My Conversation with John Nye

John is one of the smartest people I know, and one of my favorite people to talk to, here is the transcript and audio.  Here is the opening summary:

Raised in the Philippines and taught to be a well-rounded Catholic gentleman, John Nye learned the importance of a rigorous education from a young age. Indeed, according to Tyler he may very well be the best educated among his colleagues, having studying physics and literature as an undergraduate before earning a master’s and PhD in economics. And his education continues, as he’s now hard at work mastering his fourth language.

On this episode of Conversations with Tyler, Nye explains why it took longer for the French to urbanize than the British, the origins of the myth of free-trade Britain, why Vertigo is one of the greatest movies of all time, why John Stuart Mill is overrated, raising kids in a bilingual household, and much more.

Here is one bit:

NYE: In fact, one of the things I do know about the 19th century is that there’s no evidence that either unilateral free trade or multilateral did very much.

Almost all the free trade in Europe in the 19th century was a product of, initially, the bilateral trade agreement between Britain and France, sometimes known as the Anglo-French Treaty of Commerce of 1860, in which they each agreed to much more liberalized trade on a most-favored-nation basis. Once they accepted this, then what happened is, anyone who signed on to either Britain or France on the most-favored-nation basis then bought into, in some sense, this system.

Here is another:

COWEN: Particular mistakes aside, what were the systemic mistakes the Western world was making in, say, 1910, 1912?

NYE: I think the systemic mistake really boils down to how do you deal with the problem of power? How do you deal with the problem of different groups, different cultures wanting their place at the table? It’s clear that, if you look, a lot of the fight of imperialism was great-power competition.

If you look in the Far East, for example, some people may know that the United States took the Philippines from Spain at the end of the period of Spanish control of the Philippines in 1898, and partly this was due to Perry’s decision to sail into Manila Bay.

One of the things that’s not discussed — most people are unaware of — is that the German and British fleets were waiting in Hong Kong. They were waiting to see what the Americans did. And it’s quite likely that, had the Americans not steamed into Manila Bay, that the Germans or British would have intervened in the Philippines once the Spanish collapsed.


COWEN: And if there’s an underlying political subtext or import of Hitchcock, what do you think that would be? Not what he necessarily intended as his politics, but what’s in the movies in terms of human nature and political man?

NYE: Well, I think there’s this question of suspicion and the tendency to not appreciate how much is going on under the surface. I think people tend to see these things narrowly in terms of Cold War paranoia. But Hitchcock was a political conservative, and he was much more of the very old British conservative view that one should be wary in times of —

COWEN: Suspicion is metaphysical, right?

Definitely recommended, I am very honored to have had the chance to do this with John.


Public discourse being so pedestrian these days, Vertigo would perhaps be relevant were we inclined to prize the perspectives that our tall buildings confer less than two decades after 11 September 2001. (Public discourse these days thrives not in corporate suites with stunning vistas as along gutters and in vast subterranean caverns.)

Our contemporary moment perhaps possibly maybe speaks much more acutely of the relevance (and vast underappreciation for the efficacy of his depiction of the metaphor) of Hitchcock's The Birds.

NYE: It is underrated. I think that, despite its high ranking, it should be rated even further. I mean, look at this movie. On all margins, it’s great.

Watch it again. An amazing portion of the movie is devoted to extended shots of the rear of automobiles and stock footage of flying aircraft. Scores of current writers, directors and cinematographers could have done a much better job on a somewhat interesting story, which is basically a San Francisco travelogue with a plot.

It is about betrayal, trust, recovery and especially obsession.

It might be great, but it's not fun to watch. I could never understand the love for Vertigo. The story is so weird, and the characters completely unappealing. I guess obsession isn't a theme that particularly interests me.

I'll take Rear Window, Psycho, and North by Northwest any day over Vertigo.

Unlike the U.S., which is above board with its sugar tariff.

It is different. Japan Inc. is waging economic war against the West.

Nye leaves out what followed the defeat of the Spanish in the Philippines: the Americans stayed and made the Philippines an American colony, something the Filipinos didn't appreciate, resulting in the six plus year Philippine American War in which there were almost a million military and civilian casualties. Nye indicates that few people were aware that the British and German fleets were waiting in Hong Kong to see what the Americans would do. That may be true, but even fewer people are aware of the Philippine American War. I am, but that's because my grandfather served as an Army surgeon in the Philippines during the entire war.

