Category: Books
*Economist* symposium on *The Great Stagnation*
You will find it here, with contributions from Viral Acharya, Scott Sumner, Hal Varian, and Paul Seabright. From elsewhere, Noah Smith cautions economists not to invoke technology too often. Brad DeLong chimes in. From a few years ago, Austan Goolsbee measures the consumer surplus from the internet; his numbers do not refute the standard view that median income growth has become much much slower.
What is the consumer surplus of the internet?
Annie Lowrey asks:
But providing an alternative measure of what we produce or consume based on the value people derive from Wikipedia or Pandora proves an extraordinary challenge–indeed, no economist has ever really done it. Brynjolffson says it is possible, perhaps, by adding up various "consumer surpluses," measures of how much consumers would be willing to pay for a given good or service, versus how much they do pay. (You might pony up $10 for a CD, but why would you if it is free?) That might give a rough sense of the dollar value of what the Internet tends to provide for nothing–and give us an alternative sense of the value of our technologies to us, if not their ability to produce growth or revenue for us.
Here is much more.
*The Philosophical Breakfast Club*
The author is Laura J. Snyder and the subtitle is Four Remarkable Friends Who Transformed Science and Changed the World. This is an excellent book about the history and status of science in 19th century England and in particular the contributions of Charles Babbage, John Herschel, William Whewell, and Richard Jones, the latter an economist and of course Whewell debated induction and scientific method with Mill. Babbage too had writings on economics. Here is an excerpt from Snyder:
De Prony had been commissioned to produce a definitive test of logarithmic and trigonometric tables for the newly introduced metric system in France, to facilitate the accurate measurement of property as a basis for taxation.
De Prony had recently read Adam Smith's Wealth of Nations…Smith discussed the importance of a division of labor in the manufacture of pins…
De Prony was the first to see that a Smithian division of intellectual labor could be equally valuable in the work of computation of mathematical tables — although his idea had been anticipated by Leibniz, who believed that talented mathematicians should be freed from tedious calculations that could be done by "peasants."
If you enjoy the history of science, this book stands a good chance of being the best one in that genre to come out this year. Here is one good review of the book.
Pre-order your Derek Parfit, *On What Matters*, volumes I and II
*The Social Animal*
The author is David Brooks and the subtitle is The Hidden Sources of Love, Character and Achievement. I pre-ordered my copy some time ago and it is due out this Tuesday…
What is the ultimate left-wing novel?
Isaac L. writes to me:
I am hoping you and your readers can help settle an issue. I am a left-leaning voter. A conservative friend and I recently discussed Atlas Shrugged, which he said was the ultimate right-wing novel. He challenged me to point him towards a left-wing novel that does for that side of politics what Rand does for the right. I think the book needs to do two things: justify the welfare state and argue the limitations of the invisible hand. While I can think of lots of non-fiction texts, I am drawing blank on fictional offerings.
Do you or your readers have any suggestions? Any assistance would be greatly appreciated.
What jumps to mind is Steinbeck's Grapes of Wrath, but if you read the request carefully it does not qualify. Here is a list of thirty famous left-wing novels, heavy on the mid- to late nineteenth century. There is Bronte, Dickens, Hugo, Sinclair, Zola, Gorky, Jack London, and Edward Bellamy. None of these books is as analytically or philosophically comprehensive as the novels of Ayn Rand.
I would say that the story per se is usually left-wing, in both good and bad ways. It elevates the seen over the unseen, can easily portray a struggle for justice, focuses on the anecdote, and encourages us to judge social institutions by the intentions of the people who work in them, rather than looking at their deeper and longer-term outcomes. Precisely because the story is itself so left-wing, there won't be a definitive example of the left-wing novel. Story-telling encourages context-dependent thinking, although not necessarily in an accurate manner. One notable feature of Atlas Shrugged is how frequently the story-telling stops for a long speech or an extended dialogue, in order to explain some first principles to the reader.
The quality of fiction vs. the quality of non-fiction
Marcos Jazzan, a loyal MR reader, requests:
The quality of fiction seems to be decreasing relative to the quality of non-fiction, or am I just biased against active fiction writers vs. dead ones?
I agree with this assessment, and I see a few mechanisms at work:
1. A lot of good non-fiction is based on current affairs, which are always changing, or progress in science or social science, or biographies of previous uncovered subjects. Fiction doesn't have a comparable source of new material, at least not since the modernist revolutions.
