Challenge Trials in Britain!

From the FT:

London is to host the world’s first Covid-19 human challenge trials — in which healthy volunteers are deliberately infected with coronavirus to assess the effectiveness of experimental vaccines. The UK government-funded studies are expected to begin in January at a secure quarantine facility in east London, according to several people involved in the project, which will be announced next week.

…The project’s academic leader is Imperial College London, and it will be run by hVivo, a spinout from Queen Mary University of London that was bought earlier this year by Open Orphan, a Dublin-based pharmaceutical research organisation.

…The petition organiser of 1Day Sooner in the UK is 18-year-old Alastair Fraser-Urquhart who is devoting his time to the campaign before going to University College London to study cancer biology next year.

All hail Alastair Fraser-Urquhart!

This part enraged me:

The NIH is also investigating the technical and ethical requirements for challenge trials. But Nadine Rouphael, a leading vaccine researcher at Emory University in Atlanta and one of several scientists who are keen to carry out challenge studies in the US, said: “There is no urgency at NIH. The UK is well ahead — and that’s great.”

No urgency!!! I raised challenge trials with the administration in April.

Addendum: Previous MR posts on challenge trials. And here is the UK petition and the Canadian petition from 1daysooner.

The Great Forgetting: How to Stop Tooth Decay

What if I told you that a cheap, effective and painless method of stopping tooth decay had just been invented! You’d be pretty happy. What if I told you that a cheap, effective and painless method of stopping tooth decay was invented over 100 years ago and has been available in other countries for decades but only now is it starting to be used in the United States as a non-FDA approved, off-label treatment? I hope you would be angry. Well, I did tell you this in 2016 in The FDA Versus the Tooth and now the Washington Post has an update.

Studies show silver diamine fluoride stops decay in 60 to 70 percent of cases with one application. A second application six months later boosts the treatment’s long-term effectiveness to more than 90 percent.

In addition to killing cavity-causing bacteria, the treatment hardens tooth structure, desensitizes the tooth and even stops new cavities from forming. Applying the liquid on the exposed root surfaces of older adults once a year is “a simple, inexpensive, and effective way” to prevent cavities, a 2018 study concluded.

One of the most important benefits of the application on older patients is that the liquid can reach decay that forms under existing dental work such as crowns and bridges, said dental hygienist Michelle Vacha, founder of Community Dental Health, which runs clinics in Colorado Springs and Pueblo, Colo.

Previously, a dentist would have had to remove the crown, drill out the cavity and make a new crown — a traumatic, time-consuming procedure with a typical cost of $1,000 or more, Vacha said. Unable to afford the cost, many patients would instead have the tooth pulled.

The paint-on liquid is significantly cheaper than traditional treatment. Estimates vary, but a private dentist may charge $10 to $75 for one application, compared with $150 to $200 for a filling. Hygienists often have lower fees. At Vacha’s community clinics, the cost is $10 a tooth.

…Silver diamine fluoride has been used in other countries for decades, and studies have proved it safe. Its biggest downside is that it permanently turns the decayed area black — a turnoff, in particular, for people with decay on a front tooth. Dental providers say the black spots can be covered by tooth-colored material for an extra cost. For older adults, Geiselhofer said, a dark spot is a small price to pay for a treatment that stops cavities quickly, with no drilling, needle prick or trip to the dentist required.

The FDA deserves some of the blame but incredibly lost science is more common than you might think. You probably know that in 1797 the British Navy required lemon juice on all foreign service to prevent scurvy but did you know that by the early 20th century scurvy had returned because the cure had been forgotten or discounted?

Mental Floss: Yes, this really happened: scurvy was “cured” as early as 1497, when Vasco de Gama’s crew discovered the power of citrus…but this cure was repeatedly lost, forgotten, rediscovered, misconstrued, confused, and just generally messed around with for hundreds of years, despite being a leading killer of seafarers and other explorers. By the 1870s the “citrus cure” was discredited, and for nearly sixty years, scurvy — despite being cured, with scientific research to back it up — continued killing people, including men on Scott’s 1911 expedition to the South Pole. This went on until vitamin C was finally isolated in 1932 during research on guinea pigs.

