Japan facts of the day

by  Tyler Cowen in

Compared with the previous year, the survey showed a drop in the number of people who wanted to work and study abroad, work with foreigners in Japan and learn foreign languages. Most notably the percentage of those who wanted to “use English for a job” declined from its 2020 peak by 10.6 points to 38 per cent.

And:

…the support for the ruling Liberal Democratic party among young people was higher than in other generations. That, said Junji Nakagawa, a professor at Chuo Gakuin University, reflected a view among 20-year-olds that the political landscape was unlikely to ever change.

Here is more from the FT, in part focusing on demographics, sobering throughout.

Tuesday assorted links

by  Tyler Cowen

1. The economics of taxi tipping.

2. Best Chris Blattman non-fiction reads of last year.

3. Penelope Fitzgerald at age 58.

4. Austin Vernon on why nuclear power is stagnant.

5. In a Gallup survey, Americans seem to be reading fewer books.

6. “Across Congress Members, emotionality is higher for Democrats, for women, for ethnic/religious minorities, for the opposition party, and for members with ideologically extreme roll-call voting records.“

My Holberg Prize talk honoring Cass Sunstein

by  Tyler Cowen in

This is from 2018, I hadn’t know it was put on-line this last summer.  The title is about threats to democracy, but much of the actual 24-minute talk is about Cass.  Cass won the Holberg Prize that year, and I was asked to be one of the honoring speakers at the ceremony.  Here goes:

The fish and chips in Bergen was excellent.

And for this pointer I thank Clara B. Jones.

Noah Smith Substack interviews me

by  Tyler Cowen in

Here is the interview.  Here is one excerpt:

N.S.: So how would you generally describe the zeitgeist of the moment, if you had to give a simple summary? What do you think are a couple of most important trends in culture and thought right now? My impression has been that we’re sort of in a replay of the 70s — a period of exhaustion after several years of intense social unrest, where people are looking around for new cultural and economic paradigms to replace the ones we just smashed. But maybe I’ve just been reading too many Rick Perlstein books?

T.C.: I view the 1970s as a materialistic time, sexually highly charged, and America running into some significant real resource constraints, at least initially stemming from high oil prices. Mainstream culture was often fairly crass — just look at disco, or the ascendancy of mainstream network television. The current time I see as quite different. Sexually, we are withdrawing. Society is more feminized. America has far more immigrants. And we are obsessed with the virtual and with make-believe, to a degree the 1970s could not have imagined. Bruno Macaes is one author who is really on the right track here, with his emphasis on how America is building virtual and indeed often “unreal” fantasies.

I think today the variance of weirdness is increasing. Conformists can conform like never before, due say to social media and the Girardian desire to mimic others. But unusual people can connect with other unusual people, and make each other much weirder and more “niche.” For instance, every possible variant of political views seems to be “out there” these days, and perhaps that is not entirely reassuring. A higher variance for weirdness probably encourages creativity. But is it a positive development on net? We are going to find out.

Recommended throughout, and of course do subscribe to Noah’s Substack.

Australian sentences to ponder

by  Tyler Cowen in

The world number one player was questioned for over seven hours about his paperwork and who had approved medical exemption permission for his arrival in Australia.

Here is the link.  Supposedly the star won his case.  But another source relates:

However, Australia’s immigration minister has said he is “currently considering the matter” and the process of suspending Djokovic’s visa is “ongoing”.

Resentment people, resentment.  And why are the politicians doing so much speaking, rather than say the public health authorities?  I am a fan, however, of Judge Kelly (FT):

Kelly said that Djokovic had been granted a medical exemption and had filled out the necessary paperwork to enter Australia. “The point I am somewhat agitated about is what more could this man have done?” the judge told the court. He also questioned whether Djokovic had adequate time to consult his lawyers and agent after being told he would be deported.

I might even watch some of the tourney.

Kevin Grier reviews MMT

by  Tyler Cowen in

Now readers may wonder, has the government really hit the MMT highway? Am I mischaracterizing Kelton’s views? Is our current mess really an indictment of MMT?

Well, here is an article/interview with Kelton from back in June 2021 with the awesome headline, “Stephanie Kelton: Biden has Adopted MMT.” The article leads with this: “President Biden’s proposed $6 trillion budget will not be fully paid for with tax increases or other spending cuts. It will increase the deficit, according to Stephanie Kelton, and that constitutes an implicit if not explicit adoption of the principles of modern monetary theory (MMT).”

In June, inflation was already elevated. You may wonder what Kelton had to say about it, since in MMT inflation is evidence of overspending. Well, wonder no more dear reader: “Inflation is evidence of too big a deficit, Kelton said. But inflation does not mean that there is too big a deficit; it can be due to “excessive demand pressures.” That is what is happening, according to Kelton, with temporary shortages of goods like computer chips and lumber that will soon self-correct.”

Here is the full review.

What I’ve been reading

by  Tyler Cowen in

1. Michael S. Nieberg, When France Fell: the Vichy Crisis and the Fate of the Anglo-American Alliance.  It is difficult to find WWII material that is both interesting and fresh, but this book qualifies.  It is a look at how America processed the fall of France in 1940, and suddenly realized the whole thing was for real and that dangers to the homeland were not trivial.