2. The internet makes it easier for people to be interested in a "culture of facts." It doesn't help long narratives in the same manner.
3. For a given level of IQ, people are more likely to agree on what is a good non-fiction book than what is a good fiction book. Internet reviews therefore make non-fiction purchases more reliable to a greater degree than they do for fiction.
4. Arguably literary fiction peaked in the 1920s, with Proust, Kafka, Joyce, Mann, and other important writers. Could it be that fiction took a bruising from the rise of radio and film at that time? Even if we compare the 1960s to today, fiction seemed to be more culturally central then.
What mechanisms am I missing?
Who will still be famous in 10,000 years?
Sam Hammond, a loyal MR reader, asks me:
Who do you think will still be famous in 10,000 years? People from history or now. Shakespeare? Socrates? Hawking?
This requires a theory of 10,000 years from now, but let's say we're a lot richer, not computer uploads (if so, I know the answer to the question), and not in a collapsed dystopia. We still look like human beings and inhabit physical space. If you wish, postulate that not all of those 10,000 years involved strongly positive economic growth.
In that case, I'll go with the major religious leaders (Jesus, Buddha, etc.), Einstein, Turing, Watson and Crick, Hitler, the major classical music composers, Adam Smith, and Neil Armstrong. (Addendum: Oops! I forgot Darwin and Euclid.)
My thinking is this. The major religions last for a long time and leave a real mark on history. Path-dependence is critical in that area.
Otherwise, an individual, to stay famous, will have to securely symbolize an entire area, and an area "with legs" at that. The theory of relativity still will be true and it may well become more important. The computer and DNA will not be irrelevant. Hitler will remain a stand-in symbol for pure evil; if he is topped we may not have a future at all. Beethoven and Mozart still will be splendid, but Shakespeare and other wordsmiths will require translation and thus will fade somewhat. The propensity to truck and barter will remain and Smith will keep his role as the symbol of economics. Keynesian economics may someday be less true, as superior biofeedback, combined with markets in self-improvement, ushers in an era of flexible wages, while market-based expected nominal gdp targeting prevents a downward deflationary spiral.
The fame of those individuals will not perish, in part, because the more distant future will produce fewer lasting mega-famous people. Achievement will be more decentralized and more connected to teams. The dominance of Edison and Tesla, in their breakthroughs, will not be repeated. There won't be a mega-Einstein eighty years from now, to make everyone forget the current Einstein, even if (especially if) science goes very well.
Response to Alex on parenting and religion, and a bunch of other points on twin studies
Alex is right on one point, that Bryan's book is very important and everyone should read it. Otherwise, his discusson of Yana indicates that both genes and upbringing matter, which is my point — that both matter. He mistakenly cites that example against me, rather than against Bryan, who claimed upbringing and inculcation do not matter for language.
Orthodox Jews are clearly a case where parenting matters for the religion and religiosity of the kids, not just the abstract fact of having the parent or the possible genetic transmission of general religious fervor. Orthodox Jewish parents are effective, in part, because they inculcate the religion in their children. Or look at the data on Korean Protestants. I could spend a whole day finding credible studies on this question and they are not restricted to a few extreme points (though they also don't cover everyone, and probably strict inculcation of Unitarianism won't work). There is overwhelming evidence that parenting often does transmit religious observance and if twin adoption studies do not show that it is a sign of their limitations.
In the comments, Cournot (not Augustin) nails it:
Tyler is not rejecting the studies. He's rejecting Caplan's interpretation.
Imagine this were a drug and the trials showed that the drug clearly reduced fever in a stat sig group.
However a number of non-statistically significant side effects were observed. Some patients died, got rashes, or became crippled. We also have anecdotal evidence and even some good theory that there may be weird interactions with some subpopulations, but to date no good studies showing these effects have been conducted.
Should I assume that it's safe to take these drugs? I think not.
Indeed, doctors often warn us of side effects even though most of the side effects don't show up as statistically significant in clinical trials.
Tyler is just saying some of the side effects of parenting on kids may well be significant and until clearly proven otherwise, it is unsound to ignore non-statistical anecdotal evidence [TC: there is plenty of statistical evidence also] just because the major studies don't show any effects.
