The Son Also Rises
Economist and Australian politician Andrew Leigh has a very informative review of Gregory Clark’s The Son Also Rises:
If you want to know who made up Australia’s elite in the nineteenth century, a useful place to look is the Australian Dictionary of Biography. In its many volumes, you’ll find business leaders, scientists, media barons and politicians who have featured among the upper echelons of Australian society.
Now, suppose we take the first cohort of significant Australians – those who died before 1880 – and identify those with unusual surnames like Ebden or Maconochie. People with those names were overrepresented among the elite in the nineteenth century. Are they still at the top of society, or are they mixed through?
The answer to this question will depend on the level of social mobility we have in Australia.
…For Australia, it turns out that if we look at the register of modern-day medical practitioners, we find the privileged names of the nineteenth century overrepresented by a factor of nearly three. In other words, if your ancestor was at the top of Australian society six generations ago, you are three times more likely to be a doctor today than the average Australian.
…if we accept Gregory Clark’s methodology, his results imply a very static society. For Britain, the United States, India, Japan, Korea, China, Taiwan, Chile and even Sweden, he concludes that the intergenerational elasticity is between 0.7 and 0.9. This would mean that social status is at least as hereditable as height. It suggests that while the ruling class and the underclass are not permanent, they are extremely long-lasting. Erasing privilege takes not two or three generations, but ten to fifteen generations.
Read the whole thing.
What was Aragorn’s Tax Policy?
Excellent interview with George R. R. Martin at Rolling Stone:
How did you come up with the Wall?
The Wall predates anything else. I can trace back the inspiration for that to 1981. I was in England visiting a friend, and as we approached the border of England and Scotland, we stopped to see Hadrian’s Wall. I stood up there and I tried to imagine what it was like to be a Roman legionary, standing on this wall, looking at these distant hills. It was a very profound feeling. For the Romans at that time, this was the end of civilization; it was the end of the world. We know that there were Scots beyond the hills, but they didn’t know that. It could have been any kind of monster. It was the sense of this barrier against dark forces – it planted something in me. But when you write fantasy, everything is bigger and more colorful, so I took the Wall and made it three times as long and 700 feet high, and made it out of ice.
and some political economy:
A major concern in A Song of Ice and Fire and Game of Thrones is power. Almost everybody – except maybe Daenerys, across the waters with her dragons – wields power badly.
Ruling is hard. This was maybe my answer to Tolkien, whom, as much as I admire him, I do quibble with. Lord of the Rings had a very medieval philosophy: that if the king was a good man, the land would prosper. We look at real history and it’s not that simple. Tolkien can say that Aragorn became king and reigned for a hundred years, and he was wise and good. But Tolkien doesn’t ask the question: What was Aragorn’s tax policy? Did he maintain a standing army? What did he do in times of flood and famine? And what about all these orcs? By the end of the war, Sauron is gone but all of the orcs aren’t gone – they’re in the mountains. Did Aragorn pursue a policy of systematic genocide and kill them? Even the little baby orcs, in their little orc cradles?In real life, real-life kings had real-life problems to deal with. Just being a good guy was not the answer. You had to make hard, hard decisions. Sometimes what seemed to be a good decision turned around and bit you in the ass; it was the law of unintended consequences. I’ve tried to get at some of these in my books. My people who are trying to rule don’t have an easy time of it. Just having good intentions doesn’t make you a wise king.
Communism, Capitalism and Copyright
Over at Crooked Timber Scott Mclemee is upset that a copyright action is removing Marx from Marxists.org:
The Marxist Internet Archive (marxists.org) is a vast and growing resource, run entirely by donated labor, and as polylingual as circumstances permit. (Do they have Trotsky in Tagalog? Indeed they do.) Yesterday, a notice appeared in the Archive’s Facebook group, and also on its homepage, saying that Lawrence & Wishart’s lawyers demand removal of material from the Marx-Engels Collected Works: “Accordingly, from 30th April 2014, no material from MECW is available from marxists.org. English translations of Marx and Engels from other sources will continue to be available.”
…Chances are the archive volunteers never contacted the press before putting the material up because they assumed, reasonably enough, that an edition prepared largely if not entirely with the support of old-fashioned, Soviet-era Moscow gold was not anybody’s private intellectual property—that the works of Marx and Engels now belong to the commons.