2. Timothy Snyder, The Reconstruction of Nations: Poland, Ukraine, Lithuania, Belarus, 1569-1999.  I fear this book will become increasingly relevant, as it is a good introduction to what appear to be a number of growing hotspots.  The 1569 Lublin Union created a Polish-Lithuanian Commonwealth.  How did that matter, how was it the ethnic issues in that region never were settled, and have we recreated a Polish-Lithuanian Commonwealth today?  This book is good on all those questions and more.

3. John Markoff, Whole Earth: The Many Lives of Stewart Brand.  An excellent book, I have more to say about it and also Stewart’s life, but you’ll have to wait for my CWT with Stewart himself.  Stewart himself seems to like it, and he praised how the author’s archival research corrected many of his own faulty memories.

Edmond Smith, Merchants: The Community That Shaped England’s Trade and Empire.  There are some good recent books on the East India Company, this useful work looks at the phenomenon more generally.  The Muscovy Company was chartered in 1555, and survived until 1917, at which point it was turned into a “charity.”  Also of relevance for recent charter city discussions.

Barbara Stollberg-Rilinger’s Maria Theresa: The Habsburg Empress in Her Time is a comprehensive study of its chosen topic.  It doesn’t focus on the conceptual issues of liberalism that I care most about, but it is nonetheless by far the most detailed study out there.  Translated from the German.

Also new is David Autor, David A. Mindell, and Elisabeth B. Reynolds, The Work of the Future: Building Better Jobs in an Age of Intelligent Machines.

How to elect Republicans

by  Tyler Cowen in

In New York, racial minorities are automatically eligible for scarce COVID-19 therapeutics, regardless of age or underlying conditions. In Utah, “Latinx ethnicity” counts for more points than “congestive heart failure” in a patient’s “COVID-19 risk score”—the state’s framework for allocating monoclonal antibodies. And in Minnesota, health officials have devised their own “ethical framework” that prioritizes black 18-year-olds over white 64-year-olds—even though the latter are at much higher risk of severe disease.

These schemes have sparked widespread condemnation of the state governments implementing them. But the idea to use race to determine drug eligibility wasn’t hatched in local health departments; it came directly from the federal Food and Drug Administration.

Here is the full story, I am very willing to issue a correction if it turns out anything posted from this is wrong.

How decentralized really are blockchains?

by  Tyler Cowen in

At this point, there are basically two companies. Almost all dApps use either Infura or Alchemy in order to interact with the blockchain. In fact, even when you connect a wallet like MetaMask to a dApp, and the dApp interacts with the blockchain via your wallet, MetaMask is just making calls to Infura!

These client APIs are not using anything to verify blockchain state or the authenticity of responses. The results aren’t even signed. An app like Autonomous Art says “hey what’s the output of this view function on this smart contract,” Alchemy or Infura responds with a JSON blob that says “this is the output,” and the app renders it.

This was surprising to me. So much work, energy, and time has gone into creating a trustless distributed consensus mechanism, but virtually all clients that wish to access it do so by simply trusting the outputs from these two companies without any further verification. It also doesn’t seem like the best privacy situation. Imagine if every time you interacted with a website in Chrome, your request first went to Google before being routed to the destination and back. That’s the situation with ethereum today. All write traffic is obviously already public on the blockchain, but these companies also have visibility into almost all read requests from almost all users in almost all dApps.

Here is the full essay by Moxie, interesting throughout.  And more generally:

One thing that has always felt strange to me about the cryptocurrency world is the lack of attention to the client/server interface. When people talk about blockchains, they talk about distributed trust, leaderless consensus, and all the mechanics of how that works, but often gloss over the reality that clients ultimately can’t participate in those mechanics. All the network diagrams are of servers, the trust model is between servers, everything is about servers. Blockchains are designed to be a network of peers, but not designed such that it’s really possible for your mobile device or your browser to be one of those peers.

Recommended.  Via Nabeel.

Saturday assorted links

by  Tyler Cowen

1. Engineering milestones for 2022?

2. All of this happened in greater China this week.

3. “…changes in the return to human capital caused by shifts in the supply and demand for educated and skilled labor have played a crucial role in the rise in income inequality since the 1970s – rising corporate concentration and employer market power (monopsony) do not appear to be a key culprit.”  Link here.

4. “Meet the man who runs a moist towelette museum out of a planetarium.”

5. Met Opera sings through Omicron (NYT).

6. German trade surplus trending down since 2017.  Are there still people out there who think this is good news?  Remember the bizarre obsession over this issue?  Never reason from a trade surplus!

The background level of stress

by  Tyler Cowen in

That is a physiological or biological concept, or it may appear in the other sciences.  It rarely plays a direct role in economics, though I think it is important for understanding regime shifts.

I take any estimate of NAIRU, or indeed many other “steady-state” economic variables, as relative to a particular background level of stress.  In a pandemic, of course, that level of stress may be quite high, and to be clear much of that may stem from the policy response, not just the pandemic itself.

To be sure, I do not see the 2022 level of American stress as “permanent.”  But neither do I hold the 1998 or 2018 backgrounds levels of stress to be “permanent” or “natural” either.  If anything, those lower levels may be the historical outliers.

I think a great deal about what the forthcoming level of background stress will be, but I am quite uncertain about any prediction.  I do know I read a great number of people who either treat it as absurdly high (e.g., the climate doomsayers), or who are implicitly sure it will be quite low.

I believe this concept of background stress, if nothing else, helps you to see what a lot of apparently reasonable predictions can end up being proven wrong.