2 hours 9 minutes long, Lex is one of the very best interviewers/discussants in the sector. Here is the video, here is the audio. Plenty of new topics and avenues, including the political economy of Russia (note this was recorded before the massing of Russian forces on the Ukraine border). Lex’s tweet described it as follows:
Here’s my conversation with @tylercowen about economic growth, resisting conformity, the value of being weird, competition and capitalism, UFO sightings, contemporary art, best food in the world, and of course, love, death, and meaning.
Here is the audio, transcript, and video. As I mention in the beginning, Dana is the (only?) CWT guest who can answer all of my questions. Here is part of the summary:
Dana and Tyler discuss his latest book and more, including how he transformed several businesses as a corporate executive, why going to business school made him a better poet, the only two obscene topics left in American poetry, why narrative is necessary for coping with life’s hardships, how Virgil influenced Catholic traditions, what Augustus understood about the cultural power of art, the reasons most libretti are so bad, the optimism of the Beach Boys, the best art museum you’ve never heard of, the Jungianism of Star Trek, his favorite Tolstoy work, depictions of Catholicism in American pop culture, what he finds fascinating about Houellebecq, why we stopped building cathedrals, how he was able to effectively lead the National Endowment for the Arts, the aesthetic differences between him and his brother Ted, his advice for young people who want to cultivate their minds, and what he wants to learn next.
And here is one excerpt:
COWEN: Why is Olaf Stapledon an important writer?
GIOIA: It’s not a question I expected.
COWEN: How could you not expect that?
GIOIA: Well, first of all, I hope people know who Olaf Stapleton was. Tremendously influential, rather clumsy, visionary, early science fiction writer who wrote novels like Odd John and the First and Last Man. What Olaf Stapleton did was I think he was the first really great science fiction writer to think in absolutely cosmic terms, beyond human conceptions of time and space. That, essentially, created the mature science fiction sensibility. If you go even watch a show like Expanse now, it’s about Stapledonian concerns.
GIOIA: Michael Lind, the political writer, and historian, Stapledon is one of his formative writers. Star Maker is kind of an evolution of the Last and First Men. Odd John is kind of the odd, the first great mutant novel.
Definitely recommended. And I am very happy to recommend Dana’s latest book (and indeed all of his books) Studying with Miss Bishop: Memoirs from a Young Writer’s Life.
I am pleased to see Cornell mandating vaccination for all of its students. Of course other colleges and universities can do the same. Even if they do not take that step, it still seems it will be “safe enough” to hold most classes in-person in the Fall, if not sooner.
Here is what I think is the issue. Universities these days are not very good at “leaving people behind,” at least not as an act of open and deliberate commission. What about students or faculty who just had organ transplants and who thus might have compromised immune systems and also high vulnerability to Covid? Rather than the Coase theorem being applied, schools might make professors offer a hybrid option, namely that some students take the class face to face, and other students take it over Zoom, with a computer hooked up to cover the classroom.
Of course the mixed mode doesn’t work very well. I’ve learned from meetings that an all on-line meeting usually is (much) better than a mixed meeting where some people are present and others on-line, or in the old days on the phone.
So imagine universities giving every student the option to check a box: “I want this class on-line so please make it a hybrid option.”
Except they don’t make anyone prove that they just had an organ transplant.
And then ten percent of the students prefer to live in Pakistan, California, Florida — wherever. Those students check the box to make the class a hybrid option. What happens?
Many classes “might just suck.”
Another option is that the class evolves into mainly on-line as a least worst option.
Another option — #3 — is that the university forgets about the box-checking option but nonetheless uses this as a chance to evolve toward a larger and more sensible on-line presence.
#3 might happen, but I don’t think it will be in place by this fall. And thus you can see my worry about the pending fall semester in many institutions. Will they have the stones to say “No, we’re just going to offer this one face to face”?
Superb NYTimes disquisition on a masterpiece of Indian miniature painting. The text, formatting, visuals, all beautifully done–better than any museum exhibit I can recall.
