The COVID-19 crisis is accelerating a long-term trend, the shift to online education. I’ve long argued that online education is superior to traditional models. In an excellent essay in the New York Times, Veronique Mintz, an eighth-grade NYC student agrees:
Talking out of turn. Destroying classroom materials. Disrespecting teachers. Blurting out answers during tests. Students pushing, kicking, hitting one another and even rolling on the ground. This is what happens in my school every single day.
You may think I’m joking, but I swear I’m not…during my three years of middle school, these sorts of disruptions occurred repeatedly in any given 42-minute class period.
That’s why I’m in favor of the distance learning the New York City school system instituted when the coronavirus pandemic hit.
…Distance learning gives me more control of my studies. I can focus more time on subjects that require greater effort and study. I don’t have to sit through a teacher fielding questions that have already been answered.
…This year I have struggled with math. The teacher rarely had the patience for questions as he spent at least a third of class time trying to maintain order. Often, when I scheduled time to meet with him before school, there would be a pileup at his door of students who also had questions. He couldn’t help us all in 20 minutes before first period. Other times he just wouldn’t show up….With distance learning, all of that wasted time is eliminated. I stop, start and even rewind the teacher’s recording when I need to and am able to understand the lesson on the day it’s taught.
Veronique’s online courses were put together in a rush. Imagine how much more she will learn when we invest millions in online classes and teach at scale. The online classes that Tyler and I teach, using Modern Principles and the Sapling/Achieve online course management system, took years to produce and feature high quality videos and sophisticated assessment tools including curve shifting (not just multiple-choice), empirical questions based on FRED, and adaptive practice–plus the videos are all subtitled in multiple languages, they can be sped up or slowed down, watched at different times of the day in different time zones and so forth. Moreover, technology is increasing the advantages of online education over time.
That is the new Jason Brennan book, just out yesterday, here is a summary:
This candid, pull-no-punches book answers questions big and small, including
• Should I go to graduate school—and what will I do once I get there?
• How much does a PhD cost—and should I pay for one?
• What kinds of jobs are there after grad school, and who gets them?
• What happens to the people who never get full-time professorships?
• What does it take to be productive, to publish continually at a high level?
• What does it take to teach many classes at once?
• What does it take to succeed in graduate school?
• How does “publish or perish” work?
• How much do professors get paid?
• What do search committees look for, and what turns them off?
• How do I know which journals and book publishers matter?
• How do I balance work and life?
This realistic, data-driven look at university teaching and research will make your graduate and postgraduate experience a success.
Here is my blurb:
“In Good Work If You Can Get It, Jason Brennan tells it like it is. You will get the truth, the whole truth, and nothing but the truth. This is the one book to read about trying to become a professor.”
Self-recommended. And here is Bryan Caplan’s excellent review.
By Jisung Park, Joshua Goodman, Michael Hurwitz and Jonathan Smith, in the latest issue of the AEA policy journal:
We demonstrate that heat inhibits learning and that school air conditioning may mitigate this effect. Student fixed effects models using 10 million students who retook the PSATs show that hotter school days in the years before the test was taken reduce scores, with extreme heat being particularly damaging. Weekend and summer temperatures have little impact, suggesting heat directly disrupts learning time. New nationwide, school-level measures of air conditioning penetration suggest patterns consistent with such infrastructure largely offsetting heat’s effects. Without air conditioning, a 1°F hotter school year reduces that year’s learning by 1 percent. Hot school days disproportionately impact minority students, accounting for roughly 5 percent of the racial achievement gap.
NYTimes: Around the world, scientists are racing to develop and mass produce reliable antibody tests that public health experts say are a crucial element in ending the coronavirus lockdowns that are causing economic devastation. But that effort is being hamstrung, scientists say, by a shortage of the blood samples containing antibodies to Covid-19, the disease caused by the virus, that are needed to validate the tests.
Recognizing a rare opportunity, some companies are seeking to cash in on the shortages, soliciting blood donations and selling samples at rich markups in a practice that has been condemned by medical professionals as, at the very least, unethical.
“I’ve never seen these prices before,” said Dr. Joe Fitchett, the medical director of Mologic, one of the British test manufacturers that was offered the blood samples. “It’s money being made from people’s suffering.”
I am reminded of Walter Williams who asks his students whether it is wrong to profit from the misfortune of others:
But I caution them with some examples. An orthopedist profits from your misfortune of having broken your leg skiing. When there’s news of a pending ice storm, I doubt whether it saddens the hearts of those in the collision repair business. I also tell my students that I profit from their misfortune — their ignorance of economic theory.