Somehow, Americans are more appreciated than the Japanese which only stayed from 1942 to 1945 in the Philippines.

Because they are aggressors!

Because the Americans quickly realised that the Philippines were worthless to them, had a genuine plan to grant independence, and were executing that plan, unlike basically all the other European colonies Japan conquered in 1941-1942, most of which had to be re-conquered by the European powers after the war (with varying levels of success -- the Dutch never really got their East Indies back from the collaborationist independence movement).

That may be true, but even fewer people are aware of the Philippine American War.

No, that's exactly wrong.

Sure, few people are aware of the Philippine-American War. But the ones who are, usually are due to exposure to a lefty professor they encountered in college saying something about America's colonialist history. The usual line the left profs give is that the US should have let the Philippines become independent after the Spanish-American War. Which is the sort of thing that can only be said by the few aware of the Philippine-American War because fewer are aware of the waiting fleets.

There wasn't going to be any Philippine independence in 1898; the alternative to US rule was some other external power. The Germans went ahead in 1899 and actually did grab all the rest of the Spanish East Indies (the Marianas, Palau, and the Carolines), having previously taken the Marshalls from Spain in 1885. The Japanese were just north of the Philippines in Taiwan since 1895 (and in 1914 went and took for themselves the islands the Germans had taken from Spain). The British, French, and Dutch all had colonies in the area, too.

So, the question wasn't, "Will the US grant the Philippines their independence, given local sentiment for it, or crush the local resistance?" It was, "Will the US take effective control of the Philippines, or leave and watch some other colonial power crush the local resistance?"

Now, on a strict self-interest matter, it might have made sense for the US to let, say, the Germans take over. But as a matter of ethics? The US washing its hands of the matter would have kept them clean, but the independence-seeking locals were going to be suppressed by someone's mailed fist.

'But the ones who are, usually are due to exposure to a lefty professor they encountered in college saying something about America's colonialist history.'

Or they just might have heard of Admiral George Dewey, because odd as it may sound, millions of Americans remain familiar with the proud history of the U.S. Navy.

Operations in the Philippines also provided the motivation for the development of the M1911 .45 pistol, to provide one shot stopping power against the Moro insurgents.

For what it's worth, my first exposure was through Gary Cooper movies on Saturday afternoon TV.

There was widespread opposition to the war in the U.S. at the time, especcially after news of the atrocities being committed by both sides was reported in the U.S. press. As for lefties, was Mark Twain a lefty? Here is what he wrote about the war:

"There is the case of the Philippines. I have tried hard, and yet I cannot for the life of me comprehend how we got into that mess. Perhaps we could not have avoided it—perhaps it was inevitable that we should come to be fighting the natives of those islands—but I cannot understand it, and have never been able to get at the bottom of the origin of our antagonism to the natives. I thought we should act as their protector—not try to get them under our heel. We were to relieve them from Spanish tyranny to enable them to set up a government of their own, and we were to stand by and see that it got a fair trial. It was not to be a government according to our ideas, but a government that represented the feeling of the majority of the Filipinos, a government according to Filipino ideas. That would have been a worthy mission for the United States. But now—why, we have got into a mess, a quagmire from which each fresh step renders the difficulty of extrication immensely greater. I'm sure I wish I could see what we were getting out of it, and all it means to us as a nation."

Twain was being one of naive, short-sighted, or ridiculous, depending on how you interpret "act as their protector" and "a fair trial".

Fundamentally, there was no way that the United States was ever going to undertake a multi-decade commitment of blood and treasure to defend the Philippines against the whole world for decades while also letting the Philippines run itself rather than according to our ideas. The closest it could have ever been is a Cuba-style arrangement where they pretended to be independent and we let them pretend to be independent.

So, in the end, either the US was going to impose its will on the Philippines, or the US was going to leave. After which the Germans or the Japanese or British or French or Dutch were going to come in and impose their will, because there was no way an independent Philippines was going to be able to resist a takeover.

The situation in the Philippines was quite similar to what exists today in Afghanistan. If the US doesn't stay in Afghanistan bad guys like Pakistan, Russia, Iran, etc. will impose their will on the place. In the case of the Philippines, those little guys are such push-overs, killing Magellan on his global circumnavigation must have been some kind of accident.

