What a great paper, what a blah abstract

by  Tyler Cowen in

Corruption is believed to be a major factor impeding economic development, but the importance of legal enforcement versus cultural norms in controlling corruption is poorly understood. To disentangle these two factors, we exploit a natural experiment, the stationing of thousands of diplomats from around the world in New York City. Diplomatic immunity means there was essentially zero legal enforcement of diplomatic parking violations, allowing us to examine the role of cultural norms alone. This generates a revealed preference measure of government officials’ corruption based on real-world behavior taking place in the same setting. We find strong persistence in corruption norms: diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time. In a second main result, officials from countries that survey evidence indicates have less favorable popular views of the United States commit significantly more parking violations, providing non-laboratory evidence on sentiment in economic decision-making. Taken together, factors other than legal enforcement appear to be important determinants of corruption.

Here is the paper.  I might have tried the following:

During a period of diplomatic parking immunity, the average Kuwaiti diplomat to the United Nations racked up 246 parking violations.  No Swedish diplomat had any parking violations.  This paper explores how that might possibly be the case.

Greg Mankiw lets out his moralist

by  Tyler Cowen in

Ten percent of Greg disapproves of gambling.  More than anything I am baffled by gambling; to me it would be as fun as paying to count pennies.  I genuinely cannot understand the adrenalin rush but I don’t enjoy driving really fast either.  If I let out my moralist (who is more than ten percent, I might add), I would disapprove of people who are usually late, people who smoke cigars in restaurants, people who play loud music late at night, and people who are not curious.  Call me a prude if you want, but might these people be, in some fundamental sense, partly evil?  Seriously. 

Reviving the Invisible Hand

by  Tyler Cowen in

That is Deepak Lal’s new book, the subtitle is The Case for Classical Liberalism in the Twenty-First Century.  I rarely call myself a classical liberal, for fear the title has become musty and for realization that the feasible set today is quite different from that faced by Cobden and Bright.  That aside, here is what I think classical liberalism should become for the 21st century.

1. The welfare state is not going away.  But it is imperative that we avoid Western  European levels of taxation through the explosion of Medicare liabilities.  Don’t forget that the United States is a — should I say the — generator of global public goods par excellence.  Going down the path of France or Sweden would mean disaster.

2. What recipes lead to both strong markets and decent governance?  The not-yet-developed countries of the world all face this problem.  Simply deregulating does not itself solve the governance problem, as we have discovered many times in the last fifteen years.  Our understanding here is backward but much is at stake.

3. We face a variety of critical issues involving decentralization: how to deal with pandemics, natural disasters, or terrorists with nuclear weapons, to name but a few.  None of these are areas for laissez-faire.  Yet for all the squawking about the need for government, most of the real solutions "on the ground" will emphasize voluntary action and the private sector.  When faced with these problems, how can we do better rather than worse?  Note the close connection between this problem and #2; for instance in Indonesia the government won’t allow transparent communication about the nature of the avian flu problem.

Overrated classical liberal ideas are privatization (sometimes useful, but it often replicates old problems in a new regulatory guise) and abolishing foreign aid.

Your take, Alex?  Other classical liberal bloggers?

For Lal’s vision, well…you have to read his book.  You can start with the book’s web page and sample chapter here.

It is also Gerard Debreu’s birthday

by  Tyler Cowen in

Remember Theory of Value, that elegant 128 pp. book which summed up general equilibrium theory?  Here is a brief bio of Debreu, courtesy of Liberty Fund.  Here is Debreu’s own autobiography.  Here is Wikipedia. 

I recall Debreu once saying he took his inspiration from Proust.  To what extent is time a dimension just like space in its effects on human organization?  Debreu solved for those conditions, with of course assistance from Arrow, Hurwicz, Wald, and others.

And by the way, Yana just got her bag, so I feel Debreu’s model is just a little less unrealistic than it was appearing last night.

Would I have supported the American Revolution?

by  Tyler Cowen in

These modal questions are tricky.  Which "Tyler" is doing the choosing?  (If I were an elephant, would pink be my favorite color?  Living in 1773, have I at least still read Jonathan Swift?  Would a modern teenage Thomas Jefferson have a crush on Veronica Mars?)