It’s tempting to think that these forgettings are a product of the past but the more than 100 year loss of silver as a treatment for tooth decay is a painful modern example.

Hat tip: Ari Armstrong and M. Pettengill.

The Distribution of Vaccines in the 19th Century

Distributing a COVID vaccine to billions of people will be challenging. We will require vials, needles, cold storage, air travel, trained health care professionals and much more. The challenge of distributing a smallpox vaccine in the 19th century was even greater because aside from fewer resources the vaccine, cowpox, was geographically rare and infected humans only with difficulty. Moreover, the best method of storing the vaccine was in a person but that worked only until the person’s immune system defeated the virus. Thus, a relay-race of vaccine couriers was created to distribute the vaccine around the world.

In 1803, the [Spanish] king, convinced of the benefits of the vaccine, ordered his personal physician Francis Xavier de Balmis, to deliver it to the Spanish dominions in North and South America. To maintain the vaccine in an available state during the voyage, the physician recruited 22 young boys who had never had cowpox or smallpox before, aged three to nine years, from the orphanages of Spain. During the trip across the Atlantic, de Balmis vaccinated the orphans in a living chain. Two children were vaccinated immediately before departure, and when cowpox pustules had appeared on their arms, material from these lesions was used to vaccinate two more children.

The British tried the same thing to get the vaccine to India but heat and shipwrecks led to many failures until, as Andrea Rusnock writes, Jean De Carro successfully delivered live cowpox to Bombay from Vienna via Baghdad.

De Carro, a Genevan who had received his M.D. from Edinburgh and who practiced medicine in Vienna, became one of the staunchest supporters of Jenner on the continent. It was through De Carro’s effort that vaccination was introduced in Austria, Poland, Greece, and the cities of Venice and Constantinople. In a letter to Jenner, De Carro carefully described his successful shipping technique. First he saturated lint with cowpox lymph and then placed the lint between two pieces of glass, one concave, one flat. He then sealed it with oil. “To prevent the access of light,” De Carro continued, “I commonly fold it in a black paper, and when I was desired to send to Baghdad, I took the precaution of going to a wax-chandler’s, and surrounded the sealed-up glasses with so much wax as to make balls. With this careful manner it arrived still fluid on the banks of the Tigris.

In the United States, Thomas Jefferson also wanted to be vaccinated but after several failures to deliver live cowpox from the Harvard Medical School, “Jefferson designed a new container: An inner chamber would hold the fluid lymph, while a surrounding chamber, filled with cool water, insulated the lymph.”

[Later] President Thomas Jefferson gave some cow lymph to Meriwether Lewis and William Clark to take on their explorations west of the Mississippi River. Antoine Saugrain, the only practicing physician in St. Louis when Louisiana was purchased by the United States from France in 1803, received some cowpox lymph from Lewis and Clark and began to vaccinate individuals free of charge, including Native Americans. Saugrain’s free vaccination program established cowpox in the Mississippi valley roughly a decade after Jenner published his inquiry.

Talk about Operation Warp Speed!

Even when delivered, the vaccine had to be kept alive so each cohort of vaccinators was incentivized to provide the vaccine for the next cohort:

In Glasgow, parents had to put down a deposit of 1 shilling (1801) and later 2 shillings (1806) to be refunded only when the child was returned to the clinic [and more cowpox could then be extracted from the children’s lesions]. In Boston, Waterhouse resorted to paying parents to vaccinate their children in order to keep a supply of cowpox.

Occasionally, herd immunity would be reached but that meant there was no way to store the vaccine for the next generation! Physicians, therefore, looked to newly created institutes that shipped the vaccine by one method or another around the world.

