Month: January 2018
What I’ve been reading
I do not have time to read it now, but this appears to be an amazing and very high quality volume: David Biale, et.al., Hasidism: A New History, over 800 pp. but it does all appear to be well-written and also interesting, often gripping.
Shaun Walker, The Long Hangover: Putin’s New Russia and the Ghosts of the Past. Most of all useful for the Russia-Ukraine recent history.
John C. Hulsman, To Dare More Boldly: The Audacious Story of Political Risk. A consistently interesting history of political risk analysis, I most liked this sentence: “The chapters themselves are baroque in structure, a fond homage to the genius of the pioneering musician and peerless producer Brian Wilson of the Beach Boys, particularly his work on his masterpiece Pet Sounds.”
Peter J. Dougherty, Confessions of a Scholarly Publisher (not yet on Amazon). Peter was the director of Princeton University Press for many years, and these are his thoughts on the (much underrated) importance of university presses. I would stress that Michael Aronson (of Harvard University Press) and Peter were two of the most important figures in my entire career.
Tim Rogan, The Moral Economists: R.H. Tawney, Karl Polanyi, E.P. Thompson, and the Critique of Capitalism. The subtitle says it all. People talk less about Tawney these days, but his book is well worth reading if you don’t already know it.
I perused them only briefly, but these seemed attractive:
Joshua B. Freeman, Behemoth: A History of the Factory and the Making of the Modern World.
Timothy Tackett, The Coming of Terror in the French Revolution.
Arrived in my pile and not yet scrutinized is:
Anne Fleming, City of Debtors: A Century of Fringe Finance.
Which are the most skill-selected immigrant groups?
Into the United States that is:
Overall, the relationship is strong and positive (r = .56, p < 0.001): immigrant groups that are more skill-selected tend to have higher average incomes. The five most skill-selected groups are: Taiwanese, Nigerians, Swedes, Indians and Swiss. The five least skill-selected groups are: Mexicans, Salvadorans, Hondurans, Portuguese and Cape Verdeans. For example, 82% of Nigerians are high-skilled, while only 4% are low-skilled. By contrast, only 14% of Mexicans are high-skilled, while 57% are low-skilled.
Methodological caveats: I was unable to match a number of the ancestry groups (e.g., ‘Hmong’, ‘Jewish’, ‘Cajun’); the income data are not adjusted for household size or reporting bias.
That is from Noah Carl, here are his other essays. For the pointer I thank Dan Klein.
Friday assorted links
1. New and interesting Jordan Peterson article: “He speaks in rapid-fire, um-less sentences. He doesn’t smile much.” In my view Peterson is one of the five most influential public intellectuals today.
2. Paul McCartney talks about the bass.
3. Gender bias in economic texts. And more from The Economist.
4. The gravity of every state’s most important trading partner.
The culture that is San Francisco solve for the equilibrium
A man threw his body onto a self-driving car — a GM Cruise AV — causing a car vs. pedestrian collision at the 16th and Valencia intersection earlier this month, the DMV reported Wednesday.
Operating in “autonomous mode,” the Cruise AV was stopped at a green light, facing northbound on Valencia, waiting to make a right turn onto 16th Street as pedestrians crossed.
Suddenly, a man ran across Valencia Street against the “do not walk” sign, shouting, and struck the left side of the car’s rear bumper and hatch with his entire body. This is all according to a report the self-driving car manufacturer must file with the DMV in the event of a collision.
The man sustained no injuries, but the car did. It suffered “some damage to its right rear light,” according to the report.
Here is the full story.
The miracle of Israeli water policy
“Israel should have been a water basket case,” says Siegel, listing its problems: 60% of the land is desert and the rest is arid. Rainfall has fallen to half its 1948 average, apparently thanks to climate change, and as global warming progresses, Israel and the whole Levant are expected to become even drier – and from 1948, Israel’s population has grown 10-fold.
During that time, the country’s economy grew 70-fold. But instead of starting to waste water, as happens when a society becomes wealthier, it used its new affluence to implement what Siegel calls “the Israel model” of water management.
