Month: February 2018

Blog posts I wish I had written

From a reader email:

I can’t seem to find it on any of the sites you write at, but I do remember reading somewhere an article on the purpose of tenure that I want to find again.

The basic gist was that people were mad that tenured academics are cowards and won’t stand up to radical segments of campus, but the author posited that this wasn’t actually strange because the purpose of tenure isn’t really to instill courage but to function as a sort of intra-university governmental gateway: this person can be trusted so he gets tenure — or something roughly like that.

It sounds like it was something you’d written, but I can’t seem to find it in your writings.

Policemen in schools: what do they accomplish?

A 2009 study by Matthew Theriot of the University of Tennessee compared student arrest and court records from one group of schools that had a school resource officer stationed on school grounds with those of schools that didn’t. Controlling for socioeconomic status, the researcher found that there wasn’t much difference in serious crime between the schools that had SROs and the schools that didn’t. Students at policed schools were much more likely to get arrested than students at unpoliced schools, but they weren’t any more likely to actually be charged in court for weapons, drugs, alcohol, or assault. (In other words, students at policed schools were much more likely to get arrested in cases where there wasn’t enough evidence to actually charge them with a crime.)

Students at policed schools were almost five times as likely to face criminal charges for “disorderly conduct” (which apparently didn’t rise to the level of an assault). In other words, when there was a police officer roaming the halls, students were much more likely to be arrested and brought into court for behavior that was disruptive, but not violent.

That is from Dara Lind, here is more from Eric Levitz.  Via David A. Graham.

Could the tech companies run *everything* better?

Under one view, the major tech companies lucked into some pieces of rapidly scalable software.  They are phenomenal at producing and distributing such software, but otherwise they put on their pants one leg at a time, just like the rest of us.  They are not especially productive at marginal activities beyond their core competencies.

Under the second view, the major tech companies have developed new managerial technologies for hiring, handling, and motivating super-smart employees.  That is the reason why the tech companies have become phenomenal at producing and distributing rapidly scalable software.  But if tech companies turn their attention to other productive activities, they would do very very well.  Alex for instance thinks that Apple ought to buy a university.  Or you might expect that Google’s “scallion fried fish” dish would be especially tasty.  After all, do not smarter people make for better cooks?

Yet a third view starts with the idea of labor scarcity, at least for the very talented folks.  Good, ambitious, non-risk-averse managerial talent is super, super-scarce.  The tech companies have a lot of it — good for them — and they pay for it by producing and distributing readily scalable software.  In that setting, there is usually some slack within the tech company, so if the tech company takes on a new activity, it will excel at it, at least provided it does not try to move beyond the margin allowed by its collected, on-call talent.  Yet if the tech company were to undertake a massive expansion into many non-tech fields, it would be just as talent-constrained as anyone else.

Which are these three views is correct?  What if you had to pick three percentages that sum to one?  How about 30-30-40?

Is there another contending view I am missing?

Addendum: A very important question is at what rate the existence of the tech companies boosts the incentive for individuals to become one of these very talented cogs in the machine of grand productivity.  Training and talent-spotting matters!  And just as tennis players keep on getting better, so can we expect the same from talented, high-cooperation workers, at least as long as the rewards are rising.

Is this actually the variable that determines how much good the big tech companies do for the world as a whole?

Saturday assorted links

1. The re-promotion of Peter Navarro.

2. Norway is worried about winning too much (NYT).  They even offer aid to other countries to compete against them, for fear that otherwise the rest of the world will lose interest in those sports.

3. Profile of Peter Sloterdijk.

4. Were women better represented in Victorian fiction?

5. A lot of the gains from tax reform are going to domestically-oriented firms (The Economist).

India Lacks Formal, Salaried Jobs

In the United States a majority of workers work for very large firms and only 10% are self-employed. In India hardly any workers work for large firms and 80-85% are self-employed, as I pointed out in my post India is a much more Entrepreneurial Society than the United States (and that’s a problem).

Data from a draft report by the World Bank summarized by LiveMint show that India has few formal, salaried jobs not just compared to a developed country like the United States but also compared to many other less developed countries around the world.

Solving this problem is one of India’s biggest challenges as the number of workers is increasing rapidly. Land reform and deregulation of labor markets including stopping own goals that discourage firms from growing and formalizing such as requiring absurdly “generous” maternity leave benefits is a first step.