Returning to the British and India, after cowpox was delivered through De Carro’s efforts to Baghdad an Armenian child was infected and lymph from his arm was taken to Basra where an East India Company surgeon established a an arm-to-arm relay race that brought cowpox to Bombay:

On 14 June, 1802, Anna Dusthall became the first person in India to be successfully vaccinated against smallpox. Little else is known about her, except that she was “remarkably good tempered”, according to the notes of the doctor who vaccinated her…The following week, five other children in Bombay were vaccinated with pus from Dusthall’s arm. From there, the vaccine travelled, most often arm-to-arm, across India to various British bases – Hyderabad, Cochin, Tellicherry, Chingleput, Madras and eventually, to the royal court of Mysore.

As today, there was fear and opposition to the vaccine, especially in India, because it was foreign, threatened local healers who used variolation, and the use of vaccine couriers meant that “the vaccine was passing through bodies of all races, religions, castes and genders, and that ran counter to unyielding Hindu notions of purity.”

To counter the opposition, the British started an advertising campaign featuring Indian royalty. The picture above, for example, according to one compelling interpretation shows three Indian queens of Mysore with the queen on the right prominently portraying her arm where she has been inoculated with cowpox while the older queen on the left shows the discoloration around the mouth associated with smallpox. Thus, the younger queen on the right symbolizes health, vigor and the value of British science.

The challenges of delivering a vaccine in the 19th century–storage, transportation, fear, and incentives–are surprisingly similar to the challenges we face today. The 19th century effort to deliver the smallpox vaccine was impressive. Within years of Jenner’s pamphlet, the vaccine had made its way around the world. The 21st century effort will need to be much larger. Our civilization has many more resources than that of the 19th century. I hope we can match their will and ingenuity.

Our Antigens, Our Selves

In 2013 I wrote, Our DNA, Our Selves, arguing against the FDA’s crackdown on genetic readouts from firms like 23andMe. The FDA, however, proved succesful in its crackdown and that is why rapid at-home antigen tests are not available today and why tens of thousands of people are dying from COVID unnecessarily. Regulations have unintended consequences.

Let’s recap:

Consider, I swab the inside of my cheek and send the sample to a firm. The idea that the FDA can rule on what the firm can and cannot tell me about my own genes is absurd–it’s no different than the FDA trying to regulate what my doctor can tell me after a physical examination or what my optometrist can tell me after an eye examination (Please read the first line. “G T A C C A…”).

The idea that the FDA can regulate and control what individuals may learn about their own bodies is deeply offensive and, in my view, plainly unconstitutional.

Let me be clear, I am not offended by all regulation of genetic tests. Indeed, genetic tests are already regulated. To be precise, the labs that perform genetic tests are regulated by the Clinical Laboratory Improvement Amendments (CLIA) as overseen by the CMS (here is an excellent primer). The CLIA requires all labs, including the labs used by 23andMe, to be inspected for quality control, record keeping and the qualifications of their personnel. The goal is to ensure that the tests are accurate, reliable, timely, confidential and not risky to patients. I am not offended when the goal of regulation is to help consumers buy the product that they have contracted to buy.

What the FDA wants to do is categorically different. The FDA wants to regulate genetic tests as a high-risk medical device that cannot be sold until and unless the FDA permits it be sold.

Moreover, the FDA wants to judge not the analytic validity of the tests, whether the tests accurately read the genetic code as the firms promise (already regulated under the CLIA) but the clinical validity, whether particular identified alleles are causal for conditions or disease. The latter requirement is the death-knell for the products because of the expense and time it takes to prove specific genes are causal for diseases. Moreover, it means that firms like 23andMe will not be able to tell consumers about their own DNA but instead will only be allowed to offer a peek at the sections of code that the FDA has deemed it ok for consumers to see.

Ten years later we now need rapid antigen tests but the issue, as Michael Mina points out in an excellent interview with Malcolm Gladwell, is that we have medicalized all tests and readouts. Instead of thinking about the individual as having a right to know about their own body, we treated every test or readout as if the only user were a physician. Thus, instead of thinking about the value of these tests for individuals and for public health, the FDA failed to approve rapid antigen tests because it regarded them as inferior to PCR tests, for a physician diagnosing disease.