That model includes drip irrigation, the world’s highest rate of water reclamation and recycling, high prices when necessary, massive desalination, fixing leaks early and frequently, discouraging gardening, and mandating water-efficient toilets.
Are you listening California? Here is the article from Ruth Schuster at Haaretz. Here is Wikipedia on water policy in Israel. Here is the miracle of Israeli dairy; Israeli cows are far more productive than most other cows, mostly because of technology.
The life of Edith Penrose
That is the subtitle, the title is No Ordinary Woman, and the author is Angela Penrose, daughter-in-law of Edith. Here is one sentence:
Pen also wrote to Edith of his deepening love for her and how he wished she had remained in Virginia with him.
What a dramatic and eventful book. Edith Penrose (1914-1996) is a not so well-known but highly underrated economist, with her major contributions coming in the theory of the firm and industrial organization. As a girl, she survived only because her father shot a rattlesnake about to kill her. Later, her first husband was murdered, right before their first child was born. She and her second husband, working in Switzerland, helped Jews escape from Germany, and she later did food planning during the war in England. In 1948 the couple lost one of their three children, right before his third birthday. Later she received a doctorate in economics from Johns Hopkins, studying under Fritz Machlup. Machlup at one point wrote a ten-page letter to her, with the top proclaiming: “I implore you to shut off your hypersensitivity and to overlook it if I sound condescending, arrogant or otherwise unpleasant. I just want to be helpful.”
She headed the Owen Lattimore Defense Fund. Later, she did not feel entirely comfortable teaching at Johns Hopkins (she was treated badly and not tenured) and so she ended up teaching in Baghdad and Beirut and was also an important early faculty member at INSEAD, perhaps their first world class hire. She became an expert on energy economics and multinationals, traveling and advising around the world more or less without stopping. Drawing on her doctoral work, she also published on IP problems for developing economies, an area where she was well ahead of her time.
She enjoyed writing poems and limericks for her own pleasure. She also was known for her “direct questions” and her “disconcerting remarks.”
I would describe her work as halfway between economics and the business school tradition, broadly in the Austrian school but more descriptive and without the political slant of Mises and Hayek. Her contributions include:
1. She insisted that models ought to consider where firms were in the midst of a disequilibrium process, rather than assuming perfect competition or some other smoothly honed end-state. History matters.
2. She was the founding thinker behind “resource-based” theories of the firm, whereby firms are best understood in terms of what resources they have access to, rather than their products. This was a dominant approach from the 1980s onward, though she received only marginal credit for her seminal role. She also focused on which were the slack resources of a firm or not, as a means of ascertaining where the firm was headed, and ran all this analysis through a lens of expectations and perceptions, reflecting her studies with Machlup. She thought in terms of what a firm’s “moat” might be, as you might expect from a contemporary Silicon Valley analyst.
3. She developed a theory of how some firms would grow very large, but based on “economies of growth” rather than economies of scale per se. She tried to explain how there was a lumpiness to the growth process itself. Difficulties of coordination serve as the ultimate limit on firm size.
4. In her theories knowledge creation drives economic growth, and that occurs largely within firms. The cohesive shell of the firm helps to integrate knowledge.
I would describe her style as “every sentence tries to have some insight,” rather than “forcing you to come away with definite conclusions.” Those of you who are used to models or data may find it frustrating to read her, though every sentences reeks of intelligence.
It does not seem she marketed her work very hard, but rather she was content to work out puzzles and pointers for her own satisfaction. I read her work as an undergraduate, as it was recommended to me by some of the Austrian economists, and my recent rediscovery of it has been a pleasant surprise.
South Korea kimchi deficit fact of the day
If you are going to worry about bilateral deficits, here is one to keep you up at night:
According to South Korea’s World Institute of Kimchi, 89.9 percent of the kimchi purchased by South Korean restaurants in 2016 was imported from China.
The kimchi trade first went into deficit in 2006, triggering soul-searching and a headline-grabbing scandal…
South Korea imported more than 275,000 tonnes of kimchi last year, 99 percent of it from China, the Korea Customs Service (KCS) said, and exported just more than 24,000 tonnes.
The deficit stood at US$47.3 million by value, up 11 percent year-on-year and the largest since the KCS began tracking the data in 2000.
