Category: Books
Book splat
Timothy Taylor, The Instant Economist: Everything You Need to Know About How the Economy Works is too elementary for most MR readers but it is well executed and would make a good gift for anyone needing an introduction to economic reasoning.
Larry Kotlikoff and Scott Burns have their new The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy, due out in March. I believe they are still fiscal pessimists.
There is Ruchir Sharma, Breakout Nations: In Pursuit of the Next Economic Miracles, due out in April.
I reviewed Ruth Grant’s new Strings Attached: When do Incentives Corrupt? here, for Science, university readers can get through the gate.
Alessandra Casella, Storable Votes: Protecting the Minority Voice, calls for a system where you can abstain from voting on one measure and receive an extra vote on something else.
Christopher Balding, Sovereign Wealth Funds: The New Intersection of Wealth and Politics is a useful overview.
Jo Guldi, Roads to Power: Britain Invents the Infrastructure State is a good and also conceptual history of 19th century road building.
I loved Arthur Schnitzler’s Casanova’s Homecoming, free on Kindle, which I never had read before. Alice James: A Biography, by Jean Strouse, is a very good look at her life (she is the sister) and the life of the James family.
There is The Southern Tiger: Chile’s Fight for a Democratic and Prosperous Future, by Ricardo Lagos, Elizabeth Dickinson, and Blake Hounshell, next up on my Kindle.
I recommend Michael Grabell, Money Well-Spent?: The Truth Behind the Trillion-Dollar Stimulus, The Biggest Economic Recovery Plan in History. It is a very good journalistic account of how the money was spent, and less scandal-mongering than the title might indicate. I found it to be quite an objective account. There should be more books like this, looking at the nuts and bolts of economic legislation.
Tony Judt’s new book *Thinking the Twentieth Century*
It is a wide-ranging dialogue with Timothy Snyder, you can buy it here. I will gladly recommend this book, but I have mixed feelings about it. It is Judt’s “deathbed conversations” with Snyder, when he was paralyzed.
Is it fascinating? Yes. Did I read it straight through without pausing? Yes. Did I learn a lot? Yes.
Yet it doesn’t show Judt in such an overwhelmingly favorable light. He is cranky, unfair to his intellectual opponents, and he repeatedly misrepresents thinkers such as Hayek on some fairly simple points. He conducts unsubstantiated attacks on various New York Times columnists, as if they had once beaten him in a debate and this was his revenge. It shows his lifelong and mostly unhealthy obsession with what Daniel Klein has called “The People’s Romance.” Unlike in some of his previous writings, his proposals for a one-state solution to the Israel-Palestine problem come off as an irresponsible and somewhat flip symbolic gesture, easy enough to make because he doesn’t have to live with the outcome. As a reader and reviewer it is hard to not wonder whether/how Judt was medicated during these conversations, and how well he had thought through his lack of editing options before publication. Or is this the real Judt? Are we all really like this? Pondering that question is as interesting as the dialogue itself.
The Austrians will be happy when Judt writes: “The three quarters of century that followed Austria’s collapse in the 1930s can be seen as a duel between Keynes and Hayek.” Yet he has the odd view that free market ideas were “imported to the U.S. in the suitcases of a handful of disabused Viennese intellectuals.” Others may underrate the importance of central/eastern Europe but in these dialogues he overrates it.
One does not have to agree with Hayek’s Road to Serfdom to find this an unfair characterization:
Hayek is quite explicit on this count: if you begin with welfare policies of any sort — directing individuals, taxing for social ends, engineering the outcomes of market relationships — you will end up with Hitler.
My favorite part of the book comes at Kindle location 1294, here is part of that discussion:
But even when Blunt was outed as a Soviet spy, in 1979, his standing in high society, and in the distinctive codes of that society in England, still protected him…Thus Blunt — a spy, a communist, a dissembler, a liar and a man who may have actively contributed to the exposure and death of British agents — was nonetheless deemed by some of the his colleagues to be guilty of no crime serious enough to justify depriving him of the fellowship of the British Academy.
If you are seeking to “normalize” this review, I consider Judt’s Past Imperfect to be one of the best books of the last few decades, his Postwar to be one of my favorite books ever, and his late essays to be some of the best writing, in any genre, in a long time. (Though I didn’t like Ill Fares the Land.) I can recommend this too, as something worth consuming and pondering and spending money on, but I still have a slightly queasy feeling in my stomach.
