The new preface from TGS
It is added to the print version and is available on-line from Reuters, to coincide with the publication of the physical book, which is now in stores. Excerpt:
The original publication of The Great Stagnation was in eBook form only, and I meant for that to reflect an argument of the book itself: The contemporary world has plenty of innovations, but most of them do not benefit the average household. After all, the average household does not own an eReader. It’s not even clear whether the average household buys and reads books. So I viewed the exclusive electronic publication, somewhat impishly, as an act of self-reference to the underlying problem itself. It was therefore a bit amusing when some critics suggested that the new medium of the eBook itself refuted the book’s stagnation theory—quite the contrary.
Austro-Afghanistan business cycle theory
The World Bank found that a whopping 97 percent of the gross domestic product in Afghanistan is linked to spending by the international military and donor community.
That is via Matt Yglesias, original source here. Nor was the boom that great either.
Plato visits Sicily and Siracusa
With these thoughts in my mind I came to Italy and Sicily on my first visit. My first impressions on arrival were those of strong disapproval-disapproval of the kind of life which was there called the life of happiness, stuffed full as it was with the banquets of the Italian Greeks and Syracusans, who ate to repletion twice every day, and were never without a partner for the night; and disapproval of the habits which this manner of life produces. For with these habits formed early in life, no man under heaven could possibly attain to wisdom-human nature is not capable of such an extraordinary combination. Temperance also is out of the question for such a man; and the same applies to virtue generally. No city could remain in a state of tranquillity under any laws whatsoever, when men think it right to squander all their property in extravagant, and consider it a duty to be idle in everything else except eating and drinking and the laborious prosecution of debauchery. It follows necessarily that the constitutions of such cities must be constantly changing, tyrannies, oligarchies and democracies succeeding one another, while those who hold the power cannot so much as endure the name of any form of government which maintains justice and equality of rights.
The link is here, hat tip goes to Yana.
1946 Chinese painting auctions for $65 million
The story is here and hat tip goes to Felix Salmon.
Assorted links
1. More or less the opposite of the truth. And do not confuse “hilarity with universality” with “hilarity” more generally. It is on the first that the Germans fail, not the second.
3. An argument that driverless cars are not illegal.
4. Further thoughts on declining crime rates.
5. Another ZMP laborer? Or is it sticky wages?
6. Sicilian mayor sells homes for one euro.
7. We were (are) not as wealthy as we thought, or when did the recession really start?
The furor over the new British college
Read all about it. Excerpt:
Current London students also protested that New College students would be allowed to use publicly funded facilities such as the main University of London Senate House Library in Bloomsbury.
As the anger grew, Dawkins distanced himself from the launch, while David Latchman, master of Birkbeck, released a statement making clear that Grayling had resigned from his post to lead New College.
Meanwhile, questions were raised about investors in the venture, which will be one-third owned by academics, with much of the rest of the money coming from wealthy individuals, including a manager at a Swiss private equity firm.
Addendum: Tim Worstall sends along this useful link.
Which is the more important headline?
US solar power nears competing on price (“US solar power will compete on price with conventional generation within three years without subsidy thanks to plummeting costs, industry leaders say.”)
Or:
Oil leaps as Opec descends into acrimony
Is a falling oil price a necessary concomitant of viable solar power on a large scale? Or not? Is the price of natural gas falling through the floor? I missed that headline.
I thank Jim Olds for a relevant pointer.
*Unified Growth Theory*, by Oded Galor
In one scenario, the Neolithic revolution comes earlier to some areas than others; those areas then receive their gains in the form of higher population rather than higher wages, for Malthusian reasons. Under some conditions, some of those regions manage slightly positive per capita income growth for extended periods of time (it is on this question that I find the argument both haziest and most parasitic on other theories; toward the end of the book the stress is on whether an economy has had prior selection for “quality” individuals). That can lower their birth rates, which allows for a take-off out of Malthusian constraints. There may be further positive selection for pro-economic growth humans, which compounds and extends growth.
That is not the entire unified theory but it does offer a flavor of which kinds of mechanisms do the work. There isn’t much talk of government policies, coal, or liberal ideology, although every now and then incentives and intellectual property rights appear on a list of factors relevant for growth.
The book has many equations, right in the text, but the main arguments are explained clearly with words.
I would have found it valuable if the author would have asked a concrete question: “Could the Industrial Revolution have come to Song China (Rome, Baghdad, etc.)?” and told us in terms of the parameters of his theory why or why not. I am never sure what stance he is taking on the degree of contingency in observed outcomes.
It is argued that Africa has too much genetic diversity, Native American populations too little. This seems question-begging, and I wonder if the African populations which actually came into contact with each other on a regular basis, pre-imperialism, had so much genetic diversity.
The most valuable part of the book is the extended discussion of how “time since the Neolithic Revolution” matters and how subtle and indirect the indirect mechanisms of connection can be. I consider those discussions to be a major contribution.
It’s certainly an interesting work, but most of the evidence offered is supporting the more general parts of the argument, not the more controversial or novel parts. Galor is very smart, and anyone interested in economic growth should read this book, but I would not describe myself as a convert to either the conclusions or the overall method.