As you know, I have some sympathy with this complaint if not with the motivating example. What really burns Mclemee, however, fills me with glee. At the same time as Marx and Lenin were being pulled from Marxists.org he and Corey Robin received:
…radically under-priced materials from the enemy’s publishing apparatus. He’d received an order containing dirt-cheap copies of Bastiat from the Liberty Fund, while a day earlier I had downloaded free digital editions of the major Austrian School books on theory of value and the socialist-calculation debate from the Mises Institute website. There’s more to neoliberal hegemony than loss-leader pricing, but as ideological combatants those people know what they’re doing.
Rating the FDA by Division
In previous work, I have argued that asymmetric incentives make the FDA too risk averse with the result being excessive drug lag and drug loss. The FDA, however, is not a monolithic agency, it is divided into divisions which oversee different types of drugs. The divisions have different cultures, expectations histories and understandings. In my latest paper, written with Tufts researchers Joe DiMasi and Chris Milne, we put aside the question of global efficiency and ask a different question. How do the FDA divisions rate against one another? What we find is quite surprising: some of the FDA divisions appear to be much more productive than others. From the abstract:
After reviewing nearly 200 products accounting for 80 percent of new drug and biologic launches from 2004 to 2012, the authors find wide variation in division performance. In fact, the most productive divisions (Oncology and Antivirals) approve new drugs roughly twice as fast as the CDER average and three times faster than the least efficient divisions—without the benefit of greater resources, reduced complexity of task, or reduction in safety. The authors estimate that a modest narrowing of the CDER divisional productivity gap would reduce drug costs by nearly $900 million annually. The worth to patients, however, would be far greater if the agency could accelerate access to an additional generation of (about 25) drugs. Greater agency efficiency would be worth about $4 trillion in value to patients, from enhanced U.S. life expectancy. To reap such gains, this study encourages Congress and the FDA to more closely evaluate the agency’s most efficient drug review divisions, and apply the lessons learned across CDER. We also propose a number of reforms that the FDA and Congress should consider to improve efficiency, transparency, and consistency at the divisional level.
Andrew von Eschenbach a former Commissioner of the FDA and Director of the National Cancer Institute and now chairman of the Manhattan Institute’s Project FDA wrote a foreword to our paper. Eschenbach writes:
The authors of this report have taken a giant step…by assembling and analyzing a wide array of publicly available information about the relative performance of individual CDER divisions….Continuous, quality improvement measures routinely used by private industry could serve FDA leadership, sponsors, and patients by discerning factors that contribute to an optimal level of performance and, more important, disseminating such practices to ensure that all divisions achieve that performance. The payoff for such an effort could be enormous.
…Process improvement should not be a controversial proposal. An organization like the FDA—which is over a century old and which has maintained its current, basic organizational framework for decades—requires new tools to adapt to changing circumstances.
…I have enjoyed no greater privilege in my professional career than serving alongside the FDA’s talented staff. Today, the agency has more potential than ever to help the U.S. lead the world in advancing a biomedical revolution, one that will have an impact on every aspect of America’s economy and health-care system by improving health, increasing productivity, and reducing overall health-care costs.
…this report should be viewed as a positive, constructive contribution to a desperately needed dialogue on how to assist the agency in fulfilling this vital national goal.
Copyright is Out of Control
I have written about patent and copyright law primarily from the perspective of an economist interested in the institutions and incentives that maximize innovation. As a textbook author, however, I must deal with copyright law in practice. Dealing with copyright law on the ground hasn’t caused me to change my views but it has made me more frustrated. I have also come to appreciate some of the subtler costs of the system. Two cases in point.
A lot of textbooks hire a photo editor to pick generic stock photos, this simplifies things because the bundlers pre-authorize permissions and prices. But we hand picked every photo in our book to illustrate a point which means that our permissions and legal staff often have to find owners and clear permissions on an individual basis. We are grateful that our publisher is willing to do this to produce a quality product but it sometimes leads to absurdities. For example, the publisher doesn’t like to use public domain images. Why not? What could be better than free? The problem is that the bundlers insulate a publisher from lawsuits but when we use a public domain image the publisher is open to lawsuit if a mistake has been made and that makes them fearful.