Here’s Mina (roughly transcribed and lightly edited)

The only pathway that we have to evaluate tests like this are medical diagnostic pathways, pathways designed specifically to ensure that a physician like a detective is getting all the information they need to diagnose a sick person… We have so devalued and defunded public health…that we don’t have a regulatory pathway to approve a test whose primary objective is stopping an epidemic versus diagnosing a sick person. And that has held everything up. All the companies that could be producing these rapid tests in the millions and millions, they have been sitting on these tests trying to hone them so they can pass FDA standards as a medical diagnostic.

It’s not just slowing down their approval it’s actually bottle necking the companies into creating tests that are not going to be as scalable as they are having to use more expensive reagents and packing the tests with instruments so they can pass FDA review when in reality they are just these little pieces of papers. If we can do the cheap version they can be made very fast but the just won’t get through the FDA.

Gladwell: I find your explanation unconvincing. How dumb is the FDA?…If you make the exact argument you made to me…the FDA is not going to see your logic?

It’s not that they are not smart it’s that this is a regulatory body, they just don’t have a pathway. You can’t apply for approval for a public health test tool…In our country the medical establishment is extremely strong, you can’t go to get a cholesterol test without getting a prescription from your doctor. Why can’t we know that? It’s all through this very heavy medical lens and changing that, getting that big ship to turn is turning out to be a very, very difficult task but leading to potentially tens or hundreds or thousands of deaths that don’t need to be happening.

How is Defunding the Police Going in Minneapolis?

Not well.

MPR News: The meeting was slated as a Minneapolis City Council study session on police reform.

But for much of the two-hour meeting, council members told police Chief Medaria Arradondo that their constituents are seeing and hearing street racing which sometimes results in crashes, brazen daylight carjackings, robberies, assaults and shootings. And they asked Arradondo what the department is doing about it.

…Just months after leading an effort that would have defunded the police department, City Council members at Tuesday’s work session pushed chief Medaria Arradondo to tell them how the department is responding to the violence…More people have been killed in the city in the first nine months of 2020 than were slain in all of last year. Property crimes, like burglaries and auto thefts, are also up. Incidents of arson have increased 55 percent over the total at this point in 2019.

Bear in mind this is coming after just a few months of reduced policing, due in part to extra demands and difficulty and probably in part due to police pulling back either out of fear or reluctance (blue flu) as also happened in Baltimore after the Freddie Gray killing and consequent protests and riots.

A few true believers still remain:

Cunningham also criticized some of his colleagues for seeming to waver on the promises they made earlier this year to transform the city’s public safety system.

“What I am sort of flabbergasted by right now is colleagues, who a very short time ago were calling for abolition, are now suggesting we should be putting more resources and funding into MPD,” Cunningham said.

I’m a supporter of unbundling the police and improving policing but the idea that we can defund the police and crime will just melt away is a fantasy. As with bail reform the defunders risk a backlash. Let’s start by decriminalizing more victimless crimes, as we have done in many states with marijuana laws. Let’s work on creating bureaus of road safety. But one of the reasons we do these things is so that we can increase the number of police on the street. The United States is underpoliced and the consequences of underpolicing, as well as overpolicing, fall on minority communities. As I have argued before, we need better policing so that we can all be comfortable with more policing. Getting there, however, will take time.

This is Not Fine

Why is California burning? The experts all know the answer–CA was made to burn and if you don’t do controlled burns, CA will burn uncontrolled. Here’s ProPublica in an article titled They Know How to Prevent Megafires. Why Won’t Anybody Listen?

Academics believe that between 4.4 million and 11.8 million acres burned each year in prehistoric California. Between 1982 and 1998, California’s agency land managers burned, on average, about 30,000 acres a year. Between 1999 and 2017, that number dropped to an annual 13,000 acres. The state passed a few new laws in 2018 designed to facilitate more intentional burning. But few are optimistic this, alone, will lead to significant change. We live with a deathly backlog. In February 2020, Nature Sustainability published this terrifying conclusion: California would need to burn 20 million acres — an area about the size of Maine — to restabilize in terms of fire.

