Category: Books
Richard Perle reviews *An Economist Gets Lunch*
In Commentary magazine, not on-line, I especially like the end:
The only problem with this splendid book is where to put it in one’s library, with the food books or the economic books? It’s really two books with a common quality: Thinking can make things better.
Here is a short excerpt from the review, and the gate is there for subscribers. You can order the book here.
*Gone Girl*
That is the new novel by Gillian Flynn, which has found great favor among readers. It does not present itself as an intellectual book, yet by the end it turned out to be clever in a very different way than what had been promised up front. Recommended, if you are looking for a page turner and an excellent novel about both crime and marriage.
*Face Value: The Entwined Histories of Money & Race in America*
That is the new book from Michael O’Malley, a colleague of mine in the history department. Here is one of the book’s most controversial passages:
It should come as no surprise, then, to find that right-wing libertarians and proponents of the free market often tend to favor genetic accounts of identity. The heroic individualism many libertarians imagine requires a self freed from all social constraints, but at the same time founded in nature — in natural rights and natural talents. The libertarians account of individualism rests on imagining a person free of social and political power. Ayn Rand’s The Fountainhead ends with her visionary ego-driven architect standing above the city: “there was only the ocean and the sky and the figure of Howard Roark.” That is, nothing but nature and the heroic individual, standing above society: an intrinsic self entirely in possession of itself. In this sense libertarianism embraces not freedom but a kind of genetic determinism, in which “merit” derives not from social whims but from intrinsic qualities and, again in which all hierarchies are “natural.” Rand’s clunky Atlas Shrugged imagines a world in which all the creative and productive people have fled to a secret location, leaving the rest of us, “looters” and “parasites,” flailing helplessly like ants bereft of the queen. Right-wing libertarianism in this way again bears a close relationship to its nineteenth-century antecedent, social Darwinism. It stresses freedom, but also imagines nature as a set of stable confines and success as the proper reward for genetic superiority.
The book also offers an interesting discussion of the role of the gold standard in 19th century thought. There are also sections which Brad DeLong would quote at length.
I was surprised to just learn that O’Malley has an interest in Eddie Lang. I didn’t know anyone else still thought about Eddie Lang, there is YouTube here.
Arrived at my doorstep
Hypocrites and Half-Wits: A Daily Dose of Sanity from Cafe Hayek, by Donald J. Boudreaux.
I answer food questions over at Freakonomics
I liked the whole interview, here is the concluding segment:
Q. What restaurant or food type would Tyler Cowen, Murray Rothbard and Ludwig von Mises enjoy for lunch? Why? –Bill N.
A. Rothbard was quite a conservative eater, but he loved the Bavarian culture of the Baroque. Mises grew up in the Austro-Hungarian Empire. So I suggest that we would all sit down and have a Wiener Schnitzel together.
You can buy An Economist Gets Lunch here.
What kinds of financial risks do women prefer to take?
As mentioned, women make up about 5 percent of an average trading floor. But these numbers change dramatically when we leave the banks and visit their clients, the asset-management companies. Here we find a much higher percentage of women. The absolute numbers are not large, because asset managers employ far fewer risk taker than banks, but at some of the big asset-management companies in the United Kingdom women make up as much as 60 percent of the risk takers. This fact is, I believe, crucial to understanding the differences in risk taking between men and women. Asset management is risk taking, so it is not the case that women do not take risks; it is just a different style of risk taking from the high-frequency variety so prevalent at the banks. In asset management one can take time to analyze a security and then hold the resulting trade for days, weeks or years. So the difference between men’s and women’s risk taking may be not so much the level of risk-aversion as it is the period of time over which they prefer to make their decisions.
Perhaps men have dominated the trading floors of banks because most of the trading done on them has traditionally been of the high-frequency variety. Men love this quick decision-making, and the physical side of trading.
That is from The Hour Between Dog and Wolf. The author is John Coates and you can buy the book here. I would consider that hypothesis speculative, but nonetheless I found the passage of interest.
Sentence reductions in Brazil
Brazilian prisoners are now able to shorten their sentences by reading books and writing essays about them.
…four days less for every book they read. Inmates in four federal prisons holding some of Brazil’s most notorious criminals will be able to read up to 12 works of literature, philosophy, science or classics to trim a maximum 48 days off their sentence each year, the government announced.
Prisoners will have up to four weeks to read each book and write an essay which must “make correct use of paragraphs, be free of corrections, use margins and legible joined-up writing,” said the notice published on Monday in the official gazette.
The story is here, and for the pointer I thank David Zetland. Here is the Reddit discussion.