But think about it, wasn’t it more than a wee bit whacky?  "Let’s cut free of the British Empire, the most successful society the world had seen to date, and go it alone against the French, the Spanish, and the Indians." [TC: they all seemed more formidable at the time than subsequently]

Taxes weren’t that high, especially by modern standards.  The British got rid of slavery before we did.  Might I have concluded the revolution was a bunch of rent-seekers trying to capture the governmental surplus for themselves?

Or would I have been swept up by love of liberty and love of ideas and the desire for adventure…?

Or would I have estimated the long-run political equilibrium and tried to calculate when would be the optimal time for a break, in which case 1776 seemed just about right, so as to capture the intellectual Enlightenment at its peak…

Those guys expected a re-flowering of Periclean Athens; few of them were or would have been ready for the subsequent levels of 19th century alcoholism, partisan political bickering, or the later cult of Princess Diana.  What would I have expected?

What would James Madison expect today?  And would he find a TV show worth watching?

Revolutionary Characters

by  Tyler Cowen in

If we want to know why we can never again replicate the extraordinary generation of the founders, there is a simple answer: the growth of what we today presumably value most about American society and culture, egalitarian democracy.  In the early nineteenth century the voice of ordinary people, at least ordinary white people, began to be heard as never before in history, and they soon overwhelmed the high-minded desires and aims of the revolutionary leaders who had brought them into being.  The founders had succeeded only too well in promoting democracy and equality among ordinary people; indeed, they succeeded in preventing any duplication of themselves.

That is from Gordon Wood’s new and excellent Revolutionary Characters: What Made the Founders Different.  It is in my view the best introduction to the lives and thoughts of the Founders.

I don’t, by the way, agree with the above quotation.  The Founders were not the smartest Americans to have come down the pike.  Instead they a) were extremely wise, and b) had a unique chance to be both great and famous because they were first.  It has not exactly been a string of mediocrities since then, and of course there is more to American life besides the Presidency.

Does Lufthansa have customer service?

by  Tyler Cowen in

Lufthansa, HELP!

Poor Yana [Chernyak] is stuck in Nice, France without her luggage, which was "misplaced" somewhere in transit, apparently in Munich.  No one in Lufthansa, Europe will take calls or help her.  Lufthansa, USA passes the buck to the European offices.

The phone number given for Lufthansa, Nice — 0 826 103 334 — does not work from outside the country of France. 

Lufthansa, HELP, HELP, HELP!  Es gibt die deutsche Wertarbeit, nicht wahr?  Ist die Wirtschaftswunder schon so schnell vorbei?  Lufthansa, can you please help?  Does anyone from Lufthansa read this blog?

Zu Hilfe!  Arme Yana…

Energy security vs. energy independence

by  Tyler Cowen in

Energy interdependence can actually be good for energy security: Just
look at natural gas markets. Right now nearly all the natural gas that
Americans consume comes from U.S. and Canadian fields; only 3 percent
comes into the country by tanker in the form of liquefied natural gas.
This renders the United States highly vulnerable to disruptions on its
home continent. If terrorists or a hurricane took out a key pipeline,
it would be hard to bring in alternative supplies from outside North
America, and prices would spike upward. By buying more liquefied
natural gas from a diverse range of foreigners, the United States would
reduce its energy independence but enhance its energy security.

Here is more by Sebastian Mallaby.

Why I find soccer boring

by  Tyler Cowen in

Do I have a theory for all of my idiosyncratic preferences?  Well, with soccer it is simple.  There is too much apparent noise in the data.  Too many salleys and thrusts lead to immediate reversals.  Moving the ball down the field generates information about the relative strength of the teams, and in theory that is interesting, but I am poorly equipped for interpreting this information.  (I recall reading, with bewilderment, the claim that the French 1-0 victory over Brazil "wasn’t even close.")  To me all that back and forth looks random.  In this regard soccer is like baseball, hockey, or perhaps even chess and Go.  Only the cognoscenti know what is going on.  In particular, the meaning of the drama is clearer when you grow up with it.

