Month: December 2019

Markets in everything

…if you stay in the hotel bedroom created by Christopher Samuel, don’t rush to post a scathing review. He has actually designed it to be as annoying as possible (while remaining just about habitable).

“You probably wouldn’t spend more than a night in it in reality,” says Michael Trainor, creative director of the Art B&B in Blackpool. “I think the novelty would soon wear off.”

Samuel is one of 19 artists who have kitted out a room in the seaside B&B. And it’s hard not to chuckle at the fiendishness of Samuel’s adaptations every time you spot another deliberately awkward feature (the upside-down shower gel dispenser is a particular triumph of user-unfriendliness).

But for him, it’s not a joke.

By making life difficult for visitors, the artist wants to give them a taste of the access problems faced by many disabled people…

In his room – titled Welcome Inn – the bed is surrounded by a 3ft lip, which you must scramble over every time you want to get in or out. The bathroom door doesn’t close because it hits the toilet, meaning there’s no privacy.

Here is the full story.

Who were the two most powerful and effective orators of the decade?

My picks and Trump and Greta Thunberg, in that order, as explained in my latest Bloomberg column. Excerpt:

My choice for second place is Greta Thunberg. In little more than a year, Thunberg has moved from being an unheard-of 16-year-old Swedish girl to Time’s Person of the Year. While she is now a social media phenomenon, her initial ascent was driven by her public speaking. Communication is quite simply what she does.

As a public speaker, Thunberg is memorable. The unusual prosody of autistic voices is sometimes considered a disadvantage, but she has turned her voice and her extreme directness into an unforgettably bracing style. She communicates urgency and moral seriousness on climate change at a time when the world is not taking decisive action. She mixes anger and condemnation with the look of a quite innocent young girl. Her Swedish version of a British accent is immediately recognizable. There is usually no one else in the room who looks or acts like her.

Her core speech she can give in about five minutes, perfect for an age of limited attention spans. She speaks in short, clipped phrases, each one perfect word-for-word. It is easy to excerpt discrete sentences on social media or on television.

As for memorable phrases, how about these: “I don’t want your hope.” “Did you hear what I just said?” “I want you to panic.” And of course: “How dare you? You have stolen my dreams and my childhood with your empty words.”

These days, you can simply say the name “Greta” in many parts of the world, and people will know who you are referring to.

You will note that under the formal DSM definition of autism, deficits in communication are a fundamental feature of the condition — perhaps that should be changed?  Greta uses the term “selective mutism” in describing herself, but clearly the actual reality is more than just a simple deficit, rather an uneven pattern with very high peaks.  As I wrote in the column, communicating is what she does.

One other point — I frequently hear or read people charge that Greta is being manipulated by her parents.  I have no real knowledge of the Thunberg family, but in the research literature on prodigies it is clear that virtually all of those who have achieved something early had quite extreme self-motivation, a common feature of autism I might add.

Tuesday assorted non-links and links

The great Lemin Wu reemerges

Very loyal readers may recall that Lemin Wu was a Berkeley Ph.D in economic history and a student of Brad DeLong.  Then he seemed to disappear.  But for the last few years he was been working and writing, and later in 2020 he has a book coming out in China, in Chinese, title still undetermined.

I have read only parts of the book (the parts in English), and an outline.  Still , I am willing to predict it will be the best and most important economics book of the year, in any language.  It also likely will mark the first time a Chinese economist, writing in Chinese, created an important work.

I won’t “give away the plot,” but suffice to say it is about the rise of the West, the Malthusian model, group selection in history, why development takes so long, and related big topics.  Oh, and it does tie in to and draw upon Cixin Liu’s The Three-Body Problem, just in case you were wondering.

I hope very much this book will be published in English as well.

Hail Lemin Wu!

What to think about Modi these days

Ian Bremmer offers one account of all the wrongdoing, which I will not summarize here.  In any case, many of you have asked me what I think of these recent events.

I do not at all favor replacing India’s secular democracy with “Hindu nation” as a ruling principle.  For one thing, I believe in strong libertarian protections for minority rights against state power, including for Muslims.  I also believe these moves will be bad for India’s economy.  Nonetheless I find most of the extant commentary on Modi fairly misleading and/or naive.

