Month: January 2018
I am delighted that Facebook is cutting back on its news feed
A few points:
1. Facebook can now claim it is truly addressing the problems (way exaggerated in my opinion) associated with the 2016 election. This looks decisive, and the company can present it as a turning point.
2. In essence, they are blaming the media, without having to throw the stones themselves. Americans respond positively to attacks on the media, so this is a strong public relations move. Facebook retains the option of blaming the media more explicitly for its previous troubles, if need be.
3. The news feed can always be reintroduced under another name or guise. Two years from now, the entire dialogue about the major web companies is likely to be different, one way or another.
4. I do understand this may devastate some marginal media outlets, and in fact many media outlets are marginal these days in economic terms. Still, in the longer run I prefer a scenario where other web sites try to compete with Facebook rather than being co-opted by it and dependent on it.
5. Does this mean more ads will turn up on Instagram, chat apps, Facebook Messenger, and other Facebook services?
There is also this angle (NYT, speculative):
Facebook’s pulling back from the news — which necessarily depends on conflict — and elevation of homier material may bolster the company’s attempt to enter China, where it has been met with stiff resistance.
“Facebook is just desperate to get into China, and it will never do that unless it censors news — and this is actually a neat solution to that,” Mr. Weisberg, the Slate chairman, said. “If you only have news on the platform shared by users, users who live under repressive regimes don’t have access to real news and can’t share it, because it’s legally prohibited.”
I’m not entirely happy about this last factor, but I also don’t see how it is better for China for Facebook to remain permanently outside the country. And if the desire to enter China makes Facebook in some way worse for Americans, that is a potential problem, but I don’t see how this move makes the overall media environment worse for Americans.
The Doing Business Index is being recalibrated
The World Bank repeatedly changed the methodology of one of its flagship economic reports over several years in ways it now says were unfair and misleading.
The World Bank’s chief economist, Paul Romer, told The Wall Street Journal on Friday he would correct and recalculate national rankings of business competitiveness in the report called “Doing Business” going back at least four years.
The revisions could be particularly relevant to Chile, whose standings in the rankings have been especially volatile in recent years and potentially tainted by the political motivations of World Bank staff, Mr. Romer said.
…Over time, World Bank staff put a heavy thumb on the scales of its report by repeatedly changing the methodology that was used to calculate the country rankings, Mr. Romer said.
The focus of the World Bank’s corrections will be changes that had the effect of sharply penalizing the ranking of Chile under the most recent term of Chile’s outgoing president, Michelle Bachelet.
“I want to make a personal apology to Chile, and to any other country where we conveyed the wrong impression,” Mr. Romer said. The problems with the report, he said, were “my fault because we did not make things clear enough.”
Saturday assorted links
1. IKEA does price discrimination.
2. Chinese plans for the 2022 Winter Olympics.
3. The Bush administration, diplomacy, and North Korean nukes.
4. Will simulating empathy through VR help or hurt?
5. Russian economic history postdoc, working under John Nye. And be a Hoover National Fellow.
6. How much did late marriage boost the Industrial Revolution?
Let’s have more African immigrants
That is the topic of my latest Bloomberg column, here is one bit:
Or consider Nigerian-Americans, Nigeria being the most populous nation in Africa. Their education levels are among the very highest in the U.S., above those of Asians, with 17 percent of Nigerian migrants having a master’s degree.
And:
Economist Edward Lazear suggests a simple experiment. Consider immigrants to the U.S. from Algeria, Israel and Japan, and rank them in order of most educated to least educated. The correct answer is Algeria, Israel then Japan. Although that’s counterintuitive at first glance, it’s easy enough to see how it works. If you are Algerian and educated, or aspire to be educated, your prospects in Algeria are relatively poor and you may seek to leave. A talented, educated person in Japan or Israel can do just fine by staying at home. These kinds of considerations explain about 73 percent of the variation in the educational outcomes of migrants.