Hat tip: Urbanomics.

Amazon arbitrage, money laundering edition

The impersonator priced the book at $555 and it was posted to multiple Amazon sites in different countries. The book — which as been removed from most Amazon country pages as of a few days ago — is titled “Lower Days Ahead,” and was published on Oct 7, 2017.

Reames said he suspects someone has been buying the book using stolen credit and/or debit cards, and pocketing the 60 percent that Amazon gives to authors. At $555 a pop, it would only take approximately 70 sales over three months to rack up the earnings that Amazon said he made.

“This book is very unlikely to ever sell on its own, much less sell enough copies in 12 weeks to generate that level of revenue,” Reames said. “As such, I assume it was used for money laundering, in addition to tax fraud/evasion by using my Social Security number. Amazon refuses to issue a corrected 1099 or provide me with any information I can use to determine where or how they were remitting the royalties.”

Reames said the books he has sold on Amazon under his name were done through his publisher, not directly via a personal account (the royalties for those books accrue to his former employer) so he’d never given Amazon his Social Security number. But the fraudster evidently had, and that was apparently enough to convince Amazon that the imposter was him.

Here are additional points of interest, as the practice is more common than you might have thought.  Via the estimable Chug.

The fight for liberty in our time, SB 827

SB 827, a new bill before the California Senate, would require that all areas within a mile of a high-frequency transit stop, or within a half-mile of a bus or transit corridor, allow heights of at least 45 or 85 feet (depending on distance from transit, width of street, and other characteristics). That’s roughly four to eight stories, far higher than what many local zoning commissions allow.

SB 827 would also waive any minimum parking requirements in those areas and prohibit any design requirement that would have the effect of arbitrarily lowering the square footage allowed on a lot.

The bill’s changes would apply to huge swathes of the state, including the majority of land in several major cities. It would unleash dense development In markets long dominated by powerful anti-housing activists (often called NIMBYs, for Not In My Backyard). It represents a housing revolution.

There is much more at the link, David Roberts interviews Brian Hanlon at Vox.

You would have thought armed conflict with Russia would be a bigger story

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

The relative lack of attention being paid to the news that U.S.-backed forces killed 200 to 300 Russian mercenary soldiers this month in Syria seems like a non-barking dog to me.

In many years, this might have been the most disruptive story, holding the headlines for weeks or maybe months. Circa February 2018, it didn’t command a single major news cycle.

What outsiders know about the event is still fragmentary, but it sounds pretty ominous. One Bloomberg account notes: “More than 200 contract soldiers, mostly Russians fighting on behalf of Syrian leader Bashar al-Assad, died in a failed attack on a base held by U.S. and mainly Kurdish forces in the oil-rich Deir Ezzor region.” It is described as the biggest clash between U.S. and Russian forces since the Cold War. It seems that the Russian mercenaries are pretty closely tied to the Russian government.

And:

One Russian commentator called this event “a big scandal and a reason for an acute international crisis.” American foreign policy expert Ian Bremmer noted, “At some level, it’s startling that isn’t the biggest news of the year.” Yet I have found that I know plenty of well-educated people, with graduate degrees and living in and near Washington, who aren’t even aware this occurred. The story has fallen into a memory hole, in part because neither the Americans nor the Russians wish to escalate the conflict.

Is this unusual affair a one-off, or an indication of a more basic shift in the world? I am starting to believe the latter.

Finally, do solve for the equilibrium:

As the tolerance for particular instances of conflict rises, the temptation to allow or initiate such conflicts rises, if only because the penalties won’t be so large. Eventually more parties will experiment with violent sorties.

Here is further coverage from The Washington Post, from today, the most detailed article to date, but it is already way down on their front page.

Paywall sentences to ponder

Non-subscribers visiting WSJ.com now get a score, based on dozens of signals, that indicates how likely they’ll be to subscribe. The paywall tightens or loosens accordingly: “The content you see is the output of the paywall, rather than an input.”

Here is the full Nieman Lab article, you all have a good enough score to read it, just like at MR.

What is the value of studying a foreign language in high school?

Bryan Caplan writes:

While promoting my new book, I’ve repeatedly argued that foreign language requirements in U.S. schools are absurd and should be abolished.  For two distinct reasons.

