Category: Current Affairs

Cosmopolitanism vs. nationalism

by  Tyler Cowen in

That is the topic of my latest Bloomberg column.  It is hard to excerpt, but here is the closing bit:

The best way for that to happen is to let practical nationalism reign, while at the margin seeking to soften it with moral cosmopolitanism. Both perspectives are valuable, and neither can be allowed to dominate. Each perspective, standing on its own, is intellectually vulnerable, yet the two outlooks together are not quite fully harmonious. It is this dynamic clash, however, that helps to account for the strength of each.

Try explaining all that, and its required background knowledge, in a 280-word tweet. Yet much of the world manages a pretty fruitful balance between moral cosmopolitanism and practical nationalism. There is a wisdom embodied in this lived experience which neither pundits nor philosophers can convey.

A tempered and centrist cosmopolitanism won’t always command the strongest loyalties, nor will practical nationalism always look so pretty. If we can accept that reality, then maybe we can stop throwing stones at each other.

*The New Right: A Journey to the Fringe of American Politics*

by  Tyler Cowen in

That is the new book by Michael Malice, and I have to say it will go down as one of the more important albeit objectionable books of this year.  Imagine an well-informed anthropological treatment of Gamergate, PUA, Ann Coulter, Mike Cernovich, Milo, and all the rest of “that stuff,” both its history and how it fits together.

Just to be clear, this book is not written from the perspective of a journalist trying to make these movements look weird, rather it is written from the perspective of an anarchist trying to make these movements look (relatively) normal.  You might find that approach is not affiliated with the proper mood.  I don’t get the sense that Malice is “one of them,” but his “objectivity” might not be the right kind of objectivity.  I’m not going to try to resolve that meta-issue here, I’ll just say that a “normalizing” treatment of “the New Right” has some descriptive virtues, and you might end up more scared and more concerned than if you read a journalistic expose.  That said, I am not sure the author really grasps the non-niceness of so much of this stuff, or the import of that non-niceness.

Every page of this book is interesting, and so I am going to recommend it.  Here is a Kirkus Review, otherwise MSM doesn’t seem to be touching this one at all.  Here is the Amazon link, 79 reviews and an average of five stars.  The reviews themselves are not entirely reassuring.

I thank an MR reader for the pointer.

Alec Stapp on GDPR

by  Tyler Cowen in

Here is just one segment of an excellent piece:

Compliance costs are astronomical

  • Prior to GDPR going into effect, it was estimated that total GDPR compliance costs for US firms with more than 500 employees “could reach $150 billion.” (Fortune)
  • Another estimate from the same time said 75,000 Data Protection Officers would need to be hired for compliance. (IAPP)
  • As of March 20, 2019, 1,129 US news sites are still unavailable in the EU due to GDPR. (Joseph O’Connor)
  • Microsoft had 1,600 engineers working on compliance. (Microsoft)
  • During a Senate hearing, Keith Enright, Google’s chief privacy officer, estimated that the company spent “hundreds of years of human time” to comply with the new privacy rules. (Quartz)
    • However, French authorities ultimately decided Google’s compliance efforts were insufficient: “France fines Google nearly $57 million for first major violation of new European privacy regime” (The Washington Post)
  • “About 220,000 name tags will be removed in Vienna by the end of [2018], the city’s housing authority said. Officials fear that they could otherwise be fined up to $23 million, or about $1,150 per name.” (The Washington Post)

And another part:

Unseen costs of foregone investment & research

  • Startups: One study estimated that venture capital invested in EU startups fell by as much as 50 percent due to GDPR implementation. (NBER)
  • Mergers and acquisitions: “55% of respondents said they had worked on deals that fell apart because of concerns about a target company’s data protection policies and compliance with GDPR” (WSJ)
  • Scientific research: “[B]iomedical researchers fear that the EU’s new General Data Protection Regulation (GDPR) will make it harder to share information across borders or outside their original research context.” (POLITICO)

Do read the whole thing.

