China fact of the day
Trier is a worthy destination by any standard, having impressive and
important Roman ruins as well as an 11th century cathedral built in the
very place where Emperor Constantine’s mother first built a church in
the fourth century.But the Chinese clearly come to see the
place where Marx was born in 1818 [my emphasis], and the local authorities try to
take full advantage of it, promoting their city in China itself and
with the travel agencies that serve Chinese tourists.They even
offer cultural sensitivity training for merchants, restaurateurs and
others in Trier, instructing them in the finer points of dealing with
Chinese customers. The number 250, for example, which is a kind of
slang for "stupid" in Chinese, is to be avoided, and so is wrapping
paper in white, the color of funereal robes, or yellow, by custom
reserved for the emperor. It is also important to hand over visiting
cards rather formally, with two hands, not just one.
Here is the full story.
My favorite things Danish
1. Movie: A strong category for this country. Babette’s Feast used to be one of my favorite movies, though it now strikes me as sentimental. I much prefer The Celebration, or the recent After the Wedding. The Best Intentions, with a Bergman screenplay, is directed by Dane Billie August. Dreyer’s The Passion of Joan of Arc is technically a French movie but the director is Danish, in any case it is one of cinema’s greatest achievements. Ordet has splendid shots but I can’t bear the ending. I don’t rate Lars von Trier with these other creators though I did like his recent The Boss of it All, a study in the social construction of leadership.
2. Short story: "The Caryatids, An Unfinished Tale," by Karen Blixen [Isak Dinesen], in Last Tales. This one shows the influence of the now-sadly-taken-for-granted Hans Christian Andersen; read it.
3. Novel: Smilla’s Sense of Snow, by Peter Hoeg; lovely and mysterious, yet driven by plot. His History of Danish Dreams I find too baroque.
4. Composer: Poul Ruders, one of the most listenable contemporary composers, writes compelling melodies and offers a broad palate of sound colors. I most prefer his Variations on a Theme by Paganini, Concerto in Pieces, the guitar music, Tundra, and Gong. His major influences are Brahms, Berg, Sibelius, and Hindemith. I’ll buy anything by him, though I’ve never much enjoyed his operas.
5. Popular music: Help!
6. Philosopher: Kierkegaard’s Either/Or is the place to start, and don’t skip over "Diary of a Seducer" or the discussion of Don Giovanni. There are few philosophers who think more like an economist, or who use more metaphors from economic life.
7. Painting: Danish Impressionism is one of the most underrated fields in art, noting that the subtle textures and colors do not reproduce well on the web. Try this picture. Here is a nice landscape, here is a nice door. This one is lots of fun, too.
Coasian movie reviews
I bet that if the Sandman and Spiderman could have just gotten away
from their positional stances (“I need to take money” and “I need to
catch crooks” respectively), to their underlying interests (“I need to
help my little girl” and “Dude, I’m all about helping the people”),
they could have found some common ground. There was opportunity there,
and it could have saved a lot of expensive plate glass and I-beams and
cars being thrown about.I do think the Sandman didn’t open
his mind to lot of options that became available to him when he got
particle-ized. I understand that you do what you know, and he had
conceptualized himself as a thief and a fugitive. Maybe those were his
most lucrative options when he was a man, but as Sandman, I don’t think
he had to be an outlaw to make a ton of money. Considering his
strength and versatility, I bet any construction firm would have hired
him in a flash.
Here is more. Here is my earlier post, The Macroeconomics of Superman.
Can one add by subtracting?
When a man applies for a permit to go into business as an innkeeper and the application is turned down, this is not comic. But if it is turned down because there are so few innkeepers, it is comic, because the reason for the application is used as the reason against it. For example, there is a story about a baker who said to a poor woman, "No, mother, she does not get anything; there was another one recently who didn’t get anything, either. We can’t give to everybody." The comic aspect lies in his appearing to arrive at the sum total "everybody" by subtracting.
That is from Kierkegaard’s Concluding Unscientific Postscripts. I will ponder this question as I fly to Denmark…
Random impressions
Yes, I would buy Tanzania Fund.
The calm and reserved Dar Es Salaam is remarkably safe; I haven’t once felt threatened or even
"watched." It is the women who stare, not the men, as is common in Islamic countries. Throughout East Africa the country has a reputation for
politeness and courtesy.
If a 45-year-old Muslim woman tells you she took out a micro-credit
loan to open a "saloon," she usually means a "salon." In the interviews the Tanzanians are eager to be helpful, but they do not take over
the conversation, as might happen in West Africa.
Although there are no tourist sites of note, the city is a
pleasant green and backs into the water. You might see an Indian Dhow
pulling into the harbor. Every now and then you see an impressive Masai walking down the street.
Food prices are falling and the economy is
booming. Per capita gdp in Tanzania is about $700 but the city is
prosperous. Squalor can be found, but only with effort. There are plenty
of new buildings, a few real bookshops, and a bunch of OK shopping
malls. Spiderman 3 is already in the theatres. Given that
migration is possible, and the city is not crushingly overcrowded, how
bad can the countryside be? (Don’t answer that one.)