As this outsider sees it, India’s secular democracy was never liberal.  It had certain de facto liberal elements, but largely out of low levels of state capacity, necessitating a kind of tolerance but of course also leading to a very sub-par infrastructure.  Furthermore, it has been commonly described by political scientists as a “democracy without accountability.”  National voting has so much to do with religion, caste, and other particularistic principles that Indian democracy never enforced superior practical performance as it should have.

Then enter several forces at more or less the same time, including Modi, ongoing Indian economic growth, higher expectations and thus greater demands for state capacity, a rise in what is called “populism,” and also an increase in the focality of Islam and also terrorism around the world.

In essence that state capacity starts to be built and part of it is turned to wrong ends, in an attempt to appeal to the roughly 80 percent Hindu majority.  Here is the NYT:

The Modi administration has also done a better job than previous governments in pushing big anti-poverty initiatives, such as building 100 million toilets to help stop open defecation and the spread of deadly disease.

In other words, the positive and negative sides of the story here may be more closely related than is comfortable to contemplate.  The picture reminds me a bit of how parts of Renaissance Europe were often more anti-Semitic or racist than medieval Europe, in part because persecuting states had more resources and it was easier to mobilize intolerant sentiment, partly due to the printing press.  I don’t however idolize medieval times as being so libertarian, rather the earlier ideology contained the seeds of the Renaissance oppressions, which in time turned into foreign imperialism as well.

Similarly, oppression and religious conflict is hardly news in India, for instance you may recall the Partition which in the 1940s killed at least one million people and displaced at least 10 million more.

None of this is to excuse any of these oppressions, whether in India or elsewhere.  The libertarian rights still ought to apply, and should be written into the Indian constitution and laws more firmly.

(It is an interesting and much under-discussed result that the greatest violations of libertarian rights tend to come in periods of high delta in state capacity, not high absolute levels of state capacity per se.  The Nazi government was not that large as a percentage of gdp, but it was growing rapidly in terms of its efficacy along certain dimensions.)

The moral and resonant message here is “libertarian rights for minorities truly are important and beware state power!”  And somehow we need to think strategically, at a deep level, how that message can be combined with the inevitable and indeed desirable growth in Indian state capacity.  The libertarians only make this their issue by eliding the need for growth in state capacity.  So they moralize correctly about the situation, but they don’t see the underlying dilemma so clearly either.

Consider this NYT passage:

“Modi is not a normal politician who measures his success only by votes,” said Kanchan Chandra, a political scientist at New York University. “He sees himself as the architect of a new India, built on a foundation of technological, cultural, economic and military prowess, and backed by an ideology of Hindu nationalism.”

The real question here is — still mostly unanswered — “what else is the new ideology of state capacity supposed to be?”  I am happy to put in my vote for Anglo-American liberalism, but still I recognize that probably will not command either a majority or even a plurality.

Here is one proffered alternative to Modi:

“Rahul Gandhi felt people would support the Congress on issues of farmers, youth, employment, inflation. But, the core issues were left behind and surgical strikes and nationalism were highlighted. The Congress was dubbed a Muslim party. Aren’t we nationalists?” Gehlot asked.

I am not so impressed.  Or try this discussion “What is alternative to ‘Modi cult'”.  Again, on the ideas front underwhelming, at least for this classical liberal.  Maybe something good can come out of the current protest movement (NYT).

All the more, the “establishment media” just isn’t interested in framing the story in terms of individual rights and constraints on democracy.  That narrative is too…well…libertarian and also anti-statist.

For one example, blame either Nilinjana Roy or the person who titled her FT column “Democracy in India is on the brink.”  Last I checked, Modi was elected, then re-elected, and his party and its allies control almost 2/3 of the lower house.  That is truly an Orwellian column title.  It should not be so hard to write “The problem with Modi is the statism, and lack of respect for minority rights, sadly this is democratically certified and thus democracy requires real constitutional constraint of the powers of the government.”  But so many people today are mentally and emotionally incapable of thinking and writing such thoughts, having spent so much time in their mood affiliation glorifying “democracy” (or what they take to be democracy) above all other values.

