott, the most underrated trip in the Americas, Zardoz, and much much more.

Here is one excerpt:

COWEN: But if you had to pick a leading candidate to be the fixed factor, I’m not saying you have to endorse it, but what’s the most likely fixed factor if there is one?

MANN: Well, water is certainly a big candidate. There just really isn’t that much fresh water.

COWEN: But we can price it more, and since we have growing wealth — global economy grows at 4 percent a year — we can subsidize those who need subsidies…

MANN: You’re right. But water’s obviously one of them. But hovering over it is these questions about whether these natural cycles . . . is kind of a fundamental question about life itself. Is an ecosystem an actual system with an integrity of its own, with rules of its own that you violate at your peril? Which is the fundamental premise of the environmental movement. Or is an ecosystem more like an apartment building in which it is just a bunch of people who happen to live in the same space and share a few common necessities?

I don’t think ecology really has settled on this. There’s a guy in Florida, Dan Simberloff, who is a wonderful ecologist who has kind of made a career out of destroying all these models, these elegant models, one after another. So that’s the fundamental guess.

If it turns out that it’s just a collection of factors that we can shift around, that nature’s purely instrumental and we can do with it what we want, then we have a lot more breathing room. If it turns out that there really are these overarching cycles, which seems to be the intuition of the ecologists who study this, then we have less room than we think.

And:

COWEN:  Jared Diamond.

MANN: I think an interesting guy who really should learn more about social sciences.

COWEN: Economics in particular.

MANN: Yes.

COWEN: Theory of common property resources.

MANN: Yeah.

And finally:

MANN: …What I think is the underrated factor is that Cortez was much less a military genius than he was a political genius. He was quite a remarkable politician, really deft. And what he did is . . . The Aztecs were an empire, the Triple Alliance, and they were not nice people. They were rough customers. And there was a lot of people whom they had subjugated, and people whom they were warring on who really detested them. And Cortez was able to knit them together into an enormous army, lead that army in there, have all these people do all that, and then hijack the result. This is an act of political genius worthy of Napoleon.

Self-recommending, and I am delighted to again express my enthusiasm for Charles’s new The Wizard and the Prophet: Two Remarkable Scientists and Their Dueling Visions to Shape Tomorrow’s World.  Here is Bill Easterly’s enthusiastic WSJ review of the book.

Skyscrapers, Slums, and the Floor Space Index

Rent control is not the only problem plaguing housing in Mumbai, India. Mumbai also makes it very costly to build skyscrapers. In this video, I discuss the floor space index (FSI), a regulatory tool used around the world to tradeoff plot size and height. Higher FSI lets builders economize on land, reduces sprawl, and increases the value of public transportation. The lessons in urban economics go well beyond Mumbai. Check out the video. It’s one of the best in MRUniversity‘s India series.

My personal moonshot

That is a short piece I wrote for the inauguration of a new Mercatus website The Bridge.  The focus of the piece is how I think about my own career and “moat”, excerpt:

My view, or at least hope, is that these diverse outputs [listed at the link] exploit two synergies.  First, my work in any one of these areas publicizes what I am doing in the others.  Second, what I learn from each task boosts my productivity in the others.  Overall, I think of these activities as a kind of collective intellectual blitzkrieg.

I will step out of my modest demeanor for a moment and suggest that relatively few people can construct and manage such a broad portfolio, and so this gives me some kind of competitive advantage or “moat” in the world of ideas.  My moonshoot, in essence, is trying to push as hard as possible on that advantage with this blitzkrieg.

And:

By the way, I love it when people describe writing a blog, or writing on the internet, as “popularizing” economics or something similar.  That is a sign they don’t understand what is going on, that they don’t understand there is such a thing as “internet economics,” and also a sign they will not be effective competition.  It’s really about “the internet way of writing and communicating” vs. non-internet methods.  The internet methods may or may not be popular, and may or may not be geared toward a wide audience, so they are not the same as popularizing.  One point of the internet is to find an outlet for super-unpopular material.  What’s important right now is to develop internet methods of thinking and communicating, and not to obsess over reaching the largest possible numbers of people.

I would note that tylercowensethnicdiningguide.com fits into the picture too, although this essay was too short to explain the larger schema with that one.