Price is a major factor in the trade, with imports costing just US$0.50 per kilogram in 2016, according to Korea Agro-Fisheries & Food Trade Corp, while exports — primarily destined for Japan — averaged US$3.36 per kilogram…
UNESCO inscribed South Korean kimchi on its intangible cultural heritage list in 2013, saying: “It forms an essential part of Korean meals, transcending class and regional differences.”
Here is the full article, via the excellent Mark Thorson.
Thursday assorted links
1. What makes the hardest equations in physics so difficult?
2. Privacy in the new Toronto Quayside. And 30 minutes of Jordan Peterson.
3. Arving Panagariya on Indian textiles and job creation.
4. The passport culture that is Swiss (Dutch).
5. Ben Thompson on the economics and also motivations of Facebook.
6. The gender wage premium is higher for exporters. And Elena Ferrante to become columnist for The Guardian.
A Time to Kill, A Time to Heal
Why do governments sometimes engage in mass killings? Mass killings could help governments to suppress the opposition–that seems obvious–but it’s also true that mass killings can create blowback and further stiffen the opposition’s resolve. Uzonyi and Hanania offer a simple theory and some clarification:
We argue that government mass killing during war reduces opportunities for the opposition to return to military conflict in the future. This allows for longer periods of post-conflict peace. However, government atrocities that begin after the end of a civil war create new grievances without diminishing the ability of opponents to fight. This makes a faster return to conflict more likely. Statistical analysis of all civil wars between 1946 and 2006 strongly supports our arguments, even when we account for selection effects regarding when governments are more likely to engage in mass killing. These results reveal that both during-war and post-war tactics influence civil war recurrence, but that the same tactic can produce different effects depending on the timing of its use.
Essentially the authors are arguing that civil wars sometimes end when one side decisively wins. Not surprising but how about this for an uncomfortable thought:
We stress that mass killing is a grizzly and morally appalling
tactic. But it does appear to keep a country at peace for a
longer duration once a conflict ends. If the international
community disrupts these effects of mass killing, it may be
inadvertently increasing the likelihood that civil war will recur. Thus, if the international community chooses to intervene in conflicts to protect civilians, member states must also
be willing to remain in the country over the long term to
help the government and opposition groups refrain from returning to war. Unfortunately, few states have demonstrated
an appetite for such long-term commitments.
Rule of law implies a somewhat slack enforcement of immigration restrictions
That is the topic of my latest Bloomberg article, here is one bit:
What is striking about immigration, and immigration policy, is the very simple but oft neglected fact that it concerns human bodies. Any exercise of immigration law thus requires some violence, either explicit or implicit, against those bodies. It will mean the rounding up and forcible restraint of bodies, the widespread use of prisons and other coercive holding chambers, and tearful scenes of airport separation. Those methods will be applied to individuals who do not enjoy the full protections of the U.S. Constitution, who are vulnerable to mistreatment during the process, and who do not always have full fluency in the English language or a full understanding of their legal rights. The resulting problems are especially high costs, not only because of the associated dollars, but also because our precious self-image as a humane country implies keeping such episodes to a minimum. Too many violent stories and images, even when they technically can be justified by laws, damage our conception of our country. Eventually that will shape our future behavior and not for the better.
A somewhat lax enforcement of immigration restrictions is in fact the friend of the future of the rule of law, not the enemy.
Do read the whole thing.
Average is over, NYC private school edition
Compensation for the heads of some elite private K-12 schools in New York City is nearing $1 million.
Much in the city’s private school world can seem beyond the norm: the tuition and fees (topping $50,000 a year), the kindergarten application process (interviews for 4-year-olds), the facilities (climbing walls). And so too executive compensation that exceeds the pay of many college presidents.
Pay packages often include deferred compensation and perks like housing, housekeeping, social club dues and free tuition for heads’ children. Chiefs of New York City schools earn far more than the national average, due to the high cost of living, ambitious fundraising duties, competition for talent, relatively large enrollments and other factors, according to the National Association of Independent Schools.
The median base salary for heads of the city’s private schools is $493,478 this academic year among 44 city schools in a survey by the association. That compares to $275,000 nationwide. The group says the city’s pay for heads grew faster as well: Its median salary jumped 70% in a decade, compared with 45% nationwide.