The general lesson is that strong IP shrinks the public domain not just because it keeps things out of the public domain but also because it makes the public domain appear to be uncertain and dangerous. It’s as if clean, mountain spring water were freely available but people bought from the bottlers instead out of fear of contamination.
Copyright law is one of the forces behind the rise of the mega-bundlers. Mega-bundlers benefit from economies of scale in cataloging IP but there are also economies of scale in dealing with the legal system and insuring against/for lawsuit. It’s probably no accident that two of the largest bundlers, Corbis and Getty, are owned by Bill Gates and (Getty heir), Mark Getty respectively. (FYI, Piketty should have said more about this kind of 21st century rentier in Capital).
Here is another example. To illustrate the point that, contrary to what is often argued, a rich person might get more from another dollar than a poor person we have in Modern Principles a movie still of Scrooge McDuck swimming in money. We think the image speaks for itself but apparently that is a problem. The rights to the photo are–we are told–not the same as the rights to the characters shown within the photo. Thus, even though we have bought and paid for the right to print the photo, to ensure that the use of the characters within the photo falls under fair use we must discuss, comment on and critique the content of the photo in the text.
The distinction between the photo IP and the what’s in the photo IP is one only a lawyer could appreciate, as is the solution. And I mean that without irony. I am not critiquing our publisher or their lawyers. Bear in mind that this is coming to us from the very highest legal counsel of a multi-billion dollar firm. Thus, I do not doubt that the dangers are real and the legal analysis acute. The problem is copyright law itself.
The episode illustrates more generally how the complexity of copyright law has greatly elevated the power of lawyers. It’s no accident that the permissions director is one of the few people at our publisher whose signature is absolutely necessary before our book, or any book, can be published.
I am reminded of Mancur Olson’s 9th implication in The Rise and Decline of Nations:
The accumulation of distributional coalitions increases the complexity of regulation, the role of government, and the complexity of understandings, and changes the direction of social evolution.
Tom Sargent Summarizes Economics
After he won the Nobel, Tom Sargent was “interviewed” in an ad for Ally bank in which his response was simply (and correctly), “no.” The joke is even better than I realized because Sargent has a history of giving very short speeches. In 2007 he gave a graduation speech to Berkeley undergraduates summarizing economics in just 335 words.
It’s a damn fine speech.
I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.
Economics is organized common sense. Here is a short list of valuable lessons that our beautiful subject teaches.
1. Many things that are desirable are not feasible.
2. Individuals and communities face trade-offs.
3. Other people have more information about their abilities, their efforts,
and their preferences than you do.4. Everyone responds to incentives, including people you want to help. That
is why social safety nets don’t always end up working as intended.5. There are tradeoffs between equality and efficiency.
6. In an equilibrium of a game or an economy, people are satisfied with their
choices. That is why it is difficult for well meaning outsiders to change
things for better or worse.7. In the future, you too will respond to incentives. That is why there are
some promises that you’d like to make but can’t. No one will believe those
promises because they know that later it will not be in your interest to
deliver. The lesson here is this: before you make a promise, think about
whether you will want to keep it if and when your circumstances change.
This is how you earn a reputation.8. Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.
9. It is feasible for one generation to shift costs to subsequent ones. That is
what national government debts and the U.S. social security system do
(but not the social security system of Singapore).10. When a government spends, its citizens eventually pay, either today or
tomorrow, either through explicit taxes or implicit ones like inflation.11. Most people want other people to pay for public goods and government
transfers (especially transfers to themselves).12. Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.
Hat tip to Utopia–you are standing on it via Newmark’s Door.
The Socialization of Medicine
“We understand that we doctors should be and are stewards of the larger society as well as of the patient in our examination room,” said Dr. Lowell E. Schnipper, the chairman of a task force on value in cancer care at the American Society of Clinical Oncology.
In practical terms, new guidelines being developed by the medical groups could result in doctors choosing one drug over another for cost reasons or even deciding that a particular treatment — at the end of life, for example — is too expensive.
More from the NYTimes.
Mexico City Recommendations
I will be in Mexico City next week (con la familia). Recommendations and suggestions welcome!