So we should be spending our time developing and publicizing a new (non-Modi) ideology for greater state capacity in India, combined of course with greater liberty.

And yes, please do restore, redefine, re-enforce or in some cases discover all of the required minority libertarian rights.  Hundreds of millions of Indians and others are counting on it.

Monday assorted links

My Conversation with Abhijit Banerjee

I had an excellent time in this one, here is the audio and transcript.  Here is the opening summary:

Abhijit joined Tyler to discuss his unique approach to economics, including thoughts on premature deindustrialization, the intrinsic weakness of any charter city, where the best classical Indian music is being made today, why he prefers making Indian sweets to French sweets, the influence of English intellectual life in India, the history behind Bengali leftism, the best Indian regional cuisine, why experimental economics is underrated, the reforms he’d make to traditional graduate economics training, how his mother’s passion inspires his research, how many consumer loyalty programs he’s joined, and more.

Yes there was plenty of economics, but I feel like excerpting this bit:

COWEN: Why does Kolkata have the best sweet shops in India?

BANERJEE: It’s a bit circular because, of course, I tend to believe Kolkata has —

COWEN: So do I, however, and I have no loyalty per se.

BANERJEE: I think largely because Kolkata actually also — which is less known — has absolutely amazing food. In general, the food is amazing. Relative to the rest of India, Kolkata had a very large middle class with a fair amount of surplus and who were willing to spend money on. I think there were caste and other reasons why restaurants didn’t flourish. It’s not an accident that a lot of Indian restaurants were born out of truck stops. These are called dhabas.

COWEN: Sure.

BANERJEE: Caste has a lot to do with it. But sweets are just too difficult to make at home, even though lots of people used to make some of them. And I think there was some line that was just permitted that you can have sweets made out of — in these specific places, made by these castes.

There’s all kinds of conversations about this in the early-to-mid 19th century on what you can eat out, what is eating out, what can you buy in a shop, et cetera. I think in the late 19th century you see that, basically, sweet shops actually provide not just sweets, but for travelers, you can actually eat a lunch there for 50 cents, even now, an excellent lunch. They’re some savories and a sweet — maybe for 40 rupees, you get all of that.

And it was actually the core mechanism for reconciling Brahminical cultures of different kinds with a certain amount of social mobility. People came from outside. They were working in Kolkata. Kolkata was a big city in India. All the immigrants came. What would they eat? I think a lot of these sweet shops were a place where you actually don’t just get sweets — you get savories as well. And savories are excellent.

In Kolkata, if you go out for the day, the safest place to eat is in a sweet shop. It’s always freshly made savories available. You eat the freshly made savories, and you get some sweets at the end.

COWEN: Are higher wage rates bad for the highest-quality sweets? Because rich countries don’t seem to have them.

BANERJEE: Oh no, rich countries have fabulous sweets. I mean, at France —

COWEN: Not like in Kolkata.

BANERJEE: France has fabulous sweets. I think the US is exceptional in the quality of the . . . let me say, the fact that you don’t get actually excellent sweets in most places —

And this on music:

BANERJEE: Well, I think Bengal was never the place for vocal. As a real, I would say a real addict of vocal Indian classical music, I would say Bengal is not, never the center of . . . If you look at the list of the top performers in vocal Indian classical music, no one really is a Bengali.

In instrumental, Bengal was always very strong. Right now, one of the best vocalists in India is a man who lives in Kolkata. His name is Rashid Khan. He’s absolutely fabulous in my view, maybe the best. On a good day, he’s the best that there is. He’s not a Bengali. He’s from Bihar, I think, and he comes and settles in Kolkata. I think a Hindi speaker by birth, other than a Bengali. So I don’t think Bengal ever had top vocalists.

It had top instrumentalists, and Ravi Shankar, Ali Akbar Khan, Nikhil Banerjee — these were all Bengali instrumentalists. Even now, I would say the best instrumentalists, a lot of them are either Bengali or a few of them are second . . . Vilayat Khan and Imrat Khan were the two great non-Bengali instrumentalists of that period, I would say, of the strings especially. And they both settled in Kolkata, so that their children grew up in Kolkata.