At least nine heads of private K-12 schools in New York City earned total yearly packages topping $800,000, according to 2015 federal tax forms, the most recent year available.
Here is the WSJ piece, via the excellent Samir Varma.
Wednesday assorted links
My Conversation with Ross Douthat
I think Ross, along with Steven Pinker, received the hardest (though never hostile) questions from me, but of course that is a measure of respect. Plus serious questions about God are difficult by their nature. Here is how the summarizers described the ground covered:
…Douthat’s views on religion and theology, but then moves on to more earth-bound concerns, such as his stance on cats, The Wire vs The Sopranos, why Watership Down is the best modern novel for understanding politics, eating tofu before it was cool, journalism as a trade, why he’s open to weird ideas, the importance of Sam’s Club Republicans, the specter of a Buterlian Jihad, and more.
Not to mention Reformicons, CRISPR, Thiel/Girard, Godwin’s Law, euthanasia, what Ross learned his mother, and the dangers of too much smart phone use. Ross responded in fine form, here is the audio and transcript. Here is one excerpt:
DOUTHAT: I suppose that I’m drawn to the idea that the truth about human existence lies in what can seem like paradoxical formulations, and this is of course very Catholic in certain ways. Certainly a G. K. Chestertonian idea, so I’m just stealing it from other people. But the idea that various heresies of Christianity, Calvinism included — with apologies to my Calvinist friends — tend to take one particular element of you that’s supposed to be in synthesis and possibly in tension, and run with it. And therefore the truth about things lies in a place that may seem slightly contradictory.
And I think this is borne out in many ways in everyday experience. This both-and experience of human existence. The idea that you can’t split up grace and works in any kind of meaningful way. It’s connected to larger facts about the nature of human existence. The tension between determinism and free will that persists in any philosophical system. You can get rid of God and stop having these Jansenist Jesuit arguments about predestination and so on, but you’re still stuck with the free will–determinism debate. That debate doesn’t go away.
So, yeah, there’s a point at the intersection of different ideas that is as close to the truth as our limited minds can get and in Christian thought, we call that point orthodoxy. Now, how that is connected to my political views is a really good question.
And:
COWEN: We all know the Marcionite heresy: the view, from early Christianity, that the Old Testament should be abandoned. At times, even Paul seems to subscribe to what later was called the Marcionite heresy. Why is it a heresy? Why is it wrong?
DOUTHAT: It’s wrong because it takes the form . . . It’s wrong for any number of reasons, but in the context of the conversation we’re having, it’s wrong because it tries to basically take one of the things that Christianity is trying to hold in synthesis and run with it to the exclusion of everything else, and essentially to solve problems by cutting things away.
The Marcionite thesis is, basically, if you read the New Testament, Jesus offers you a portrait of God that seems different from the portrait of God offered in Deuteronomy; therefore, these things are in contradiction. Therefore, if you believe that Jesus’s portrait of God is correct, then the Deuteronomic portrait of God must be false; therefore, the God of the Old Testament must be a wicked demiurge, etc., etc. And the next thing you know, you’re ascribing to, again, a kind of . . . What is the Aryan Christianity of the Nazis, if not the Marcionite heresy given form in the 1930s and 1940s?
And so the orthodox Christian says, “No, any seeming tension between the Old Testament and the New, any seeming contradiction, is actually suggesting that we need to look for a kind of synthesis between them, and for a sense in which there is not contradiction, but fulfillment in some way, which —
COWEN: Bringing us back to Hegelian Douthat.
DOUTHAT: Yes, yes.
And:
I think it’s probably fair to say that Chesterton’s Father Brown stories had as much influence on my worldview as his more sort of polemical and argumentative writings. And, again, I think therein lies some important insight that I haven’t thought through, but I think you’re correctly gesturing at, about a particular way of thinking about God and theology that isn’t unique to Christianity, but that is strongly suggested by just the structure of the revelation that we have. Marilynne Robinson has a line, I think in Gilead, about — one of the characters is imagining that this life is like the epic of heaven. That we’re living in the Iliad or the Odyssey of heaven. This is the story that will be told in the streets.