The real losers from the U.S.-China trade war

by  Tyler Cowen in

The countries caught in the middle, as I argue in my latest Bloomberg column.  Excerpt:

n this setting, many Pakistani businesspeople work with both China and the U.S. Now President Donald Trump is essentially telling them to choose sides. Will they do business with Huawei or not? Will they work to open up the Chinese economy or not? And so on.

If you’re Pakistan, on the actual matters under consideration, you will side with China. Pakistan is not going to ban Huawei or push China to open its markets to major U.S. tech companies. China will get its way on those issues, and win some very public victories in the Pakistani public arena. Pakistani leaders and businesspeople who sided with the U.S., or expressed strong American loyalties, will feel burned. Their side just lost a very big debate, centered on a conflict that did Pakistan no good in the first place and was at least in the proximate sense started by Trump.

In other words, the U.S. is making it harder for many foreigners to be on its side, even partially. Over time, it is limiting its own soft power in the countries caught between America and China — and soft power is the one area in which America still has (or is it, already, had?) a big advantage over China.

There is much more at the link, including coverage of Singapore and South Korea.

Venezuelan comovement now includes violent crime too

by  Tyler Cowen in

The feared street gangster El Negrito sleeps with a pistol under his pillow and says he’s lost track of his murder count. But despite his hardened demeanor, he’s quick to gripe about how Venezuela’s failing economy is cutting into his profits.

Firing a gun has become a luxury. Bullets are expensive at $1 each. And with less cash circulating on the street, he says robberies just don’t pay like they used to.

For the 24-year-old, that has all given way to a simple fact: Even for Venezuelan criminals it’s become harder to get by.

“If you empty your clip, you’re shooting off $15,” said El Negrito, who spoke to The Associated Press on the condition he be identified only by his street name and photographed wearing a hoodie and face mask to avoid attracting unwelcomed attention. “You lose your pistol or the police take it and you’re throwing away $800.”

In something of an unexpected silver lining to the country’s all-consuming economic crunch, experts say armed assaults and killings are plummeting in one of the world’s most violent nations. At the Venezuelan Observatory of Violence, a Caracas-based nonprofit group, researchers estimate homicides have plunged up to 20% over the last three years based on tallies from media clippings and sources at local morgues.

Officials of President Nicolás Maduro’s socialist administration have drawn criticism for not releasing robust crime statistics, but the government on Tuesday gave the AP figures showing a 39 percent drop in homicides over the same three-year period, with 10,598 killings in 2018. Officials also report a fall in kidnappings.

The decline has a direct link to the economic tailspin that has helped spark a political battle for control of the once-wealthy oil nation.

Here is more from Scott Smith, via the excellent Kevin Lewis.

Maciej Cegłowski on gdpr

by  Tyler Cowen in

The plain language of the GDPR is so plainly at odds with the business model of surveillance advertising that contorting the real-time ad brokerages into something resembling compliance has required acrobatics that have left essentially everybody unhappy.

The leading ad networks in the European Union have chosen to respond to the GDPR by stitching together a sort of Frankenstein’s monster of consent,a mechanism whereby a user wishing to visit, say, a weather forecast page 4 is first prompted to agree to share data with a consortium of 119 entities, including the aptly named “A Million Ads”network. The user can scroll through this list of intermediaries one by one, or give or withhold consent en bloc, but either way she must wait a further two minutes for the consent collection process to terminate before she is allowed to find out whether or it is going to rain.

This majestically baroque consent mechanism also hinders Europeans from using the privacy preserving features built into their web browsers, or from turning off invasive tracking technologies like third-party cookies,since the mechanism depends on their being present.

For the average EU citizen,therefore, the immediate effect of the GDPR has been to add friction to their internet browsing experience along the lines of the infamous 2011 EU Privacy Directive (“EU cookie law”) that added consent dialogs to nearly every site on the internet.

The GDPR roll out has also demonstrated to what extent the European ad market depends on Google, who has assumed the role of de facto technical regulatory authority due to its overwhelming market share. Google waited until the night before the regulation went into effect to announce its intentions, leaving ad networks scrambling.