A price is a signal wrapped up in an incentive so if you want a strong signal and a strong incentive you need to let prices rise. The prices in this case don’t even seem that high:
From March 31 to April 22, prices asked by Cantor BioConnect for its cheapest samples — always sold by the milliliter, the equivalent of less than a quarter of a teaspoon — rose more than 40 percent, to $500 from $350.
Bear in mind the costs of collecting the sample, including nurse time and PPE. Some samples which are especially rich in antibodies, do sell for prices that are well above cost which is not surprising as those samples are in high demand as they may offer a cure.
Do the firms willing and able to pay the highest prices necessarily have the best science? No, not necessarily, but on balance the decentralized allocation process offered by markets and civil society will likely be far more effective than centralized, political allocation. We also know from field experiments around the world that higher prices for blood increase supply, a key consideration.
As Hayek said the moral rules of the tribe which appear natural to us–like don’t profit from misery–cannot maintain a civilization so we struggle between what we think is right and what actually works to prevent misery.
There can be no doubt that our innate moral emotions and instincts were acquired in the hundreds of thousand years—probably half a million years—in which Homo sapiens lived in small hunting and gathering groups and developed a physiological constitution which governed his innate instincts. These instincts are still very strong in us. Yet civilization developed by our gradually learning cultural rules which were transmitted by teaching and which served largely to restrain and suppress some of those natural instincts.
That is the topic of my latest Bloomberg column, here is one excerpt:
Among my friends and acquaintances, the best predictor of how seriously they take the matter is whether they read science fiction in their youth. As you might expect, the science-fiction readers are willing to entertain the more outlandish possibilities. Even if these are not “little green men,” the idea that the Chinese or Russians have a craft that can track and outmaneuver the U.S. military is newsworthy in and of itself. So would be a secret U.S. craft, especially one unknown to military pilots.
The cynical view is that the science-fiction readers are a bit crazy and are trying to recapture the excitement of their youth by speculating about UFOs. Under this theory, they shouldn’t be taken any more seriously than Tolkien fans who wonder if orcs are hiding under the next stone.
The more positive view is that science-fiction readers are more willing to consider new ideas and practices. This kind of openness presumably is a good thing, at least in general, so why aren’t the opinions of more “open” observers accorded more respect? Science-fiction readers have long experience thinking about worlds that are very different from the current one, and perhaps that makes them more perceptive when something truly unusual does come along.
Some of the individuals who were early to see and point out Covid-19 risk, such as tech entrepreneur Balaji Srinivasan, also have taken the UFO reports seriously, perhaps due to the same flexibility of mind.
Do read the whole thing, the column does not excerpt easily.
MRU introduces a new series, Economists in the Wild. In this series, we talk with economists in widely varying fields about their cutting edge research. First up in the series is David Autor on the rise of superstar firms and the fall of the labor share.
More great material for your online economics seminars and a great resource to use with Modern Principles!
I found it interesting throughout, the first half was on Covid-19 testing, and the second half on everything else. Here is the audio and transcript. Here is the summary:
Tyler invited Glen to discuss the plan, including how it’d overcome obstacles to scaling up testing and tracing, what other countries got right and wrong in their responses, the unusual reason why he’s bothered by price gouging on PPE supplies, where his plan differs with Paul Romer’s, and more. They also discuss academia’s responsibility to inform public discourse, how he’d apply his ideas on mechanism design to reform tenure and admissions, his unique intellectual journey from socialism to libertarianism and beyond, the common element that attracts him to both the movie Memento and Don McLean’s “American Pie,” what talent he looks for in young economists, the struggle to straddle the divide between academia and politics, the benefits and drawbacks of rollerblading to class, and more.
Here is one excerpt:
WEYL: There’s one really critical element of this plan that I don’t think has been widely discussed, which is that there are 40 percent of people in the essential sector who are still out there doing their jobs. There may have been some improvements in sanitation. There probably have been, though there have been a lot of issues with getting the PPE required to do that.
But those people are basically transmitting the diseases they always have been. And so, by far, our first priority has to be not “reopening the economy,” but rather stabilizing that sector of the economy so that transmission is not taking place within that sector.
Once we’ve accomplished that goal, it will actually be relatively easy to reopen the rest of the economy, given that that’s 40 percent. It’s just a doubling to get to everybody being in a disease-stabilized situation. So I really think the focus has to be on stabilizing the essential sector by building up this regimen. I think we can do that by the end of June.
Once that’s accomplished, I think we can, over the course of July, reintroduce most of the rest of the economy and have the confidence that, because we haven’t seen reemergence of diseases within the essential sector, that reintroducing everybody else will proceed in a similar fashion.
