Month: January 2022
A nice, well-reasoned piece from Harold Lee pushing back on the idea that we should buy experiences not goods:
While I appreciate the Stoic-style appraisal of what really brings happiness, economically, this analysis seems precisely backward. It amounts to saying that in an age of industrialization and globalism, when material goods are cheaper than ever, we should avoid partaking of this abundance. Instead, we should consume services afflicted by Baumol’s cost disease, taking long vacations and getting expensive haircuts which are just as hard to produce as ever.
Put that way, the focus on minimalism sounds like a new form of conspicuous consumption. Now that even the poor can afford material goods, let’s denigrate goods while highlighting the remaining luxuries that only the affluent can enjoy and show off to their friends.
[The distinction is too tightly drawn]…tools and possessions enable new experiences. A well-appointed kitchen allows you to cook healthy meals for yourself rather than ordering delivery night after night. A toolbox lets you fix things around the house and in the process learn to appreciate how our modern world was made. A spacious living room makes it easy for your friends to come over and catch up on one another’s lives. A hunting rifle can produce not only meat, but also camaraderie and a sense of connection with the natural world of our forefathers. In truth, there is no real boundary between things and experiences. There are experience-like things; like a basement carpentry workshop or a fine collection of loose-leaf tea. And there are thing-like experiences, like an Instagrammable vacation that collects a bunch of likes but soon fades from memory.
Indeed, much of what is wrong with our modern lifestyles is, in a sense, a matter of overconsuming experiences. The sectors of the economy that are becoming more expensive every year – which are preventing people from building durable wealth – include real estate and education, both items that are sold by the promise of irreplaceable “experiences.” Healthcare, too, is a modern experience that is best avoided. As a percent of GDP, these are the growing expenditures that are eating up people’s wallets, not durable goods. If we really want to live a minimalist life, then forget about throwing away boxes of stuff, and focus on downsizing education, real estate, and healthcare.
Hat tip: The Browser.
Photo Credit: MaxPixel.
I was two days ago at Hereticon, and wondering which views actually should be considered heretical. It seems there are some distinct categories, for instance here are a few categories of the “partially heretical”:
1. Used to be heretical, or on the verge of switching.
Favoring gay marriage, or more on the border thinking that UFOs are of alien origin. The latter view is now presented with a straight face by former presidents and CIA heads, so it is not heretical any more. In polls, it is not even so unusual amongst the American public, though some elites will mock it and it remains outside of the mainstream.
2. It’s heretical to say but the actual idea is not heretical.
Presenting “eugenics” ideas is heretical, but talking about “dating” and “matchmaking” is not. Embryo selection is on the verge of not being heretical, if it ever was. Or talking about “the feminization of society” is modestly heretical, but believing women have a much greater cultural influence is not heretical at all. You just have to talk about it the right way.
3. The idea is not heretical globally.
But it might be heretical domestically, such as saying “the CCP is great.” Or “women should have their kids really young.” Those are a special category of heretical ideas, extremely common around the world, for better or worse, but still a no-no in some locales.
4. Popular views, but heretical with many elites.
Try “Darwin is wrong,” or “Facebook is fine.” How about “autocracy is good”? NB: In all of these discussions, I am not considering whether the belief is right or wrong.
Which would be a truly heretical belief that does not fall into these “partially heretical” categories? But it can’t be absurd either, for instance it is not “heretical” for me to believe I can jump one hundred feet in the air, rather it is simply stupid. I am also not looking for beliefs that offend or insult groups per se, as that is too easy. “Group X is crummy” is not interesting for my purposes.
Maybe here are a few outright heretical views, again noting that I am not endorsing them:
5. ESP works.
6. Whales are smarter than people and deeper thinkers too.
7. In fact you can trust Congress to do the right thing.
8. Ten percent inflation a year is just fine.
9. Fortunately America has so many guns that we couldn’t do very strict lockdowns for Covid.
10. It would be better if humans never had existed, as they have destroyed more welfare than they created. Most of all because of their effects on non-human animals.
