Month: November 2023

China estimate of the day

by  Tyler Cowen in

According to a report by the All-China Federation of Industry and Commerce, more than 80% of China’s 1 billion private enterprises are family-owned, with about 29% of these businesses in traditional manufacturing. From 2017 to 2022, around three-quarters of China’s family businesses are in the midst of a leadership transition, marking the largest succession wave in Chinese history.

Here is the full story, via Rich Dewey.

My Conversation with the excellent Brian Koppelman

by  Tyler Cowen in

Here is the audio, video, and transcript.  Here is the episode summary:

Brian Koppelman is a writer, director, and producer known for his work on films like Rounders and Solitary Man, the hit TV show Billions, and his podcast The Moment, which explores pivotal moments in creative careers.

Tyler and Brian sat down to discuss why TV wasn’t good for so long, whether he wants viewers to binge his shows, how he’d redesign movie theaters, why some smart people appreciate film and others don’t, which Spielberg movie and Murakami book is under appreciated, a surprising fact about poker, whether Jalen Brunson is overrated or underrated, Manhattan food tips, who he’d want to go on a three-day retreat with, whether movies are too long, how happy people are in show business, his unmade dream projects, the next thing he’ll learn about, and more.

Excerpt:

COWEN: Thank you. I have some very simple questions for you about the history of television to start with. I grew up in the 1970s and I’ve long wondered, “Why was TV so bad for so long before the so-called Golden Age?” Maybe you could date that to the 90s or the noughties, but why weren’t shows in the 70s and 80s better than they were? Would you challenge that premise?

KOPPELMAN: Well, I also grew up in the ’70s. I was born in ’66. I’m not sure that the hypothesis that it was bad is correct. It certainly wasn’t, in general, as an art form, operating on the level that cinema was operating on or the level that music, in part, was operating on during that time.

But if we look at, say, children’s television, I could argue that Jim Henson and Sesame Street, for what it was and aimed at what it was aimed at, was as important as any television that’s on today. I would say that Jim Henson moved the art form forward. He figured out a use case for TV that hadn’t really been done before, and he created a way of thinking about the medium that was really different.

Then, look, Hill Street Blues shows up in the ’80s and, I think, figures out how to use certain techniques of theater and cinema and novels to tell these TV stories. Like any other business, when that started to connect, then people in the business started to become aware of what was possible.

Yes, it was a function of three channels, to answer your question. Yes, in the main, of course, TV was worse. No doubt about it, but there were high points. I think those high points pointed the way toward the high points that came later. For me, NYPD Blue is the network show that’s fully on the level of any of these shows that came after. David Milch cut his teeth on Hill Street Blues.

There’s a wonderful book by Brett Martin, called Difficult Men, that’s about showrunners. It starts, in a way, with Bochco and Milch in that time period. It’s a great look into how this idea of showrunners created modern television. HBO needing something, all these business reasons underneath it, but how people who came up through, originally, Hill Street were able to go on and start this revolution.

COWEN: In your view, how good, really, was I Love Lucy? Is it just a few memorable moments, like Vitameatavegamin? Or is it actually a show where it’d be good episode after good episode, like The Sopranos?

And from Brian:

I don’t know Wes Anderson. I don’t know him, but I met him once. I love his movies, and I love that his movies are 90 minutes. The one time I met him, we were screening a film. He invited some people who happened to be in town, who he knew were film people, so I got to watch a movie with him. Afterwards, we were just talking about movies, and I said, “These movies of yours — they are 90 minutes,” and he said, “Yes. I found that the concepts I’m interested in don’t really support a journey that lasts longer than that.” He’s an incredibly disciplined filmmaker. I was like, “That makes total sense.”

Recommended, interesting and entertaining throughout.

Will we see less comovement in global economic growth?

by  Tyler Cowen in

That is the question behind my latest Bloomberg column.  China is now, and looking forward, less of a common growth driver around the world.  Oil price shocks may not be less important for humanitarian outcomes, but they matter less for many of the largest economies.  America is now an oil exporter, and the EU just made some major adjustments in response to the Russia shock.  More renewable energy is coming on-line, most of all solar.

