Category: Books

Samuel Brenner reads *Stubborn Attachments*

An excellent review and interpretation, here is one summary part:

…the fundamental idea of the book is not “economic growth is good” but rather “here’s how to reason under extreme uncertainty”, and that once you adopt Tyler’s view about how to reason under extreme uncertainty, both principles (growth and rights) fall out as the only two important considerations…

My preferred view of the book’s overall argumentative structure is more like the following:

G. Good things are better than bad things
H. We need to act in order to achieve good things
I. But there’s a huge froth of uncertainty, and our actions might be counterproductive
J. So we should have faith
K. And also we should only pursue the actions with really high expected value and which are likeliest to rise above the froth of uncertainty
L. The actions that pass this test best are growth and rights, so we have to pursue both

I would stress this is a complement to other interpretations rather than a substitute for them, in any case an excellent short essay.  And here is “About Samuel Brenner.

What I’ve been reading

David Dickson, Dublin: The Making of a Capital City.  Yes this is Dublin only, but still one of the best books on Irish history I know.

Jing Tsu, Kingdom of Characters: The Language Revolution That Made China Modern.  A little slow to start, but a good book on how China used technological innovation to adapt Chinese characters to the advent of the typewriter and the telegraph.  The danger to the Chinese language seems entirely to be past.

Useful is Philip Keefer and Carlos Scartascini, Trust: The Key to Social Cohesion and Growth in Latin America and the Caribbean.  You can download it for free.

Tom G. Palmer and Matt Warner, Development with Dignity: Self-Determination, Localization, and the End to Poverty is a good classical liberal short book on economic development.

My colleague lives his words, here is Todd B. Kashdan The Art of Insubordination: How to Dissent & Defy Effectively.

I agree very much with Tim Kane’s new pro-immigration book The Immigrant Superpower: How Brains, Brawn, and Bravery Make America Stronger.

I have not had a chance to read Bruce Clark, Athens: City of Wisdom, a history of the city through the ages, but it looks good.

Most of all, I have been reading about the history of Ireland to prep for my forthcoming Conversation with Roy Foster.

Where I differ from Bryan Caplan’s *Labor Econ Versus the World*

One thing I liked about reading this book is I was able to narrow down my disagreements with Bryan to a smaller number of dimensions.  And to be clear, I agree with a great deal of what is in this book, but that does not make for an interesting blog post.  So let’s focus on where we differ.  One point of disagreement surfaces when Bryan writes:

Tenet #6: Racial and gender discrimination remains a serious problem, and without government regulation, would still be rampant.

Critique: Unless government requires discrimination, market forces make it a marginal issue at most.  Large group differences persist because groups differ largely in productivity.

I would instead stress that most of the inequity occurs upstream of labor markets, through the medium of culture.  It is simply much harder to be born in the ghetto!  I am fine with not calling this “discrimination,” and indeed I do not myself use the word that way.  Still, it is a significant inequity, and it is at least an important a lesson about labor markets as what Bryan presents to you.

But you won’t find much consideration of it in Bryan’s book.  The real problems in labor markets arise when “the cultural upstream” intersects with other social institutions in problematic ways.  To give a simple example, Princeton kept Jews out for a long time, and that was not because of the government.  Or Princeton voted to admit women only in 1969, again not the government.  What about Major League Baseball before Jackie Robinson or even for a long while after?  Much of Jim Crow was governmental, but so much of it wasn’t.  There are many such examples, and I don’t see that Bryan deals with them.  And they have materially affected both people’s lives and their labor market histories, covering many millions of lives, arguably billions.

Or, the Indian government takes some steps to remedy caste inequalities, but fundamentally the caste system remains, for whatever reasons.  Again, this kind of cultural upstream isn’t much on Bryan’s radar screen.  (I have another theory that this neglect of culture is because of Bryan’s unusual theory of free will, through which moral blame has to be assigned to individual choosers, but that will have to wait for another day!)

We can go beyond the discrimination topic and still see that Bryan is not paying enough attention to what is upstream of labor markets, or to how culture shapes human decisions.

