A simple argument for state capacity libertarianism
Again and again—and in countries all over the world—declines in trust of government correlate strongly with calls for more government regulation in more parts of our lives. “Individuals in low-trust countries want more government intervention even though they know the government is corrupt,” explain the authors of a 2010 Quarterly Journal of Economics paper. That’s certainly the case in the United States, where the size, scope, and spending of government has vastly increased over exactly the same period in which trust and confidence in the government has cratered. In 2018, I talked with one of the paper’s authors, Andrei Shleifer, a Harvard economist who grew up in the Soviet Union before coming to America. Why do citizens ask a government they don’t believe in to bring order? “They want regulation,” he said. “They want a dictator who will bring back order.”
Counterintuitively, the relative size and spending of government in the United States actually flattened or dipped during periods when trust and confidence in government picked up…
That is Nick Gillespie, via Arnold Kling.
Friday assorted links
1. Does the quality of blog comments deteriorate? (MR post from 2008)
2. Is local news really dying?
3. America’s favorite architecture?
4. Africa has 1.2 billion people and only six labs that can test for coronavirus. And “We find that expansions of transportation networks have significant health costs in increasing the spread of viruses, and that propagation rates are pro-cyclically sensitive to economic conditions and increase with inter-regional trade.”
5. Vulnerability to disgust does not predict social conservatism very well.
*Seven Worlds, One Planet*
That is the new David Attenborough BBC nature show, available on streaming or buy the discs from the UK. Believe it or not it has better footage than the earlier BBC nature shows, while remaining inside the basic template of what such shows attempt to accomplish. Here is a very good Guardian review. Here is a somewhat snotty NYT review, bemoaning Attenborough’s tone of “polite optimism.” Strongly recommended.
U.S. nurse conservation fact of the day
In the period 2010–17 the number of NPs in the US more than doubled from approximately 91,000 to 190,000. This growth occurred in every US region and was driven by the rapid expansion of education programs that attracted nurses in the Millennial generation. Employment was concentrated in hospitals, physician offices, and outpatient care centers, and inflation-adjusted earnings grew by 5.5 percent over this period. The pronounced growth in the number of NPs has reduced the size of the registered nurse (RN) workforce by up to 80,000 nationwide.
Here is the underlying research, via the excellent Kevin Lewis. Given the growth of the health care sector, should not the number of nurses, broadly construed, be rising at a higher rate?
Via the excellent Kevin Lewis.
What I’ve been reading
1. Lane Kenworthy, Social Democratic Capitalism. A very smart, well-written, well-argued book, and an argued book indeed it is. As the title suggests, Kenworthy tries to persuade the reader to embrace social democratic capitalism, but with an emphasis on what government can do, not the market. One rebuttal: responding to the Swiss experience requires far more than the two short paragraphs on pp.105-106, and furthermore Switzerland has done very well in many sectors above and beyond being a financial safe haven (which in some regards hurts those other sectors through exchange rate effects).
Laurence Louër, Sunnis and Shi’a: A Political History of Discord. Captures the complexities, and in fact pulls the reader away from the usual tired dichotomy.
Neil Price, A History of the Vikings: Children of Ash and Elm. I have only browsed this book, yet it appears to have much more information about the Vikings than other books I know, yet without getting squirrelly. That said, I find it difficult to connect books on the Vikings with the broader conceptual narratives I know, and thus I do not retain their content very well. So I am never sure if I should read another book on the Vikings.
John Took’s Dante is the book to read on Dante after you’ve read all the other books (an interesting designation, by the way, I wonder how many areas have such books? In most cases, if you’ve read all the other books you shouldn’t bother with the next one!).
Fred Kaplan, The Bomb: Presidents, Generals, and the Secret History of Nuclear War, is not a secret history, but it is a good general overall introduction to its chosen topic.
Dietrich Vollrath, Fully Grown: Why a Stagnant Economy is a Sign of Success is now out, my previous review is at that link, an excellent book on economic growth and it will make my best of the year list.
Is (productive) big business taking over services?
From today’s WSJ, by Chang-Tai Hsieh and Esteban Rossi-Hansberg:
If you live in a midsize American city, you’ve probably noticed that an increasing share of local services are provided by chain establishments such as the Cheesecake Factory and Wegmans. Why? It’s because the industrial revolution that transformed U.S. manufacturing more than a century ago is finally reaching many local services, which had long resisted standardization.
…Locals sometimes lament when a new chain in town bears down on a mom-and-pop shop. But in the past four decades industries in which top firms have grown in share have created many more jobs than ones where market share is dispersed among small peers. Companies that have taken advantage of the industrial revolution in services grow by expanding into smaller cities or exurbs, and provide competition to previously dominant local monopolists. This brings jobs, as well as cheaper and higher quality services from groceries to health care, to areas that need them most.