'bad guys like Pakistan, Russia, Iran, etc. will impose their will on the place'

They can try, but history is pretty clear on the fact that Pakistan and Russia are unable to impose their will on the place. One can doubt the Iranians will do any better.

those little guys are such push-overs, killing Magellan on his global circumnavigation must have been some kind of accident

Oh, sure, inflicting a few casualties on an isolated Age of Sail exploratory mission is equivalent to resisting the invasion of an industrial army, so the correct comparison for the Philippines' ability to resist a German or Japanese invasion c.1910 is Magellan's death. Rather than, say, using the Philippines' actual record in fighting the US and Japan in the first half of the 20th Century.

But, seriously, how in the world are you able to type while performing an autocolonoscopy? It's quite a talent.

Pershing spent 13 years trying to subdue the Muslim element of Philippine society and left for Europe and WWI without accomplishing it. A country in name only, made up of 7641 islands and over 150 languages, even today "control" over its entirety by a central authority is an unrealized dream.

The Japanese lost roughly 1/3 of a million men in their WWII Philippine fiasco. Not all of them were killed by Douglas MacArthur.

You're the bad guy: the USA


If the Americans were simply concerned with protecting the Philippines against other aggressors out of pure altruism, couldn't they just provide military assistance instead of taking over the country?

On "missing" meritocracy:

NYE: I think the problem with that is the following. I agree with you, it really upsets people, and for that reason, we don’t see meritocracy in most venues, even in academia. But I think the real problem that you get in the United States is, given the ethnic and cultural diversity of the United States, then what you get is, you get tribalism along lines that recreate many of the things that I think the liberal republic was designed to get rid of. You basically recreate factionalism.

While an interesting perspective, I certainly hope not. I'd hope that Tyler and John would be part of an effort to recommit to founding American values (now generalized to ex-slaves etc), and that this would defeat that sort of tribalism.

Of course, once you do commit to one American tribe based on common values, you do still have an outstanding question regarding meritocracy or redistribution within that one tribe.

On Philippine food ... I've had a fair amount, rarely at restaurants, mostly at Philippine market food courts, or food fairs.

Hate to say it, but I don't see it in the same class as genius cuisines like Japanese, Korean, or Vietnamese. I remember fairly bland and fatty foods without much flavor profile. YMMV.

Go grab a Banh Mi. They're not $2 anymore, but still a great deal.

My banh mi ga was too salty, tbh.

You hit on something there. Filipino food isn't as "generalizable" as some other cuisines, but there are subsets that can be made broadly appealing.

Chinese-derived foods (pancit canton, etc.) are quite appealing, and not too huge of a gap to bridge because Americans already understand Chinese food. The only issue there is that they aren't distinctive enough from Chinese food, so they're a hard sell.

Adobo (the non-fatty cut variety) is amazing and has to the most potential for generalization.

I personally love sinigang but it would be a hard sell to most Americans.

I was hoping for some recommendations back, I will seek out sinigang. Thank you, Happy Thanksgiving.

Tyler is on a never-ending quest for oracles. Makes him a meta-oracle.

"Perry’s decision to sail into Manila Bay"


Come now, are you arguing facts with one of the smartest people Prof. Cowen knows?

Thanks, that confused me as well -- went off digging through wikipedia to figure out if Perry of the Black Ships fame had a son or something . . .

"had the Americans not steamed into Manila Bay, that the Germans or British would have intervened in the Philippines": spot on.

It's a little-known fact that had the American attempt to conquer Canada in 1812 not been made, the Japanese had a plan to cross the Pacific, the Rockies, and then the Prairies, and attempt a conquest themselves.

You know, apart from considering the embarrassing history of the British Empire when facing the Japanese in WWII, you might have actually been aware of how the Japanese were expanding in the region before the Spanish-American War.

But what happened to Singapore or the HMS Prince of Wales is the sort of thing left better forgotten, just like how the Japanese Empire had been steadily expanding for almost 2 generations before those events.

I am not American! Brazil has never commited crimes against humanity. Quite the opposite indeed. Brazil fiercely opposed Nazism and Communism.

I wouldn't call it "steady" . . . before the Spanish-American war, the expansion is just formal annexation of Okinawa and then annexation of Taiwan after the first Sino-Japanese war. Korea is detached from Chinese suzerainty (hence the Independence Gate), but Japan still had to win round 2 (Russo-Japanese War) before annexation.