Police Union Privileges, Officer Misconduct and Systems Thinking

In Police Union Privileges I explained how union contracts and police bill of rights give police officers privileges not afforded to regular people. What differences do these privileges make? A new paper, The Effect of Collective Bargaining Rights on Law Enforcement: Evidence from Florida, suggests that police union privileges significantly increase the rate of officer misconduct:

Growing controversy surrounds the impact of labor unions on law enforcement behavior. Critics
allege that unions impede organizational reform and insulate officers from discipline for
misconduct. The only evidence of these effects, however, is anecdotal. We exploit a quasi-experiment in Florida to estimate the effects of collective bargaining rights on law enforcement
misconduct and other outcomes of public concern. In 2003, the Florida Supreme Court’s
Williams
decision extended to county deputy sheriffs collective bargaining rights that municipal police
officers had possessed for decades. We construct a comprehensive panel dataset of Florida law
enforcement agencies starting in 1997, and employ a difference-in-difference approach that
compares sheriffs’ offices and police departments before and after
Williams. Our primary result is
that collective bargaining rights lead to about a 27% increase in complaints of officer misconduct
for the typical sheriff’s office. This result is robust to the inclusion of a variety of controls. The
time pattern of the estimated effect, along with an analysis using agency-specific trends, suggests
that it is not attributable to preexisting trends. The estimated effect of
Williams is not robustly
significant for other potential outcomes of interest, however, including the racial and gender
composition of agencies and training and educational requirements.

This is important research but although I’m not surprised that collective bargaining rights lead to more misconduct I do find the size of the effect implausibly large. One reason is that police union privileges are only one brick in the blue wall. Juries, for example, often fail to convict police even when faced with video evidence that would be overwhelming in any other context [e.g. Philando Castile]. Police union privileges are unjust and should be abolished but solving the problems with policing requires more than a change in naked incentives.

To solve this problem we need to adopt the same kind of systems wide thinking that has led to large reductions in fatal accidents in anesthesiology, airplane crashes, and nuclear accidents. Criminologist Lawrence Sherman writes:

The central point Perrow (1984) made in defining the concept of system accidents is that the
urge to blame individuals often obstructs the search for organizational solutions. If a system-crash
perspective can help build a consensus that many dimensions of police systems need to be changed
to reduce unnecessary deaths (not just but certainly including firing or prosecuting culpable shooting officers), police and their constituencies might start a dialog over the details of which system
changes to make. That dialog could begin by describing Perrow’s central hypothesis that the interactive complexity of modern systems is the main target for reform. From the 1979 nuclear power
plant near-meltdown at Three Mile Island in Pennsylvania to airplane and shipping accidents,
Perrow shows how the post-incident reviews rarely identify the true culprit: It is the complexity of
the high-risk systems that causes extreme harm. Similarly, fatal police shootings shine the spotlight
on the shooter rather than on the complex organizational processes that recruited, hired, trained,
supervised, disciplined, assigned, and dispatched the shooter before anyone faced a split-second
decision to shoot.

Gerrymandering encourages social liberalism

That is the topic of my latest Bloomberg column, here is one excerpt:

For instance, if you are a Democrat who is strongly pro-abortion rights, gerrymandering might be very much in your interests. That’s because the sharp polarization of today’s politics favors a lot of outcomes that are either the status quo or are easier to implement and enforce. That can favor social liberalism.

Note that many Republican representatives don’t actually want strong legal enforcement of the toughest social conservative positions — can you really imagine the government trying women for murder if they try to have abortions?

Whether you like it or not, American society seems to have hit on a pretty comfortable equilibrium — comfortable for our elected representatives that is. Democrats will strongly support liberal positions on social issues, and the Republicans will stake out more conservative positions. And Republicans will tolerate the Democrats getting their way for the most part. You can debate whether this mix is what a majority of voters want or should want, but it is the easiest outcome for us to agree upon.

Do read the whole thing.

More on talent optimization and where it is weak and strong

Hi Tyler, one point you didn’t mention in your talent optimization post was career path dependence. Getting an assistant professorship might require some of the skills required to being a great professor, but it absolutely does not require any degree of interest in or talent at management, even though (at least in STEM) managing a lab, including people management, attraction of talent, administration, etc., is the critical skill.

One generalization is that any sort of administrative job that selects among a highly filtered group (senior medical administration at a hospital that mostly fall to MDs, executives within technical organizations such as CTOs) is likely forced to ignore the best talent.