In addition to the subject matter this piece has a lot to say about online education and how news is becoming a winner take-most market. Note what Tyler and I said on endogenous fixed costs in our piece on online education in the AER and consider how many newspapers could put together a display of this quality.
Shaked and Sutton (1987) and Sutton (1998) show that when quality is primarily vertical, meaning that there is a measure of quality such that all consumers agree that higher quality is more preferred, then increased market size does not result in reduced concentration. Instead, as market size increases, firms invest more in quality, which endogenously increases economies of scale and maintains market concentration.
Along related lines, Berry and Waldfogel (2010) show that there are many more restaurants in larger than smaller cities, but even as city size increases by a factor of 10 there is no tendency for the number of newspapers to increase. Larger cities have more restaurants than smaller cities because economies of scale are limited and quality differs “horizontally,” according to taste (thus, larger cities have more diverse restaurants). Yet larger cities are served by roughly the same number of newspapers as smaller cities because quality is more vertical, most newspaper consumers want more coverage, better writers and more features.
I saw that circulating as an April Fool’s joke, but is it such a crazy idea? Here would be a few effects:
1. Submissions would decline, thus liberating some time for editors and referees. This is valuable in its own right, and furthermore remaining decisions might be made with greater care. And presumably the remaining submissions would be those with a higher chance of acceptance.
2. To some extent departments would pick up the submission fee. This would favor researchers in wealthier departments, though whether this is good or bad I am not sure. And even the most flush departments would find this pretty steep and I don’t think would offer carte blanche reimbursement.
3. It would favor senior and wealthier colleagues over junior colleagues. That sounds bad to most people, but is it? Favoring the wealthier senior colleagues might help limit the arms race for “here is my 90-page paper that has performed every possible cross-check of the results.” It also might lower the return to technique, as younger researchers tend to be more up on the latest math but they are also less broad and by definition less experienced.
4. Graduate students in particular would be less likely to submit, especially from lower-tier departments. It would be harder for job candidates from the non-top schools to prove themselves by publishing in the AER.
5. Papers would be “shopped around” more to seminars before being submitted.
6. Papers would become longer, which is probably a bad thing.
7. It might select for overconfident economists from wealthier families.
8. The AER would no longer “get all the best papers,” at least as such things are perceived. That could very well be good! Why should one journal have such a lock?
Would the AEA take in more revenue with this plan?
What else? What is in fact the optimal submission fee for a journal where publications can be worth tens of thousands of dollars (or sometimes much more) there? Why should the authors/submitters be charged so little?
This new piece in American Economic Journal: Macroeconomics seems to be channeling some parts of Bryan Caplan’s argument:
Despite increases in the college earnings premium to persistently high levels, investment in college education remains low. We can understand this apparent puzzle by considering the risk of attending college and, in particular, the possibility of failing to graduate. Students with a reasonable probability of completing college already enroll, and for those who do not enroll, the low chance of completion blunts the impact of the rising college premium. In the absence of improved college readiness, our quantitative results suggest that continuing long-standing trends in skill-biased technological change can be expected primarily to increase earnings inequality rather than college attainment.
From Kartik Athreya and Janice Eberly. The implied discontinuity in the de facto talent distribution also echoes some themes from my own Average is Over.
After recovering from a severe mortality crisis in the seventeenth century, life expectancy among scholars started to increase as early as in the eighteenth century, well before the Industrial Revolution. Our finding that members of scientific academies—an elite group among scholars—were the first to experience mortality improvements suggests that 300 years ago, individuals with higher social status already enjoyed lower mortality. We also show, however, that the onset of mortality improvements among scholars in medicine was delayed, possibly because these scholars were exposed to pathogens and did not have germ theory knowledge that might have protected them. The disadvantage among medical professionals decreased toward the end of the nineteenth century.
Here is more from Robert Stelter, David de la Croix, and Mikko Myrskylä. Via the excellent Kevin Lewis.