Assorted Launching Links
Paul Howard of the Manhattan Institute talks with me about innovation in a fun podcast (mp3) and here is my earlier Econ Talk with Russ Roberts. I was also interviewed by Davin O’Dwyer for the Irish Times. Launching also has a new cover, shown at right. Here is one bit from the Irish Times:
The new normal is that we’re going to go back to where China and India are going to be playing huge roles. That definitely means that our relative status is going to fall. We’re not going to be, either the US or Europe, the powerhouse we once were. We’re not going to be the giant in the land of the Lilliputians. But, in an absolute sense, we can continue to do well and even better than before. I like to say that if you invent a cure for cancer, that’s great, that’s fantastic. If your neighbour invents a cure for cancer, that’s almost as great.
The new Charles Murray book
Kevin Drum offers comment:
…is it really true that back in 1963 the “upper tribe” and the “lower tribe” were more similar than they are today? It might seem that way in retrospect, but it sure didn’t at the time. It didn’t seem that way to Gunnar Myrdal or Michael Harrington, anyway. Overall, I can pretty easily buy the “Apart” piece of the title, but I’m a lot less sure about the “Growing” piece. For every example of a way in which top and bottom have diverged over the past 50 years, I suspect that you could also find an example of ways in which they’ve converged. It’s just that Murray wasn’t looking for any of those.
Perhaps electronic communications is one example, or maybe air conditioning, paging Don Boudreaux. Sharing a greater number of absolute benefits is an extra commonality, for instance sharing “telephone plus internet” is more in common than just “everyone has a telephone,” even if the absolute number of differences is rising too.
This “mood affiliation” review is from a Rortybomb pointer I believe, excerpt:
Murray can’t tell you what really caused the class divide in marriage because the class-based changes in families he laments closely track the class warfare of the 1%. Up through the mid-’80s, upper class and working class divorce rates rose and fell together. Starting in 1990, the lines diverged, with the divorce rates of college graduates falling back to the level of the mid-sixties (before no-fault divorce) while the divorce and non-marital birth rates of everyone else continued to rise.
Do all the other social indicators follow this same pattern? Did religiosity decline because of privileges for the wealthy and class warfare? Are we supposed to think that broadly stagnant incomes for the lower classes caused more divorce for those individuals? Didn’t stagnant incomes set in around 1973, with parts of the 1990s being relatively good times for the labor market? In other words, those divorce rate and other social indicator changes are not the fault of the top one percent as this review would have you believe. This latter point in the review makes more sense to me, though I don’t read it as contra Murray:
Third, women’s employment increased in the same period and women’s wages gained the most vis-à-vis men at the bottom of the income scale. As recently as 1990, women of all educational levels earned about the same percent of the hourly wages of men with the same education. To the extent the gendered “wage gap” varied, college educated women enjoyed slightly more parity with men than working class women. By 2007, the wage gap varied dramatically by class. College-educated women earned a smaller percentage of the hourly income of their male counterparts, while the wage gap between working-class men and women shrunk substantially.
…The result: a change in family norms. College-educated women postpone childbearing, invest in their careers, and conduct a long search for a compatible and reliable mate.
But does he have the stones to write “A hypergamy theory of changing social indicators”?
The liberation of American women also damaged the quality of public education, by removing the implicit subsidy of so many “captive” and smart female laborers. I would say that the non-wealthy did not have good norms to deal with women’s liberation and maybe they could not have had such norms. It’s time to come to terms with that history. I am willing to embrace it, though I am not sure Murray is.
I’ve now read the book and I think it is very good, very well-written, and considerably more bulletproof than some of the critics are suggesting. That said, not much in it surprised me or changed my views; admittedly these are areas where I’ve been doing a lot of reading lately.
David Brooks on the new Charles Murray book
Roughly 7 percent of the white kids in the upper tribe are born out of wedlock, compared with roughly 45 percent of the kids in the lower tribe. In the upper tribe, nearly every man aged 30 to 49 is in the labor force. In the lower tribe, men in their prime working ages have been steadily dropping out of the labor force, in good times and bad.
People in the lower tribe are much less likely to get married, less likely to go to church, less likely to be active in their communities, more likely to watch TV excessively, more likely to be obese…
It’s wrong to describe an America in which the salt of the earth common people are preyed upon by this or that nefarious elite. It’s wrong to tell the familiar underdog morality tale in which the problems of the masses are caused by the elites.
The truth is, members of the upper tribe have made themselves phenomenally productive. They may mimic bohemian manners, but they have returned to 1950s traditionalist values and practices. They have low divorce rates, arduous work ethics and strict codes to regulate their kids.
Members of the lower tribe work hard and dream big, but are more removed from traditional bourgeois norms. They live in disorganized, postmodern neighborhoods in which it is much harder to be self-disciplined and productive.
Remember when “rage” used to mean “Radical Alternatives to Government Enterprise”? Murray’s book will bring rage of a different kind, because it strikes rather directly at how political views are based on emotional feelings about the deserved status of various social groups (RH: “Politics isn’t about policy.”) Here is more. If you are wondering, my copy of the book arrives today. Perhaps my review will consider whether economic forces are driving the social ones, or vice versa.
