Month: May 2018
Thursday assorted links
1. Caplan-Glaeser debate video.
2. Joe Lubin vs. Nouriel Roubini crypto debate video.
3. Can crypto compete with Big Tech? I say no, but here is the opposite case.
4. “Tusked animals will be banned from flying, but miniature horses will not.”
Yes I am headed to Ethiopia
Blogging might be more erratic, if so I apologize. Please don’t think I am getting sick of this — I am not — it’s just that convenient internet connections might be hard to come by in the more rural parts of the country.
Like from 2017:
Ethiopia has cut off internet access nationwide until at least June 8 to try to stop cheats from posting high school exam papers on social media, a government official said on Thursday.
The good news is they just turned internet access “back on” last month. Let’s hope it stays that way.
At the very least, I have posts on autopilot. Let’s hope I can add to those, and at the very worst MR will be back to normal and normally timed service in less than ten days. The modal scenario is that in fact you will get more than average, but I can’t promise that either. Wish me luck.
The new UK cap and trade?
High street newsagents are to sell so-called “porn passes” that will allow adults to visit over-18 websites anonymously.
The 16-digit cards will allow browsers to avoid giving personal details online when asked to prove their age.
Instead, they would show shopkeepers a passport or driving licence when buying the pass.
For the pointer I thank a loyal MR reader.
*Bull Shit Jobs: A Theory*
That is the new and entertaining book by David Graeber, probably you already have heard of it. Here is a brief summary.
Coming from academia, I am sympathetic to the view that not everyone is productive, or has a productive job. And my ongoing series “Those new service sector jobs…” is in part reflecting the wonder of the market in providing so many obscure services, but also in part a genuine moral query as to how many of these activities actually are worthwhile. You are supposed to have mixed feelings when reading those entries, just as with “Markets in Everything.”
Still, I think Graeber too often confuses “tough jobs in negative- or zero-sum games” with “bullshit jobs.” I view those as two quite distinct categories. Overall he presents the five types of bullshit jobs as flunkies, goons, duct tapers, box tickers, and taskmasters, but he spends too much time trying to lower the status of these jobs and not enough time investigating what happens when those jobs go away.
He doubts whether Oxford University needs “a dozen-plus” PR specialists. I would be surprised if they can get by with so few. Consider their numerous summer programs, their need to advertise admissions, how they talk to the media and university rating services, their relations with China, the student lawsuits they face, their need to manage relations with Oxford the political unit, and the multiple independent schools within Oxford, just for a start. Overall, I fear that Graeber’s managerial intelligence is not up to par, or at the very least he rarely convinces me that he has a superior organizational understanding, compared to people who deal with these problems every day.
A simple experiment would vastly improve this book and make for a marvelous case study chapter: let him spend a year managing a mid-size organization, say 60-80 employees, but one which does not have an adequately staffed HR department, or perhaps does not have an HR department at all. Then let him report back to us.
At that point we’ll see who really has the bullshit job.
Are more productive companies higher up?
Tall commercial buildings dominate city skylines. Nevertheless, despite decades of research on commercial real estate and horizontal patterns of urban development, vertical patterns have been largely ignored. We document that high productivity companies locate higher up, with less productive offices lower down and retail at ground level. These patterns reflect tradeoffs between street access and vertical amenities. Vertical rent gradients are non-monotonic, independent of nearby employment, and large. Doubling zipcode employment is associated with a 10.7% increase in rent, consistent with the presence of agglomeration economies. Moving up one floor has the same effect on rent as adding roughly 3,500 workers to a zipcode.
That is by Crocker H. Liu, Stuart S. Rosenthal, and William C. Strange, via the excellent Kevin Lewis. I do get why the ground floor companies would have lower productivity, because they may be walk-in service sector outlets. But otherwise, why might this relationship hold? Is it that everyone wants to better view and the power office? Is being “high up” high status per se?