New books in my pile
Richard Florida, The Rise of the Creative Class–Revisited: 10th Anniversary Edition–Revised and Expanded.
There is also The Kipper und Wipper Inflation, 1619-23, An Economic History with Contemporary German Broadsheets, by Martha White Paas, John Roger Paas, and translations by George Schoolfield. The origins of German monetary thought turn out to be more important than might have been expected…
Yana reviews the new John Goodman book
You can buy Priceless: Curing the Health Care Crisis here, her comments are under the fold…
Goodman’s *Priceless: Curing the Healthcare Crisis* is an excellent treatise on the healthcare industry and how our political solutions are making that world increasingly perverse, ineffective, and stagnant. Tyler has written before about how healthcare is one of the few remaining industries with low-hanging fruit for innovation. In my work I am consistently struck by how many great healthcare delivery ideas are illegal and Goodman showcases many examples of healthcare entrepreneurship which aren’t allowed to take off because of the regulatory environment and the entrenchment of major players.
Goodman at once lays a strong foundation for healthcare as a system “too complex for any single individual (or group of individuals) to grasp or understand” and makes a strong case for how much hubris policy has had in trying to address the problems of the industry. Herein lies the most powerful lesson of the book: while it is impossible that any entrepreneur will devise an overarching solution for our healthcare problems we have forgotten how to let process innovators test solutions and chip away at problems the way they do to roaring success in other industries.
Goodman pinpoints various turns the US has taken to bring existing private coverage and provision of services under the government umbrella. Woven together, these examples provide a vivid picture of systematically government payers have crowded out private sector solutions. This has led to stagnation while propagating the myth that the government is the only capable provider of services for everything from prescription drug coverage (with the passage of Medicare Part D) to comparative-effectiveness research ($1.1 billion allocated under the stimulus bill alone). This has led to a price system so broken that it does not exist. Goodman’s discussion of time prices exposes that we cannot simply push prices down without shifting the costs to other means of rationing. Similarly, his comparison of Medicaid to food stamps showcases how ridiculous Medicaid’s prohibitions on supplementing care with cash are, even within the internal logic of a robust welfare state.
Goodman is not shy about exposing the politics of healthcare and how it stands in the way of treating those who need care the most, including the poor and elderly, but this book is no exercise in partisanship. Rather, he homes in on one of the biggest insurmountable obstacles that the political debate brings to bear:
“Normally I do not comment on the motives of people I disagree with…Yet through the years I have discovered that the most important differences people have over health policy have little to do with facts, reasoning or logical argument. The most important differences stem from differences in fundamental world views. There are a very large number of people in this field who find the price system distasteful – at least for medical care…For well-intentioned reasons perhaps, they are emotionally predisposed to favor the suppression of normal market processes.”
Goodman has a strong grasp of realities such as the fact that many acute care services will always be sticky to being provided locally but that ambulatory and elective procedures make up the majority of the market and have the potential for reinventing how healthcare is delivered. Many will disagree with the ideas presented but the book will push the thinking of anyone involved in healthcare. This is especially true since Goodman has a thoroughgoing understanding of healthcare as an industry, a quality which most of the loudest voices in policy sorely lack.
*The Hour Between Dog and Wolf*
This new and interesting book focuses on the hormones and neuroeconomics behind market trading and traders. It also has a good passage on the illusion of free will:
In fact our conscious brain has surprisingly little grasp of what makes us decide to do one thing rather than another. A telling example of this ignorance has been provided by Joe LeDoux and Michael Gazzaniga, two neuroscientists who conducted a study of patients with a severed corpus callosum, the bundle of nerve fibers connecting the two hemispheres of the brain, leaving the two sides of the brain unable to communicate with each other. LeDoux and Gazzaniga gave instructions to these patients, via their right hemisphere (hemispheres can be targeted with instructions shown to either the left or right visual field), to giggle or wave a hand, then asked them, via the left hemisphere, why they were laughing or waving. The patients’ left hemisphere had no knowledge of the instructions given to their right hemisphere, but the patients would nonetheless venture an explanation, saying that they were laughing because the doctors looked so funny or waving because they thought they saw a friend. However implausible the answer, the patients were convinced they knew why they were acting in the way they were; but they were deluded in thinking so. Their self-understanding was pure confabulation.
The author is John Coates and you can buy the book here.
New books in my pile
Richard Florida, The Rise of the Creative Class–Revisited: 10th Anniversary Edition–Revised and Expanded.