…When I reached Malcolm North, a research ecologist with the U.S. Forest Service who is based in Mammoth, California, and asked if there was any meaningful scientific dissent to the idea that we need to do more controlled burning, he said, “None that I know of.”

So why doesn’t it happen? Liability law, risk-aversion, rent seeking and vetocracy. Here’s Pro-Publica on excess risk aversion in the fire service (driven by a risk averse public.) (Compare with my analysis of why the FDA is too risk averse.)

Burn bosses in California can more easily be held liable than their peers in some other states if the wind comes up and their burn goes awry. At the same time, California burn bosses typically suffer no consequences for deciding not to light. No promotion will be missed, no red flags rise. “There’s always extra political risk to a fire going bad,” Beasley said. “So whenever anything comes up, people say, OK, that’s it. We’re gonna put all the fires out.”

The ProPublica piece is actually remarkably radical as it offers as one solution, privatized burning!

Fire is not just for professionals, not just for government employees and their contractors. Intentional fire, as she sees it, is “a tool and anyone who’s managing land is going to have prescribed fire in their toolbox.” That is not the world we’ve been inhabiting in the West. “That’s been the hard part in California,” Quinn-Davidson said. “In trying to increase the pace and scale of prescribed fire, we’re actually fighting some really, some really deep cultural attitudes around who gets to use it and where it belongs in society.”

Here’s a bit on vetocracy:

Planned burns are human-made events and as such need to follow all environmental compliance rules. That includes the Clean Air Act, which limits the emission of PM 2.5, or fine particulate matter, from human-caused events. In California, those rules are enforced by CARB, the state’s mighty air resources board, and its local affiliates. “I’ve talked to many prescribed fire managers, particularly in the Sierra Nevada over the years, who’ve told me, ‘Yeah, we’ve spent thousands and thousands of dollars to get all geared up to do a prescribed burn,’ and then they get shut down.”

…“One thing to keep in mind is that air-quality impacts from prescribed burning are minuscule compared to what you’re experiencing right now,”

Francis Fukuyama also pointed to liability law, risk-aversion, rent seeking and vetocracy as factors driving dysfunction at the forest service in a 2014 article in Foreign Affairs but the forest service was only the jumping off point for his pieced titled, America in Decay The Sources of Political Dysfunction (jstor). I don’t agree with everything in that piece but it’s well worth reading to drive home the point that pandemics, forest fires, electrical shortages and more are deeply connected.

Hat tip: Garett Jones.

How to Gain Super Powers!

Imagine that you were offered the superpower of being immune to bullets. Bullets just bounce off you like Luke Cage. That’d be pretty cool, right? Even partial immunity to bullets would be a great superpower! I’d be willing to pay a lot for that superpower, even undertake say some mildly perilous journey. So I am puzzled that some people say they don’t want a COVID vaccine. What??? That’s like rejecting a super-power, the power of immunity! Indeed, COVID has killed far more people this year than bullets, so virus immunity is a much better superpower than bullet immunity. Sign me up!

Addendum: Perhaps you think that the superpower of bullet immunity is better than the super power of virus immunity because, like Luke Cage, you could use bullet immunity to save lives, thus becoming a super-hero. Guess what? Vaccination also gives you the power to save lives.

Arise Vaccination Man! Arise Vaccination Woman! Gain Super Powers! Be a Super Hero!

Failing the Challenge

CNN says “In one word, this is why there likely won’t be a vaccine available before Election Day: biology.” Wrong. The one word is complacency. What CNN refers to as biology is the time it takes to run clinical trials.

Here’s how the trials work: You take 30,000 people, give half of them a vaccine and half of them a placebo, which is a shot of saline that does nothing. Then those 30,000 people go about their lives, and you wait to see how many in each group become infected and sick with Covid-19, the “endpoint” in medical parlance.