Breaking Bones
It’s sometimes said that conservative economists are heartless bastards who don’t understand the evil of unemployment or what it’s like to live on a low income. Edward Lambert from the left-of-center Angry Bear proves that to get what they want some on the left can be equally heartless.
I would love to support continued aggressive policy to bring the economy back to full employment, but the social cost of inequality is sickening. And if stopping this disease means putting the economy back into a recession, then so be it…It is like re-breaking a bone to set it straight. If the re-breaking of a bone is not done, the bone won’t work correctly in the future. It is proper medicine.
…Current day economists seem squeamish…
Sentence of the Day
Photovoltaic energy is already so cheap that it competes with oil, diesel and liquefied natural gas in much of Asia without subsidies.
More here.
Going Postal: My First Job
In this article some Nobel prize winners talk about their first jobs and the lessons they learned. One of my first jobs was as a scab.
One summer when I was a teenager, the Canadian postal union workers went on strike and I was hired to deliver the mail. The pay was astounding, something like $25 an hour plus benefits when I was earning $4 an hour as a stock boy. The first day was disorganized and we never got out of the depot where we were supposed to be assigned to a postal station. The second day we were taken in a van to a station but the striking workers rocked and shook the van violently and we barely made it in. The company feared for our safety so we spent the entire day twiddling our thumbs. It was boring sitting around for 8 hours but I was thrilled to head home with $200. The third day we were again trucked to a postal station but there was no mail to deliver and by early afternoon it was clear we were going nowhere and doing nothing. I decided to leave. The guy in charge looked at me incredulously but said it was my call. I slipped out a back door but several burly postal workers saw me and started to chase. I hopped over a fence into, of all places, a graveyard. I ran through the graveyard and eluded a beating. The strike ended the next day. For several years afterwards I collected some kind of pension/overtime benefit.
The summer after that I ran away and joined the circus. I worked selling tickets and cleaning up after the elephants. That was also fun.
I learned a lot from both jobs.
The Peltzman Effect in Children
David Ball, a professor of risk management at Middlesex University, analyzed U.K. injury statistics and found that as in the U.S., there was no clear trend over time. “The advent of all these special surfaces for playgrounds has contributed very little, if anything at all, to the safety of children,” he told me. Ball has found some evidence that long-bone injuries, which are far more common than head injuries, are actually increasing. The best theory for that is “risk compensation”—kids don’t worry as much about falling on rubber, so they’re not as careful, and end up hurting themselves more often.
From The Overprotected Kid by Hanna Rosin in the Atlantic.
Addendum: More on the Peltzman Effect.
Gunshot Victims to be Put into Suspended Animation
A hospital in Pennsylvania will soon begin clinical trials to put gunshot or other accident victims into a state of suspended animation while their organs are repaired. By all measures the people suspended will be dead for hours but with luck many will be brought back to life.
The first step is to flush cold saline through the heart and up to the brain – the areas most vulnerable to low oxygen. To do this, the lower region of their heart must be clamped and a catheter placed into the aorta – the largest artery in the body – to carry the saline. The clamp is later removed so the saline can be artificially pumped around the whole body. It takes about 15 minutes for the patient’s temperature to drop to 10 °C. At this point they will have no blood in their body, no breathing, and no brain activity. They will be clinically dead.
In this state, almost no metabolic reactions happen in the body, so cells can survive without oxygen. Instead, they may be producing energy through what’s called anaerobic glycolysis. At normal body temperatures this can sustain cells for about 2 minutes. At low temperatures, however, glycolysis rates are so low that cells can survive for hours. The patient will be disconnected from all machinery and taken to an operating room where surgeons have up to 2 hours to fix the injury. The saline is then replaced with blood. If the heart does not restart by itself, as it did in the pig trial, the patient is resuscitated. The new blood will heat the body slowly, which should help prevent any reperfusion injuries.
The technique will be tested on 10 people, and the outcome compared with another 10 who met the criteria but who weren’t treated this way because the team wasn’t on hand. The technique will be refined then tested on another 10, says Tisherman, until there are enough results to analyse.