Nick_L in the comment section provides another interesting example: “Talent selection in the Armed Forces is in an interesting category. The only way to achieve the rank of General (in G7 forces, at least), is by entry as a 2nd lieutenant. Due to the (understandable) narrowing of opportunities the higher you go in the armed forces, the best talent frequently leaves around the time they make Colonel.” Note that that comment assumes that the skills that make a great 2nd lieutenant or colonel are the same skills that make a great general.

That is from an email by John McDonnell.

Eliminating the mortgage tax deduction could boost homeownership

(3) Implications of US Tax Policy for House Prices, Rents, and Homeownership

Kamila Sommer and Paul Sullivan

This paper studies the impact of the mortgage interest tax deduction on equilibrium house prices, rents, homeownership, and welfare. We build a dynamic model of the housing market that features a realistic progressive tax system in which owner-occupied housing services are tax-exempt and mortgage interest payments are tax-deductible. We simulate the effect of tax reform on the housing market. Eliminating the mortgage interest deduction causes house prices to decline, increases homeownership, decreases mortgage debt, and improves welfare. Our findings challenge the widely held view that repealing the preferential tax treatment of mortgages would depress homeownership.

Here is the link to the AER piece.

Monday assorted links

1. A left-wing take on Dalits and caste and class struggle.

2. Dan Drezner’s five most important (not the same as “influential”?) public intellectuals: Coates, Gessen, Fukuyama, Chernow, and Autor.  I think he considerably underrates how much Bezos and other tech people are respected for vision, execution, and depth of understanding, rather than just having a lot of money.

3. Chinese train station built in nine hours.

4. Was Rome or Han China more technologically advanced?

5. “This futuristic house actually gets stronger as hurricanes pass through.

The Return of Henry George?

NYTimes: Today, with the subway in precipitous decline and the city enjoying an economic boom, some policymakers think the time has come for the subway to profit from the financial benefits it provides, including its considerable contribution to property values.

…In Manhattan’s main business corridors, from 60th Street south, the benefit of being near a subway adds $3.85 per square foot to the value of commercial property, according to calculations by two New York University economists.

The notion that property owners should pay extra for their proximity to the subway is called “value capture” and has long been debated in urban planning circles. Now Gov. Andrew M. Cuomo, a Democrat, has made value capture a prominent part of his plan to salvage the subway system by proposing to give the Metropolitan Transportation Authority the power to designate “transit improvement subdistricts” and impose taxes.

..The Cuomo proposal calls for before and after assessments in neighborhoods where a new transportation project, like the extension of a subway line, raises property values. Officials would determine the difference between the previous assessment and the new, higher one.

Of the tax on that difference, 75 percent would go to the transit agency and 25 percent to the city.

Solve for the Dutch equilibrium

Police in the Dutch city of Rotterdam have launched a new pilot programme which will see them confiscating expensive clothing and jewellery from young people if they look too poor to own them.

Officers say the scheme will see them target younger men in designer clothes they seem unlikely to be able to afford legally – if it is not clear how the person paid for it, it will be confiscated.

The idea is to deter criminality by sending a signal that the men will not be able to hang onto their ill-gotten gains.

…He [the police chief] said the young men targeted often have no income and are already in debt from fines for previous convictions but wearing expensive clothing.

This “undermines the rule of law” which sends “a completely false signal to local residents”, he explained.

I know how this would play out in New Jersey or Rhode Island, but the Netherlands?  Here is the full article, and for the pointer I thank the excellent Samir Varma.

More sectors bad at finding talent (from the comments)

Surgery (and many medical specialties, esp. highly compensated ones) should be on the list of ‘Bad at finding best talent.’ There’s no way to show aptitude for a surgical specialty before medical school, and there is no mechanism for good surgeons to rise to the top, and bad surgeons to be identified and punished. If you make it into a surgical residency, you will succeed, even if you faked your way into med school and your surgical success rate is terrible. There is essentially no mechanisms to make sure aging surgeons learn the newest techniques, and no checks on waning competency. It is only because the training is so long and difficult that it isn’t a complete disaster.

Policing should also be on the list. It’s another job where, like being a surgeon, once you’ve made it into the profession, you have to fail spectacularly to be kicked out. At least half the police officers I know shouldn’t be allowed to carry firearms, much less have the power of life and death over ordinary citizens.

That is from Kevin, based on my earlier post on this question.