Here is my previous post on the book.
Siracusa and Ortigia
Europe’s oldest church is an add-on to a former Temple to Athena; Catholic style draws upon the Greek more obviously when the two are juxtaposed. Food delicacies include sardines, pistachio, imaginative use of bread crumbs, unparalleled swordfish, smoked tuna, zucchini, sweet and sour pumpkin, fennel, and as in the Arab world the line between the meal and the sweets is not as firm as the French have tried to make it. Most of all, the ricotta stands out. Order a pasta “norma” style, with ricotta on top, and then have ricotta for dessert too.
Depopulation is evident, even in the beautiful areas near the sea on Ortigia. Fifty years from now, will it be empty, a crowded tourist theme park, ruled by Chinese capital, or full of Tunisians? Is the embedded cultural capital in current Siracusan society positive or negative in value? Is mobility equalizing average rates of return?
No one seems to mind that most of the art museum is rotting away. Ordinary life here has very little to do with the internet. The cats are skinny and fearful. The visit is splendid.
Assorted links
1. Critique of TGS, by Kindred Winecoff.
2. Why the epidemic of mental illness and depression?
3. Tugboats and Arctic icebergs.
4. Germany’s Great Stagnation, and David Leonhardt on Germany.
What do the laws against driverless cars look like?
A few people have asked me this question, here is one example, from Falls Church City:
No person shall operate a motor vehicle upon the streets of the city without giving full time and attention to the operation of the vehicle.
Of course that wasn’t intended as a law against driverless cars per se, but that would be its practical effect. Ask yourself the following question: let’s say you sat in the back seat, singing rap songs with your shirt off, while the computer piloted the car flawlessly. In a 35 mile per hour zone, the car would go exactly 35 mph and you would smile and wave — with both hands — at each police officer you passed. For effect, you could stick your two feet out the window as well. How long could you go before they pulled you over? How far could you get? When would you get your car back, with computer of course? How would they respond if you asked: “Officer, please show me where in the books this is illegal?” In which state would that question go over best? Worst?
Liability and public opinion issues loom larger still. The driverless car, if it proves feasible, is most likely to come first to a smaller, higher-trust nation such as Denmark. In some countries, if the government announces “X is safe” people believe “X is safe.” The United States is not one of those countries.
What happens if you respond to spam?
While doing some spam research a couple of years ago, we did a series of test purchases from spam e-mails.
We bought pills, software, cigarettes, et cetera. We were a bit surprised that almost all of the orders went through and actually delivered goods. Sure, the Windows CD we got was a poor clone and the Rolex was obviously fake, but at least they sent us something.
We were carefully watching the credit card accounts we created for our tests but we never saw any fraudulent use of them.
The most surprising outcome from this test was that we didn’t see more spam to the e-mail addresses we used to order the goods.
Via Eapen Thampy, the link is here and they cite a new study on spam (pdf), which is interesting throughout. How does the financial side work?
One of the most interesting details in the study is this: almost all spam sales worldwide are handled by just three banks.
The banks? They were:
• DnB NOR (a Norwegian bank)
• St. Kitts-Nevis-Anguilla National Bank (in the Caribbean)
• Azerigazbank (from Azerbaijan)
Further assorted links
1. Stephen Roach defends the economic prospects of China.
2. Public choice reasons why protectionism is not stronger.
3. Temporal allies and spatial rivals.
4. Blogger Tim Kane has a new eNovel, which I thought was very good, some free chapters are here.
The next Fed nominee
1. Should have spent a lot of time talking to Republicans.
2. When meeting with Ron Paul, the following should come to his mind: “I have great respect for the proponents of hard money and I view them as one reason why America became great again, in the 1980s. I know you think the minimum wage is worse than we at the Fed do, so please let me bring one argument to your attention. Unemployment is very high now, perhaps in part because the minimum wage has raised forty percent in the midst of a downturn a few years ago. But those statists in Congress simply will not vote to lower or abolish the minimum wage, damn them. We can, however, surreptitiously lower the minimum wage in real terms with a bit of loose monetary policy. I know you are not with us on this monetary issue, but if you find yourself having to strike a compromise of some kind, at least rest assured that a budge from your side would be liberating millions of lower-income Americans from slavery. It could get us off the Road to Serfdom.”
The Fed governor doesn’t have to believe that, and may not wish to say exactly that, but a speech of that nature should come rather quickly to his or her mind. If not, he or she is probably not the right nominee in the first place. The Fed staff can figure out the rest.
Addendum: Matt Yglesias offers relevant comment. Alternatively, Felix Salmon may be correct that there is no deal to be made with the Republicans. In that case, a) Diamond would not have mattered anyway, and b) we still should base the choice upon the scenarios where the choice stands a chance of making a difference. Furthermore, the Republican reps. do not have the same incentives as the Presidential candidate, so a deal may be possible after all.
Assorted links
1. There is no Great Stagnation (short video).
2. Poverty and depletable willpower.
3. Japan’s artistic gas storage tanks.
4. MIE: AlibiNetwork, from Elan.
5. Slate’s engine for graphing Hollywood careers, inspired by Alex. And try to guess who the best and most consistent actor is. The link is interesting throughout.