Using a survey of 7218 professors in PhD-granting departments in the United States across eight disciplines in STEM, social sciences, and the humanities, we find that the estimated median childhood household income among faculty is 23.7% higher than the general public, and faculty are 25 times more likely to have a parent with a PhD. Moreover, the proportion of faculty with PhD parents nearly doubles at more prestigious universities and is stable across the past 50 years.
No, I was not paid directly for this job, but it has been worth an enormous amount to me, most of all as a path to tenure and also future career opportunities of a broader nature.
I started publishing earlier than most people, with two articles accepted which I wrote at age nineteen, though it took a while for them to come out.
There I was at George Mason University, an undergraduate, and I figured I needed to do something to advance my lot. And I already had the experience of beating adults at chess at young ages. So it seemed to me I could publish something, even if not in the very best journals.
I was also well aware that GMU was specializing in various brands of Austrian and market-oriented economics, so some portfolio diversification would not be a bad thing, in part to ensure I would learn other traditions, and in part to signal that I was interested in them, as indeed was (and still is) the case.
I had been doing a lot of reading on the Cambridge capital debates, and so I thought I would try publishing a piece in the Journal of Post Keynesian Economics. I sent it in, and they took it! While I had thought this was possible, I still was quite surprised at the outcome, as it was my very first submission to a refereed journal. The piece was “The rate of return in general equilibrium: a critique,” and it focused on the claims of Christopher Bliss and others that GE models were a successful resolution to the capital reswitching debates. Editor Paul Davidson gave me detailed and excellent comments to help turn it into a publishable piece.
I was aware of course that such pieces would brand me as “not on the mainstream fast track,” but still it seemed like a very good deal to me.
Another area I had been studying was public goods theory, at the original behest of Walter Grinder, an early inspirational mentor of mine. So I wrote up some of my ideas on public goods theory, but put them in a neo-institutionalist framework, and sent it off to Review of Social Economy, an institutionalist journal.
They accepted the piece too! Of course I had to respond to the comments from Reviewer 2, ever-valuable training to this day. Note that with these early pieces I received only modest help from GMU faculty at the time.
I also was doing a term paper for a British history class, and I studied the 17th century British mercantilist Nicholas Barbon, and early advocate of free trade and also YIMBYism for London, following the Great Fire. I turned that into a submission too, and a bit later it was accepted at Research in the History of Economic Thought and Methodology, then edited by Warren Samuels. That was “Nicholas Barbon and the Origins of Classical Liberalism,” and it contained some of the ideas that later evolved into state capacity libertarianism. I recall three referee reports, not just two, and lots of follow-up work that was required.
My learning from these experiences was pretty simple:
1. I ought to keep on trying and writing more, but aiming higher.
2. My experience with early success in chess was not entirely unique, so of course this boosted my confidence more generally.
3. Try things, and make people tell you no. Just keep on trying, in the most naive “Reader’s Digest” sense. Most people simply won’t be doing that, so it can be a huge comparative advantage.
4. It is worth writing for people with ideas and political viewpoints different from one’s own, and they might have a real interest in what you are doing, especially if you can become fluent in their languages as well as your own.
5. I realized I didn’t have to grow up “having a chip on my shoulder,” as I saw was the case with many other young libertarians or for that matter left-wing radicals. I figured I would and could strike out along a different path of eclecticism.
6. The publications probably got me get accepted into top graduate schools, as I was accepted everywhere I applied, basically the top six plus a few safety schools. That validated my earlier decision to go to George Mason as an undergraduate and work on my own, rather than be stuck with more homework and more conformism at a bigger name university. I figured that subsequent “work on my own” decisions might turn out well too, and later they did.