And:
COWEN: When you see how much behavior Islam or some forms of Islam motivate, do you envy it? Do you think, “Well, gee, what is it that they have that we don’t? What do we need to learn from them?” What’s your gut emotional reaction?
On another topic:
I’ve been always disappointed that there hasn’t been a kind of sustained Watership Down revival because it’s such a great book and it’s a book about — essentially, it’s about a founding.
It’s connected, in a sense, to the kind of things that the Straussians are always arguing about and so on. What does the founding mean, and so on? But you have a group of rabbits who go forth and encounter different models of political order, different ways of relating to humankind, that shadow over rabbit-kind at any point.
You have a warren that has essentially surrendered itself to humanity and exists as a kind of breeding farm, and you have a warren that’s run as a fascist dictatorship essentially. And then you have this attempt to form a political community that is somewhere in between the two, getting back to the Hegelian synthesis and so on. And you have sort of this primal narrative where the problem is of course that they don’t have any females, and so there’s this competition, this competition for reproductive power that’s carried out between these different warrens where the rabbits from the good warren have to literally — not kidnap, because the does come willingly — but steal women from the fascist dictatorship, which maintains a ruthless control over reproduction.
So there’s just a lot of fascinating stuff there, and then it’s all interspersed with storytelling. There’s the sort of rabbit folktales that Richard —
COWEN: So, narrative again.
DOUTHAT: Narrative again.
Strongly recommended, and I do thank Ross for putting up with me. Do read or listen to the whole thing.
And I very much enjoyed reading Ross’s forthcoming book To Change the Church: Pope Francis and the Future of Catholicism, which I found totally engrossing.
Dear Canada: Don’t Ban Paid Blood Plasma Donation
The United States has been called the OPEC of blood plasma because it exports hundreds of millions of dollars worth to other countries. Why does the US dominate the blood plasma industry? Because in the U.S. it’s legal to pay donors which increases supply. Some provinces in Canada have also allowed paid donors but 80% of the blood plasma given to Canadians is imported from the United States and, to make matters worse, some provinces have banned or are considering banning paid donation. A very good letter opposes the ban:
We are professional ethicists in the fields of medical ethics, business ethics, and/or normative ethics, and academic economists who study how incentives and other mechanisms affect individual behaviour. We all share the goal of improving social welfare.
We have strong reservations regarding any Act or legislation (hereafter: “Acts”) that would prohibit compensation for blood plasma donations…….Both the ethical and the economic arguments against a compensatory model for blood plasma for further manufacture into PDMPs are weak. Moreover, significant ethical considerations speak in favour of the compensatory model, and therefore against the Acts.
The letter carefully discusses many of the objections such as that paid donations will drive out unpaid:
The compensatory model leaves open the possibility of donors’ opting out of compensation, or the operation of a parallel non-compensatory model. The United States does just this, and has an approximately 50% higher voluntary, unpaid, per capita blood donation rate than Canada. Germany, Austria, and the Czech Republic, where plasma donors can be compensated, likewise all have higher rates of voluntary, unpaid per capita blood donation than Canada.
Is paid blood plasma less safe?
Dr. Graham Sher, the CEO of Canadian Blood Services, has said, “It is categorically untrue to say, in 2015 or 2016, that plasma-protein products from paid donors are less safe or unsafe. They are not. They are as safe as the products that are manufactured from our unremunerated or unpaid donors.”
The letter is signed by two Nobel Prize winners in economics, Alvin Roth and Vernon Smith, by philosophers like Peter Jaworski, who did most of the heavy lifting, and by experts who have studied incentives and blood donation closely like Nicola Lacetera and Mario Macis. I am also a signatory.
Singapore crime fact of the day
In 2016, the island nation’s police reported 135 total days without any crimes including snatch-theft, house break-ins and robbery. That low crime rate means many small businesses enjoy little concern about shoplifting.
In fact, as CNBC recently observed, many local businesses take few precautions when closing shop at night.
For instance, in the ground floor lobby of a mixed-use building in the downtown business district, many shops don’t have windows, locks — or even doors.
Here is the full story.