COWEN: Other than possibly the adoption of your plan, what do you think will be the most enduring economic or social change from this pandemic?
WEYL: My guess is that there will be a lot of large corporations that take on important social responsibilities because of the trust environment that you were talking about and that it becomes increasingly illegitimate for them to be run under a pure shareholder-maximization perspective once they’re taking on that role. I think we’re going to see fundamental shifts in some of the corporate governance parameters as a result of the social role that a bunch of companies end up taking on.
COWEN: At heart, coming out of the Jewish socialist tradition, through a matter of biographical accident, you first became a libertarian. Needed time to find your way back to the tradition you belonged to. Along the way, did economics, so you believe in some notion of markets, albeit directly adjusted by regulation and mechanism design. And you’ve moved away from methodological individualism.
But you’re this weird person of a Jewish socialist, believes in markets, and had this path leading away from libertarianism. No other person in the world probably is that, but you are. Is that a unified theory of you?
WEYL: Well, the thing that throws a little bit of a wrench into that is that I was actually a Jewish socialist before I became a libertarian.
COWEN: Does that strengthen or weaken the theory?
For me the most instructive part was this:
COWEN: What do you view yourself as rebelling against? At the foundational level.
But you will have to read or listen to hear Glen’s very good answer.
Very well-deserved, here is the full account, including a summary of her research. Excerpt:
Historians (e.g., Engerman and Sokolov) have long argued for the persistence of institutions and the “long shadow” of historical events on developing countries. For example, cross-national studies have noted that Latin America and North America organized labor differently during colonial periods and used cross-country historical data to support the idea that these differences have had long-run impacts. More generally, Acemoglu, Johnson, and Robinson compare the experience of countries with different institutions set in place during colonial time for largely accidental reasons, showing that these early differences continue to matter today.
In her work, Dell goes beyond the cross-country evidence, using historical accidents or peculiarities to shed light on persistent effects of institutional differences, including different in the organization of the state. She exploits historical settings in which she is able to very convincingly establish the persistent impacts of specific institutions as well as explore specific channels through which these impacts occur.
Do read the whole thing. Here are some previous MR posts on Melissa Dell.
The U.S. higher education sector will also be hard hit, with U.S. universities increasingly dependent on tuition from Chinese students. According to the Institute of International Education, China has remained the largest source of international students for ten years running,44 with 369,548 Chinese students enrolled in U.S. higher education programs in 2018 and contributing $15 billion in tuition payments.45 The postponement or cancellation of U.S. college entrance examinations in China, indefinite travel restrictions, and continued uncertainty surrounding when U.S. college campuses will reopen are expected to reduce Chinese demand for U.S. higher education in the 2020-2021 academic year.46 University administrators report that cancelled recruitment events in China and inability to work with local recruitment agencies could further depress Chinese student enrollment in U.S. university programs.
Here is the full document, on cascading economic impacts from China more generally. For the pointer I thank a loyal MR reader.
Here is the audio and transcript, here is part of the summary:
He joined Tyler to discuss whether the world as a whole is becoming harder to predict, whether Goldman Sachs traders can beat forecasters, what inferences we can draw from analyzing the speech of politicians, the importance of interdisciplinary teams, the qualities he looks for in leaders, the reasons he’s skeptical machine learning will outcompete his research team, the year he thinks the ascent of the West became inevitable, how research on counterfactuals can be applied to modern debates, why people with second cultures tend to make better forecasters, how to become more fox-like, and more.
Here is one excerpt:
COWEN: If you could take just a bit of time away from your research and play in your own tournaments, are you as good as your own best superforecasters?
TETLOCK: I don’t think so. I don’t think I have the patience or the temperament for doing it. I did give it a try in the second year of the first set of forecasting tournaments back in 2012, and I monitored the aggregates. We had an aggregation algorithm that was performing very well at the time, and it was outperforming 99.8 percent of the forecasters from whom the composite was derived.
If I simply had predicted what the composite said at each point in time in that tournament, I would have been a super superforecaster. I would have been better than 99.8 percent of the superforecasters. So, even though I knew that it was unlikely that I could outperform the composite, I did research some questions where I thought the composite was excessively aggressive, and I tried to second guess it.
The net result of my efforts — instead of finishing in the top 0.02 percent or whatever, I think I finished in the middle of the superforecaster pack. That doesn’t mean I’m a superforecaster. It just means that when I tried to make a forecast better than the composite, I degraded the accuracy significantly.
