Month: May 2021
Hayek and Keynes: Bomb Throwers
Sometime in the summer of 1942, the economists John Maynard Keynes and Friedrich Hayek spent the night on the roof of the King’s College Chapel in Cambridge. The Germans were in the midst of what some called the “Baedeker bombings,” a campaign to destroy the quaint and historical sorts of buildings that might be found in a Baedeker travel guide, in an effort to break the British fighting spirit. The Cambridge faculty volunteered to spend nights protecting their buildings from damage by extinguishing flames from incendiary bombs. Keynes was a long-time fellow of King’s College. Hayek was in Cambridge for the summer, the London School of Economics having closed due to the blitz.
Keynes’ greatest book, his General Theory of Employment, Interest and Money had been published in 1936, to the acclaim and fury of the entire field of economics. Hayek had just finished what was to become his greatest book, The Road to Serfdom, but he had yet to find a publisher for it. When he did publish it, the impact would be explosive.
Both men were intellectual bomb throwers; creatively destructive in their attacks on prevailing orthodoxies.
Eric Samuelsen on his play, Clearing Bombs, which somehow I missed when it was performed in Salt Lake City in 2014. Did any of you see it?
The supply of motivation is elastic — Study Web
Study Web is the space students have constructed for themselves in response to the irl system that just isn’t working. Unable to find a place or person to turn to with their academic and career anxieties, they find internet strangers—strange kin—to speak to, or simply share the same space with, online. Lacking the intrinsic inspiration to study for hours each day, online advice and group accountability provide a solution. Feeling isolated, virtual study partners create a sense of fellowship. On Study Web, while stressed, students have accepted their lot—they’re not investigating the rightness or wrongness of the pressurized environment of the Gen Z student or asking whether college is worth it at all. 12-hour Study With Me videos are seen as something to aspire to rather than rebel from. Students accept the premise that school and studying are non-negotiables. Where they come from, where they live, their beliefs and value systems are not barriers to community-building; they suffer in common.
And Study Web is huge, and weird:
The Study Web is a constellation of digital spaces and online communities—across YouTube, TikTok, Reddit, Discord, and Twitter—largely built by students for students. Videos under the #StudyTok hashtag have been viewed over half a billion times. One Discord server, Study Together, has over 120 thousand members. Study Web extends far past study groups composed of classmates, institution specific associations, or poorly designed retro forums discussing entrance requirements for professional programs. It includes but transcends Studyblrs on Tumblr that emerged in 2014 and eclipses various Reddit and Facebook study groups or inspirational images shared across Pinterest and Instagram. Populated mostly by Gen Z and the youngest of millennials, Study Web is the internet most of us don’t see, and it’s become a lifeline for students from junior high to college.
By Fadeke Adegbuyi, this is one of the best pieces I have read all year.
“Why economics is failing us”
That is the topic of my latest Bloomberg column, here is one excerpt:
Here’s the dirty little secret that few of my fellow economics professors will admit: As those “perfect” research papers have grown longer, they have also become less relevant. Fewer people — including academics — read them carefully or are influenced by them when it comes to policy.
Actual views on politics are more influenced by debates on social media, especially on such hot topics such as the minimum wage or monetary and fiscal policy. The growing role of Twitter doesn’t have to be a bad thing. Social media is egalitarian, spurs spirited debate and enables research cooperation across great distances.
Still, an earlier culture of “debate through books” has been replaced by a new culture of “debate through tweets.” This is not necessarily progress.
To use a bit of economic terminology, economists haven’t fully internalized the lessons of the Laffer Curve. By demanding so much rigor in academic research, they’ve created an environment in which most of the economics people actually see is less rigorous.
There is also a political effect. Twitter is a relatively left-wing social medium, and so the tenor of popular economic discourse has moved to the left.
Recommended, and it is one of those pieces where the reaction to the piece itself confirms the thesis of the piece…
Vaccine wastage, toward a general theory of multilateral institutions
South Sudan, for instance, recently destroyed nearly 60,000 doses it received from Covax; Malawi destroyed 20,000. Neither were able to distribute their entire allotments before the vaccines expired. Kenya, with more than 50 million people, received over a million doses from Covax in early March, but had used less than one-fifth by late April. The Ivory Coast similarly distributed less than a quarter of the over 500,000 doses it received in late February, raising fears that doses will expire before they are used. The problem goes beyond lower-income countries. More than 600,000 Covax-provided AstraZeneca vaccines sit in Canada at risk of spoilage, while Canadians debate whether it is safe to use them. Vaccinations can begin to confer meaningful protection in under 14 days. Freed from freezers, these vaccines could have saved many lives in Peru, India or Brazil, where the pandemic is raging.
Here is more from Zeke Emanuel and Govind Persad (NYT).