And the other great instrumentalists are these Kolkata-born. They went to the same high school as I did. There were these Kolkata-born, not of Bengali families, but from very much the same culture. So I think Kolkata still is the place which produces the best instrumentalists — sitarists, sarod players, et cetera.

COWEN: Why is the better vocal music so often from the South?

Definitely recommended, Abhijit was scintillating throughout.

The Innovation Prisoner’s Dilemma

I find windmills beautiful but many people disagree, even in environmentally conscious Germany.

Bloomberg:…it’s getting harder to get permission to erect the turbine towers. Local regulations are getting stricter. Bavaria decided back in 2014 that the distance between a wind turbine and the nearest housing must be 10 times the height of the mast, which, given the density of dwellings, makes it hard to find a spot anywhere. Wind energy development is practically stalled in the state now. Brandenburg, the state surrounding Berlin, passed a law this year demanding that wind-farm operators pay 10,000 euros ($11,100) per turbine each year to communities within 3 kilometers of the windmills.

…local opponents of the wind farms often go to court to stall new developments or even have existing towers dismantled. According to the wind-industry lobby BWE, 325 turbine installations with a total capacity of more than 1 gigawatt (some 2% of the country’s total installed capacity) are tied up in litigation. The irony is that the litigants are often just as “green” as the wind-energy proponents — one is the large conservation organization NABU, which says it’s not against wind energy as such but merely demands that installations are planned with preserving nature in mind. Almost half of the complaints are meant to protect various bird and bat species; others claim the turbines make too much noise or emit too much low-frequency infrasound. Regardless of the validity of such claims, projects get tied up in the courts even after jumping through the many hoops necessary to get a permit.

Another reason for local resistance to the wind farms is a form of Nimbyism: People hate the way the wind towers change landscapes. There’s even a German word for it, Verspargelung, roughly translated aspollution with giant asparagus sticks.

As I wrote earlier, more and more the sphere of individual action shrinks and that of collective action grows and, as a result, nothing can get done because there are so many veto players in the system. We have locked ourselves into an innovation prisoner’s dilemma where each player can say no and as a result we are all worse off.

Windmill, Energy, The Windmills, Wind, The Power Of

The Lancet Commission on Pollution and Health, and IQ

The Lancet Commission on Pollution and Health, an authoritative review with well-over a dozen distinguished co-authors, is unusually forthright on the effect of pollution, most especially lead, on IQ. I think some of their numbers, especially in paragraph three, are too large but the direction is certainly correct.

Neurotoxic pollutants can reduce productivity by impairing children’s cognitive development. It is well documented that exposures to lead and other metals (eg, mercury and arsenic) reduce cognitive function, as measured by loss of IQ.168

Loss of cognitive function directly affects success at school and labour force participation and indirectly affects lifetime earnings. In the USA, millions of children were exposed to excessive concentrations of lead as the result of the widespread use of leaded gasoline from the 1920s until about 1980. At peak use in the 1970s, annual consumption of tetraethyl lead in gasoline was nearly 100 000 tonnes.

It has been estimated that the resulting epidemic of subclinical lead poisoning could have reduced the number of children with truly superior intelligence (IQ scores higher than 130 points) by more than 50% and, concurrently, caused a more than 50% increase in the number of children with IQ scores less than 70 (figure 14).265 Children with reduced cognitive function due to lead did poorly in school, required special education and other remedial programmes, and could not contribute fully to society when they became adults.