The explosive expansion only starts in the 1930's, with the conquest of Manchuria, minor border wars with the Soviets and Chinese warlords, followed by full scale invasion in 1937. And of course, the conquest of the European colonies in East Asia in 1941-42.

Singapore is worth remembering, though. Didn't the IJA take it with bicycle troops?

Nye: I would say things are a bit blurry in the early 1900s, but probably it’s not till sometime in the early 20th century that they [France] fully catch up [to Britain].

Not according to Maddison - France caught up in the 1960s:

UK France GDP per capita in 1990 dollars
1820 $2,100; $1100; 50%
1850 $2,350; $1,600; 70%
1900 $4,500; $2,900; 65%
1930 $5,400; $4,500; 85%
1950 $6,900; $5,200; 75%
1960 $8,600; $7,400; 85%
1970 $10,800; $11,400; 105%
2000 $21,000; $20,400; 95%
2017 $43,000; $43,000; 100% (2017 dollars)

Americans are the last colonialists!!

I do not blame Americans for their behavior, they have brains around 30-35% the size of Brazilian brains. It is their nature.

No. Others will follow.

It's not even the best late-50s Hitchcock film (NxNW) and Psycho is perhaps even better.

Terrific interview

Sweet sweater ;-)

Very nice interview.

best Convo with Tyler yet. More economic history, please


Warning: Economic history can become addictive.

"Once one starts thinking about [actions to accelerate economic growth], it is hard to think about anything else." - Robert Lucus

Agreed, best convo with Tyler I've seen so far.

So you admit that Brazilian politicians and tycoons are fraudsters and yet you insist that the Brazilian character is not synonymous with fraud. You speak like a true Brazilian fraudster.

CNTRL + F + "patents" --> no hits in John Nye's CWT
CNTRL + F + "Lopez" --> " "

How smart can John Nye really be? I will cherry pick a few things and comment. Besides getting England/France ketchup/catch-up growth wrong (see upstream, but it's a minor mistake) here are more errors and omissions:

1/ correctly says bilateral or multilateral trade is irrelevant to early USA growth but fails to mention that trade was only 15%-20% of total income (source: Walton & Rockoff, History of American Economy, 10th edition). Fifteen to 20% is not enough to show up in the statistics since the statistics are very crude before the 1940s, as Angus Maddison can attest. Consider that monetary shocks by the Fed Reserve constitute only 3.2% to 13.2% out of 100% of any macro change (source: Bernanke et al.'s FAVAR paper of 2002), yet people obsess over this small change, likewise trade at 15-20% should also be important.

2/ fails to point out how patents helped the USA (in fact this was in the US Constitution, see more here: - note how the patent laws have changed over time, but today's patent laws are essentially unchanged except for minor things like duration, since the 1950s). Notable early patents (after 1850 too numerous to mention) Cotton gin (Whitney), Swivel chair (T.Jefferson), Potash (first US patent), U.S. Patent 5,236; see also all references to patents here:
Note further that patent popularity in courts waxes and wanes depending on public perceptions of monopoly: during the mid-19th century they waxed, late 19th century they waned (Big Trust Progressive hysteria), during the mid-1950s they waxed, during the 1960s-70s they waned (Hippy hype), during the 1980s they waxed (Reagan free-market), during the 00s to present they waned (Great Stagnation pessimism). Some of the above is from the link, some is my personal observations.

3/ likes Napoleon III yet Wikipedia says he was responsible for promoting nationalism (which was in the air with the Romantic movement anyway), seems more of a bumbler to me, and French banks on the rise cannot be the result of anything he did.
4/ Likes Filipino food. C'mon. That's some of the worse food in the world. Nuff said. I realize you like the food you were raised with (I personally like vegetables, no spices, just olive oil and maybe vinegar or lemon) but for mass appeal, Filipino food is like modern Hawaiian food: basically Spam, chicken, pork (all as a topping, in tiny amounts, not enough to get good mouthfeel), white rice and Coca-Cola. No vegetables unless covered in a foul shrimp paste, no fruits (they export all their mangoes to the USA and strangely they don't eat the super cheap papaya, nor many bananas, nor cheap pineapples (pina, they are cut into spirals to avoid the eyes) and western fruits like apples, grapes, pears (pears?!, I haven't even seen one yet, except an Asian pear) don't grow here due to the tropical climate and are imported from Australia/China, as are, strangely oranges. Mangosteen, durian (yummy!), dragon fruit, rambutan (hairy red fruit), buko (coconut, PH trees are old and not yielding fruit, compare to Thailand where they are plentiful) are also relatively rare and avoided. Filipinos do eat chocolate however; sadly they are replacing durian orchards with chocolate farms in Davao. They love white rice here too. Not jasmine, not brown (arsenic danger anyway in the husk), not black, not red, not sushi sticky rice but long-grained milled white rice. Boring.