Basketball, my favorite sport, generates ongoing data but those results are marked by numbers, most notably points scored, but also rebounds, turnovers, steals, etc.  It is far easier to approach a basketball game "cold" and figure it out on the fly.  If you tune in during halftime, a few stats will indicate what is going on.  It is the perfect sport for people who, like myself, don’t have much time for sports.

Here is a good essay on whether soccer is boring.  Read this too, it compares soccer and hockey.

The Devil Wears Prada — a Straussian interpretation

by  Tyler Cowen in

Imagine a beautiful, pseudo-nerdy and ultimately devious Anne Hathaway [Andy] receiving a job at a top fashion magazine, more or less by accident.  At first she is baffled and fails but soon she is dressing up to fit the role and climbing the ladder of social success, ruthlessly at times.  Her model and mentor is Miranda, the magazine’s editor, an empire-builder played by a commanding and sexier-than-ever Meryl Streep.  Andy is transformed by a taste of success and she abandons her boyfriend, friends, and father in her Hegelian quest to command the obedience of others.

Of course Andy is troubled along the way.  After all, but a few months ago she was editing the school newspaper at Northwestern and wearing frumpy (but oh so cute, to my eyes) sweaters.  I much prefer her size six to her later size four, and yes women really do look better without make-up.

The key moment and emotional center of the movie comes when Miranda [Meryl Streep] tells Andy [Anne Hathaway] that, contrary to her initial expectations, Andy reminds her very much of herself.  Andy runs out of the cab, supposedly rejecting the life of obsessive careerism, for [get this] a [low stress?] career of journalism. 

But does she reject the life of the Uebermensch?  Andy had distanced herself from her hot but low-status boyfriend.  She never gets back together with him, and we learn that they will live in separate cities.  We never see her boring loser friends again.  She had been rude to her dull dad [from Ohio] and is never seen making amends.  Wouldn’t a cornier movie have closed with a fading shot of Andy on the phone, smiling and saying "Hi, Dad, Happy Birthday!  I Love You!"  But this never happens.  She is too hard at work on her next feature story. 

In fact Andy is an irresistible She-Demon, every bit as powerful as the mentor she turned her back on.  Andy didn’t so much scorn Miranda as mimic her and pay homage to her.  Miranda [Meryl Streep] was right (is she ever wrong?): Andy is strong enough to be her own leader and build her own world.  That is why Andy had to leave the realm of Miranda; it was not big enough to fit two such ravenous and yes extremely sexy women.  If Camille Paglia reviewed this movie, she would find occasion to use the words "Gorgon" and "autochthonous."

Andy even rejects the famous free-lance writer ("Christian") whom she sleeps with for kicks ("I’ve run out of excuses" she says) and then unceremoniously abandons — "I’m not your baby!"  Having sniffed out her own capabilities, she is no longer content to play second fiddle in a relationship, no matter how handsome or successful the man.  She also tells this guy just how much she admires Miranda — Andy is quite sincere — and notes that Miranda’s behavior would be found totally acceptable and indeed admirable in a man.

And the poor little British girl Andy screwed over (and caused to be run over by a car, I might add, check the movie’s title) during her rise at the magazine?  She buys her off with a set of new clothes from Paris.  How Kantian of her.

Make no mistake about it, this is a movie about sheer power lust.  It is a movie of how that lust can be cloaked or shifted to another sphere but never denied.  Never bottled up.  Never stopped.  It is a delicious tale of social intrigue, ambition, class, and how much clothes really do matter.  And to take sweet Anne Hathaway — remember the wonderful but underrated Ella Enchanted?– and have her play Max Stirner — that is a mark of genius.

The movie has many other fine points, most of which were neglected by the film’s intended demographic.  Here is Michael Blowhard on Anne Hathaway.  Here is Wikipedia on the movie.

Here is my earlier post, a Straussian reading of Star Wars.  What will be next?