Should climate change limit the number of kids you have?

No, or so says I in my latest Bloomberg column., here is the closing bit:

Let’s not give up by ceasing to have children.

Finally, leave aside the implausibility of these arguments and consider their assumptions. What you’ll find is zero-sum thinking, negative value judgments about large families, and an attempt to use guilt and shame to steer social and environmental policy. I suspect that is why these arguments are finding some traction, not because they are the result of any careful cost-benefit calculations.

So if you are both worried about climate change and considering starting a family, I say: Put aside the unhelpful mess of emotions some participants in this debate are trying to stir up. Instead, focus on how your decision might boost future innovation. As a bonus, you might find that one of the better approaches to climate change is actually pretty fun.

Super simple arguments, with credit to Paul Romer and Alex T. and Bryan and Ross Douthat as well.

Ghent travel notes

Ghent is one of the loveliest small- to mid-sized cities in Europe, perhaps lucky to have never received UNESCO World Heritage status, unlike Bruges.  Ghent was one of the earliest seats of the continental Industrial Revolution, through textiles, and the city core has splendid architecture from late medieval times up through the early 20th century.  It is what Amsterdam should be, but no longer is.

The center is full of interesting, quirky small shops, along the lines of the cliche you do not expect to actually find.  Only rarely are restaurant menus offered in English.  Most of the tourists in the hotel seemed to be Chinese.

Walk around, don’t miss Graffiti Street, and the Ensors and the Roualt in the Fine Arts museum complement the more famous items there.  The Industrie Museum has numerous textile machines from the 18th century onwards; I found it striking how different the 1770 machine was from the 1730 vintage, but how little by 1950 the machines had advanced .

For dining I recommend the Surinamese restaurant Faja Lobi and the Syrian Layali Habab, the mainstream Belgian places seem to be good but no better than good unless you pay a lot of money.

Most of all, you should walk around and ponder why we seem unable (or is it unwilling?) to build such compelling cities these days.

The competence downshift by white liberals

Most Whites, particularly sociopolitical liberals, now endorse racial equality. Archival and experimental research reveals a subtle but persistent ironic consequence: White liberals self-present less competence to minorities than to other Whites—that is, they patronize minorities stereotyped as lower status and less competent. In an initial archival demonstration of the competence downshift, Study 1 examined the content of White Republican and Democratic presidential candidates’ campaign speeches. Although Republican candidates did not significantly shift language based on audience racial composition, Democratic candidates used less competence-related language to minority audiences than to White audiences. Across 5 experiments (total N = 2,157), White participants responded to a Black or White hypothetical (Studies 2, 3, 4, S1) or ostensibly real (Study 5) interaction partner. Three indicators of self-presentation converged: competence-signaling of vocabulary selected for an assignment, competence-related traits selected for an introduction, and competence-related content of brief, open-ended introductions. Conservatism indicators included self-reported political affiliation (liberal-conservative), Right-Wing Authoritarianism (values-based conservatism), and Social Dominance Orientation (hierarchy-based conservatism). Internal meta-analyses revealed that liberals—but not conservatives—presented less competence to Black interaction partners than to White ones. The simple effect was small but significant across studies, and most reliable for the self-reported measure of conservatism. This possibly unintentional but ultimately patronizing competence-downshift suggests that well-intentioned liberal Whites may draw on low-status/competence stereotypes to affiliate with minorities.

Here is the paper by Dupree, C. H., & Fiske, S. T., yes there is a replication crisis in social psychology, nonetheless I thought this was worth passing along.

For the pointer I thank a loyal MR reader.

Facebook and the new privacy revolution

It seems to me that the new, pending reconfiguration of Facebook will bring much more user privacy, most significantly from the forthcoming integration of all of the Facebook messenging services.  More concretely, WhatsApp is way better than Facebook Messenger as it stands, so why not make Messenger more like WhatsApp?

In some ways this will mean considerable sacrifice for the company.  Facebook has been pushing through this plan for general, end-to-end encryption, even though one of the top product people at the company just resigned for exactly this reason, a very real loss to the building process.