11. Non-human animals suffer more than they enjoy, and it would be better if they did not exist.
12. American TV was much better in the 1960s and 1970s.
The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics this summer from June 20-29, 2022. The program is designed for students in graduate programs in economics, though students in graduate school in other fields as well as newly minted PhDs will also be considered.
Students will be competitively selected and successful applicants will receive free (double occupancy) housing, a booklet of readings, and stipends for travel and food. The deadline for applying is March 1.
We are very excited about this year’s program, which will focus on giving participants the tools to set up and teach their own undergraduate course in the history of economic thought. There will also be sessions devoted to showing how concepts and ideas from the history of economics might be introduced into other classes. The sessions will be run by Duke faculty members Bruce Caldwell, Steve Medema, and Jason Brent. More information on the Summer Institute is available at our website, http://hope.econ.duke.edu/
TikTok stars are dancing their way to the bank. Some are making more than America’s top chief executives.
Charli D’Amelio, who started posting videos of herself dancing on TikTok in 2019, brought in $17.5 million last year, according to Forbes, which recently ranked the highest-earning TikTok stars of 2021. With 133 million followers on TikTok, she makes her money from a clothing line and promoting products in TikTok videos and other ads.
By comparison, median pay for chief executives of S&P 500 companies was $13.4 million in 2020, according to a Wall Street Journal analysis of data from MyLogIQ. CEO compensation figures include stock and option awards, which typically make up most of executive pay, as well as annual salary and bonus, perks and some kinds of retirement-benefit gains. Only some 2021 CEO compensation figures have been released so far.
1. David Brooks on America falling apart (NYT).
4. “Likewise, authors from the same PhD program or who previously worked with the reviewer are significantly more likely to receive a positive evaluation. We also find that sharing “signals” of ability, such as publishing in “top five”, attending a high ranked PhD program, or being employed by a similarly ranked economics department significantly influences editor decisions and/or reviewer recommendations.” Link here.
7. Good Bridgewater/Dalio piece (FT).
That question is the topic of my latest Bloomberg column. The wealthy can fly to the sun, meet outdoors, test regularly, and find many other workarounds. Poorer individuals tend to be working together in public-facing service jobs. That has a Covid downside, but it does make them less lonely. So who are the biggest loneliness losers?
…it’s pointless to debate which group is loneliest. Still, I might argue for some sympathy for Northerners in midlevel jobs who work alone or remotely. Think of academics, accountants, middle managers.
From the excellent John List, the subtitle is How to Make Good Ideas Great and Great Ideas Scale.
I’ll break this into parts, and put my answer after each query:
1) I’m a remote worker. Why should I live in a city? Heck, why should I live in a suburb, or anywhere that has a state income tax? Even if I want “city amenities” why bother with NYC or SF or anywhere else that is built around the local job market? Why don’t I live in Puerto Rico and skirt income tax entirely?
You live in a city for culture, for sex, and to marry well. If those don’t apply to you, don’t live in a city. And your state income tax probably does not lower your level of happiness, so for most people it should not be a major factor in their location decisions. Puerto Rico has seen population outflow for a long time, what is that telling you? Or do you love mofongos? I would have a hard time making friends there, though I love the place and have visited twice, and hope to go again. (Did you see the museum in Ponce is closed right now? It has excellent pre-Raphaelite works.)
2) Why is it so hard for non-US countries to develop a tech industry?
The best entrepreneurs so often want to come to the U.S., and can. Venture capital as a financial center also tends to be relatively centralized, as are many other financial centers, and that pushes some centralization onto tech itself, though less and less in this age of work from a distance. That said, I challenge the premise of this question. There are plenty of start-up scenes around the world, and most of them are growing. I don’t see an obvious end to that process in sight.
3) If, tomorrow, we get a breaking news alert that an epidemic of a previously unknown disease is spreading in, say, Gabon, how should the federal government- before it gets any other information about spread, severity, etc- react?
The federal government needs to ban travel from Gabon. I am far from sure this will prove effective, but it is the kind of security theater you need for the rest of the public health response not to get too caught up with recriminations over this issue. There are some (possible) stupidities you simply need to tolerate.
4) Seriously, why a University of Austin and not “Socrates Institutes” or whatever at established universities?