Reason #1: Americans almost never use their knowledge of foreign languages (unless they speak it in the home).

Reason #2: Americans almost never learn to speak a foreign language very well in school, even though a two- or even three-year high school requirement is standard.

This double whammy is easily generalized.  If studying X for years yields minimal knowledge, and you wouldn’t use X even if you knew it, you could defend X as an elective.  But how could anyone defend X as a requirement?

My view is this:

1. Learning at least one language is of high value for America’s elite.  It helps them see different points of view, and prepares a small number for careers in the foreign service or in other international capacities.  It makes intellectuals deeper and improves their scholarship.  This is a sliver of the population, but the global rate of return to having it is very high.  And I suspect a significant portion of this population received its first exposure to a foreign language in high school (or even junior high), which in turn may have helped them do “study abroad.”

2. If we could target foreign language acquisition to this future elite, I would gladly let the vast majority of the student population off the hook.  One move toward this end would be to use foreign language “tiebreakers” for those wishing to finish in the top quarter of their high school class.  I would like to see a study of whether this would produce sufficiently accurate targeting.

3. Here is an estimate that knowing a foreign language brings a wage premium of about 2%; I have not read the paper, but I do not wish to overclaim on the causality front.  It still is measuring something about quality.

4. Many European countries teach their citizens English (above all), French, and German with reasonable success and high returns, especially for English.  So it is possible to succeed with this endeavor within a public education system.

5. As English is the closest we have to a global language, the imperative for Americans to learn another language is surely smaller than for say Danes to learn English.

6. I do not think opportunity costs during high school are especially high.

7. Overall, not only is education signaling, but an educational system itself is part aspirational and is also a signal.  I see high returns to America having relatively cosmopolitan aspirations, and signaling that it does not take its dominant status, linguistic and otherwise, for granted.  I do not mind commandeering language education toward this end.  Let’s send the right signal rather than acquiescing in a civilizational retrogression.

8. My casual impression is that elite private high schools usually take foreign language training pretty seriously.

So I do not see big gains by eliminating foreign language requirements in American high schools, though I would consider moves toward more effective targeting.  Most of all, I’d like to see the whole thing followed up more with additional study abroad programs at the later undergraduate level.

Addendum: Disagreement aside, I am so pleased that this year the two big exciting economics books so far are by Bryan and Robin Hanson.  Do buy and read both!  As for Bryan, maybe some of you are thinking you just can’t accept his argument about education being so wasteful.  But I’ll say this: Bryan always defends his “absurd” views much better than you think he is going to be able to.  Trinity College just announced it will be charging $71,660 next year — do you really think the value-added in terms of learning has gone up so much?

College average is over

Concord University in West Virginia and Clemson University in South Carolina were both founded shortly after the Civil War. During the 20th century, each grew rapidly. Now, the two public universities that sit just 300 miles apart face very different circumstances.

Clemson, a large research university, enrolled its largest-ever freshman class in 2017 and in December broke ground on an $87 million building for the college of business.

Concord, a midsize liberal-arts school, has seen its freshman enrollment fall 19% in five years. It has burned through all $12 million in its reserves and can’t afford to tear down two mostly empty dormitories…

According to an analysis of 20 years of freshman-enrollment data at 1,040 of the 1,052 schools listed in The Wall Street Journal/Times Higher Education ranking, U.S. not-for-profit colleges and universities are segregating into winners and losers—with winners growing and expanding and losers seeing the first signs of a death spiral.

The Journal ranking, which includes most major public and private colleges with more than 1,000 students, focused on how well a college prepares students for life after graduation. The analysis found that the closer to the bottom of the ranking a school was, the more likely its enrollment was shrinking.

That is from Douglas Belkin at the WSJ, via multiple MR readers, some of them excellent.

Many of you have asked me for further commentary on Bryan Caplan’s education book, which is doing very well.  I’ll be doing a Conversation with Bryan, but for the time being I’ll say this: everyone obsesses over the mood-affiliated “I’m going to lower the status of education signaling argument.”  Hardly anyone has discussed what to me is Bryan’s strangest assumption, namely a sociologically-rooted, actually anti-economics “conformity is stronger than you think” argument, which Bryan uses to assert the status quo will continue more or less indefinitely.  It won’t.  To the extent Bryan is correct (and that you can debate, but at least he is more correct than most people in the educational establishment will let on), competency-based learning and changes in employer behavior will in fact bring about a new equilibrium…not quickly, but certainly in well under two decades.