Further Monday assorted links
7. Yuan Longping, RIP (NYT).
8. Famous musicians pick their favorite Bob Dylan songs. Would mine be “Highway 61”? “Mr. Tambourine Man”? “Tangled Up in Blue”? “Don’t Think Twice It’s Alright”? Too many choices. Bob is today 80 years old. The most overrated is perhaps “Desolation Row”, with its pretentious lyrics?
9. Why the new Elon Musk rocket really will matter?
10. Why a new business surge in black communities during the pandemic? (NYT)
Monday assorted links
Staple a Lottery Ticket to Every Vaccination Card
I’ve been promoting stapling a lottery ticket to every vaccination card for some time, so it was good to see Ohio followed by New York, Maryland and Oregon introduce vaccine lotteries. Moreover, the program appears to be working as noted by Philip Bump in the Washington Post:
The seven-day average number of Ohioans getting their first shots increased the day after DeWine’s announcement and continued heading up through Sunday. It’s worth noting that this happened while the number of vaccinations nationally remained flat, suggesting that the trend in Ohio was driven by something different. It’s also worth pointing out that the number of Ohioans completing their vaccinations continued to slip lower, again reinforcing that these were people newly seeking out the vaccine. (In two or three weeks it will be interesting to see if more people are completing their vaccinations.)
Sadly, some politicians are now introducing legislation in Ohio to stop the program. Thus, it’s worthwhile recapping why we expect a lottery program to work. Most people think first about behavioral or psychological explanations. A vaccination is all about immediate costs and future benefits and it’s more difficult to act on future benefits than immediate costs, ala hyperbolic discounting. A free beer, donut, or lottery ticket provides an immediate benefit to offset the immediate cost and so may encourage vaccination, especially for those who are very present oriented. Note, however, that a lottery ticket might be expected to be less beneficial than an equivalent-cost donut because the donut is truly immediate while the lottery ticket is not. On the other hand, if vaccine hesitancy is driven by over-estimated fear of rare side-effects then perhaps a lottery ticket balances with an over-estimated hope of rare-benefits.
Even within a risk-neutral, rational model, however, there are good reasons to tie public goods to lotteries (ungated). Charities, for example, often use lotteries or raffles to fund public goods. Why? The reason is that a lottery is a natural counter to free-riding. Imagine that there is a public good but no one contributes because they each hope to free ride off other people’s contributions. As a result, the public good is not provided. Now introduce a fixed prize lottery. If no one else contributes then a contributor wins the lottery for certain so it can’t be an equilibrium for everyone to free ride (reminiscent of my dominant assurance contract mechanism for producing public goods). Note that the lottery in this model can’t just be a regular lottery ticket where you have to match X numbers to win. It has to be a raffle where the probability of winning is 1/N where N is the number of contributors. Thus, the Maryland and Ohio vaccine lotteries, which draw winners from the vaccinated, are much better than New York version which just hands out free lottery tickets. Thus, I expect the Ohio and Maryland versions to be more successful than the New York version.
Hat tip: Casey Mulligan for reference to the Morgan paper.
Facts about recessions and unemployment (and matching)
Not everyone is going to like this one:
During a recovery, unemployment seems little responsive to demand disturbances. Economic policy should focus on preventing recessions rather than trying to ameliorate their effects.
That is from the new slides/paper by Robert E. Hall and Marianna Kudlyak on the consistency of recovery from recessions, lots of evidence behind that claim, as employment recovery occurs at a remarkably consistent rate across recessions, regardless of policy response. Furthermore explanation of the micro-data mostly follows from the supply of employment, not the demand, and no that doesn’t require any kind of weird DSGE model, nor does it involve aggregate demand denialism about the initial cause of the problem. Links are here, including other papers by Kudlyak, many good papers in there, sadly these rooftops are nearly empty.
The British in 18th century India
The British were obliged to design a state structure in India virtually from scratch, because the one Warren Hastings lashed together between 1772 and 1784 was considered to have failed. He had tried to adapt traditional Indian practice while adding a British top layer to it, but this compromise never worked well. Absence of supervision, abundant temptation, scarcity of reliable information and poor communication between Calcutta and the mofussil (rural areas) created multiple problems. When placed in Indian shoes, Europeans often behaved worse than their native predecessors. Hastings’s system lacked discipline, so British politicians resolved in the early 1780s to supply standards and enforce them. Pitt’s India Act of 1784 and the Cornwallis Code of 1793 were the results.
Traditional ruling practices in India were replaced by specific rules, designed to reduce personal discretion. What the British most feared in their own rulers — arbitrary power — they were determined, at least initially, to deny to those placed in authority in India.