There are inevitable trade-offs between “ability to control messages,” and “promoting user privacy.”  In the longer run I think company control of messages does not face objective standards that can command social consensus, or for that matter survive competition from less salubrious and less mainstream alternatives.  I fear also that company control of messages will evolve all too suddenly into government control, First Amendment or not.  Even with a non-activist government, a large and publicly visible company cannot help but look over its shoulder, and consider the possible regulatory or antitrust reaction from the government, when making post/not post decisions.

General encryption and thus user privacy is the right way to go.  Of course there will be public relations bumps along the way, and probably today we are seeing one of them, namely the personnel shifts.  Facebook and Mark Zuckerberg are currently in a kind of PR trap where any decision, any announcement, can and will be taken the wrong way and as a sign that some value or another simply isn’t being served the proper way.  We all know that negative news typically has more clicks and longer legs than positive news.  But if you’ve been talking about user privacy, I think this is a decision you have to favor.

You can debate whether there should be one, two, or three cheers here, but the actual reality is we are taking some pretty big steps toward truly private internet social media.

Thursday assorted links

Do female board members matter?

Maybe less than you might think, at least once you adjust for geographic distance:

Recent literature has shown that gender diversity in the boardroom seems to influence key monitoring decisions of boards. In this paper, we examine whether the observed relation between gender diversity and board decisions is due to a confounding factor, namely, directors’ geographic distance from headquarters. Using data on residential addresses for over 4,000 directors of S&P 1500 firms, we document that female directors cluster in large metropolitan areas and tend to live much farther away from headquarters compared to their male counterparts. We also reexamine prior findings in the literature on how boardroom gender diversity affects key board decisions. We use data on direct airline flights between U.S. locations to carry out an instrumental variables approach that exploits plausibly exogenous variation in both gender diversity and geographic distance. The results show that the effects of boardroom gender diversity on CEO compensation and CEO dismissal decisions found in the prior literature largely disappear when we account for geographic distance. Overall, our results support the view that gender-diverse boards are “tougher monitors” not because of gender differences per se, but rather because they are more geographically remote from headquarters and hence more reliant on hard information such as stock prices. The findings thus suggest that board gender policies, such as quotas, could have unintended consequences for some firms.

Here is the paper by Zinat S. Alam, Mark A. Chen, Conrad S. Ciccotello, and Harley E. Ryan.  Via the excellent Kevin Lewis.

Does a Carbon Tax Reduce CO 2 Emissions? Evidence From British Columbia

From Felix Pretis:

Using difference-in-differences and a novel break-detection approach I show that the introduction of a carbon tax has not ‘yet’ led to a significant reduction in aggregate CO2 emissions in British Columbia, Canada. Despite the lack of detectable aggregate effect, there are heterogeneous emission reductions across sectors: the tax led to a reduction in emissions from transportation incl. personal vehicles (-5%), buildings (-5%), waste processing (-3%), and light manufacturing, construction and forestry (-11%). Introducing a new method to assess policy based on breaks in difference-in-differences fixed effect panel models, I demonstrate that neither the carbon tax, nor the carbon price and emissions trading schemes introduced in other Canadian provinces are detected as significant interventions in aggregate emissions. The absence of significant aggregate reductions in emissions is consistent with existing evidence that current carbon taxes (and prices) are too low to be effective.

Since current carbon taxes are already not so popular, I don’t take this as especially good news.  For the pointer I thank Warren Smith.

My Conversation with Raghuram Rajan

Here is the transcript and audio, we covered so much, here is the CWT summary:

How much has the U.S. actually fixed the financial system? Does India have the best food in the world? Why does China struggle to maintain a strong relationship with allies? Why are people trading close-knit communities for isolating cities? And what types of institutions are we missing in our social structure? Listen to Rajan’s thorough conversation with Tyler to dive into these questions and much more.

Here is one excerpt:

COWEN: A lot of observers have suggested to me that the notion of a kind of Anglo-American liberalism as ascendant in India is now a dead idea, that ideologically, India has somehow shifted, and the main currents of thought, including on the so-called right, are just really not liberalism anymore. Do you have a take on that view?

RAJAN: I’m not sure I would agree. I would say that we’ve had a government over the last five years which has elements of the majoritarian, Hindu nationalist group in it. But I would argue the country, as a whole, is still firmly secular, liberal in the Nehruvian idea, which is that we need a country which is open to different religions, to different ethnicities, to different beliefs if we are to stay together.