It is significant that Google and Facebook also took advantage of the US-EU privacy shield to move 1.5billion non-EU user records out of EU jurisdiction to servers in the United States. Overall, the GDPR has significantly strengthened Facebook and Google at the expense of smaller players in the surveillance economy.

The data protection provisions of the GDPR, particularly the right to erase, imposed significant compliance costs on internet companies. In some cases,these compliance costs just show the legislation working as intended. Companies who were not keeping adequate track of personal data were forced to retrofit costly controls, and that date is now safer for it.

But in other cases, companies with a strong commitment to privacy also found themselves expending significant resources on retooling. Personally identifying information has a way of seeping into odd corners of computer systems (for example, users will sometimes accidentally paste their password into a search box), and tracking down all of these special cases can be challenging in a complex system.The requirements around erasure, particularly as they interact with backups, also impose a special burden, as most computer systems are designed with a bias to never losing data,rather than making it easy to expunge.

Here is the full Senate testimony, there are many interesting points in the piece.  I thank an MR reader for the pointer.

Shipping the good economists out?

by  Tyler Cowen in

How many of you even get that reference these days?  Here is the latest from DOA, from Liz Crampton at Politico:

The Agriculture Department is moving nearly all its researchers into the economic effects of climate change, trade policy and food stamps – subjects of controversial Trump administration initiatives – outside of Washington, part of what employees claim is a political crackdown on economists whose assessments have raised questions about the president’s policies.

Since last year, employees in the department’s Economic Research Service have awaited news of which members of their agency would be forced to relocate, after Agriculture Secretary Sonny Perdue stunned them by declaring he was moving most of the agency to a location outside the capital. The announcement sparked claims that Perdue was trying to pressure economists into leaving the agency rather than move their families.

On March 5, the department began notifying people who were allowed to stay in Washington, but didn’t provide a comprehensive list, only telling employees in person if they made the cut.

But current and former employees compiled one anyway, covering all 279 people on staff, 76 of whom are being allowed to stay in Washington…

A USDA spokesman declined to directly address the employees’ allegation of political bias, but provided a written statement from Perdue saying that the moves were not prompted by the work being done by ERS.

In general I am reluctant to post this kind of report, because I find it difficult to know what is truly going on here, so do read this with an open mind.  Still, it seemed newsworthy.

I thank John Chamberlin for the pointer.

State and local policy is the real immigration policy

by  Tyler Cowen in

That is the central claim of my latest Bloomberg column, here is one excerpt:

State and local governments are making immigration policy all the time, mostly for the worse, and often Democrats are more restrictionist than Republicans.

Obviously the law can deter potential illegal migrants from entering the U.S. But so can the high cost of living. Even though there are much higher wages in the U.S. than in its neighbors to the South, a lot of those higher wages are eaten up by much higher rents — especially if the immigrant moves to a major city, as is often the case. I once wrote a book based on fieldwork in rural Mexico, and I found that, for those who had migrated temporarily to the U.S., high rent was typically their biggest complaint. It therefore follows that policies which raise rents tend to discourage immigrants, particularly poorer immigrants.

And:

The minimum wage is another tool of anti-immigration policy, at least for less skilled immigrants. Say a city sets a minimum wage of $15 an hour. That means a potential migrant whose work is worth only $12 an hour won’t be able to get a legal job in that city. That will deter migration, both legal and illegal. Furthermore, a worker in, say, Honduras may not find it possible to improve his or her skills to be worth $15 an hour, at least not without arriving in the U.S.

Incentives matter, installment #1437

by  Tyler Cowen in

A US jury has found that a former Uber driver living in Virginia committed acts of torture during Somalia’s civil war in the late 1980s.

Somali citizen Farhan Tani Warfaa testified last week in the Washington DC suburbs that ex-Somali colonel Yusuf Abdi Ali shot and tortured him.

Ali was a commander in the national army and supporter of dictator Mohamed Siad Barre, say court documents.

Until this month, Ali drove for Uber, with a high 4.89 rating.

Here is the full story by Holly Honderich, via Ian Bremmer.