Do read the whole thing.
Friday assorted links
1. Extreme peak-load pricing for London restaurant.
2. History of Henry George, NYC, and the single land tax.
3. Economics lessons from the career of Andre Agassi?
4. If you would like to attend my NYC Conversation with Matt Levine.
5. WSJ review of Hanson and Simler.
6. “Butcher breaks out of own freezer using black pudding.” Beef and lamb prove to be inferior escape tools.
Innovation Versus Time and Culture Bound Normality
Scott Alexander at SlateStarCodex riffs off my post on how we laugh at Oregonians afraid to pump their own gas while not looking at our own absurd restrictions on cutting hair, for example, and adds a few of his own:
There are way too many discrepancies in approved medications between countries to discuss every one of them, but did you know melatonin is banned in most of Europe? (Europeans: did you know melatonin is sold like candy in the United States?) Did you know most European countries have no such thing as “medical school”, but just have college students major in medicine, and then become doctors once they graduate from college? (Europeans: did you know Americans have to major in some random subject in college, and then go to a separate place called “medical school” for four years to even start learning medicine?) Did you know that in Puerto Rico, you can just walk into a pharmacy and get any non-scheduled drug you want without a doctor’s prescription? (source: my father; I have never heard anyone else talk about this, and nobody else even seems to think it is interesting enough to be worth noting).
Scott then strikes at the heart of the issue:
So maybe the scary thing about Oregon is how strongly we rely on intuitions about absurdity. If something doesn’t immediately strike us as absurd, then we have to go through the same plodding motions of debate that we do with everything else – and over short time scales, debate is interminable and doesn’t work. Having a notion strike us as absurd short-circuits that and gets the job done – but the Oregon/everyone-else divide shows that intuitions about absurdity are artificial and don’t even survive state borders, let alone genuinely different cultures and value systems.
This is part of what I meant by collective action kills innovation. I wasn’t saying that DARPA can’t work but rather that by subjecting everything to collective action we subject it to debate. discussion and legislation and that slows down innovation, in part because our notions of what is normal are so time and culture bound.
Is lobbying profitable for business?
Maybe not, as I argue in my latest Bloomberg column:
The numbers instead indicate that lobbying hurts the underlying capital values of the corporations. Lobbying doesn’t increase the chance that favored bills are passed by Congress, and it isn’t associated with the company receiving more government contracts.
Those are the key results from a new study by Zhiyan Cao, Guy D. Fernando, Arindam Tripathy and Arun Upadhyay, published in the Journal of Corporate Finance and considering 1,500 S&P companies over the period 1998 to 2016. Neither spending money at all on lobbying nor spending more money on lobbying over those years seem to help companies, and for that matter contributions to political action committees don’t work either.
And:
If corporate lobbying is an unprofitable use of money, why does it happen? One possibility is that corporate leaders are using company resources to indulge their own ideological preferences. Other researchers have found that companies with weaker governance and more entrenched management are those more likely to spend on lobbying. This study finds that lobbying expenditures are higher when the percentage of CEO perks is higher and when the board of the company is larger.
It’s also possible lobbyists are ripping off companies with slick sales pitches, or that incompetent CEOs are spending money on lobbying so they seem to be doing something constructive.
Do read the whole thing, I also consider under what kind of hypothesis the lobbying actually might be paying off.
Is marrying your cousin bad for democracy?
The title of the paper is “The Churches’ Bans on Consanguineous Marriages, Kin-Networks and Democracy” and the author is Jonathan F. Schulz, here is the abstract:
This paper tests the hypothesis that extended kin-groups, as characterized by a high level of cousin marriages, impact the proper functioning of formal institutions. Consistent with this hypothesis I find that countries with high cousin marriage rates exhibit a weak rule of law and are more likely autocratic. Further evidence comes from a quasi-natural experiment. In the early medieval ages the Church started to prohibit kin-marriages. Using the variation in the duration and extent of the Eastern and Western Churches’ bans on consanguineous marriages as instrumental variables, reveals highly significant point estimates of the percentage of cousin marriage on an index of democracy. An additional novel instrument, cousin-terms, strengthens this point: the estimates are very similar and do not rest on the European experience alone. Exploiting within country variation support these results. These findings point to the importance of marriage patterns for the proper functioning of formal institutions and democracy.