Established universities already are dominated by a particular set of interest groups and incentives. Let’s try something new! That said, I am all in favor of innovating within established universities too, and have made various efforts in that direction myself. New universities were common in the American past, why should we be running away from them now?
5) Content creator economy discussion. For example in the long run who will have higher mean/median earnings on Twitch, men or women? Will people with college degrees have higher earnings (and if so will it be causal, or just because people with degrees happen to be more conscientious or whatever)?
The very highest earners will be men with college degrees, but with a very long second-tier tail of women earning lots.
6) Seems like a lot of people are claiming that immigration is a solution for low fertility rates. So why doesn’t the US go all the way and set a target of 75% of immigrants being young unmarried women and buy them a match.com account?
“A good start,” but since single-parent families usually are suboptimal, we should import the men to marry them as well.
1. In Austin, Caplan and Razib Khan will comment on Hanania. I am telling them to put it on YouTube.
The gender-equality paradox refers to the puzzling finding that societies with more gender equality demonstrate larger gender differences across a range of phenomena, most notably in the proportion of women who pursue degrees in science, technology, engineering, and math. The present investigation demonstrates across two different measures of gender equality that this paradox extends to chess participation (N = 803,485 across 160 countries; age range: 3–100 years), specifically that women participate more often in countries with less gender equality. Previous explanations for the paradox fail to account for this finding. Instead, consistent with the notion that gender equality reflects a generational shift, mediation analyses suggest that the gender-equality paradox in chess is driven by the greater participation of younger players in countries with less gender equality. A curvilinear effect of gender equality on the participation of female players was also found, demonstrating that gender differences in chess participation are largest at the highest and lowest ends of the gender-equality spectrum.
Excellent piece by Derek Thompson:
America has too much venting and not enough inventing. We say that we want to save the planet from climate change—but in practice, many Americans are basically dead set against the clean-energy revolution, with even liberal states shutting down zero-carbon nuclear plants and protesting solar-power projects. We say that housing is a human right—but our richest cities have made it excruciatingly difficult to build new houses, infrastructure, or megaprojects. Politicians say that they want better health care—but they tolerate a catastrophically slow-footed FDA that withholds promising tools, and a federal policy that deliberately limits the supply of physicians.
The way I put it in Launching the Innovation Renaissance is that we can be an Innovation Nation or what we are now which is a Welfare-Warfare State.
To give one example, the debate over the Patient Protection and Affordable Care Act was long and vociferous. One of the reasons the debate was vociferous is that the PPACA is part of the vision of the welfare state, a redistributive vision.
How would the innovative state approach the issue of health care? From an innovation perspective two facts about health care are of great importance. First, a huge amount of health care spending is wasted. A strong consensus exists on this point from health care researchers all along the political spectrum. More money will get you a much bigger house, but once you have basic health insurance more money won’t get you much better health care. Should Bill Gates get prostate cancer, his billions will get him a private room and a personal physician, but they won’t do much to extend his lifespan beyond that of a middle-class man with the same disease.
…The second fact is that although spending more on health care now doesn’t get you much, spending more on health care research gets you a lot. It has been estimated, for example, that increases in life expectancy from reductions in mortality due to cardiovascular disease over the 1970-1990 period were worth over $30 trillion–yes, 30 trillion dollars. In other words, the gains from better health over the period 1970-1990 were comparable to all the gains in material wealth over the same period.
Looking at the future, if medical research could reduce cancer mortality by just 10 percent, it would be worth $5 trillion to U.S. citizens (and even more taking into account the rest of the world). The net gain would be especially large if we could reduce cancer mortality with new drugs, which are typically cheap to make once discovered. A reduction in cancer mortality of this size does not seem beyond reach, and the value of such a reduction in mortality far exceeds that of spending more on medical care today. Yet because the innovation vision is not central to our thinking, we overlook potentially huge improvements in human welfare.
The numbers would be higher now due to inflation, population and income growth but you get the idea.