In contrast, employment has shrunk in sectors still dominated by small independent operators, such as plumbing and electrical wiring. Over the past four decades, the growth of the top 10% of firms in local services in a given year has accounted for 80% of the cumulative wage and employment growth in the U.S.
Might this also someday mean that services will become easier to export? I am also happy to recommend the authors’ underlying piece The Industrial Revolution in Services.
Thursday assorted links
1. The awesome intellect of George Steiner.
2. Will classical architecture become the mandated style for federal buildings?
3. Optimal virulence. And Jordan Schneider podcast about citizen reporting of the coronavirus in China.
4. David Wolpe remembers Kirk Douglas (NYT, do see “Paths of Glory” if you never have).
5. Why do Greenland and Guyana have such high suicide rates?
6. Uh-oh.
Model this asymmetric fatality rate?
The fatality rate in Wuhan is 4.1 percent and 2.8 percent in Hubei, compared to just 0.17 percent elsewhere in mainland China.
Is it really medical supply scarcity, as brought by the quarantine, as the NYT article seems to suggest? Why is the fatality rate so asymmetrically distributed, or is it?
How public intellectuals can extend their shelf lives
Scholar’s Stage has a long post on why public intellectuals often have such short careers in terms of quality output. Here are my tips for extending your shelf life, noting that I am not myself suggesting I have managed all of these, do as I say not necessarily as I do:
1. Take a cue from Kobe Bryant. As you get older, you have to practice critical thinking more, and harder, compared to when you were young. Most people let up on their practice habits over time.
2. Avoid criticizing other public intellectuals. In fact, avoid the negative as much as possible. However pressing a social or economic issue may be, there is almost always a positive and constructive way to reframe your potential contribution. This also will force you to keep on thinking harder, because it is easier to take apparently justified negative slaps at the wrongdoers.
3. You probably don’t have as much actual influence as you like to think, and besides fame is a mix of benefits and costs. So write to meet your own standards of quality, and no I don’t mean your standards for how much influence you think you ought to have.
4. In your copious spare time, keep on picking up and learning new areas of study.
5. Go to some travel locations you never would have gone to before, and without too many firm plans, so for instance avoid having a full schedule of public lectures.
6. Interact with students, and not just in a “famous person interacting with students” kind of way. The value of having to motivate and explain things to people who don’t necessarily care who you are is high.
7. Shy away from discussion of political candidates as much as possible. “Run away” is better yet.
8. Try not to write things, including tweets, a less analytical and intelligent person also could have written.
10. Hang around happy, cheery people. That said, also have some ornery friends determined to make (intellectual) life difficult for you. You need both.
11. Continue to read some serious fiction, always. Genre fiction has other uses, but most of it doesn’t satisfy this stricture.
12. Be very reluctant to purge your friends and acquaintances for perceived intellectual or political wrongdoings.
What else?
Coronavirus would be worse without the web
That is the topic of my latest Bloomberg column, here is one excerpt:
Scientific information about the coronavirus has spread around the world remarkably quickly, mostly because of the internet. The virus has been identified, sequenced, and tracked online, and researchers around the world are working on possible fixes. The possibility that the failed ebola drug remdesivir may help protect against the virus is now well known and the drug is being deployed. The notion of using an HIV cocktail plus some anti-flu drugs against the coronavirus also has been publicized online. The final word on those potential fixes is not yet in, but the internet accelerates the spread of knowledge, along with its application.
Researchers from India prematurely published a claim that the coronavirus resembles in some critical ways the HIV virus, and their presentation hinted at the possibility something sinister was going on. The online scientific community leapt into action, however, and very quickly the theory was struck down and a retraction came almost immediately. I saw this whole process unfold on my Twitter feed in less than a day.
There is much more at the link, including a discussion of two possible downsides, first panic buying and second too much state-led “digital quarantine” of individuals. In addition, I wish to thank @pmarca and also Balaji Srinivasan for some ideas relevant to this column.
Wednesday assorted links
1. The demand for telephone operators.
2. Visions of ARPA, from Policy Exchange, a genuinely good short, free book on how to create new ARPAs.
3. “Happy Birthday” in the styles of ten famous classical composers. Recommended, for those who care.