I recall reading related ideas in the MR comments section from Steve Sailer and others. For the pointer I thank Alexander B.
“Queen’s bra fitter Rigby & Peller loses royal warrant”
A company which supplied lingerie to the Queen has lost its royal warrant over a book which revealed details of royal bra fittings.
Rigby & Peller, a luxury underwear firm founded in London, had held the royal warrant since 1960.
It was withdrawn after June Kenton, who fitted bras for the Queen, released a book called ‘Storm in a D-Cup’.
Mrs Kenton said there was “nothing” in the book to “be upset about”, adding that it was an “unbelievable” decision.
Buckingham Palace said it did not “comment on individual companies”.
A statement from Rigby & Peller said it was “deeply saddened” by the decision, adding it was “not able to elaborate further on the cancellation out of respect for her Majesty the Queen and the Royal Warrant Holders Association”.
The Royal Warrants Association says 20 to 40 Royal Warrants are cancelled every year – and a similar number granted.
File under “elsewhere in the cosmos.” And for the pointer I thank M.
Is this the market working or the market failing?
A Twitter battle over the size of each “nuclear button” possessed by President Donald Trump and North Korea’s Kim Jong-un has spiked sales of a drug that protects against radiation poisoning.
Troy Jones, who runs the website www.nukepills.com, said demand for potassium iodide soared last week, after Trump tweeted that he had a “much bigger & more powerful” button than Kim — a statement that raised new fears about an escalating threat of nuclear war.
“On Jan. 2, I basically got in a month’s supply of potassium iodide and I sold out in 48 hours,” said Jones, 53, who is a top distributor of the drug in the United States. His Mooresville, N.C., firm sells all three types of the product approved by the Food and Drug Administration. No prescription is required.
Here is the full piece, via the excellent Mark Thorson.
*Elephant in the Brain* — what is really going on in this book?
Not long ago, over lunch, I asked Robin who he wanted to see rise and fall in status, as a result of his book with Kevin Simler. As for who should rise, he cited the book’s epigram to me:
To the little guys, often grumbling in a corner, who’ve said this sort of thing for ages: you were right more than you knew. —Robin
So yes the little guys, but I also stress the cynics as well, or maybe it is the gentle cynics who go through life with a smile.
And who should decline in status? Robin’s lunch answer was again to the point: policy analysts. Policy analysis, while it often incorporates behavioral considerations, when studying say health care, education, and political economy, very much neglects the fact that often both the producers and consumers in these areas have hypocritical motives. For that reason, what appears to be a social benefit is often merely a private benefit in disguise, and sometimes it is not even a private benefit. Things that feel good aren’t always good for you, or for the broader world. Here is Robin’s take on that:
Our new book, The Elephant in the Brain, can be seen as taking one side in a disagreement between disciplines. On one side are psychologists (among others) who say of course people try to spin their motives as being higher than they are, especially in public forums. People on this side find our basic book thesis, and our many specific examples, so plausible that they fear our book may be too derivative and unoriginal.
On the other side, however, are most experts in concrete policy analysis. They spend their time studying ways that schools could help people to learn more material, hospitals could help people get healthier, charities could better assist people in need, and so on. They thus implicitly accept the usual claims people make about what they are trying to achieve via schools, hospitals, charities, etc. And so the practice of policy experts disagrees a lot with our claims that people actually care more about other ends, and that this is why most people show so little interest in reforms proposed by policy experts. (The world shows great interest in new kinds of physical devices and software, but far less interest in most proposed social reforms.)