Rewarding Virtue
In the Elizabethan period, business was sneered upon. In Shakespeare’s plays, the only major bourgeois character, Antonio, is a fool because of his affection for Bassanio. There is no need to dwell on how the other bourgeois character in “The Merchant of Venice,” Shylock, is characterized.
She contrasts this with attitudes 200 years later. When James Watt died in 1819, a statue of him was erected in Westminster Abbey and later moved to St. Paul’s cathedral. This would have been unthinkable two centuries earlier. In Ms. McCloskey’s view, this shift in perceptions was central to the economic take-off of the West.
From a profile of Deirdre McCloskey in the WSJ.
*The Age of Austerity*
That is the new book by Thomas Byrne Edsall, here is my WaPo review. Overall I thought his treatment was not deep enough, and that too frequently he substituted caricature for insight. Here is one excerpt from my piece:
I wished for more discussion of the elderly. The two biggest government programs — Medicare and Social Security — are almost exclusively for them, with a significant chunk of Medicaid going to the elderly as well. By about 2030, America as a whole will have the age structure currently found in Florida. That means the elderly, who vote at above-average rates, are very likely to keep winning political battles. The real question about our fiscal future is not Republicans vs. Democrats but rather whether any coalition can limit benefits to older people. It is already unlikely that the Republicans will gut Medicare or Social Security or get very far in trying. The last major expansion of Medicare came under the Bush administration, and, despite the tough talk of Rep. Paul Ryan’s plan, the Republicans are unable to enact fundamental Medicare cost control because they are too dependent on the white elderly vote.
There is a Matt Yglesias review here. Here is a WSJ review.
The Innovation Nation versus the Warfare-Welfare State
We like to think of ourselves as an innovation nation but our government is a warfare-welfare state. To build an economy for the 21st century we need to increase the rate of innovation and to do that we need to put innovation at the center of our national vision. Innovation, however, is not a priority of our massive federal government.
Nearly two-thirds of the U.S. federal budget, $2.2 trillion annually, is spent on just the four biggest warfare and welfare programs, Medicaid, Medicare, Defense and Social Security. In contrast the National Institutes of Health, which funds medical research, spends $31 billion annually, and the National Science Foundation spends just $7 billion.
That’s me writing at The Atlantic drawing on Launching the Innovation Renaissance. Here is one more bit:
Our ancestors were bold and industrious–they built a significant portion of our energy and road infrastructure more than half a century ago. It would be almost impossible to build that system today. Could we build the Hoover Dam today? We have the technology but do we have the will? Unfortunately, we cannot rely on the infrastructure of our past to travel to our future. Airports, an electricity smart grid that doesn’t throw millions into the dark every few years, ubiquitous Wi-Fi — these are among the important infrastructures of the 21st century, and they are caught in the regulatory thicket.
Putting innovation at the center of the national vision is not simply about spending more, it’s about how we approach all problems. Read the whole thing for more discussion of regulation and other issues.
Some new books in my pile
I am learning a good deal from Stephen Bainbridge’s Corporate Governance After the Financial Crisis:
There seems little doubt that the monitoring model has influenced board behavior. In 1995, only one in eight CEOs [of those stepping down] was fired or resigned under board pressure. By 2006, however, almost a third of CEOs were terminated involuntarily. Over the last several decades, the average CEO tenure has decreased, which also has been attributed to more active board oversight.
I cannot say I am personally so interested in the topic of Ed Leamer’s The Craft of Economics: Lessons from the Heckscher-Ohlin Framework, but he is a master of exposition for complex economic results and this book is no exception.
Daniel Hausman’s Preference, Value, Choice and Welfare reflects his characteristic intelligence and judgment and it should be read by anyone with an interest in economic methodology.
Johan van Overtveldt’s The End of the Euro is a very good book on the background leading up to the current euro crisis; also useful is David Marsh’s The Euro: The Battle for the New Global Currency.
I still think Michael Nielsen’s Reinventing Discovery: The New Era of Networked Science is an important book on an important topic.
*Life in the Sick-Room*
This neglected gem of a book was written by Harriet Martineau, best known for her 19th century tracts on political economy. Now I learn she was a forerunner of behavioral economics, occupying a space somewhere between Burton’s Anatomy of Melancholy and the pain meditations of Dan Ariely, excerpt:
I have spoken of the relief afforded by visitations of severe pain. These really the vital forces, and dismiss the temptation, by substituting torture for weariness — at times a welcome change. The healthy are astonished at the good spirits of sufferers under tormenting complaints; and the most strait-laced preachers of fortitude and patience admit an occasional wonder that there is no suicide among that class of sufferers. The truth is, however, that the influence of acute pain, when only occasional, and not extremely protracted, is vivifying and cheering on the whole. The immediate anguish causes a temporary despair: but the reaction, when the pain departs, causes a relish of life such as the healthy and the gay hardly enjoy. Though a slow death by a torturing disease is a lot unspeakably awful to meet, and even to contemplate, there can be no question to the experience, that illness in which severe pain sometimes occurs is less trying than some in which a different kind of suffering is not relieved by such a stimulus and its consequent sensations.