4. How conservatism is changing, with a nod to Leo Strauss.
The “Little Divergence” — England vs. Iberia
From a new paper by António Henriques and Nuno Palma:
Why did the countries which first benefited from access to the New World – Castile and Portugal – decline relative to their followers, especially England and the Netherlands? The dominant narrative is that worse initial institutions at the time of the opening of Atlantic trade explain Iberian divergence. In this paper, we build a new dataset which allows for a comparison of institutional quality over time. We consider the frequency and nature of parliamentary meetings, the frequency and intensity of extraordinary taxation and coin debasement, and real interest spreads for public debt. We find no evidence that the political institutions of Iberia were worse until at least the English Civil War.
From the paper:
Our argument that the mid seventeenth-century is when English political divergence truly began gains support from the fact that this is also when English GDP per capita started to grow persistently,structural change began, and fiscal capacity took off in comparative terms…The idea that Iberian political institutions at the start of the sixteenth century (or evenearlier) were more absolutist than those in England and the Netherlands does not standup to close historical scrutiny.
Note by the way that Portuguese coinage was stable 1500-1800 throughout, and the same cannot be said for England or the Dutch Republic. For the time being, score at least one for the primacy of economics over the primacy of politics.
An anonymous reader on talent misallocation and bureaucratization
Building upon my recent Bloomberg column on old people getting the interesting jobs, a reader writes the following on his blog:
I do not think that the main explanation for this is the increasing age requirements for America’s best jobs. Instead, I contend that this sorting is an efficient response to the standardization of entry-level jobs and bureaucratization of hierarchies . Most firms are not well-equipped to efficiently utilize the top tier of smart, talented but raw new employees. Sending them off to consulting firms is a rational response from the point of view of both the young employees as well as the companies.
(Since the number of startup founders and scientists is relatively small, the real cost of this talent allocation is to Fortune 500 companies. I will therefore focus on large companies. I will also just focus on consulting, though I believe the arguments apply equally to law, finance, and perhaps big tech.)
Most corporate entry-level programs do not offer much stratification between the smart, highly motivated individual and the more average performer. Fifty years ago a bright, ambitious new college graduate had no choice but to pay one’s dues by starting at the bottom like everyone else and then work one’s way to the top–albeit at a faster rate than today. Today that same graduate can select into the fast track via consulting.
Moreover, this is an equilibrium that–at least in the short- to medium-term–makes sense for all players. The ambitious young graduate receives a wage premium in exchange for higher productivity. The consulting firm gets to hire the smart people it needs to build its pyramid. And even the Fortune 500 company gets to gain from the intelligence of the new graduate when it hires the consulting firm; arguably this company is a loser on net compared to fifty years ago (when it received access to the talent but did not have to pay the consulting firm to act as a middleman), but the equilibrium is still tenable.
My own experience at GE and a top management consulting firm is a good example of this in action. I joined GE through one of its leadership development programs but found my peers to be less talented and hard-working than I had hoped. Unsurprisingly, I also found the roles to be uninspiring and poor uses of my time. After less than two years, I left to join a top consulting firm. I was challenged from day one and at times was not sure if I would make it. My bosses asked much more of me, but they also better resourced me. My productivity was an order of magnitude higher than at GE, and I was accordingly paid nearly twice as much.
For further evidence, consider that 90% of US companies have predefined pay bands based on experience. Given one’s experience level, it is difficult to make considerably more than one’s peers in the first few years (which is the purpose of pay bands). Contrast that with consulting: an average graduate with an engineering degree (the highest earning of all degrees) earns $69k but a new associate at McKinsey earns $105k. The disparity only widens for lower-earning degrees.
One counterargument is that the sorting done by consulting firms is based mostly on the prestige of one’s university education (whether undergraduate or graduate). Obviously all the smart people did not go to the Ivy League, and besides, don’t those schools screen for a narrow type of excellence anyways?
Yes, this is certainly true. However, I think it is also true that most people who can gain admission into one of these schools and pass the rigorous battery of consulting interviews are, by most reasonable measures, smart. Their willingness to self-select into consulting indicates their work ethic. It is far from a perfect screen, but it is a relatively effective one given how easy it is to utilize.
Thus, it is rational (at least in this narrow sense) for young people to self-select into consulting…
There is a bit more at the link.
What should I ask Ross Douthat?
Here is my first CWT with him, I will be doing another, based in part around Ross’s new book The Decadent Society: How We Became the Victims of Our Own Success, reviewed by me enthusiastically here. So what should I ask him?
Martin Gurri, philosopher and social scientist
I am pleased to announce that Martin Gurri is joining Mercatus as an affiliated scholar. As you probably may know, Martin is the author of The Revolt of the Public and the Crisis of Authority in the New Millennium, one of the more important and more prophetic social science books of our time.
Here is Martin’s recent short piece for Mercatus on revolt, populism, and reaction. Here is a 21-minute podcast with Martin.