Grosse and colleagues 46 found that each IQ point lost to neurotoxic pollution results in a decrease in mean lifetime earnings of 1·76%. Salkever and colleagues 266 who extended this analysis to include the effects of IQ on schooling, found that a decrease in IQ of one percentage point lowers mean lifetime earnings by 2·38%. Studies from the 2000s using data from the USA 267,268 support earlier findings but suggest a detrimental effect on earnings of 1·1% per IQ point.269 The link between lead exposure and reduced IQ 46, 168 suggests that, in the USA, a 1 μg/dL increase in blood lead concentration decreases mean lifetime earnings by about 0·5%. A 2015 study in Chile 270 that followed up children who were exposed to lead at contaminated sites suggests much greater effects. A 2016 analysis by Muennig 271 argues that the economic losses that result from early-life exposure to lead include not only the costs resulting from cognitive impairment but also costs that result from the subsequent increased use of the social welfare services by these lead-exposed children, and their increased likelihood of incarceration.

https://marlin-prod.literatumonline.com/cms/attachment/1755ebf7-a99e-4e30-837f-2cb1846c9e66/gr14_lrg.jpg

*Capital and Ideology*, by Thomas Piketty

This book is more than 1000 pp., here are my impressions:

1. About 600 pp. of this book is a carefully done history of the accumulation and sometimes dissipation of wealth and property.  You can evaluate that material without reference to any particular set of political views.

2. At some point the book veers into partisan issues such as the wealth tax.  Many of those parts remain interesting, but it also becomes clear that Piketty is “out to lunch,” to wit (p.591):

To return to the Soviet attitude toward poverty, it is important to try to understand why the government took such a radical stance against all forms of private ownership of the means of production, no matter how small.  Criminalizing carters and food peddlers to the point of incarcerating them may seem absurd, but there was a certain logic to the policy.  Most important was the fear of not knowing where to stop.  If one began by authorizing private ownership of small businesses, would one be able to set limits?

I can think of a less naive explanation of Soviet attitudes toward the private sector.  Piketty also calls for “participatory socialism” (p.592), a dubious doctrine not to be confused with say Nordic social democracy.  For instance, Sweden (among other countries) seems to have fairly extreme wealth inequality.

3. The sentence “Real wages are much higher in America than in Western Europe” does not come easily to his pen.  Nor does “The United States is a remarkably successful innovator, let’s see what we can learn from that.”  Or even “Raising wages is more important than merely limiting inequality.”  Those seems to be banished thoughts in the Piketty intellectual universe.

4. The sections on Soviet and socialist experience can only be called “delusional.”  In his account, if only a few political decisions had gone the other way, the USSR might have ended up on a path similar to that of Norway (p.603 and thereabouts).

You know, maybe you think that the inequalities of the current day are much worse than people had been expecting.  but that should not revise your view of socialism and the Soviet Union, two matters fairly well settled by historical research.

5. Give these lenses, it is impossible for Piketty to offer any commentary on recent events (about the last 400 pp. of the book) that is anything other than distorted and unreliable.  There is massive distrust of the wealthy in this book, and virtually no distrust of concentrated state power.

6. There is a considerable sum of useful and valuable material in this book, and I would not try to dissuade anyone inclined from reading it.  Nonetheless I suspect its main import is as another sign of the growing compartmentalization of academic discourse — good work intermingled with highly questionable partisan material — and how so many academics, if the mood affiliation tilts in the right direction, will tolerate or even encourage that.

You can pre-order the book here.

Sunday assorted links

1. “This wearable vest grows a self-sustaining garden watered by your own urine.

2. “A self-educated philosopher who never completed high school, Olavo has formed a new generation of conservative leaders in Brazil through an online philosophy course he has taught for 10 years.”  Main story link here.

3. How to fall in love with modern classical music.

4. Mostly non-profit hospitals: “Atlantic Health System, whose CEO is the AHA’s chairman, Brian Gragnolati, has sued patients for unpaid bills thousands of times this year, court records show, including a family struggling to pay bills for three children with cystic fibrosis.”

5. Alasdair Gray of Lanark fame has passed away.

Extreme Aging

Japan now has over 70,000 people who are more than 100 years old.

That stunning fact comes from Extreme Economies, an interesting new book by Richard Davies. Davies looks at extreme economies around the world such as extreme failure (Darien, Kinshasa, Glasgow), extreme resilience (Aceh, Angola Prison, LA), extreme inequality (Santiago) and in the case of Japan (Akita), extreme aging.