5/ Nye gets style points for marrying a woman outside his comfort zone (she spoke no English, though they both spoke French) though apparently the same Chinese 'race'; style points for having kids too.

6/ Likes a biography by some circus freak. should be reviewed, though not in the Wikipedia page, Judge Rafeedie was a circus barker when young, and, also not in Wikipedia, he released the defendant in United States v. Alvarez-Machain, 504 U.S. 655 (1992) for lack of evidence.

All in all, John Nye (not the science guy) strikes me as a pedestrian, even trite, striving and over-achieving humanities oriented fellow. Good man though.

This part is vague but Nye seems wrong about American growth in the 1800s. First, since Tyler asked about GDP per capita growth a little earlier, I assume that he means GDP per capita growth here since talking about "the big effect was simply getting more people into the county."

COWEN: If you think more generally about 19th century economic growth, the numbers we have for GDP growth — they often don’t appear impressive. Is it that growth actually was slow, the numbers are wrong, the big effect was simply getting more people into the country? How do you interpret the 19th century American episode — slavery aside — the growth of the rest of the country?

NYE: "I think American growth was quite impressive. I mean, 2.5 percent averaged over a century or a century and a half is quite a lot of growth,... in fact, especially if you take into account the standard biases and the way in which GDP does things... all these things contributed to what looks like slow growth. But it’s not really slow growth by historical standards, and I don’t think that’s a surprise at all."

Nye isn't correct. The 19th century had faster growth than the 18th century but was slower than the 20th century.

(GDP per capita and average growth in 20 year increments, 1990 dollars)

1820 $1,400; 0.3% (estimated growth from 1800)
1840 $1,500; 0.3%
1860 $2,200; 1.3%
1880 $3,200; 1.9%
1900 $4,100; 1.2%
1.0% growth in the 19th century

1920 $5,600; 1.6%
1940 $7,000; 1.1%
1960 $11,300; 2.4%
1980 $18,600; 2.5%
2000 $28,700; 2.2%
2.0% growth in the 20th century

2018 1.0% (OECD stats for 2000 to 2018)
last 138 years >1880 to 2018 = 1.4% per year.

It's probably not quite as precise to take 5 yearly growth rates from 1820-1900 and average them? If you just look at average growth rate you need a rate of 1.35% to get from 1820-1900, 2.07% to get from 1920-2000. 1.35% is pretty close to 1.4%?

I'm not sure what you are saying here. My point was that Nye's 2.5% over the last 150 years doesn't make sense to me even if he means overall growth. American per capita growth from 1776 to 2000 has been estimated at 0.3% to 0.5%, which increased to 1.5% from 1840 to 1900 and then 2.0% in the 20th century. Nye said that the 19th century was typical for America but only typical for the mid to late 19th century.

The data from Maddison shows the late 19th century was roughly equal in per capita real GDP as the late 20th century. Before then, the data is hard to come by, so Nye's guess is as good as yours.

Bonus trivia: there were roughly 64 comments in this thread before I made this comment, which equals the number of squares on a chessboard. Amazing how often that happens!

"Before then, the data is hard to come by, so Nye's guess is as good as yours."

Maddison's 19th century data is fine. Economists like Gregory Clark have criticized his pre-19th century data.

Seems to me there is a big difference in the tariffs that Nye talks about the British applying on wine vs tariffs designed to protect local industries. Tariffs on wine are clearly a luxury tax since the UK had no local wine industry to protect. There was no real mercantilism intent, vs say tariffs applied to manufactured goods. Luxury taxes like wine tax are progressive ways to apply a consumption tax, generally agreed to be good tax policy in terms of taxing more wealthy people. So the analogy with present day Japan doesn't really apply - they are applying taxes to agricultural imports to protect their local industries - so doing the opposite in terms of incidence - higher food prices penalize poor people. and benefit relatively richer land owners.