Wednesday assorted links
1. Should wine be more natural?
2. “…it is a theory of limited government leading to military strength…”
3. Exit interview with Arthur Brooks.
4. MIE: “This British Airways flight will only carry crew named Meghan or Harry on the day of the royal wedding — and they’ll be serving Champagne and British cakes.”
5. GDPR is an impossible, sprawling mess (NYT).
Is North Korea withdrawing from the nuclear talks?
No, they are negotiating, read their latest statement, it is full of “ifs.” If you are negotiating, especially in a fraught situation, often you will feel the need to walk away from the talks, or at least threaten to do so. (Of course, many people suggest Obama should have done more of this leading up to the Iran deal.) And Kim doesn’t want to enter the talks with Trump having had an unbroken string of PR successes.
Now, there is a perfectly reasonable argument for being pessimistic about the North Korean nuclear talks, namely that some of the demands of the two sides may prove incompatible. The good news, if you would call it that, is that we are not actually calling for complete denuclearization of North Korea, though nonetheless we may require more than they are willing to cede. Most of all, we want them to start acting like a normal evil government, rather than like a crazy evil government. Maybe that is too hard for Kim to pull off and still feel stable.
Still, the new news isn’t really bad news at all. It is how an evil tyrannical government negotiates. It is also how some non-evil tyrannical governments negotiate as well, not to mention non-evil, non-tyrannical governments too.
Counterterrorism Spending
The Stimson group has a new report on counterterrorism spending:
In the summer of 2017, the Stimson Center convened a nonpartisan study group to provide an initial tally of total CT spending since 9/11, to examine gaps in the understanding of CT spending, and to offer recommendations for improving U.S. government efforts to account for these expenditures. Stimson’s research suggests that total spending that has been characterized as CT-related – including expenditures for government wide homeland security efforts, international programs, and the wars in Afghanistan, Iraq, and Syria – totaled $2.8 trillion during fiscal years 2002 through 2017. According to the group’s research, annual CT spending peaked at $260 billion in 2008 at the height of the wars in Afghanistan and Iraq. This represents a 16-fold increase over the 2001 total. In 2017, as war funding declined, total CT spending amounted to $175 billion, nearly an 11-fold increase from the 2001 level.
With this growth, CT spending has become a substantial component of total discretionary spending for programs across a wide range of areas, including defense, education, and medical research. Of $18 trillion in discretionary spending between fiscal years 2002-2017, CT spending made up nearly 15 percent of the whole. At its peak in 2008, CT spending amounted to 22 percent of total discretionary spending. By 2017, CT spending had fallen to 14 percent of the total. Despite this drop, the study group found no indication that CT spending is likely to continue to decline.
Counterterrorism spending is thus about $1280 per US household every year–that’s affordable but still a lot for what we get, which is very unclear.
American dams in the 19th century
To appreciate how essential dams were in the nineteenth century, simply look at the 1840 U.S. Census: It found that almost every river had a dam, and many rivers had dozens. In total, the twenty-six states that made up the United States at the time had around 65,000 dams. With a population of only 17 million at that time, the United States had one dam for every 261 people.
That is from the new and often quite interesting Martin Doyle, The Source: How Rivers Made America and America Remade its Rivers.
The economics of cousin marriage
The title of the article is “Cousin Marriage Is Not Choice: Muslim Marriage and Underdevelopment,” by Lena Edlund, and here is the abstract:
According to classical Muslim marriage law, a woman needs her guardian’s (viz. father’s) consent to marry. However, the resulting marriage payment, the mahr, is hers. This split bill may lie behind the high rates of consanguineous marriage in the Muslim world, where country estimates range from 20 to 60 percent. Cousin marriage can stem from a form of barter in which fathers contribute daughters to an extended family bridal pool against sons’ right to draw from the same pool. In the resulting system, women are robbed of their mahr and sons marry by guarding their sisters’ “honor” heeding clan elders.
From the new May American Economic Review.
Who gets the gains from innovation?