My Conversation with Ezekiel Emanuel

by  Tyler Cowen in

Very much a fun one, here is the audio and transcript, here is part of the opening summary:

Do we overrate the importance of doctors? What’s the importance of IQ versus EQ in the practice of medicine? What are the prospect for venture capital in biotech? How should medical training be changed? Why does he think the conventional wisdom about a problem tends to be wrong? Would immortality be boring? What would happen if we let parents genetically engineer their kids?

Tyler questions Emanuel on these topics and more, including the smartest thing his parents did while raising him, whether we have right to medical self-defense, healthcare in low- versus high-trust institutions, and much more.

Here is one excerpt:

COWEN: How can we improve medical education?

EMANUEL: Cut it down. Make it shorter.

COWEN: Cut it down? Why does that make it better? Or does it just make it cheaper?

EMANUEL: No, I think it will make it better. So, we have a lot of memorization, a lot of . . . So, let’s go back to the start. The four years of medical school: two years of preclinical in the classroom learning about biochemistry, genetics, anatomy, microbiology; and the two years of clinical time in the hospital, on the wards.

That dates from 1910. We haven’t really updated it much, except in this one way: we’ve cut down the preclinical time because — less of it — and it changes so fast, by the time you learn it in medical school, get out as a doctor, it’s out of date, A; and B, it’s more or less irrelevant to managing most patients…

And then, by the way, in med school, spending your time in a hospital is not the future. The future of American medicine is out of the hospital. So we need more rotations, more experiences for students out of the hospital.

No med school has made that big shift, and those are the shifts that are going to have to happen over the next 15 or so years.

And:

COWEN: Is there a right to medical self-defense that should override FDA bans on drugs and medical devices? I want to try something that’s not approved —

EMANUEL: No. I don’t like that.

COWEN: I’m saying it’s my body. But why don’t you like it?

EMANUEL: No, no, no, no, no, no, no, no, no, Tyler.

Finally:

COWEN: Now, you’ve written a much-misunderstood article about how hard you would try yourself to live past the age of 75. Would not the suspense of world and national history always keep you wanting a bit more extra time?

So, say I’m 75. I’ve decided I agree with you, but the NBA Finals aren’t over yet. I want to see game seven. I want the Mueller report to come out. Isn’t there always something?

And then, it’s kind of intransitivity of indifference. Every day there’s something, and you just keep on hanging on, even if one accepts your arguments in the abstract. Can you talk me out of that?

EMANUEL: No, no, Tyler, I think you’re exactly right. That’s why people do hang on. It’s because . . . you know, so I talked to my father, who — he says, “Zeke, you’re absolutely right. I’ve become slower, physically slower, mentally slower. My life” . . . what ends up happening is your life cones down, and you begin to overvalue certain small things. Like the NBA Finals. Like what’s in the Mueller report.

We all know, from any cosmic standpoint — even not a cosmic standpoint, just a 2,000-foot standpoint — most of those things are not irrelevant. It’s really cool to know.

You often ask — and this happens to me all the time. I teach undergraduates. Pretty smart undergraduates. Very smart undergraduates. MBA students, nurses, doctors, right? They have no understanding of history. So, whoever finishes in the NBA Finals, in five years, people have forgotten.

Recommended, interesting throughout.

The recent political revolution is a major shift toward the right

by  Tyler Cowen in

And when I say recent, I mean in the last few weeks.  That is the topic of my recent Bloomberg column, here is one bit:

The populist “New Right” isn’t going away anytime soon, and the rise of the “New Left” is exaggerated.

Start with Australia, where Prime Minister Scott Morrison won a surprising victory last week. Before the election, polls had almost uniformly indicated that his Liberal-National Coalition would have to step down, but voters were of another mind. With their support of Morrison, an evangelical Christian who has expressed support for President Donald Trump, Australians also showed a relative lack of interest in doing more about climate change. And this result is no fluke of low turnout: Due to compulsory voting, most Australians do turn out for elections.