And so that publishing job was to continue for a long time, in conjunction with my other labors of course…
Here is the audio, transcript, and video. So many good parts it is hard to excerpt, here is part of the summary:
John joined Tyler to apply that habit of mind to a number of puzzles, including why real interest rates don’t equalize across countries, what explains why high trading volumes and active management persist in finance, how the pandemic has affected his opinion of habit formation theories, his fiscal theory of price level and inflation, the danger of a US sovereign debt crisis, why he thinks Bitcoin will eventually die, his idea for health-status insurance, becoming a national gliding champion, how a Renaissance historian for a father and a book translator for a mother shaped him intellectually, what’s causing the leftward drift in economics, the need to increase competition among universities, how he became libertarian, the benefits of blogging, and more.
Here is one bit from John:
COCHRANE: You ask two questions here. One is active management, and the other is trading. I’d like to distinguish them. It’s a puzzle in the Chicago free market sense.
Let me ask your question even more pointedly. If you believe in efficient markets, and you believe in competition, and things work out right, we’ve scientifically proven since the 1960s, that high-fee active managers don’t earn any more than a proverbial monkey throwing darts in a well-managed slow index. So why do people keep paying for high-fee active management?
Chicago free market — we’re not supposed to say, “Oh, people are dumb for 40 years — 50 years now,” [laughs] but there’s a lot of it. It’s one of those things. Active management is slowly falling away. The move towards passive index investment is getting stronger and stronger.
There’s a strong new literature, which I’ll point to. My colleague here, Jonathan Berk, has written some good articles on it. This is the puzzle of efficient markets. If everybody indexed, markets couldn’t be efficient because no one’s out there getting the information that makes markets efficient. Markets have to be a little inefficient, and somebody has to do the trading.
Your second question is about trading. Why is there this immense volume of trading? When was the last time you bought or sold a stock? You don’t do it every 20 milliseconds, do you? [laughs]
I’ll highlight this. If I get my list of the 10 great unsolved puzzles that I hope our grandchildren will have figured out, why does getting the information into asset prices require that the stock be turned over a hundred times? That’s clearly what’s going on. There’s this vast amount of trading, which is based on information or opinion and so forth. I hate to discount it at all just as human folly, but that’s clearly what’s going on, but we don’t have a good model.
Here goes, here is one good excerpt of many:
Isaac Asimov’s New Guide to Science. I read that when I was 13 or 14 and thought it was just amazing. (I was an exchange student in Germany at the time. I didn’t learn much German but I did have my eyes opened to many aspects of science that I previously knew nothing about!) Some of John Gribbin’s books, like In Search of Schrödinger’s Cat, really inspired me. Douglas Hofstadter — especially Metamagical Themas. (I read GEB when I was a teenager but found it a bit of a slog.) But, honestly, I think I was always interested in creating technology to some extent. I spent hours and hours playing with Lego when I was young and then transitioned pretty quickly to programming. I remember being pretty certain that I’d love programming before I’d ever written a line of code and, sure enough, I did. So, maybe it’s just something about how my mind is wired.
Overall, my single biggest science policy suggestion would be to pursue far greater structural diversity in our mechanisms. More different kinds of grant making institutions, more different kinds of research organizations, more different career paths for participants, etc. That’s not easy to do — bureaucracies by their nature seek to standardize which this fosters homogeneity. So, to the extent that the Endless Frontier Act can bring us closer to a more structurally varied world, I’m probably supportive relative to the status quo. My biggest qualm would probably be that it combines regional development policy with scientific policy. While the political merit is easy to see, I’m not sure that that’s a good idea. Talent clusters are real and I think it probably makes more sense to think about how best to improve those clusters than it does to foster underdog competitors.
Recommended, interesting throughout.
Kenny Workman, building tools for computational biology.
Brianna GoPaul, “17 y/o learning fusion energy.”
Justin Glibert, from Belgium near Liege, nanotechnology and cryptography and space manufacturing.
Andrew Tate Young, custom audio from blogs, and to create audiobooks from science information in the public domain.
Michael Trinh of Toronto, synthetic biology and immunology, general career development.
Austin Diamond, general career development.
A splendid cohort, we are honored to have you as winners, and here are previous Emergent Ventures cohorts.