If there was no mercantilist intent, would you not see equal taxes levied upon beer and spirits producers within the United Kingdom?

Today we place sales taxes on alcohol of all kinds, but not tariffs, for this reason; the aim is to "progressively" tax luxuries somewhat (though it's a very good way to do it today) and to discourage consumption. But we don't apply this in the form of tariffs at the border because we don't seek to favour domestic producers. So if UK in 19th was applying tariffs for progressive and not mercantilist reasons, why were they not doing likewise? Lack of capacity to do this with their state infrastructure? That's about all I can come up with.

Not an expert but I think there were heavy duties on spirits. I may be wrong but I don't think duties varied on imported vs locally made spirits, they all had the same duty. Beer was the drink of the lower classes which pertains to my point - the duties on wine were more about taxing rather than protecting a local industry. It was about getting the most feathers for the least amount of hissing.

One more...

NYE: "One of the things that shocked me was that, from about the 1850s, or certainly the 1860s, to the end of the 19th century, France had, in fact, much earlier, going back to the ’30s, France seemed to have lower average tariffs than the British did, for I would say three-quarters of the 19th century. It’s not till the end of the 19th century that Britain catches up with France in terms of openness of trade."

The graph below shows trade openness defined as (imports + exports) / GDP for European countries from 1820 to 1949. Britain's trade openness was quite a bit higher than France from 1850 until the 1930s.

______ Britain_____France (trade openness)

Trade openness as "imports+exports relative to total GDP" seems a bit tricky. The US has pretty low figure on this in the scheme of things in the contemporary ... because it's a huge economy with a massive internal market to trade with. Lichtenstein, or more moderately, the Netherlands are going to be much more open to trade as captured by this measure; small states with limited internal markets where much economic activity must necessarily carry on across borders.

Right, that's why I originally started with "It's a little vague" but I apparently deleted that. Britain had a population of around 27 million in 1850 whereas France's was 36 million, not too far apart. France's GDP was 70% that of Britain's then at $57 billion (1990$) while Britain's GDP then was $63 billion. So their economies were about the same size yet Britain's openness was twice as high then.

That should be: "France's GDP *per capita* was 70% that of Britain..."

We at Team Kreider regret the error.

English becomes Daddy’s language and Mandarin becomes Mommy’s language. And strangely enough, that worked. Our son became very fluent.

How is that strange? That is the standard procedure for raising a child to be bilingual. Did Nye reinvent the wheel without doing any research?

> the King Abdullah University of Science and Technology has been hiring a lot of top people in the sciences. But I’m not sure how successful they’re being at creating a really vibrant university that will attract the best and the brightest to come there.

From the pure science research metric WFC from, an off-shoot of one of the top science journal "Nature", on 2017 data KAUST was already ahead of IndianaU, BostonU, ArizonaU, StonyBrook, Brown, UCSantaCruz, CarnegieMellon, CaseWestern, Dartmouth, etc. What is more striking is that KAUST was on an positive upward trend while the rest of the US universities in that cluster except one were on negative downward slopes. It is projected when the data for 2018 is finalized KAUST will be on top in that cluster.


My kids speak Daddy's World (/Hollywood) English, and Mama's Slovak, which they also learn in Slovak church schools (getting almost as much from Gov't per student as gov't schools).

Accent is very important.

The mother should push the second son to speak Mandarin -- when he responds in English, the mother should repeat the response in Mandarin while telling the son to say it in Mandarin. Seldom is message as important as the language lesson -- and if the mother does do this correcting, the son will learn it's easier (thus more fun) to just talk in Mandarin with the mother.

Similar to pushing kids to clean up after themselves -- telling them to do it is always harder than doing it yourself, but they will never do it themselves until they get the habit.

Nye seems quite highly educated, but very unsure about many of his own opinions; or perhaps Cowen was pushing questions specifically about the things he was unsure of. I would have liked more certainty about opinions, and topics where he was more certain, like the ending book opinion.

Perry sailed into Manila Bay? No, he sailed all over the area, but not there.
Maybe he means Dewey?

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