And here is Richard A.:
The Body-Mass Index of Twins Who Have Been Reared Apart
We conclude that genetic influences on body-mass index are substantial, whereas the childhood environment has little or no influence. These findings corroborate and extend the results of earlier studies of twins and adoptees. (N Engl J Med 1990; 322:1483–7.)
http://www.nejm.org/doi/full/10.1056/NEJM199005243222102
IOWs, the reason why white kids of today are much fatter than white kids of the 50s and 60s is due to genetic influences and environment has little or no influence
This shows that the twin studies are flawed.
If that doesn't convince you, ponder the Zoroastrians, an extreme minority in most of the places they have lived. Parents inculcated religious observance for centuries, yet now that pattern of replication seems to be falling apart and the religion and way of life is in danger. In other words, now we are viewing the time series evidence (as does Richard A. in the case of body weight). Parental inculcation can matter a lot, or not so much at all, depending on circumstances. The very size of that variation suggests two points: a) cross-sectional evidence alone won't pin down the proper genetic component, for instance studying this group today, rather than across time, would overestimate the genetic influence, and b) if the transmissibility can change so quickly we are pushed away from genetic explanations, though of course without abandoning them altogether. Genes are still very, very important.
In contrast, what do you expect for the heritability of IQ over the generations? Lead poisoning and the like aside, I expect estimates of that heritability don't change much over time at all. That is more closely tied to genetics, and the time series evidence confirms it.
Labor history bleg
C.R., a loyal MR reader, writes to me:
I'm writing with a small favor, I was wondering if you could recommend (or ask for recommendations on MR) for a good history of labor unions in the US. I know a lot has been written especially from the left labor economists, but I don't have the knowledge to sort out the good from the bad. I'm interested in it from a historical perspective (origins and accomplishments) and a current political analysis perspective (what are reasonable claims about the costs&benefits of modern union membership). The case in Wisconsin has really grabbed my attention and I'm curious about unions as a case study of the creation, growth and changes of institutions.
I know where to go for the standard economics of labor unions, if you wish start with the surveys in Journal of Economic Perspectives (on-line and free) and then go to the Handbook of Labor Economics. But what about labor history? What is the best way to approach this often controversial topic?
Parenting: Anecdotes and Data
Tyler's post, What Can Parents Influence (below), uses anecdotes from his own family to try to rebut some findings from behavioural genetics. I don't think the rebuttal is successful. Moreover, Tyler's anecdotes are selective. A fuller description suggests a more balanced accounting of nurture and nature.
Yes, Yana speaks Russian which she learned from her mother. Yana also speaks French, German, Spanish and I believe several other languages. Tyler tells me that Yana has a gift for languages. Tyler also does not mention that his wonderful wife, Natasha, doesn't simply speak Russian she is an accomplished translator. Perhaps the gift runs in families?
But enough of anecdotes. On religion, I don't think Tyler has fully confronted the evidence from genetic studies. Of course, a child born to Orthodox parents is more likely to practice and be Orthodox. EVERYONE agrees with this. So how can Bryan say parents "have little long-run effect on intrinsic religiosity or observance"? Parents with blue eyes often have children with blue eyes but parents don't have much influence on whether their children have blue eyes.
More fundamentally, what Bryan is asking is how much does parenting influence religiosity? To answer this question we have to distinguish parenting from parents. How do we do this? Adoption and separated twin studies. What adoption and separated twin studies show is that once you have controlled for parents, parenting has very little influence on adult religiosity. These studies could be wrong but, contra Tyler, stamping your feet is not good enough on this issue because what we naturally observe (primarily parents raising their biological children) is not what we need to know to answer the fundamental question.
I could say more but instead let me say this, buy Bryan Caplan's book Selfish Reasons to Have More Kids. It's a remarkable book. I place it alongside Guns, Germs, Steel and The Selfish Gene as one of those books that, whether one agrees with the conclusions or not, everyone owes it to themselves to read in order to be informed, educated, and part of the conversation.
Murakami’s *1Q84*
That's the new Haruki Murakami book, due out in the U.S. in late October. It's over one thousand pages and it was published originally in three parts. My view of Murakami is that his later works are good but not special, and that his masterpieces are the early novels and also his non-fiction chronicle of the Tokyo gas attacks, Underground. My favorite is Hard Boiled Wonderland the End of the World, which also should appeal to science fiction fans.