You can trace my earlier jobs here, my next job, which I believe started at age nineteen, involved giving summer talks to high school debaters. The program was called Economics in Argumentation, and it continues today in a much broader form under the name Economic Thinking, led by the excellent Gregory Rehmke, who was program leader back then as well.
The program was looking for someone who had debate experience (I debated for one year, my high school debate partner was the later economist and Fed governor Randall Kroszner), someone who was available, someone willing to fly around the whole country, someone affordable, someone who could relate to the high school students, and someone who knew enough economics. That was me.
So I barnstormed for part of the summer, doing I would guess six to eight events a year? I was paid $500 plus expenses for a weekend, typically to give a few talks on how to apply economics to the year’s debate topic. One topic example was “the economics of arms sales,” and so in advance I had to spend a few months reading up on the topic of that year. Other potential speakers were not so interested in doing that.
For my first talk, which was my very first public talk ever, I was nervous and disorganized, but after that I was fine and just consistently got better. That is when and how I learned to give public presentations. It was also my first time taking flights on a regular basis, and navigating new locations other than the immediate Atlantic seaboard/95 corridor.
Here are a few things I learned and some related memories:
1. I visited Seattle and Houston most frequently. But I also went to Louisville, Grand Rapids, Wichita, a bunch of other Midwest places, and Los Angeles and San Francisco for the first time. I learned what a great country America is, and I began to figure out how to travel. I became acquainted with locales such as eastern Kansas, and would have not otherwise seen them, or realized how much I enjoy seeing them. My knowledge base expanded rapidly.
2. Greg was super-nice to me throughout, and he has ended up being one of the people who helped me out most. The money was useful but most of all the experience. Greg had to put up with a lot of me, and he enjoyed mocking me (gently) for thinking (at first) that all restaurants around the United States were going to be serving chocolate ice cream. Greg had formerly been a student of Paul Heyne’s at the University of Washington, so he had broadly Austrian and market-oriented views, and I fit into his programmatic vision very well. (In fact most of what I was teaching I had learned from Heyne’s own book, which I read when I was fourteen.) Plus going around with Greg was a lot of fun. He is also a basketball fan, explained to me articulately exactly why Bill Walton was such a great player albeit briefly, and he taught me things like “if you are going to fly around the country, you need to have a credit card.”
3. High school debate coaches are in general a great and very dedicated group of educators. The debate world back then was a kind of privatized appendage to the public school system, and it was a good refuge for people who really wanted to learn things. They were also good audiences to practice upon, because a) they are used to considering all sides of an argument, and b) they judge presentations as such and apply fairly high but not obnoxious standards. They also expect you to get to the point very quickly.
4. Giving the talks forced me to figure out what I thought economics really was all about. Incentives and opportunity cost were the two ideas I pushed the hardest. I tried to show the audience, through the application of concrete examples and arguments to the topic area, that those ideas were useful for formulating and responding to debate arguments. I also encouraged them to think about secondary consequences in a more rigorous and systematic fashion, rather than just tacking them onto arguments for the sake of debate.
5. Here is a seven-minute excerpt from one of my talks. I was younger then.
6. I had the chance to meet Paul Heyne when we visited Seattle, and in general met lots of interesting people along the way.
6b. I have a memory of driving around with Greg, finding a delicious Basque restaurant in Nevada. But how did we end up in Nevada?
7. A number of other speakers for the program were graduate students in economics, and with debate backgrounds, yet I noticed immediately that they did not really think like economists. They knew more neoclassical economics than I did, but somehow they were lifeless in their approaches and were not able to integrate the economic way of thinking with debate topics. Some remain in the profession to this day. It was important for me to learn just how much of the educated world fit into this category, one way or another.
8. Most of all this job required the energy to start, finish, and maintain each talk in a way that would command the attention of bright high school students. They also respected preparation, so you had to come in knowing more than they did about the topic, but at the same time make the economics the primary focus. Ultimately “show up and perform” is one of the job styles I am most comfortable with.