That waiting takes time, especially since the coronavirus vaccines currently being studied in the US are two-dose vaccines with each dose several weeks apart.

But it gets worse because trial volunteers are not random:

“Who’s in the trials – the kind of people who tend to stay at home or the kind of people who attended the Sturgis rally?” said John Moore, an immunologist at Weill Cornell Medicine, referring to a motorcycle rally in South Dakota that led to at least dozens of cases of Covid-19.

Historical precedent, as well as the demographics of the participants in the current coronavirus vaccine trials, suggest more the stay-at-home type.

That does not bode well for bringing the trials to a speedy conclusion.

Typically, those who volunteer for clinical trials tend to be “White, college-educated women,” said Frenck, who has been the principal investigator on dozens of vaccine clinical trials, and has served on the Data and Safety Monitoring Board for many others.

All three of those factors are potentially bad news for the coronavirus clinical trials, because data indicates White college-educated women are at lower risk for being exposed to the novel coronavirus.

None of this, however, is actually about biology. It’s about complacency. We could have run human challenge trials and paid for diverse volunteers but we decided that was too risky or too new or too radical or too something and so thousands of people die every week as we wait.

Addendum: Previous posts on challenge trials.

Does Demand for New Currencies Increase in a Recession?

Every time there is a recession we hear more about barter and new currencies, especially so-called “local” currencies. An inceased interest in barter and new currencies suggests a theory of recessions, the lack of liquidity theory:

Bloomberg: “In times of crisis like the one we are jumping into, the main issue is lack of liquidity, even when there is work to be done, people to do it, and demand for it,” says Paolo Dini, an associate professorial research fellow at the London School of Economics and one of the world’s foremost experts on complementary currencies. “It’s often a cash flow problem. Therefore, any device or instrument that saves liquidity helps.”

I wrote about this several years ago but on closer inspection it’s not obvious that interest in barter or new currencies increases much in a recession or that these new currencies are helpful. Here’s my previous post (with a new graph) and no indent.

Nick Rowe explains that the essence of New Keynesian/Monetarist theories of recessions is the excess demand for money (Paul Krugman’s classic babysitting coop story has the same lesson). Here’s Rowe:

The unemployed hairdresser wants her nails done. The unemployed manicurist wants a massage. The unemployed masseuse wants a haircut. If a 3-way barter deal were easy to arrange, they would do it, and would not be unemployed. There is a mutually advantageous exchange that is not happening. Keynesian unemployment assumes a short-run equilibrium with haircuts, massages, and manicures lying on the sidewalk going to waste. Why don’t they pick them up? It’s not that the unemployed don’t know where to buy what they want to buy.

If barter were easy, this couldn’t happen. All three would agree to the mutually-improving 3-way barter deal. Even sticky prices couldn’t stop this happening. If all three women have set their prices 10% too high, their relative prices are still exactly right for the barter deal. Each sells her overpriced services in exchange for the other’s overpriced services….

The unemployed hairdresser is more than willing to give up her labour in exchange for a manicure, at the set prices, but is not willing to give up her money in exchange for a manicure. Same for the other two unemployed women. That’s why they are unemployed. They won’t spend their money.

Keynesian unemployment makes sense in a monetary exchange economy…it makes no sense whatsoever in a barter economy, or where money is inessential.

Rowe’s explanation put me in mind of a test. Barter is a solution to Keynesian unemployment but not to “RBC unemployment” which, since it is based on real factors, would also occur in a barter economy. So does barter increase during recessions?

There was a huge increase in barter and exchange associations during the Great Depression with hundreds of spontaneously formed groups across the country such as California’s Unemployed Exchange Association (U.X.A.). These barter groups covered perhaps as many as a million workers at their peak.

In addition, I include with barter the growth of alternative currencies or local currencies such as Ithaca Hours or LETS systems. The monetization of non-traditional assets can alleviate demand shocks which is one reason why it’s good to have flexibility in the definition of and free entry into the field of money (a theme taken up by Cowen and Kroszner in Explorations in New Monetary Economics and also in the free banking literature.)