Bryan for instance advocates open borders (for all countries?).  I think that would be cultural and political suicide, most of all for smaller countries, but for the United States too.  You would get fascism first, if anything.  I do however favor boosting (pre-Covid) immigration flows into the United States by something like 3x.  So in the broader scheme of things I am very pro-immigration.  I just think there are cultural limits to what a polity can absorb at what speed.

If you consider Bryan on education, he believes most of higher education is signaling.  In contrast, I see higher education as giving its recipients the proper cultural background to participate in labor markets at higher productivity levels.  I once wrote an extensive blog post on this.  That is how higher education can be productive, while most of your classes seem like a waste of time.

On poverty, Bryan puts forward a formula of a) finish high school, b) get a full time job, and c) get married before you have children.  All good advice!  But I find that to be nearly tautologous as an explanation of poverty.  To me, the deeper and more important is why so many cultures have evolved to make those apparent “no brainer” choices so difficult for so many individuals.  Again, I think Bryan is neglecting the cultural factors upstream of labor markets and in this case also marriage markets.  One simple question is why some cultures don’t produce enough men worth marrying, but that is hardly the only issue on the table here.

More generally, I believe that once you incorporate these messy “cultural upstream” issues, much of labor economics becomes more complicated than Bryan wishes to acknowledge.  Much more complicated.

I should stress that Bryan’s book is nonetheless a very good way to learn economic reasoning, and a wonderful tonic against a lot of the self-righteous, thoughtless mood affiliation you will see on labor markets, even coming from professional economists.

I will remind that you can buy Bryan’s book here, and at a very favorable price point.

Who’s Watching You?

John List has been chief economist for UBER and for Lyft. He’s also run experiments for United, the United Way, and the Chicago schools. In his new book, The Voltage Effect, he talks about a number of these experiments but what really comes through is how much fun he is having.

Several years ago, a company that provided loans to small business owners approached me and my friend and colleague Steven Levitt to help them try to do something intriguing: accurately evaluate the character of people who had applied for loans.

Now, I can imagine a lot of ways of doing this–a traditional approach, for example, would be to look at spending decisions, credit card reports, criminal records, marriage lengths, number of children. One can imagine a lot of potential correlations to be found using big data. That would be pretty clever but here’s what List and Levitt did:

Over the course of several weeks, a research assistant walked by each establishment whose owner had applied for a loan and “accidentally” dropped his wallet on the sidewalk out front. Seconds later, a different member of my research team would pick up the wallet (in which we had placed a slip of with a name and phone number) walk into the establishment, and turn in the wallet to the owner, saying that they had found it outside on the sidewalk and weren’t sure what to do.

Then we waited.

Our first metric coded how long it took for the loan applicant to call to tell us that they had our wallet–that is, if they called at all..[Next] we looked at how much money remained inside: the original $60 (in the form of 3 $20 bills), $40, $20 or no money at all….we were invariably treated to a declaration to the effect of ‘this is how I found it.’ I thanked each person who called; then once we had the data we needed, my team and I generated character/integrity scores for each business owner and sent our reports to the company that had hire us.

Moral of the story: if you ever find a wallet in Chicago, return it. You never know who is watching.

My Israel-only Conversation with the excellent Russ Roberts

Here is the audio, video, and transcript, here is the CWT summary:

In this special crossover special with EconTalk, Tyler interviews Russ Roberts about his new life in Israel as president of Shalem College. They discuss why there are so few new universities, managing teams in the face of linguistic and cultural barriers, how Israeli society could adapt to the loss of universal military service, why Israeli TV is so good, what American Jews don’t understand about life in Israel, what his next leadership challenge will be, and much more.

We didn’t shy away from the tough stuff, here is one question:

COWEN: Let me ask you another super easy question. Let’s say we think that under current circumstances, a two-state solution would not lead to security either for Israel or for the resulting Palestinian state. Many people believe that. Let’s say also, as I think you believe, that a one-state solution where everyone votes would not lead to security for a current version of Israel or even a modified version of it.

Let’s say also that the current reliance of the Palestinian territories on the state of Israel for protection, security, intelligence, water — many important features of life — prevent those governing bodies from ever attaining sufficient autonomy to be a credible peace partner, guaranteer of its own security, and so on. From that point of view, what do we do? We’re not utilitarians. We’re thinking about what’s right and wrong. What’s the right thing to do?