Hard Brexit is alive and well, the European Parliament elections later this week could be a disaster, and Modi seems to be on the upswing in the Indian election.  But perhaps most importantly there is this:

One scarcely noticed factor in all of this has been the rising perception of China as a threat to Western interests. The American public is very aware that the U.S. is now in a trade war with China, a conflict that is likely to provoke an increase in nationalism. That is a sentiment that has not historically been very helpful to left-wing movements. China has been one of Trump’s signature causes for years, and he seems to be delighting in having it on center stage.

The Democratic Party is not well-positioned to make China a core issue. Democrats have been criticizing Trump’s tariffs for a while now, and it may be hard for them to adjust their message from “Tariffs Are Bad” to “Tariffs Are Bad But China Tariffs Are OK.” Their lukewarm support for free trade agreements — especially the Trans Pacific Partnership, which could have served as a kind of alternative China trade policy — also complicates matters. The net result is that Republicans will probably be able to use the China issue to their advantage for years to come.

Nor did Obama stand up to China on the militarization of the South China Sea.  Do read the whole thing.

Anarchy is Worse than Socialism

by  Alex Tabarrok in

Socialism is bad. I need no convincing. But the collapse of Venezuela is much worse than anyone would have predicted from socialism alone:

NYTimes: ….the drop in Venezuela’s economic output under Mr. Maduro has undergone the steepest decline by any country not at war since at least 1975.

By year’s end, Venezuela’s gross domestic product will have shrunk by 62 percent since the beginning of the recession in 2013.

Venezuela has lost a tenth of its population in the past two years as people fled, even trekking across mountains, setting off Latin America’s biggest ever refugee crisis.

Venezuela’s hyperinflation, expected to reach 10 million percent this year according to the I.M.F., is on track to become the longest period of runaway price rises since that in the Democratic Republic of Congo in the 1990s.

“This is essentially a total collapse in consumption,” said Sergi Lanau, deputy chief economist at the Institute of International Finance…

So what is causing the tremendous drop in economic activity? Ironically, it’s not too much government but too little. Outside of the capital, the government has practically abandoned its most basic responsibility of providing law and order. The result has been widespread looting. Ordinary theft is about stealing money or valuable “final” goods like diamonds or art works. In theory, the thief receives more or less what the owner loses. Looting, however, is a special kind of theft. Looting is theft plus destruction. The person who steals a candy bar is a thief. The person who breaks a store front window and steals a candy bar is a looter. Looters destroy intermediate goods and infrastructure and gain far less than owners lose. Looting is the worst kind of theft.

He said he lost his job at a hotel when looters ransacked it in March, ripping out even window frames and cable wiring. He now collects wild plums to sell for a few cents in the city’s parks. Most of his community’s diet now consists of wild fruits, fried corn pastries and bone broth, residents said.

Farther from the state capital, conditions are worse.

…The four stone quarries that are the island’s only industry have been idle since robbers stole all power cables connecting them to the grid last year. Local opposition activists estimate up to a third of the residents have emigrated from the island in the past two years.

“It used to be a paradise,” said Arturo Flores, the local municipality’s security coordinator, who sells a fermented corn drink from a bucket to local fishermen to round up his salary, which is equivalent to $4 a month. “Now, everyone is fleeing.”

On the other side of Zulia state, in the ranching town of Machiques, the economic collapse has decimated the meat and dairy industries that had supplied the country.

Power cuts have idled the local slaughterhouse, once one of the largest in Latin America. Armed gangs extort and rustle cattle from the surviving ranchers.

“You can’t produce if there’s no law,” said Rómulo Romero, a local rancher.

…“There’s no local, regional or national government here,” said José Espina, a motorbike taxi driver there. “We’re on our own.”

To say that socialism is better than anarchy is not to defend the rotten Chavez-Maduro regime. Instead I am pointing to the relevance of Mancur’s Olson’s model of the roving and stationary bandit. Olson explained why roving bandits evolve into stationary bandits:

Under anarchy, uncoordinated competitive theft by “roving bandits” destroys the incentive to invest and produce, leaving little for either the population or the bandits. Both can be better off if a bandit sets himself up as a dictator-a “stationary bandit” who monopolizes and rationalizes theft in the form of taxes. A secure autocrat has an encompassing interest in his domain that leads him to provide a peaceful order and other public goods that increase productivity.