In this paper we merge individual income data, firm-level data, patenting data, and IQ data in Finland over the period 1988–2012 to analyze the returns to invention for inventors and their coworkers or stakeholders within the same firm. We find that: (i) inventors collect only 8 percent of the total private return from invention; (ii) entrepreneurs get over 44 percent of the total gains; (iii) bluecollar workers get about 26 percent of the gains and the rest goes to white-collar workers. Moreover, entrepreneurs start with significant negative returns prior to the patent application, but their returns subsequently become highly positive.
That is by Philippe Aghion, Ufuk Akcigit, Ari Hyytinen, andd Otto Toivanen in the new AER. Via Ben Southwood.
Low-skilled immigration seems to boost support for Republicans
In this paper we study the impact of immigration to the United States on the vote for the Republican Party by analyzing county-level data on election outcomes between 1990 and 2010. Our main contribution is to separate the effect of high-skilled and low-skilled immigrants, by exploiting the different geography and timing of the inflows of these two groups of immigrants. We find that an increase in the first type of immigrants decreases the share of the Republican vote, while an inflow of the second type increases it. These effects are mainly due to the local impact of immigrants on votes of U.S. citizens and they seem independent of the country of origin of immigrants. We also find that the pro-Republican impact of low-skilled immigrants is stronger in low-skilled and non-urban counties. This is consistent with citizens’ political preferences shifting towards the Republican Party in places where low-skilled immigrants are more likely to be perceived as competition in the labor market and for public resources.
Here is the NBER paper by Anna Maria Mayda, Giovanni Peri, and Walter Steingress.
Tuesday assorted links
Euthanasia and bargaining power within the family
Let’s say more of the world moves to a Netherlands-style euthanasia law. While euthanasia is at first based on individual consent, it usually evolves into a “in unclear cases your spouse or guardian has the actual say.”
How will this affect bargaining power within the family? Here are a few options:
1. Family members will be much nicer to each other, ex ante, so they will be kept around for longer if they come down sick.
1b. Because of time consistency problems, family members won’t be much nicer with each other.
1c. You fear that family members aren’t willing enough to pull the plug on you, so you become actively less nice.
2. Family members will be much more anxious with each other, because they will so often be wondering how the others will wish to dispose of them, and when.
3. Some family members will make explicit ex ante deals, such as: “You can send me to my doom when the time comes, with a clear conscience, but on Tuesday nights we’re going to watch my game shows, not your reality TV.”
4. “It stresses me out that you are stressed out over my dying, so I will apply for euthanasia right here and now, even though I still have nine months to live with my cancer. Except I will tell you that I just don’t want to live any longer, so you don’t feel bad about why I am doing this.”
5. You have no family and given your illness you are a net revenue drain on your nursing home. If you go back to live out your final days, you’ll end up with the worst room and less spicy food and no private TV. You agree to euthanasia, granted that they send $20,000 to your favorite charity. You leave this earth with a warm glow, feeling that 20k probably saved at least one life. In reality, with p = 0.68 it subsidized someone’s overhead.
What else?
What I’ve been reading
The Virtue of Nationalism, by Yoram Hazony. Falls into the “contrarian, but shouldn’t need to be contrarian” category. It makes good points, but I felt it was interior to my knowledge set.
Karl Ove Knausgaard, Spring, a comeback for Knausgaard.
Gabriel Said Reynolds, The Quran and the Bible: Text and Commentary. I won’t have the time soon to work through the thousand pages of this book, but it appears to be a major achievement and of very high quality. Here is the book’s home page. Here is a good piece by Reynolds on related topics.
Nick Polson and James Scott, AIQ: How People and Machines are Smarter Together, is a new and (believe it or not) original and very good take on this theme.
Heiner Rindermann, Cognitive Capitalism: Human Capital and Wellbeing of Nations perhaps covers too much ground, but is still a very useful 500 pp. plus survey of exactly what the title suggests.
Jan Assmann, The Invention of Religion: Faith and Covenant in the Book of Exodus. One of the best introductory works on the best and most important book ever written.