They carry eggs on the bicycles and everything else on the top of
womens’ heads. SUVs are common. Crafts are not impressive. Tanzania,
though large and populous, is far from an African cultural leader.
The Indian and Chinese restaurants are spicy and genuine. The crab and the vegetables are superb. Ugali is the native
dish; you get some ground cornmeal, roll it in a ball with your
fingers, and then dip it into a coconut sauce with vegetables. They
cook "pullau" rice with cloves, cinnamon, black pepper, and coriander. Goat biryani is also common; it bears only a passing resemblance to the Indian concept of the same name.
Zanzibar, a two hour ferry ride away, has splendid old Arabic and
Indian doors and many Arabic-style buildings. Children play in the
narrow streets. Most of the women wear headscarves and a few wear the
full veil. The beaches appear perfect though I did not have time to
swim. For nightly street food there is spicy lobster, grilled fish,
large fresh prawns, and french fries.
My guide in Zanzibar explained:
I decide to sell to muzungu [in Swahili this means "white person," plus
some local nuances of expression] for my living. The Tanzanian custom is go to witch doctors. The muzungu custom is go to travels.
Shantaram
This 936-page romantic canvas of the Indian underworld, and the adventures of one scoundrel therein, is one of the best bad books I have read. Try this passage:
It seemed impossible that a modern airport, full of prosperous and purposeful travellers, was only kilometers away from those crushed and cindered dreams.
It is a must for all lovers of Bombay. Here is information on the author, who was an anarchist, escaped criminal, and heroin dealer before hitting it big. Most of this tale draws upon his life. Buy it here; if you think you might like it you will.
Solow on Schumpeter
Mark Thoma offers some excerpts. I should note that the TNR web-site still refuses to let me — a paid subscriber — in.
Addendum: This link now seems to be working for all.
How to prepare for your trips, culturally
At this point in life the answer is usually that I do nothing other than call up memories of previous cultural consumption. If you are not at that point, Wikipedia is an excellent source for fiction and movies from a country. When it comes to music, consult the various Rough Guides to music; I mean the books, not the mediocre CD collections or the so-so travel guides. Also try the AllMusic guide, either paper or on-line; when it comes to music neither Amazon nor Wikipedia is to be trusted ("why not?" is an interesting question, is it because too many people feel entitled to have an opinion about music?). Bring music on cassette, CD, or iPod, as soundtrack for your trip, and ask your driver to put on Radio East Africa. Finding the best non-fiction books is the hardest category to master. I still prefer shelf browsing at libraries and book superstores.
An MR request is another option. Matt Dreyer asks what I recommend for a trip to Greece and Turkey. Offhand I’ll say Herodotus, the usual Greek classics, Pamuk’s Snow and Istanbul books, Sarkan (a Turkish singer), Sufi music, Greek traditional music from 1930-1950 (there are some wonderful collections, look for the word rembetika), a study of Turkish and also Greek textiles, a picture book on Cycladic art, a book on Greek sculpture at the National Museum in Athens, Norwich on the Byzantine empire, Michael Grant on the ancient world, Lord Kinross on the Ottoman centuries, a biography of Ataturk and there are a few good recent books which survey contemporary Turkey.
Your tips, either general or specific, are of course welcome.
Education as the critical problem behind current inequality
Here is an excerpt from my New York Times column today:
The return for a college education, in percentage terms, is now
about what it was in America’s Gilded Age in the late 19th century;
this drives the current scramble to get into top colleges and
universities. In contrast, from 1915 to 1950, the relative return for
education fell, mostly because more new college graduates competed for
a relatively few top jobs, and that kept top wages from rising too
high.Professors Goldin and Katz portray a kind of race.
Improvements in technology have raised the gains for those with enough
skills to handle complex jobs. The resulting inequalities are bid back
down only as more people receive more education and move up the wage
ladder.Income distribution thus depends on the balance between
technological progress and access to college and postgraduate study.
The problem isn’t so much capitalism as it is that American lower
education does not prepare enough people to receive gains from American
higher education.Bottlenecks currently keep more individuals from improving their education…
Note that education is a fundamental issue behind the kinds of inequality we should worry about most, namely the failure of many poor people to do better over time. It is not the fundamental problem behind every kind of measured inequality, as the column itself explains. It does not, for instance, explain rising gains to the top one percent. Inequality debates too often conflate different phenomena.
Here is a non-gated version of the very interesting Goldin-Katz paper which I cover.
In a dynamic era does educational access have much of a chance of keeping up with technological improvement? Even if we had optimal educational policies, which of course we don’t, modern technology goes "whoosh," education often just pokeys along.
Brad DeLong offers related commentary, though I think he is too quick to accuse Becker and Murphy of confusing the Marshallian scissors. Mark Thoma offers commentary and relevant links. Concerning Krugman’s claims, in general the data (see David Card’s Econometrica 2001 piece, plus the work of James Heckman) still find relatively high returns to additional education.