During the Great Depression there was a marked increase in alternative currencies or scrip, now called depression scrip. In fact, Irving Fisher wrote a now forgotten book called Stamp Scrip. Consider this passage and note how similar it is to Nick’s explanation:

If proof were needed that overproduction is not the cause of the depression, barter is the proof – or some of the proof. It shows goods not over-produced but dead-locked for want of a circulating transfer-belt called “money.”

Many a dealer sits down in puzzled exasperation, as he sees about him a market wanting his goods, and well stocked with other goods which he wants and with able-bodied and willing workers, but without work and therefore without buying power. Says A, “I could use some of B’s goods; but I have no cash to pay for them until someone with cash walks in here!” Says B, “I could buy some of C’s goods, but I’ve no cash to do it with till someone with cash walks in here.” Says the job hunter, “I’d gladly take my wages in trade if I could work them out with A and B and C who among them sell the entire range of what my family must eat and wear and burn for fuel – but neither A nor B nor C has need of me – much less could the three of them divide me up.” Then D comes on the scene, and says, “I could use that man! – if he’d really take his pay in trade; but he says he can’t play a trombone and that’s all I’ve got for him.”

“Very well,” cries Chic or Marie, “A’s boy is looking for a trombone and that solves the whole problem, and solves it without the use of a dollar.

In the real life of the twentieth century, the handicaps to barter on a large scale are practically insurmountable….

Therefore Chic or somebody organizes an Exchange Association… in the real life of this depression, and culminating apparently in 1933, precisely what I have just described has been taking place.

What about today (2011)? Unfortunately, the IRS doesn’t keep statistics on barter (although barterers are supposed to report the value of barter exchanges).  Google Trends shows an increase in searches for barter in 2008-2009 but the increase is small. Some reports say that barter is up but these are isolated (see also the 2020 Bloomberg piece), I don’t see the systematic increase we saw during the Great Depression. I find this somewhat surprising as the internet and barter algorithms have made barter easier.

In terms of alternative currencies, the best data that I can find shows that the growth of alternative currencies in the United States is small, sporadic and not obviously increasing with the recession. (Alternative currencies are better known in Germany and Argentina perhaps because of the lingering influence of Heinrich Rittershausen and Silvio Gesell).

Below is a similar graph for 2017-2020. Again not much increase in recent times.

In sum, the increase in barter and scrip during the Great Depression is supportive of the excess demand for cash explanation of that recession, even if these movements didn’t grow large enough, fast enough to solve the Great Depression. Today there seems to be less interest in barter and alternative currencies than expected, or at least than I expected, given an AD shock and the size of this recession. I don’t draw strong conclusions from this but look forward to further research on unemployment, recessions and barter.

Parasite and Burning

I was asked by Russell Hogg to join him on his movie podcast with Agnes Callard and Abe Callard. We discussed Parasite and Burning. Russell labeled the podcast Alex Tabarrok Versus the People, although there was much agreement among the panel with my controversial analysis of Parasite! I also threw in a reactionary reading of Snowpiercer at the end. We also had a fine discussion of Burning and whether the orange peeling is a hint about the meaning of the ending.

Monkey Parenting Matters

In a new NBER paper, a group of economists, including James Heckman, have joined with researchers who study child development to analyze data from a multi-generational monkey raising experiment. It’s well known from the Harlow experiments of the 1950s that monkeys raised without their mothers don’t do so well. (It’s also from these experiments that the mantra of skin-to-skin mother-child contact comes from.) What’s distinctive in the new paper is that there are two generations of monkeys who are raised by their mothers or in nurseries and in each generation the treatment is randomly chosen. Indeed, I believe this new paper includes the children of monkeys discussed in this earlier paper which also included Heckman. The multi-generational experiment lets the researchers test whether disadvantage is transmitted down the generations and whether it can be alleviated.