The process is working in reverse in Venezuela. In Venezuela, the stationary bandit regime is collapsing and it is being replaced by a regime of roving bandits.

The incentives Olson identifies will eventually result in a new stationary bandit or, if Venezuela is lucky, maybe even less banditry and better institutions. The process is already underway. Consider this:

Local shopkeepers have pulled together to repair power lines and keep telecom towers running, to feed public workers, and to procure diesel for backup generators.

“We have practically taken on the functions of the state,” said Juan Carlos Perrota, a butcher who runs Machiques’ chamber of commerce.

Local shopkeepers are repairing power lines, feeding public workers and taking over the power of the state. Awesome! ¡Viva la maquinaria de la libertad!

The process of rebuilding governance, however, is slow and the destruction of wealth and human life costly. Indeed, it’s a surprise that Venezuela has gone so far down this path. Stationary bandits are usually replaced by other stationary bandits. Juan Guaidó seems far superior to Maduro on every score but the real puzzle is how Maduro has held off the generals even as anarchy looms. Don’t the generals see that that the goose is dying?

Harvard and Ronald Sullivan, why Harvard was basically right

by  Tyler Cowen in

I hope your head doesn’t explode, but it seems to me that Harvard and Matt Yglesias are right about the dismissal of Sullivan from his Winthrop House post at Harvard.  Matt explains:

Sullivan isn’t a public defender who’s simply taking the clients assigned to him. He’s not even a full-time criminal defense lawyer who just takes whichever clients happen to come through his door. He’s a busy guy who has classes to teach, a dorm to administer, and various other demands on his time. While it’s obviously true that all criminal defendants have a right to an attorney, it’s equally obvious that criminal defendants don’t have a particular right to Ronald Sullivan’s services.

Now, I don’t doubt that Harvard may have acted for what in part are the wrong reasons, namely asymmetric treatment of left-and right wing causes and cases.  Still, it seems reasonable to me that Harvard insists that its faculty dorm administrators face a minimum of outside distractions, especially controversial distractions, without having to judge whose fault is the controversy (Sullivan’s fault? Harvard’s fault? the fault of the possibly “snowflaky” students?).  Maybe Harvard would have been unfair and inconsistent had another, non-Weinstein defendant been involved, still that does not make Sullivan’s dismissal the wrong decision.

On top of that, having “snowflake” students in the dorm is still a reason to make Sullivan choose either the dorm or the legal case — complainers don’t always have to be correct for their wishes to have some validity.  It really is about helping students focus on their studies, and sometimes that might mean removing distractions which distract for maybe not entirely rational reasons.  Furthermore, in this case maybe the distraction was rational to some extent (I genuinely do not know on that one as I do not have direct information, Matt thinks yes but in my view leaps to quickly to that conclusion).

Let’s say I hired a TA for my Econ 101 class, and then I learned that TA would be defending Edward Snowden in his or her spare time.  Probably I would ask for another TA!  And that has nothing to do with my view of Snowden, one way or the other, or whether my students have rational views of Snowden or not (I genuinely do not know if they do).

With the Sullivan/Weinstein episode, it is not difficult to imagine the media becoming “too interested” in Winthrop House and Sullivan’s role, for media-prurient reasons, and to the detriment of student focus.  It is not crazy for Harvard to choke this off before it gets started, with no animus required toward Sullivan or any particular defendant.

Note also this from Matt:

At least some of the heat around this topic stems from a measure of confusion among the general public as to what the job of faculty dean amounts to. It sounds like a lofty academic post but actually is closer to being a kind of glorified RA — though even this is arguably an overstatement of the role.

Overall, I don’t think this is the right cause for free speech advocates, opponents of PC in universities, etc.  It seems to me like a private institution making an entirely defensible governance decision, on a matter which does quite genuinely fall under its governance purview.