Japan’s aging is unprecedented and is having effects throughout the economy and society:

In 1975 social security and healthcare spending commanded 22 percent of the country’s tax revenues; by 2017 the figure, driven up by elderly care and pensions, had risen to 55 percent. By the early 2020s the figure is set to hit 60 percent. To look at it in another way, every other public service in Japan — education, transport, infrastructure, defense, the environment, the arts–could rely on almost 80 percent of tax revenue in 1975, but the increase in elderly-related spending means that only 40 percent is left for other national public expenditures. In budgetary terms, ageing is eating Japan.

As a country, Japan is aging not just because it’s people are getting older but because it’s birth rate is well below replacement. This year there will be fewer than 900,000 births in all of Japan–a number not seen since 1874 when Japan’s total population was much smaller. Overall, Japan’s population is declining.

Population decline may have some good effects but the combination of fewer young people and more elderly people is straining Japanese culture along with its finances. The young naturally resent the increasing burden put on them for supporting the elderly. As with all Ponzi schemes, pay-as-you-go social security schemes come under stress when the population is no longer growing.

…over the next 30 years or so, many countries’ pension systems will require young workers to fund a system that everyone knows will be far less generous by 2040. It is hardly a way to generate confidence in public policy.

And those 70,000 centenarians? Almost 90 percent are women so an aging society is a gender unbalanced society meaning old people lose caregivers or at least someone to share a household with.

Davies is interested in Japan as an example of where many countries are going,

Southern Europe, in particular, is following fast with Italy, Spain and Portugal already experiencing population decline. Germany will start to shrink in 2022, Korea in the early 2030s. Akita, Japan’s cutting edge of ageing economics,…offers a valuable window on the future.

New evidence that YouTube doesn’t radicalize

The role that YouTube and its behind-the-scenes recommendation algorithm plays in encouraging online radicalization has been suggested by both journalists and academics alike. This study directly quantifies these claims by examining the role that YouTube’s algorithm plays in suggesting radicalized content. After categorizing nearly 800 political channels, we were able to differentiate between political schemas in order to analyze the algorithm traffic flows out and between each group. After conducting a detailed analysis of recommendations received by each channel type, we refute the popular radicalization claims. To the contrary, these data suggest that YouTube’s recommendation algorithm actively discourages viewers from visiting radicalizing or extremist content. Instead, the algorithm is shown to favor mainstream media and cable news content over independent YouTube channels with slant towards left-leaning or politically neutral channels. Our study thus suggests that YouTube’s recommendation algorithm fails to promote inflammatory or radicalized content, as previously claimed by several outlets.

That is from a new paper by Mark Ledwich and Anna Zaitsev.  That hardly settles the matter, but you may recall the last serious papers on this topic also indicated that YouTube does not radicalize.  So if you are still believing that YouTube radicalizes, you will need to come up with additional facts for your point of view.

Here is a Mark Ledwich tweet storm on the paper.

Taliban markets in everything

Nearly 400 people who were either wounded while serving in the U.S. military in Afghanistan or are family members of service members who died in the conflict sued a group of companies on Friday they say helped fund attacks against Americans by making protection payments to the Taliban.

“Defendants supported the Taliban for a simple reason: Defendants were all large Western companies with lucrative businesses in post-9/11 Afghanistan, and they all paid the Taliban to refrain from attacking their business interests,” the 288-page complaint filed in federal court in Washington, D.C. on Friday states. “Those protection payments aided and abetted terrorism by directly funding an al-Qaeda-backed Taliban insurgency that killed and injured thousands of Americans.”

Relying on confidential witnesses, internal documents and publicly available information from journalists, government watchdogs and congressional hearings, the complaint alleges companies that worked in war-torn Afghanistan commonly acceded to the Taliban’s mob-style demands for payment in exchange for the guarantee that their businesses interests would not be attacked.

One unnamed American executive who worked in Afghanistan is quoted in the complaint as saying “We don’t need any security if the payments are made. Nobody f—s with us.”

The payments allegedly climbed as high as 40% of the value of the company’s project and were often facilitated through subcontractors. The subcontractors, such as private security firms that were known to pay off the Taliban, would sometimes send money through Afghanistan’s traditional money transfer network, which can be hard to trace. Other times, the companies would simply hire Taliban operatives to work as guards.

Here is the full story.