The analysis indicates first that being raised by a mother results in better health and higher social status than being raised in a nursery (as measured by who wins disputes and ELO scores similar to those used in chess!). Second being raised by a mother who was raised by a mother is better than being raised by a mother who was raised in a nursery. The latter indicates that disadvantage transmits down the generations. Indeed, being raised by a mother who was raised in a nursery is just as bad as being raised in a nursery. In other words, it’s hard to ameliorate disadvantage in one generation.

The sample is small (about 100 monkeys in generation one and 60 in generation two) but because of random assignment still potentially useful.

The authors suggest that there are lessons for humans:

Our findings are in line with results from a social experiment on humans. Heckman and Karapakula (2019) document the intergenerational effects of the Perry Preschool Project,which was a randomized social experiment in the 1960s that provided high-quality preschool experiences to socially disadvantaged children. They find that the positive effects of the preschool program were transmitted into the next generation. The offspring of the treated participants were more likely to have better health, achieve higher education, and were more likely to be employed than the offspring of the non-treated participants. In the same way that early-life advantage via maternal presence for rhesus-monkeys led to improved health and higher social rank for their offspring, early-life advantage via high-quality preschool in humans led to better health and social outcomes for their children.

But note the subtle shift in “treatment” meaning. In the monkey experiment, mother-raised is better and it’s the nurseries which are bad but in the human experiment it’s the nurseries that are good. It’s hard enough to justify external validity across human experiments in different places or times doing so across species is an even more perilous leap.

Tesla’s Gigafactory

Elon Musk has said that he thinks not of building cars but of building factories that make cars, the machine that makes the machine. You can see what he is on about in this new video of the first Gigafactory.

Three points of note. The factory was up and running in 10 months. There are lots of robots, in a factory in China–that tells you a lot about Chinese wages and the productivity of robots today. Tesla is building Gigafactory Berlin and Gigafactory Texas next.

Economists in the Wild: Finkelstein, Oostrom and Ostriker

Here’s the latest Economists in the Wild video featuring Amy Finkelstein, Tamar Oostrom and Abigail Ostriker discussing some of their research (with Einav and Williams) on breast cancer screening. It’s a good video for illustrating how the tools of economics can be used to study a startling wide variety of problems.

Here’s a free assignment to help connect this video to class.
More professor resources.
High school teacher resources.

Testing Targets and Intensifies Social Distancing on the Infectious

I’ve been pounding on the need for fast, frequent testing but it’s clear from some of the comments to The Beginning of the End that I have failed to convey some fundamental points. A seemingly sophisticated objection is to note that given background prevalence rates even a fairly specific test will result in a high fraction of false positives among those who test positive. (This is the standard Bayesian doctor puzzle.) It’s nice to see people doing the Bayes calculation but some of them are then drawing the wrong conclusion. Let’s spell it out.

Suppose that the numbers are such that 50% of the people who test positive actually are negative. That sounds bad and it’s not great for a diagnostic test but it’s good enough to be a massive help in a pandemic. To see why, just imagine that you could easily identify people who had a 50% chance of being infectious. That’s a very useful piece of information! If just this group were to intensify social distancing for a week or two the pandemic would end quickly.

In essence, testing allows us to target and intensify social distancing on the people who are most likely to be infectious. Suppose that 10 in 1000 people are infectious (a 1% infectious rate) and that all 1000 are doing some social distancing to protect ourselves from the 1%. If we test and 20 people test positive (10 infectious and 10 not) then 980 people can return to their lives and only 20 need to intensify social distancing. The pandemic ends quickly.

We could cut the number quarantining even further by retesting using PCR and that’s good but not necessary. Also note that the 20 who test positive were already social distancing, albeit perhaps less carefully than ideal, so the additional cost is low and intensifying social distancing on the infectious reduces the transmission rate.  I have ignored false negatives to focus on a key issue. False negatives will mean some transmission still occurs but that will be picked up by more frequent testing.

The takeaway is that when you are blind, you don’t need 20/20 vision to be much better off.