9. I felt I was getting a good deal overall, and wasn’t looking to demand a higher wage. At the margin, I was more likely to ask for more events on the West Coast and in other good places.
10. Maybe I did this for three summers in a row? (One of my successor speakers was Air Genius Gary Leff.) Graduate school and then moving to Germany pulled my attention toward other endeavors. But it was a job I loved, and a job that in modified form I still have to this day.
I’ve already posted about my chess teaching, and my grocery store work (here and here), my next job was as managing editor of the Austrian Economics Newsletter, for 1980-1981. I was only eighteen (and nineteen) then, so for me this was a big step up.
I was responsible for commissioning content, making sure authors got their pieces in on time, editing those pieces (along with the editor proper, Don Lavoie), proofreading, picking up all the copy and delivering it to the typesetter, and coming up with ideas for future features. I wrote a few short pieces too, conference coverage if I recall. Part of my job was managing Don as well, though overall he was extremely generous with his time and also easy to work with. Note that all of this work was de facto pre-computer.
From this job I learned a few things:
1. Most of all, I was grateful to Don for taking a huge chance on me. A while earlier, I had driven to a party at his house in Brooklyn and spent a few hours with him. One core lesson here is show up! If I had not gone to Don’s party, almost certainly none of this would have happened. At the time, the drive from New Jersey to Brooklyn seemed a little daunting to me, but my Auseinandersetzung with the BQE went fine.
2. I began to suspect all the more that “keeping track of things getting done” requires an innate predisposition, though a bad upbringing can squeeze it out of you. But a lot of people just can’t or won’t do that, even if they are very smart.
3. The most fragile element of the supply chain was keeping the typesetter in line to deliver material promptly. We were just never going to be a major customer of his and thus we were not a priority. I just had to keep on bugging him, and I was afraid he would find out I was only an eighteen-year-old.
4. Parents matter! My father and mother owned and ran a magazine (Commerce, affiliated with a chamber of commerce in NJ but they owned and ran it), and there I was at age eighteen, helping to run a mini-magazine. Coincidence? I don’t think so. And my mother dealt with typesetters all the time. My grandmother helped with the editing and the proofreading.
Here I am at an older age, still co-running a magazine of sorts, namely MR. (Some of you help with the proofreading — thanks!) You could say it is affiliated with a number of groups, starting with GMU, but it is owned and run by…you get the picture.
5. The issues of the Austrian Economics Newsletter all came out in an orderly fashion, so I considered my work there a success. Don and I also pushed each other in broader and more empirical directions, away from the earlier Austrian praxeological approaches. The Newsletter helped make Austrian economics a broader tradition.
6. Managing your boss is a big part of most jobs. Again, Don I found easy to work with, and I learned a great deal from him, but he did need a co-worker who could appreciate his ideas and listen to his “speeches.” I feel I served that function well. I did see that Don was onto ideas that represented real advances in Austrian economics, and to this day Don is underrated. He was the best and most influential Austrian economist of his generation, but is not universally regarded as such (he passed away prematurely of cancer at the age of 50).
7. As a young person, you can advance much more quickly if you are doing something outside of the mainstream. That is yet another reason to be on the lookout for “weird” talent.
8. One of the more important things I learned was “what it means to know everyone/everything going on in a particular field.”
9. I don’t recall exactly how the job ended. But I think that version of the newsletter was discontinued, and Don stopped doing it, more or less at the same time. (Later it was taken over by the Mises Institute and became a very different product; the Mercatus publication Market Process was the true successor.) I was very glad to have done it, but after two years or so I was ready to move on to the next thing.
We find that the WTP [willingness to pay] for in-person instruction (relative to a remote format) represents around 4.2% of the average annual net cost of attending university, while the WTP for on-campus social activities is 8.1% of the average annual net costs. We also find large heterogeneity in WTP, which varies systematically across socioeconomic groups. Our analysis shows that economically-disadvantaged students derive substantially lower value from university social life, but this is primarily due to time and resource constraints.
That is from a new NBER working paper by Aucejo, French, and Zafar.