No one knows how long people can be maintained in suspended animation before revival is impossible. We know from accidents where people drown in icy lakes that suspended animation can work for at least half an hour and experiments on pigs suggest no cognitive defects from revived animals suspended for up to an hour, mice have been suspended for up to six hours and roundworms for up to 24 hours. If the initial trials are successful, further experiments will likely discover ways to lengthen the period of suspended animation in humans and perhaps suggest improvements to current cryonic techniques.
Hat tip: Noah Smith.
Metadata Reveals Sensitive, Private Information
The President and other apologists for the NSA have defended the NSA’s illegal mass surveillance of US telephones by arguing that it’s “only” metadata, so “nobody is listening to our telephone calls.” But where, when, how long and to whom customers make phone calls does reveal information that could easily be used to blackmail, stifle and control. A group of computer scientists at Stanford’s Security Laboratory gathered information from volunteers who agreed to have an app on their cell phone mimic what the NSA collects. Here is an initial report.
At the outset of this study, we shared the same hypothesis as our computer science colleagues—we thought phone metadata could be very sensitive. We did not anticipate finding much evidence one way or the other, however, since the MetaPhone participant population is small and participants only provide a few months of phone activity on average.
We were wrong…The degree of sensitivity among contacts took us aback. Participants had calls with Alcoholics Anonymous, gun stores, NARAL Pro-Choice, labor unions, divorce lawyers, sexually transmitted disease clinics, a Canadian import pharmacy, strip clubs, and much more. This was not a hypothetical parade of horribles. These were simple inferences, about real phone users, that could trivially be made on a large scale.
…Though most MetaPhone participants consented to having their identity disclosed, we use pseudonyms in this report to protect participant privacy.
- Participant A communicated with multiple local neurology groups, a specialty pharmacy, a rare condition management service, and a hotline for a pharmaceutical used solely to treat relapsing multiple sclerosis.
- Participant B spoke at length with cardiologists at a major medical center, talked briefly with a medical laboratory, received calls from a pharmacy, and placed short calls to a home reporting hotline for a medical device used to monitor cardiac arrhythmia.
- Participant C made a number of calls to a firearm store that specializes in the AR semiautomatic rifle platform. They also spoke at length with customer service for a firearm manufacturer that produces an AR line.
- In a span of three weeks, Participant D contacted a home improvement store, locksmiths, a hydroponics dealer, and a head shop.
- Participant E had a long, early morning call with her sister. Two days later, she placed a series of calls to the local Planned Parenthood location. She placed brief additional calls two weeks later, and made a final call a month after.
We were able to corroborate Participant B’s medical condition and Participant C’s firearm ownership using public information sources. Owing to the sensitivity of these matters, we elected to not contact Participants A, D, or E for confirmation.
In other news, a former president believes that his email is being monitored. He is probably correct. Monitoring presidential candidates is all too realistic.
Fortunately, President Obama has announced that the bulk collection of phone calls will end. Dismantling that illegal program is a start. Obviously, this would not have happened without the revelations of Edward Snowden.
Still Burned by the FDA
Excellent piece in the Washington Post on the FDA and sunscreen:
…American beachgoers will have to make do with sunscreens that dermatologists and cancer-research groups say are less effective and have changed little over the past decade.
That’s because applications for the newer sunscreen ingredients have languished for years in the bureaucracy of the Food and Drug Administration, which must approve the products before they reach consumers.
…The agency has not expanded its list of approved sunscreen ingredients since 1999. Eight ingredient applications are pending, some dating to 2003. Many of the ingredients are designed to provide broader protection from certain types of UV rays and were approved years ago in Europe, Asia, South America and elsewhere.
If you want to understand how dysfunctional regulation has become ponder this sentence:
“This is a very intractable problem. I think, if possible, we are more frustrated than the manufacturers and you all are about this situation,”
Who said it? Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research! Or how about this:
Eleven months ago, in a hearing on Capitol Hill, FDA Commissioner Margaret A. Hamburg told lawmakers that sorting out the sunscreen issue was “one of the highest priorities.”
If this is high priority what happens to all the “low priority” drugs and medical devices?
The whole piece in the Washington Post is very good, read it all. I first wrote about this issue last year.
Addendum: See FDAReview.org for more on the FDA regulatory process and its reform.