Contingency
On my first trip to adopt in China, I happened to sit at a table
next to another adopting couple from the United States. They were
older, with no prior children, and had been assigned a three- or
four-year-old girl. If memory serves me correctly, the father was a CEO
of a large firm in New Jersey. They seemed like very nice people. The
child that was assigned to them was very headstrong. She did not want
to go with her adoptive parents and proceeded to throw tantrums,
screaming, throwing things and spitting on and punching them for
several days. They decided they couldn’t go through with it, and the
girl was returned to the orphanage. My understanding is that she would
not be eligible for adoption (at least, not internationally) in the
future.The next day, the couple told me, another three-year-old was brought
over from an orphanage. The first thing she did when she met them was
say, in English, “I love you, Mommy. I love you, Daddy.” The person
who had transported the child from the orphanage had taught her the
words. She had no idea what she was saying, but it didn’t
matter. Needless to say, this little girl went home with them to New
Jersey.
That is from Steve Levitt, in one of his best posts.
Cell phone monies
I heard a report that in northern Tanzania they are using cell phone credits in lieu of traditional money. If you want to pay for something, just make a call to the provider and transfer cell phone credits to the other trader’s account. Why should those credits be any less liquid than currency? They are easier to store and transfer and just about everybody uses them.
Monetary economics in Africa is very, very difficult. It must start with the presumption that money is the asset with the highest carrying costs, if only because your relatives find it so easy to take away from you.
The Legacy of Max Weber
This obscure but interesting Ludwig Lachmann book is now available on-line for free. I studied with Lachmann at NYU when I was very young, and he helped make me more contrarian. This short book is about how institutions coordinate plans, and how the sociological legacy of Weber is an indispensable component of any theory of Hayekian spontaneous order. From that description alone, you ought to know whether or not you will like it.
Why does America have tipping?
Back in the days of Fifty Questions, a loyal MR reader asked:
I am interested in the economics of tipping. This seems appropriate, since you seem to eat out a lot. Why in the United States is the pay of waitstaff structured as it is as compared to elsewhere, where tipping is less expected?
The best way to understand tipping is to go to a restaurant you will never patronize again. Once your meal is over, when she is not looking, leave your tip not on your table but rather on another table she served. That way she still gets her money and you have in no way ripped her off.
That is psychologically tough to do. You fear the waitress will think you are a lout and a deadbeat. Of course in no-tipping countries, or for that matter non-tipping sectors, this dilemma does not arise.
The real question is why America is structured so that waiters and waitresses can sell feel-good services ("you are a generous tipper and a fine man") to strangers, in return for money. In other words, how did waiters end up as fundraisers, noting that the final Marshallian incidence may lower their wages by the amount they receive in tips? Most cross-cultural explanations of tipping start with the agency problem between diners and servers ("can you bring my drink now?"), but I believe that is the wrong approach. I view tipping as correlated with effective fundraising in other areas, and Americans as being especially willing to set this additional fundraising arena in motion.
Articles of total wisdom, part II
Robin Hanson’s health care petition
Whereas, our single clearest data point regarding the marginal value of this spending, the US-funded RAND health insurance experiment,
where from 1974 to 1982, 7700 subjects were randomly assigned to 3 to 5
years of free or not free medicine, found no significant evidence of a
substantial health effect of more medicine, confirming the usual results of continuing aggregate health–medicine correlation studies,
We the undersigned petition the US to
publicly conduct a similar experiment again soon, this time with at
least ten thousand subjects treated for at least ten years, which
should be feasible for a half billion dollars, or one part in forty
thousand of annual medical spending. Whatever other purposes such an
experiment pursues, it should try to make clear the aggregate health
effects of variations in aggregate medical spending, variations induced
by feasible regimes of quality control, including free patient choice
induced by a varying aggregate price.
Here is the link. I doubt if upping the number of subjects will much change the results. As long as we are playing mad scientist, I would prefer some disaggregated tests, namely:
1. How much better off are the poor uninsured if they get health insurance? (Financially much better off but in health terms only slightly better off is my current guess, and yes there is already some evidence here.)
2. How much less healthy would the well-insured be if they had to consume thirty percent less health care?
3. How much healthier would we be if we retargeted expenditures to some commonly recommended areas, such as pre-natal care and prescription drugs?
And my favorite is:
4. How much would health care cost if we simply banned all health insurance and modified forms thereof?
Except possibly for #1, these are not easy experiments to run, and yes computational modeling would beg the relevant questions. But I think #3 — or even the thought thereof — poses the biggest problem for Robin’s worldview that medicine doesn’t do us much good. Robin is a real world innovator, a hands-on, duct tape kind of guy, so he can’t retreat into the claim that we cannot possibly parse current expenditures more effectively. Lots of health care does lots of good, and from there we can pick up the ball and run with it.
For more on Robin’s revisionist health care views just scroll through the last week’s entries on his blog.