The column closes with this:

In this new world, with these major common shocks neutered, a country’s prosperity will be more dependent on national policies than on global trends. Culture and social trust will matter more too, as will openness to innovation — and, as fertility rates remain low or decline, so will a country’s ability to handle immigration. A country that cannot repopulate itself with peaceful and productive immigrants is going to see its economy shrink in relative terms, and probably experience a lot of bumps on the way down.

At the same time, excuses for a lack of prosperity will be harder to come by. The world will not be deglobalized, but it will be somewhat de-risked.

Dare we hope that these new arrangements will produce better results than the old?

Or perhaps a more general rising tide was the only way many countries were going to make progress?

Urban sentences to ponder

by  Tyler Cowen in

Cities in the top decile of the city-size distribution have a 50% lower markup than cities in the bottom decile.

That is from the job market paper of Santiago Franco, who is on the job market from University of Chicago with one of this year’s most interesting papers.  Does that stylized fact then mean there are too many firms and outlets in the major cities, and not enough in the lesser cities?

What I’ve been reading

by  Tyler Cowen in

1. Dan Sinykin, Big Fiction: How Conglomeration Changed the Publishing Industry and American Literature.  An excellent history of U.S. trade publishing, and not the sort of anti-capitalist mentality snark you might be expecting from the title.  Recommended, for those who care.

2. Richard Cockett, Vienna: How the City of Ideas Created the Modern World.  It’s not the same kind of deep explanation as Toulmin or Schorske, nonetheless an excellent survey and introduction to the miracles of Viennese science, philosophy, and culture, earlier in the 20th century.  I enjoyed this very much.

3. Peter Kemp, Retroland: A Reader’s Guide to the Dazzling Diversity of Modern Fiction.  Is this an actual book, or just some smart guy running off at the mouth and writing what he really thinks?  Would I prefer the former?  No!

4. Cat Bohannon, Eve: How the Female Body Drove 200 Million Years of Human Evolution.  It is getting harder and harder to find good popular science books, due to exhaustion of the major topics, but this is one of them.  I kept on seeing reviews of this book, and not buying it due to fears of pandering.  But most of this book is genuinely illuminating and on a wide range of biological topics, most of all how the female body is different.  Ovaries, menopause, differences in brains — you’ll find it all here.  Furthermore, the book does not drown in political correctness.  Recommended.

5. Larry Rohter, Into the Amazon: The Life of Cândido Rondon, Trailblazing Explorer, Scientist, Statesman, and Conservationist.  I loved this book, in part because I like Brazil so much but not only.  Rondon, arguably the greatest tropical explorer of all time, played a central role in the development of northern Brazil.  He laid down a 1,200 mile telegraph line in the Amazon, at the time considered one of the world’s greatest achievements (radio telegraphy made this obsolete, however).  He was Teddie Roosevelt’s guide for two years, published over one hundred papers, and advocated rationalism, tolerance, and a Comtean version of progress.  Rondon’s indigenous background has made him a hero of another sort as well.  Recommended.

Note also that Ethan Mollick’s Co-Intelligence is coming out in April, likely to be very good.  I haven’t seen it yet.

Tuesday assorted links

by  Tyler Cowen

1. “I find that having an additional birth causally increases desired fertility by 0.15-0.30. Further, I find the result is unlikely to be driven by experiential learning but can be explained through either a model of reference-dependent preferences or ex-post rationalization.”  From Prankur Gupta, job market candidate from UT Austin.