Do read Russ’s answer!  (Too long to excerpt.)  And:

COWEN: Now, the United States has about 330 million people, yet there are more Israeli TV shows I want to watch than American TV shows. There’s Srugim, there’s Shtisel, there’s Prisoners of War, there’s In Judgment, there’s Tehran. There’s more. Why is Israeli TV so good?

ROBERTS: I’m glad you mentioned Prisoners of War, which doesn’t get enough — Prisoners of War is in my top five. If I had to list my top five, I’d pick Shtisel, Prisoners of WarThe Americans, probably The Wire, and The Crown. Do you have a top five that you could reel off?

COWEN: The Sopranos would be my number one. Srugim and Prisoners of War plausibly would be in my top five.

We then consider the Israeli topic at hand.  Interesting throughout, a very good dialogue.

*Talent*, my new book with Daniel Gross

Due out May 17, you can pre-order here for Amazon, here for Barnes & Noble.

The subtitle is How to Identify Energizers, Creatives, and Winners Around the World, and my co-author is the Daniel Gross from venture capital and Pioneer.

From Amazon:

How do you find talent with a creative spark? To what extent can you predict human creativity, or is human creativity something irreducible before our eyes, perhaps to be spotted or glimpsed by intuition, but unique each time it appears?

The art and science of talent search get at exactly those questions.

From the new Kirkus review:

Personality, they note, is revealed during weekends. Another good one: “What are the open tabs on your browser right now?” The aim is to assess the applicant’s thought processes and willingness to embrace new thinking.

And:

A useful and entertaining map for companies looking toward a creative future.

Definitely recommended.

What should I ask Lydia Davis?

I will be doing a Conversation with her, and here is part of her Wikipedia page:

Lydia Davis (born July 15, 1947) is an American short story writer, novelist, essayist, and translator from French and other languages, who often writes extremely brief short stories. Davis has produced several new translations of French literary classics, including Swann’s Way by Marcel Proust and Madame Bovary by Gustave Flaubert.

So what should I ask her?

Enemy of All Mankind and Indian Chemical Engineering

In 1695 the British pirate Henry Every commanding a stolen ship, one of the fastest in the world, captured the Ganj-i-Sawai an immense treasure ship carrying the granddaughter of the Mughal Emperor, Aurangzeb, from her pilgrimage to Mecca. The looting and mass rapes set off repercussions around the world.

Enemy of All Mankind is Steven Johnson’s page-turning account. I’m not fascinated by pirates per se but Johnson surrounds the narrative arc with expert historical context. Anyone can tell you that cotton was important in trade between India and Europe but you would be hard-pressed to find a more concise account of why than Johnson’s primer. What made Indian cotton unique wasn’t the cotton but Indian chemical engineering.

What made Indian cotton unique was not the threads themselves, but rather their color. Making cotton fiber receptive to vibrant dyes like madder, henna, or turmeric was less a matter of inventing mechanical contraptions as it was dreaming up chemical experiments. The waxy cellulose of the cotton fiber naturally repels vegetable dyes….The process of transforming cotton into a fabric that can by dyed with shades other than indigo is known as “animalizing” the fiber, presumably because so much of it involves excretions from ordinary farm animals. First, dyes would bleach the fiber with sour milk; then they attacked it with a range of protein-heavy substances: goat urine, camel dung, blood. Metallic salts were then combined with the dyes to create a mordant that permeated the core of the fiber.

…The result was a [soft] fabric that could both display brilliant patterns of color and retain that color after multiple washings. No fabric in human history had combined those properties into a single cloth.

Lots of other insights. Every, by the way, was never captured but in 2014 a Yemeni coin that might have come from the Ganj-i-Sawai was found in a Rhode Island orchard.

See also my previous post on Enemy of All Mankind.