She is one of the world’s leading classical guitarists. Here is the transcript and audio, here is part of the CWT summary:
She joined Tyler to discuss that transition from prodigy to touring musician and more, including how Bach challenges her to become a better musician, the most difficult piece in guitar repertoire, the composers she wish had written for classical guitar, the Beatles songs she’d most like to transcribe, why it’s important to study a score before touching the guitar, the reason she won’t practice more than seven hours per day, how she prevents mistakes during performances, what she looks for in young classical guitarists, why she doesn’t have much music on streaming services, how the pandemic has changed audiences, why she stopped doing competitions early on, what she’d change about conservatory education for classical guitarists, her favorite electric guitarists, her love of Croatian pop music, the benefits and drawbacks of YouTube for young musicians, and what she’ll do next.
COWEN: You once said that you don’t practice past seven hours a day. What would happen in that eighth hour if you were to go there?
VIDOVIĆ: [laughs] I would probably go crazy.
COWEN: Is it mental? Is it physical? Or . . . ?
VIDOVIĆ: I just had a conversation with a friend of mine about that — how the amount of hours are actually not important as much as the quality of the practice. As a child, I used to practice many, many hours because I didn’t know, I didn’t find a way. You kind of experiment over the years. At this age, I finally learned that it’s more about concrete work, focused work, working on things that give you trouble, either if it’s technical or musical, and then you practice in sections. That takes less time.
You practice very slowly before playing fast, and then you put it all together. It just takes a lot of years to get to a point where you know what you need to work on. Two or three hours of focused practice is more efficient than seven or eight hours because sometimes there is a danger of just playing the piece through and not really working on sections and things that we should work on. I think at the eighth hour, we should all stop. [laughs]
1) what do you think are good long-term investments in your health? I know you’re a teetotaler and non-smoker, what about exercise? where do returns start not making sense?
I do not think I am the expert you should consult, but I can tell you where my knowledge base comes from. I have endured a lifetime of people with very exact ideas about health maximization, but with a paucity of data or carefully controlled studies. I thus tend to be skeptical of very specific advice. At the same time, common sense appears to yield some broad dividends, or will involve no real cost. I think the answers that follow are pretty stupid and uninteresting, but this was the highest rated reader request, so here goes:
1. Don’t drink. It is fine or even beneficial for most people, but terrible for 10-15% That might be you. And even for those who are not “problem drinkers,” I’ve had plenty of people write me and tell me their lives are much better since they stopped drinking. Stop treating “drinking” as a default.
2. Exercise every day. For me the main options are basketball, tennis, walking, weights, and Peloton. I am not suggesting those are best, they are simply what I bring myself to do. And indeed that is probably the most important factor for you. I am skeptical of very high stress exercises, such as risky rock climbing, and so on. I don’t see the case for making your exercise into a health risk.
3. Get good sleep. I am blessed in this regard. For me what works is going to bed and waking up at regular hours, and not treating weekends any differently. I don’t pretend that advice has universal validity, but perhaps for some of you it is worth trying. Other people have theories about sleeping in the cold, sleeping with masks, etc. I am not opposed! Try those if you need them. I don’t.
4. Don’t eat junk food. Try to eat mostly unprocessed foods. That said, I don’t think we understand diet very well or have good data on what works. I just don’t seem the harm in eating mostly natural foods. They taste better anyway, and there is possible upside.
5. Be happy. Have goals and projects. Have sex. Have good social networks. There is some evidence on these, I am not sure how strongly causal it is. “Go to church” might work as well, but I don’t do that one. It would frustrate me more than anything.
6. Unless you have strong evidence to the contrary, take a minimum of medications. Don’t just pop random stuff because it might have some modest short-run benefit. But yes I do believe in vaccines and most of all those kinds of medicine that have direct parallels with what we do to try to fix animals.
That is my advice. I consider it mostly trivial, but still it is better than violating the advice.
Say you were trying to teach yourself, to a 99th percentile *layperson’s* level, how, say, an electric car actually worked. How would you go about doing that, precisely?
I am not sure exactly how high (or low) a standard that is, but here is what I would do.
2. Read a book or two on how electric cars work, along the way finding an expert or mentor who could answer my questions.
3. If needed, read a more general book about electricity.
4. Try to explain to someone else how electric cars work. Try again.
I would recommend this same general method for many particular questions.