2. Leave ChatGPT Voice on while reading a book.

3. Niall Ferguson on the economic impact of the Middle East war (Bloomberg).  And on non-economic issues Yarvin.

4. Can Microsoft use tech to accelerate progress in chemistry?

5. Elites in sub-Saharan Africa are also seeing low fertility.

6. Model these favorability ratings.

7. Ethan Mollick on “GPTs” [agents].

Autonomous Vehicles Lower Insurance Costs

by  Alex Tabarrok in

The insurance giant Swiss RE did a study comparing human drivers with Waymo autonomous vehicles in the same zip-codes and found that autonomous vehicles generated significantly fewer insurance claims.

This study compares the safety of autonomous- and human drivers. It finds that the Waymo One autonomous service is significantly safer towards other road users than human drivers are, as measured via collision causation. The result is determined by comparing Waymo’s third party liability insurance claims data with mileage- and zip-code-calibrated Swiss Re (human driver) private passenger vehicle baselines. A liability claim is a request for compensation when someone is responsible for damage to property or injury to another person, typically following a collision. Liability claims reporting and their development is designed using insurance industry best practices to assess crash causation contribution and predict future crash contributions. In over 3.8 million miles driven without a human being behind the steering wheel in rider-only (RO) mode, the Waymo Driver incurred zero bodily injury claims in comparison with the human driver baseline of 1.11 claims per million miles (cpmm). The Waymo Driver also significantly reduced property damage claims to 0.78 cpmm in comparison with the human driver baseline of 3.26 cpmm. Similarly, in a more statistically robust dataset of over 35 million miles during autonomous testing operations (TO), the Waymo Driver, together with a human autonomous specialist behind the steering wheel monitoring the automation, also significantly reduced both bodily injury and property damage cpmm compared to the human driver baselines.

The Waymo vehicles are in San Francisco and Phoenix so this doesn’t mean that autonomous vehicles are better everywhere. Also, when we say autonomous vehicles we really mean the entire Waymo system including backup. In addition, there are some differences that are hard to account for such as human drivers use more freeways even in the same zip codes. Nevertheless, it is clear that autonomous vehicles are happening. I predict that some of my grandchildren will never learn to drive and their kids won’t be allowed to drive.

Persistence in policy: evidence from close votes

by  Tyler Cowen in

That is the job market paper by economist Zach Freitas-Groff of Stanford University.  Here is the abstract:

Policy choices sometimes appear stubbornly persistent, even when they become politically unpopular or economically damaging. This paper offers the first systematic empirical evidence of how persistent policy choices are, defined as whether an electorate’s or legislature’s decisions affect whether a policy is in place decades later. I create a new dataset that tracks the historical record of more than 800 state policies that were the subjects of close referendums in U.S. states since 1900. In a regression discontinuity design, I estimate that passing a referendum increases the chance a policy is operative 20, 40, or even 100 years later by over 40 percentage points. I collect additional data on U.S. Congressional legislation and international referendums and use existing data on state legislation to document similar policy persistence for a range of institutional environments, cultures, and topics. I develop a theoretical model to distinguish between possible causes of persistence and present evidence that persistence arises because policies’ salience declines in the aftermath of referendums. The results indicate that many policies are persistently in place—or not—for reasons unrelated to the electorate’s current preferences.

Impressively original.  Zach has several interesting papers (see the first link), some from an EA-adjacent point of view.

Monday assorted links

by  Tyler Cowen

1. “Director of new Godzilla film pursuing ‘Japanese spirituality’ of 1954 original.”

2. Java jumps the queue?

3. “Additionally, WFH has the largest detrimental impact on mental health of individuals with lower social abilities relative to WP, and it confers the most substantial benefits on those with higher cognitive abilities compared to NW.”  From the job market paper of Jacqueline Nguyen, University of Maryland.

4. 300 Americans have been able to leave Gaza (NYT, it receives some coverage but just an ordinary story not at the top of the page.  Not dominating the news anywhere else that I can see).