And democracy plays an important role here because it allows some of the pressures which build up in each community to essentially get expressed and therefore diffuses some of the pressure. So I think India’s ideal is still a polyglot coming together in this country.

COWEN: But someone like Ramachandra Guha — what he symbolizes intellectually — do you think that would be a growing part of India’s future? Or that will dwindle as colonial ties become smaller, the United States less important in global affairs?

RAJAN: I think that an open, liberal, tolerant country is really what we need for the next stage of growth. We are now reaching middle income. We could go a little faster. We should go a little faster there.

Once we reach middle income, to grow further, I think we need an intellectual openness, which only the kind of democracy we have — the open dialogue, a respectful dialogue — will generate the kinds of innovative forces that will take us more to the frontier.

So I keep saying, and I say this in the book, we’re very well positioned for the next stage of growth, from middle to high income. But we first have to reach middle income.

And:

COWEN: Will current payments companies end up as competitors to banks or complements to the banking system? Or are they free riders on the banking system?

RAJAN: I think they’re trying to figure out their space. As of now, sometimes they’re substituting for . . . Certainly, my daughter uses her payment system completely separate from her bank account. But longer term, we’ll find ways of meshing these in and reduce the costs of making payments. Those costs are really too high at this point, and reducing those costs makes a lot of sense.

COWEN: Will banks ever be truly excellent at doing software?

RAJAN: I think we will have a combination of the guys who are truly good at software — the fintech companies — merging with banks who know how to do the financial side. They’ll bring each of their talents together. I’ve seen a lot of fintech people who have no clue as to what finance is really about. And I’ve seen a lot of banks who have no clue as to what tech is about. I think some merger will happen over time.

There is much more at the link.  And here is Raghu’s new book The Third Pillar: How Markets and the State Leave Community Behind.

Was concentrated big business behind the Nazi rise?

No, there isn’t much evidence for that now-common claim:

As I show below, the claim that big business contributed to the rise of the Nazi Party is simply inconsistent with the consensus among German historians. While there is some evidence industrial concentration contributed in Hitler’s ability to consolidate power after he was appointed chancellor in 1933, there is no evidence monopolists financed Hitler’s rise to power, and ample evidence showing industry leaders opposed his ascent.

Here is the longer essay, with much more additional detail, from the soon-to-be-better-known Alec Stapp.

The college bribery scandal

Of course universities have long taken money to let in unqualified applicants, what is happening here is they are going after the local rate busters.  Here is my Bloomberg column on this topic, excerpt:

My second worry is that the number of bribery cases suggests that many wealthy Americans perceive higher education to be an ethics-free, law-free zone where the only restraint on your behavior is whatever you can get away with.

I suspect that most of those charged in this case never expected they might have to answer in court for their actions. To consider a parallel situation: I wouldn’t dream of shoplifting. Yet I sometimes drive 32 mph in a 25 mph speed zone. Like most of us, I draw a distinction between laws we are expected to follow, and laws we aren’t.

To me, the number of people caught up in this scandal indicates that too many Americans do not take seriously the idea that our system of higher education is a set of institutions bound by morality and laws. They take its governing rules as optional and conditional, depending on convenience, much as we do many speed-limit signs.

In this case, those charged are mostly wealthy Americans of high social status, not gangsters. They probably thought of themselves as law-abiding Americans, with exceptions so minor as to be negligible. In other words, this case illustrates what a low opinion America has of its system of higher education. As a university professor, I would feel much better if it had been mobsters charged with these alleged crimes.

There is much more at the link.

It is easier to do this when there is no single dominant company involved

Or is it that real estate developers are somehow especially popular these days?:

New York was riveted for weeks by a debate over whether Amazon should receive $3 billion in tax breaks and other incentives in return for setting up a headquarters in Queens and creating 25,000 jobs. But with far less public attention, the city government has for more than a decade been funneling even more aid to Hudson Yards, a 28-acre complex of gleaming office buildings and luxury residential towers that is one of the nation’s biggest real estate projects in recent years.

In all, the tax breaks and other government assistance for Hudson Yards have reached nearly $6 billion, according to public records and a recent analysis by the New School.

Here is more from Matthew Haag at the NYT,