In ignoring hypocrisy, policy analysts are themselves hypocritical, and thus Robin wishes to downgrade their status, perhaps doubly so. Sorry people!
I find these status questions to be a useful means of thinking about many non-fiction books, sometimes fiction too. I would note it is sometimes hard to market books with the “group X ignores well-known truth from field Y” spin, but perhaps that also means there are intellectual arbitrage gains to be had from studying such works.
Thursday assorted links
1. Macron challenges farm subsidies.
2. Bitcoin conference stops accepting Bitcoin.
3. Bloomberg reports on five papers from the AEA meetings. And Tankersley and Scheiber cover bias against women in the economics profession (NYT).
4. Gourmet chocolate becomes economic lifeline in Venezuela crisis.
Wednesday assorted links
1. Markets in everything: Sol LeWitt sports bra. And there is no great stagnation.
2. Canadian documentary about Jordan Peterson. Covers gnosticism, the Heideggerian side, Jung, etc. Not so much about the anti-PC stuff or the personality psychology.
4. Chetty’s on-line Stanford class.
5. The drone wars heat up, this time in Syria and against Russia.
6. Dylan Matthews on Auten and Splinter and inequality debates.
In praise of earmarks
That is the topic of my latest Bloomberg column, here is one excerpt:
In essence, earmarks give congressional leaders more control over individual members. Recalcitrant representatives can be swayed by the promise of a perk for their district. That eases gridlock and gives extreme members of Congress something to pursue other than just ideology.
But is more legislation always a good result? Advocates of smaller government should keep in mind that reforming spending and regulation requires some activism from Congress. Gridlock today is not the friend of fiscal responsibility, coherent policy, or a free, well-functioning capitalist economy.
But what if you’re a Democrat? In these days of Republican rule, you might have discovered a newfound love for stasis. Still, earmarks make it harder for, say, far-right party members to hold legislation hostage to their demands. In other words, party leadership can put up a more centrist bill and then buy off the extremists with local benefits rather than policy concessions.
There is much more at the link. Addendum: I thank Garett Jones for spurring my interest in this topic.
Dolphin Capital Theory
The Guardian…Kelly the dolphin has built up quite a reputation. All the dolphins at the institute are trained to hold onto any litter that falls into their pools until they see a trainer, when they can trade the litter for fish. In this way, the dolphins help to keep their pools clean.
Kelly has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on.
…Her cunning has not stopped there. One day, when a gull flew into her pool, she grabbed it, waited for the trainers and then gave it to them. It was a large bird and so the trainers gave her lots of fish. This seemed to give Kelly a new idea. The next time she was fed, instead of eating the last fish, she took it to the bottom of the pool and hid it under the rock where she had been hiding the paper. When no trainers were present, she brought the fish to the surface and used it to lure the gulls, which she would catch to get even more fish. After mastering this lucrative strategy, she taught her calf, who taught other calves, and so gull-baiting has become a hot game among the dolphins.
The dolphins are not only gaming the system they are saving and using a capital structure to increase total output.
The more we learn, the smaller appears the gap between humans and other animals. Over twenty years ago, I read When Elephants Weep: The Emotional Lives of Animals. I was convinced. But at that time it was a controversial book. Today, with thousands of youtube videos of animals clearly having fun or exhibiting other emotions, it seems obvious.
Animal consciousness is still controversial but the gap between other minds and other non-human minds appears to me to be very small. If I can believe in the first, I can easily believe in the second. As the Cambridge Declaration put it:
Convergent evidence indicates that non-human animals have the neuroanatomical, neurochemical, and neurophysiological substrates of conscious states along with the capacity to exhibit intentional behaviors. Consequently, the weight of evidence indicates that humans are not unique in possessing the neurological substrates that generate consciousness. Nonhuman animals, including all mammals and birds, and many other creatures, including octopuses, also possess these neurological substrates.