And what about on-line education?  Well, a lot of students don’t like it because they have to actually work on their own and pay attention.  To the extent education really is just signaling, that should give on-line options a brighter future all the more.  But not in the Caplanian world view, as conformity serves once again as an intervening factor.  For better or worse, Bryan’s book subverts economics as a science at least as much as it does education.  Bryan of course is smart enough to see the trade-offs here, and he knows if the standard model of economic competition were allowed to reign supreme, we would (even with subsidies, relative to those subsidies) tend to see strong moves toward relatively efficient means of signaling, if only through changes in the relative sizes of institutions.

Quinn Slobodian’s *Globalists*

The subtitle is The End of Empire and the Birth of Neoliberalism.  Imagine a novel and interesting coverage of the post-war Austrian School, here relabeled the “Geneva School,” a well-done partial history of the WTO and EU, and a book where the central characters are not only Mises and Hayek, but also Alexander Rüstow, Wilhelm Röpke, and Michael Heilperin.

And it’s written by a Wellesley historian who appears to be entirely sane and responsible throughout.

The main lesson, and here these are my own words not those directly of the author, is that various liberals came to realize that their dreams for a free world order in fact involved quite an extensive international legal apparatus, far removed from the traditional nightwatchman state.  The EU and the “Four Freedoms” are in this view the actual instantiation of historic classical liberalism, arguably more than anything the United States has done of late.  And if you don’t like the over-regulation and excess bureaucracy of the EU, well maybe you’d better realize those are difficult to avoid secondary consequences of having the international law be so strong as to actually constrain state power (again my words, not Slobodian, though his book may lead you to this idea).

Wilhelm Röpke it turns out is the (a?) bad guy, and I have to say I always considered him a third-rate, misguided agrarian thinker.  It turns out his views on Africa were not entirely sound, and furthermore he sought to pull the rest of the liberals away their “economic libertarianism,” keeping in mind that Hayek already favored a social welfare state and socialized health insurance, among other interventions.

I folded over 12 separate pages in this book, which is considerably higher than average.

That all said, I don’t quite buy onto the whole story.  I read Hayek as rebelling against the vanquished Austro-Hungarian Empire, rather than keeping it as a mental model for reform.  Nor am I persuaded by the idea of a identifiable “Geneva School,” whether as an independent group or as a sub-branch of the Austrians.  In my view, the connections running through Geneva are historical ones (various people and institutions got put there), not intellectual in nature.  Haberler and Machlup I would have covered in greater detail, and that would have strengthened the author’s core thesis.  Oddly, there is no mention of Melchior Palyi at all.

pp.271-272 have a good fifteen-point summary of what the Geneva School is supposed to stand for, you might try #5: “World law trumps a world state. International institutions should act as mechanisms for protecting and furthering competition without offering spaces for popular claims-making.”

Henry Farrell has very good remarks on the book.  You can pre-order it here.

And by the way, use of the word “neoliberalism” in a book’s title is almost always a major negative signal, but here it is actually appropriate.

What I’ve been reading

1. Jörn Leonhard, Pandora’s Box: A History of the First World War.  This is probably the meatiest and most comprehensive WWI book yet published.  It covers the origins of the war, preparation for fighting, public reactions, war aims, the course of battle, war economies, internal politics, the battlefields, how it ended, and more, all at 1,060 Belknap Press pages.  Translated from the German, it doesn’t exactly spring to life in your lap, but it is consistently intelligent and thoughtful.  Amazingly the author is only fifty years old.

2. Martin Goodman, A History of Judaism.  Imagine a scholarly history of Judaism, told from the points of view of the time, rather than treating so many events as lead-ups to later anti-Semitism: “My attempt to provide an objective version of Judaism may strike some readers as naive.”  I found the book to be a useful mood affiliation jiu jitsu, plus it has plenty of information that competing sources don’t, most of all about the immediate post-Temple period.  Recommended.

William Deringer, Calculated Values: Finance, Politics, and the Quantitative Age, covers the rise of numerical reasoning in 17th century Britain.

Domenico Starnone’s self-contained short novel Trick is now out, translation and introduction by Jhumpa Lahiri.