There is also The Kipper und Wipper Inflation, 1619-23, An Economic History with Contemporary German Broadsheets, by Martha White Paas, John Roger Paas, and translations by George Schoolfield. The origins of German monetary thought turn out to be more important than might have been expected…
Medical Tourism
We have all heard about medical tourism to India, Singapore or Thailand, places where patients can enjoy high quality and low prices. But do you know about medical tourism to the United States? By some estimates, around 400,000 people travel to the United States for medical treatment every year and the big surprise is that for tourists U.S. health care prices can be very low! Canadians coming to the United States can get a knee replacement for less than half of what Americans pay and at a price not much more than they would pay in India. I learned this from John Goodman’s very interesting new book, Priceless: Curing the Healthcare Crisis (this is an Independent Institute book where I am director of research).
Nor is that the end of the story. Here is Goodman on an even more surprising twist:
Moreover, you do not have to be a foreigner to benefit from domestic medical tourism.
Colorado-based BridgeHealth International offers US employer plans a specialty network
with flat fees for surgeries paid in advance that are 15 percent to 50 percent less than a
typical network. North American Surgery, Inc., has negotiated deep discounts with 22
surgery centers, hospitals and clinics across the United States as an alternative to foreign
travel for low-cost surgeries. As noted, the “cash” price for a hip replacement in the
network is $16,000 to $19,000, making it competitive with facilities in India and
Singapore.One reason why so little is known about the domestic medical tourism market is that
hospitals prefer that most of their patients not know about it. The reason: they are often
offering the traveling patient package prices not available to local patients. That occurs
because the hospital is only competing on price for the patients who travel.
To be sure, the prices paid in the “travel” market are probably closer to marginal prices than average prices. Nevertheless, I think Goodman is absolutely right to focus in on the sectors of the health care economy which are competitive, it is in these sectors that we see listed prices, falling costs and increasing quality. Priceless is about how we can expand the competitive sectors. More on the book here.
What I’ve been reading
1. Charles Rosen, Freedom and the Arts: Essays on Music and Literature. Rosen has mastered pianism, writing, and learning. The best parts, such as on Chopin or Schumann, are stunningly good.
2. Karl E. Meyer and Shareen Blair Brysac, Pax Ethnica: Where and How Diversity Succeeds. Some parts of the world make cross-ethnic collaboration work. I would prefer more comparative analysis with the regions where diversity does not work so well, but this is an interesting book with historical substance.
3. Navi Radjou, Jaideep Prabhu, and Simone Ahuja, Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth. Full of cliches, but thoey do not totally drown out the substance. I have been wanting a book on this topic, namely why the poor are (sometimes) more innovative, illustrated through India.
4. Alonso Cueto, The Blue Hour. Just translated from Spanish, this book made a big splash in Peru. It turns on a family story, the history of the Shining Path, and a man’s obsession with a woman. I have yet to see major reviews (here is one summary), but for my taste it is one of the best novels of the year. The UK has paper copies, right now US has only Kindle, possibly a paper edition in July.
*The Twilight of the Elites: America After Meritocracy*
That is the new book by Christopher Hayes, here is one marvelously good review. I was myself very impressed by the level of execution in this book.
In terms of pushback, I would offer two points.
1. The best critiques of meritocracy usually come from those with extreme merit.
2. I wish the book had been more Hegelian. One could well have written a book called *The Twilight of the Non-Elites*, for instance:
“Can’t you’all have some better schools? It’s not mainly about money, rather a school is a collection of parents and children.”
“Get married. And stay married.”
“You didn’t have to falsify your income on that mortgage application; isn’t that a felony?”
“It’s your fault you ended up in jail, don’t blame the elites.”
And so on. What’s interesting about today’s scene is that both “Twilights” seem correct.
*The Locavore’s Dilemma*
The authors are Pierre Desrochers and Hiroko Shimizu, and the subtitle is In Praise of the 10,000 Mile Diet:
The publisher’s page summarizes it thus:
Today’s food activists think that “sustainable farming” and “eating local” are the way to solve a host of perceived problems with our modern food supply system. But after a thorough review of the evidence, Pierre Desrochers and Hiroko Shimizu have concluded that these claims are mistaken.
In The Locavore’s Dilemma they explain the history, science, and economics of food supply to reveal what locavores miss or misunderstand: the real environmental impacts of agricultural production; the drudgery of subsistence farming; and the essential role large-scale, industrial producers play in making food more available, varied, affordable, and nutritionally rich than ever before in history.
They show how eliminating agriculture subsidies and opening up international trade, not reducing food miles, is the real route to sustainability; and why eating globally, not only locally, is the way to save the planet.
I very much enjoyed reading the book, you can order a copy here. For the pointer I thank Daniel Klein.