Just as the US Constitution was designed to thwart the central executive, so the objective of the Cornwallis system of 1793, its near contemporary, was to restrain the EIC’s [East India Company’s] servants in India. The collective self-regulation that it set up, by means of boards and committees, worked fairly well in enforcing honesty within government in India after 1784, but not in achieving efficiency. Day-to-day government was not facilitated, and judicial decisions slowed to a crawl. Meanwhile tax revenues, instead of sticking to British fingers, stayed somewhere out in the rural areas, hid behind an opaque wall of legal and customary technicalities.
That is from Roderick Matthews’s excellent Peace, Poverty and Betrayal: A New History of British India. Here is my previous post on the book.
Cold Storage No Longer a Constraint
Yahoo: With little fanfare, the U.S. Food and Drug Administration gave Pfizer permission this week to store its COVID-19 vaccine in a typical refrigerator for one month — freeing the vaccine from the need to be shipped in cumbersome boxes stuffed with dry ice.
Among authorized COVID-19 vaccines, Pfizer’s vaccine was notorious for its ultra-cold storage requirements. Now, as the only vaccine authorized for children ages 12 to 17, this new flexibility could dramatically accelerate the effort to vaccinate America’s teens and adolescents.
Pfizer spent millions on its cold storage technology and now discovers that it isn’t strictly necessary–that wasn’t a mistake, Pfizer did the right thing–but it’s a good reminder of how new this technology is and also how the clinical trial decisions are not written in stone.
Straussian take: Investigate fractional dosing.
San Francisco fact of the day
At a board of supervisors hearing last week, representatives from Walgreens said that thefts at its stores in San Francisco were four times the chain’s national average, and that it had closed 17 stores, largely because the scale of thefts had made business untenable.
Brendan Dugan, the director of the retail crime division at CVS Health, called San Francisco “one of the epicenters of organized retail crime” and said employees were instructed not to pursue suspected thieves because encounters had become too dangerous.
“We’ve had incidents where our security officers are assaulted on a pretty regular basis in San Francisco,” Dugan said.
And yes incentives matter:
The retail executives and police officers emphasized the role of organized crime in the thefts. And they told the supervisors that Proposition 47, the 2014 ballot measure that reclassified nonviolent thefts as misdemeanors if the stolen goods are worth less than $950, had emboldened thieves.
Here is more from the NYT, via Ilya Novak.
Sunday assorted links
*New Order* (this movie review is full of spoilers)
I found this Mexican movie unpleasant to watch, quite a few reviews are negative, and very few of you ought to see it. Yet at least it is fundamentally interesting, and it does show off some skills of movie-making, such as good cinematography and creation of tension and communicating a sense of Mexico City.
Most gringos won’t understand it. Most of the time watching you think it is a racist movie about revolt from indigenous Mexicans who stick together from motives of racist solidarity. By the end of the movie, but only at the end, you realize the paler skinned elites of the Army engineered the whole thing. What seemed to be the racism of the movie is in fact implicit commentary on the racist paranoia of the Mexican elites. And then finally you realize that the outrages committed by the indigenous people in the movie are mirroring outrages committed under the Conquest (e.g., rape, kidnapping for ransom), and that in reality the Conquest is being re-committed each and every day by the elites, yet with these somewhat racist paranoid fantasies layered on top that the logic of the Conquest someday will be reversed by the indigenous. And yet always it will be the elites in charge, who at the same time make their paranoid racist dystopian nightmares the fundamental narrative of society, thereby screwing everybody over double. The faucets do not in fact produce green water, though kind of they do, as cadmium green is a national color of Mexico.
YMMV, but at least a day later I am still thinking about it.
Did humans evolve to be suited for large-scale cooperation as well?
Here is the new Boyd and Richardson paper:
We present evidence that people in small-scale, mobile hunter-gatherer societies cooperated in large numbers to produce collective goods. Foragers engaged in large-scale communal hunts, constructed shared capital facilities; they made shared investments in improving the local environment; and they participated in warfare, alliance, and trade. Large-scale collective action often played a crucial role in subsistence. The provision of public goods involved the cooperation of many individuals, so each person made only a small contribution. This evidence suggests that large-scale cooperation occurred in the Pleistocene societies that encompass most of human evolutionary history, and therefore it is unlikely that large-scale cooperation in Holocene food producing societies results from an evolved psychology shaped only in small group interactions. Instead, large scale human cooperation needs to be explained as an adaptation, likely rooted in the distinctive features of human biology, grammatical language, increased cognitive ability, and cumulative cultural adaptation.
If true, this would revise a fair amount of social science, including Hayek on atavistic desires and also various “off the cuff” invocations of evolutionary biology and assumptions about the conditions of early human evolution.
Via Kevin Vallier, who has recently published Trust in a Polarized Age, a book of interest to anyone considering this topic.
Peter Thiel on The Bible
I have not heard it yet, from various MR readers, whom I thank, here goes with the new and improved YouTube link:
And here is still the audio-only link.