5. Ian Leslie on the new song (NYT).  His book will be excellent.

6. Progress-related Substack from Michael Magoon.

7. Noah on how Ireland got so rich.

What the Kia-Hyundai Crime Wave Tells Us About the Long-Term Decline in Crime

by  Alex Tabarrok in

Motor vehicle thefts (per capita) are about one third the level they were in the early 1990s, a drop which is consistent with the Great Crime Decline, the large fall in many crimes since the early 1990s. A lot of ink has been spent trying to explain the great crime decline–abortion legalization, lead abatement, increased imprisonment, more policing–these are just some of the leading theories.

In recent years, however, there has been a notable increased in motor vehicle theft–not back to earlier peaks–but a substantial increase. Theft hasn’t increased uniformly across the board, however. Thefts of Kias and Hyundais have seen massive increases–in some places thefts of these cars have increased by a factor of five or ten in just a few years. The reason is simple–most cars today have electronic immobilizers which mean that without the key present these cars can’t easily be hotwired. Some enterprising thieves, however, discovered that Kia and Hyundai neglected to install these devices and they spread the word through Tik-Tok videos about a method to quickly and efficiently jack these cars.

I propose that the micro can shed light on the macro. Consider the four theories for the great crime decline that I mentioned earlier–abortion legalization, lead abatement, increased imprisonment and more policing. The first two, abortion legalization and lead abatement, are theories about why there are fewer criminals–these theories say that people improved and that is why crime declined. But better people shouldn’t steal any car models, including Kias and Hyundais! Moreover, people haven’t suddenly become worse. Thus, offender-based theories cannot explain the sharp rise in motor vehicle thefts. There have been some changes in punishment, imprisonment and policing, in recent years but these have been slow moving and fairly small and in addition they also don’t explain the rise in Kia and Hyundia thefts in particular.

Obviously, what explains the rise in thefts of Kias and Hyundias in particular is the discovery that these vehicles were unguarded, unprotected and unsecured. Notice that being unguarded, unprotected and unsecured swamped any effect coming from abortion legalization, lead abatement, increased imprisonment or more policing.

The failure of the big four to explain the rise in Kia and Hyundai thefts isn’t proof that these theories are wrong. But lets ask the inverse question, can the rise in Kia and Hyundai thefts suggest an explanation for the great crime decline? In other words, can we explain the great crime decline by an increase in security. Begin with the most direct case, motor vehicle theft. Car immobilizes and other security devices began to be installed in the 1990s so the timing fits. Moreover, the timing fits multiple countries. One of the weaknesses of theories of the great crime decline such as increased imprisonment and policing is that these theories work for the United States but the crime decline occurred in many industrialized countries at about the same time. Canadian crime rates, for example, fall in near lockstep with US rates but with very different prison and policing strategies. Immobilizer technology, however, happened at similar times in similar places and where we saw delays or early adoption we also see delayed or early falls in motor vehicle theft. In addition, motor theft declined first for newer cars (secured) rather than for older cars despite the fact that the newer cars are the more desirable for thieves–again this fits the security hypothesis better than an offender or punishment hypothesis.

The security hypothesis fits motor vehicle theft but the connection is less clear with respect to other crimes. Home security devices have increased and become higher quality over time but the change was less rapid and less precisely timed to the early 1990s. The rise of credit cards and decline of cash could have reduced muggings, although again the timing doesn’t appear to be precise. Violent crime would seem even less likely to be security related–although cameras and lights surely matter–but keep in mind that a lot of violent crime is a side-effect of property crime. Vehicle thefts, muggings and drug deals turn into homicides, for example. In addition, there are “life of crime” or “career” effects. If you make motor vehicle theft and burglary less profitable that makes a life of crime less profitable which can reduce crime in general even without specific deterrence.

Overall, the security hypothesis carries some weight, especially in explaining multiple countries. I don’t fully discount any of the major theories, however. Multiple causation is important.

The main less I draw is this: The increase in Kia and Hyundai thefts suggests that the crime wave declined not because the ocean became more gentle but because we built more secure sea walls. The big waves are still out there in the vast ocean and if we lower the walls we shouldn’t be surprised if another big crime wave comes rolling in.