The Wikipedia page on Martineau is especially good.
Philip Coggan’s *Paper Promises*
He writes for The Economist and the subtitle is Debt, Money, and The New World Order. It is a very good and sensible introduction to the history of the recent economic crisis, with an emphasis on debt and also historical perspective. It is due out February 7, recommended.
Eventually, p = 0 catches up to you
Especially if it is a product consumers wish to bring home:
In Fairfax, officials more than doubled the inventory of e-book copies from 2010 to 2011, to more than 10,000, but demand for the books tripled in that time. Now the average wait time is three weeks. Of course, there can also be lengthy waits for hardcover and paperback books, although those waits are usually for current bestsellers while older titles are generally available.
By contrast, on a typical day, about 80 to 85 percent of the system’s e-books are checked out, said Elizabeth Rhodes, the collection services coordinator for the Fairfax library system. But after the holidays, when many people received e-readers, 98 percent of the collection was spoken for.
Here is more.
*The Sounding of the Whale*
For now, suffice it to say that a kind of tragedy haunts the story of whale biology in the first half of the twentieth century: the science that developed between 1910 and 1940 for the purpose of protecting whale populations from excessive exploitation by whalers became, along the way, a science so deeply entangled with the whaling industry — dependent upon it, bound to it, acculturated to its physical labor, and finally, constituted on its operations — as to become, finally, nothing less than an obstacle to many conservation policies. It was a reasonably complete science of whales but was ultimately incapable of realizing the aims of its founders: checking the progressive destruction of the world’s large cetaceans.
That is from D. Graham Burnett’s very impressive The Sounding of the Whale: Science and Cetaceans in the Twentieth Century. Here is a NYT review, and here is a WSJ review. It could be the most detailed study of a commons problem ever written, with plenty on the corruption of science along the way.
Law and Literature reading list
Class started yesterday, the reading list is here (pdf):
The New English Bible, Oxford Study Edition, Billy Budd and Other Tales, by Hermann Melville. The Metamorphosis, In the Penal Colony, and Other Stories, by Franz Kafka, In the Belly of the Beast, by Jack Henry Abbott, Borges and the Eternal Orangutans, by Fernando Verrissimo, Glaspell’s Trifles, available on-line, Sherlock Holmes, The Complete Novels and Stories, Sir Arthur Conan Doyle, volume 1, I, Robot, by Isaac Asimov, Moby Dick, by Hermann Melville, excerpts, chapters 89 and 90, available on-line. Year’s Best SF 9, edited by David G. Hartwell and Kathryn Cramer, G.K. Chesterton, The Man Who Was Thursday, Edgar Allen Poe, The Gold-Bug, available on-line, Joseph Conrad, The Secret Agent, Running the Books, by Avi Steinberg, Sakhalin Island, Anton Chekhov. tr. Brian Reeve, Death and the Maiden, Ariel Dorfman, The Pledge, Friedrich Durrenmatt. tr. Joel Agee, Red Harvest, Dashiell Hammett, Red April, by Santiago Roncagliolo, The Crime of Sheila McGough, Janet Malcolm, Leslie Katz, “John Keats’s Attitudes to Lawyers,” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1307146.
Some additions to this list will be made as we proceed, mostly a few short articles. We also will view a small number of movies on legal themes. You will be responsible for obtaining these or for viewing them in the theater.
*Demystifying the Chinese Economy*
That is the new book by Justin Yifu Lin, who is also Chief Economist of the World Bank. It is derived from lectures delivered in China. Much of the book is an OK survey, though I did not find it added much insight to extant accounts.
The discussion of why China had no Industrial Revolution does not consider individualism or liberalism, a’la McCloskey. And what am I to make of sentences like this?:
Building the new socialist countryside, now on the right track, has produced remarkable results.
I suppose it can be held to be true in both the literal and Straussian senses, but when I read it (and some others) frankly I felt my intelligence was being insulted.
There is plenty of talk lately about ethics standards for economists. How about a new proposal? For anything in the social sciences written by a citizen of China, or by someone with relatives living in China, or by someone working in or for China, there should be a disclaimer on the publication: “Produced under conditions of censorship and threat of career penalty.” I don’t favor actually doing that, but the absence of this idea from the debate is itself revealing.