IQ84 has been a smash hit in Japan and the never-easy-to-please Germans very much like it too. Here are other foreign reviews. I have read the first 130 pages and believe it may well be his masterpiece. It starts off with two dual stories, with what are recognizably Murakami-esque characters, but I won't say more than that.
*How Measurement led to the Modern World*
That's the very good subtitle, the less interesting title is The Institutional Revolution, and it is a book manuscript by Douglas W. Allen. Someone sent it to me in the mail. The bottom line:
Once fundamental measurement problems were solved — involving time, distance, weights, and power, among others — it became possible to cheaply measure worker performance, input and output quality, and the role of nature, in areas of life that were unheard of before. This ability to cheaply measure ushered in the world of modern institutions.
Pre-modern customs, in contrast, were all about dealing with trust, the need for direct supervision, and facing up to the enormous risks posed by nature. The astute reader will note the influence of Yoram Barzel, one of the most underrated economists.
When will this book come out?
What I’ve been reading
1. Carsten Jensen, We, the Drowned. A series of generational tales from a Danish fishing village, starting with the 1864 conflict against Germany. The WSJ loved it, the Danes loved it, eight Amazon readers loved it, and I liked it quite a bit at first. Eventually I was wandering in a "tweener" novel — serious enough not to be stupid, yet not enough giddy fun to be a page turner, not serious enough to be deep, and ultimately a European novel of ideas by the numbers. Some of you are likely to enjoy this, but I put it down with no regrets before p.200. Artificial gusto, I say.
2. Adrian Johns, Death of a Pirate: British Radio and the Making of the Information Age. A very good book on the history of radio, but the real bonus is the history of economic thought section, covering what Coase, Hayek, Arnold Plant and others thought of the BBC in its early years and how that related to debates over The Road to Serfdom. I hadn't know that some of the British pirate stations of the 1960s were inspired by Hayek. Plus it's only $4.68 in hardcover.
3. César Aira, An Episode in the Life of a Landscape Painter. Commonly portrayed as an Argentina eccentric, he writes a few short books each year and over time he has accumulated the reptutation as one of the most important contemporary Latin writers. Broadly in the Borges tradition, scattered and philosophical, there is little downside to giving him a try.
4. Javier Cercas, The Anatomy of a Moment: Thirty-Five Minutes in History and Imagination. In the waning of Franco's time, how did Spain turn away from military rule and toward democracy? Can a mediocre man make a difference in history simply by retreating at the right moment? Can a political life boil down to a single response, under gunfire at that? Half of this book is brilliant writing, the other half is brilliant writing combined with obscure, hard-to-follow 1970s Spanish politics (does Adrian Bulli understand the life of John Connally? I don't think so). Cercas is a novelist, intellect, and historian all rolled into one, and he is sadly underrated in the United States. There's nothing quite like this book. On top of everything else, if you can wade through the thicket, it is an excellent public choice account of autocracy.
5. Patrick Cockburn and Henry Cockburn, Henry's Demons: Living With Schizophrenia, A Father and Son's Story. Interesting but never insightful (can I coin that as a new phrase?). On the surface this book shows the difficulties of having a son with schizophrenia, from both the perspective of the parents and also in the son's own words. In reality, it turned me (further) against the idea of forced institutionalization of an adult. They lock the son up for years and they don't seem to regret it, even though he repeatedly tries to escape from what are obviously inhumane conditions and brutal, dehumanizing medications. They were there and I wasn't, but still by putting it into a book they invite reader reactions and that is mine. Is the ultimate argument for the son's commitment that they cannot live with the thought of his suicide risk? For me that's not enough and I wonder if "empathy" always leads to better moral decisions. The parents themselves stress that he probably was not a danger to others and also he had committed no crime.
Interfluidity has a dream
A few nights ago, a gentleman accosted me in a dream and declared himself to be “Tyrone”, Tyler Cowen’s evil twin. Tyrone told me that his brother had “as usual” got it all backwards. In fact, he told me, we’ve been in the Great Stagnation for a century as a result of, rather than for the lack of, technological progress. The median household is experiencing wealth stagnation caused by technological change. Households are feeling the pain now more than in the past, even despite a relatively modest pace of change, because over the past few decades we have managed to avoid employing the sort of durable and effective countermeasures to stagnation that have succeeded in the past.
Here is much more, interesting throughout. Here is another excellent sentence:
I worry that specialization in the information asymmetry industry could be an antidevelopment strategy for developed countries.