Anéantir, by Michel Houellebecq

As it happens, Balzac is Houellebecq’s hero. Anéantir not only demonstrates comparable ambition to Balzac; it is also proof of Houellebecq’s tireless work. In his various books he has accumulated notes on: the stages of terminal tongue cancer; the precise topography of the Ministry of Finance; the exact operation of a guillotine (with schematics); the names, composition and texture of processed sandwiches on sale in Parisian train stations; the vernacular of Paris’s best political spin doctor; the triage of dying residents in provincial care homes, and more. When, some time around the 2100s Anéantir is re-published by Penguin Classics, the notes section will take up half the space of the novel proper. The translator will battle to properly convey the Tom Wolfe-like bleak hopelessness encompassed in ‘un sandwich Daunat maxi-moelleux au blanc de poulet-emmental dans son emballage et une Tourtel’.

Like Balzac, many of Houellebecq’s characters are drawn from real life. The book is set in the year 2026. The sitting president is transparently Emmanuel Macron, who’s been re-elected in 2022. Term limits mean he can’t run again: his cunning plan is to push a popular television talk show host to win in 2027, coached by, among others, the minister of finance, thereby keeping the seat warm for a return of ‘Macron’ himself at the 2032 election — a kind of Putin-Medvedev switcheroo.

The book just came out in France, here is more information.  Is Houllebecq best at 736 pp.?  I guess we’ll find out.  In French, on Kindle.  And in German.  When in English?  I have ordered it in German, though I am not sure when I will get to start much less finish it.

What I’ve been reading

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.

What Adam Smith thought of large, shareholder-owned companies

The only trades which it seems possible for a joint stock company to carry on successfully, without an exclusive privilege, are those, of which all the operations are capable of being reduced to what is called a routine, or to such a uniformity of method as admits of little or no variation. Of this kind is, first, the banking trade; secondly, the trade of insurance from fire, and from sea risk and capture in time of war; thirdly, the trade of making and maintaining a navigable cut or canal; and, fourthly, the similar trade of bringing water for the supply of a great city.

Of course that is from Wealth of Nations.  Always worried about agency problems and incentives, Smith saw them in large, capitalist firms as well.

The Barbary Pirates

Rumors held that as many as sixty Barbary men-of-war were actively prowling the English Channel, waiting for the opportunity to capture more product for the slave markets of Algiers and Tripoli. For most of the seventeenth century, an English or Irish family living near the coast confronted the real possibility that the might be hauled off without warning….[the] numbers suggest that the odds of sudden enslavement by Barbary pirates were far higher for the average Devonshire resident than the odds of experiencing a terrorist attack in a modern-day Western City.

From Steven Johnson’s excellent Enemy of All Mankind, about which I will say more later.

The Jeff Holmes Conversation with Tyler Cowen

Jeff is the CWT producer, and it has become our custom to do a year-end round-up and summary.  Here is the transcript and audio and video.  Here is one excerpt:

HOLMES: …Okay, let’s go through your 2011 list really quickly.

COWEN: Sure.

HOLMES: All right, number one — in no particular order, I think — but number one was Incendies. Do you remember what that’s about?

COWEN: That is by the same director of Dune.

HOLMES: Oh, is that Denis Villeneuve?

COWEN: Yes, that’s his breakthrough movie. It’s incredible.

HOLMES: I didn’t know that. I’d never heard of it. French Canadian movie, mostly set in Lebanon.

COWEN: Highly recommended, whether or not you like Dune. That was a good pick. It’s held up very well. The director has proven his merits repeatedly, and the market agrees.

HOLMES: I’m a fan of Denis Villeneuve. Obviously, Arrival was great. I can’t think of the Mexican drug movie off the top of my head.

COWEN: Is it Sicario?

HOLMES: Sicario — awesome.

COWEN: It was interesting, yes.

HOLMES: He is one of the only directors today where, when he now makes something, I know I will go and see it.

COWEN: Well, you must see Incendies. So far, I’m on a roll. What’s next?

HOLMES: All right, number two: Uncle Boonmee Who Can Recall His Past Lives.

COWEN: Possibly the best movie of the last 20 years. I’m impressed by myself. It’s a Thai movie. It’s very hard to explain. I’ve seen it three times since. A lot of other people have it as either their favorite movie ever or in a top-10 status, but a large screen is a benefit. If you’re seeing the movie, pay very close attention to its sounds and to the sonic world it creates, not just the images.

There are numerous interesting observations in the dialogue, including about some of the guests and episodes.

Self-recommended!