COWEN: But what do you think is the kind of patience you’re lacking? Because if I look at your career, you’ve been working on these databases on this topic for what? Over 30 years. That’s incredible patience, right? More patience than most of your superforecasters have shown. Is there some dis-aggregated notion of patience where they have it and you don’t?
TETLOCK: [laughs] Yeah, they have a skill set. In the most recent tournaments, we’ve been working on with them, this becomes even more evident — their willingness to delve into the details of really pretty obscure problems for very minimal compensation is quite extraordinary. They are intrinsically cognitively motivated in a way that is quite remarkable. How am I different from that?
I guess I have a little bit of attention deficit disorder, and my attention tends to roam. I’ve not just worked on forecasting tournaments. I’ve been fairly persistent in pursuing this topic since the mid 1980s. Even before Gorbachev became general party secretary, I was doing a little bit of this. But I’ve been doing a lot of other things as well on the side. My attention tends to roam. I’m interested in taboo tradeoffs. I’m interested in accountability. There’re various things I’ve studied that don’t quite fall in this rubric.
COWEN: Doesn’t that make you more of a fox though? You know something about many different areas. I could ask you about antebellum American discourse before the Civil War, and you would know who had the smart arguments and who didn’t. Right?
…I had a very interesting correspondence with William Safire in the 1980s about forecasting tournaments. We could talk a little about it later. The upshot of this is that young people who are upwardly mobile see forecasting tournaments as an opportunity to rise. Old people like me and aging baby-boomer types who occupy relatively high status inside organizations see forecasting tournaments as a way to lose.
If I’m a senior analyst inside an intelligence agency, and say I’m on the National Intelligence Council, and I’m an expert on China and the go-to guy for the president on China, and some upstart R&D operation called IARPA says, “Hey, we’re going to run these forecasting tournaments in which we assess how well the analytic community can put probabilities on what Xi Jinping is going to do next.”
And I’ll be on a level playing field, competing against 25-year-olds, and I’m a 65-year-old, how am I likely to react to this proposal, to this new method of doing business? It doesn’t take a lot of empathy or bureaucratic imagination to suppose I’m going to try to nix this thing.
COWEN: Which nation’s government in the world do you think listens to you the most? You may not know, right?
I will be doing a Conversation with him, mostly about his ideas on Covid-19 response and testing, though we will cover other topics as well. So what should I ask him?
I talk COVID-19 with David Beckworth on the latest episode of Macro Musings. We cover quite a bit of material including the real Corona threat that we are totally unprepared for and no one is talking about. Self-Recommending.
I “zoom bombed” a high school class that is using Modern Principles of Economics. I thought that it would be useful to relate some virus economics to some regular economics. Here’s what I said:
Why has the response to coronavirus been so poor? Exponential growth, rare events, and the necessity of using theory instead of experience.
Coronavirus infections, when unchecked, double approximately every three days. If we start out with 1000 infections that means in 10 doublings, just 30 days, there will be one million infections (1,2,4,8,16,32,64,256,512,1024). If you act early and stop just one doubling, you prevent 500,000 people from being infected. Speed is of the essence. But you need to act when the problem appears small. You need to use theory rather than observation which isn’t natural or easy.
People get good at something when they have repeated attempts and rapid feedback. People can get pretty good at putting a basketball through a hoop. But for other decisions we only get one shot. One reason South Korea, Hong Kong and Taiwan have been much better at handling coronavirus is that within recent memory they had the SARS and H1N1 flu pandemics to build experience. The US and Europe were less hit by these earlier pandemics and responded less well. We don’t get many attempts to respond to once-in-a-lifetime events.
Even as coronavirus swept through China and Italy, many people dismissed the threat by thinking that we were somehow different. We weren’t. Even within the United States some people think that New York is different. It’s not. Most people learn, if they learn at all, from their own experiences, not from the experiences of others–even others like them. Learning from your own mistakes and experiences is a good skill. Many people make the same mistakes over and over again. But learning from other people’s mistakes or experiences is a great skill of immense power. It’s rare. Cultivate it.
Now let’s apply these issues to another one close to your life. Savings and retirement. Savings also follow an exponential process, albeit one neither as rapid nor as certain as those involving viruses. The same principles apply, however. But in this case instead of wanting to avoid the gains at the end you want to start saving early in order to capture the big gains in your 50s and 60s as you approach retirement. You don’t get many attempts at retirement so you need to use theory rather than experience. And because you don’t get many attempts you need to learn from other people, including other people’s mistakes, to guide your savings decisions today.
The students asked good questions and we also talked about aggregate demand and supply and how to think about the economic crisis.
Hat tip: Joel Cohen and Dr. Brian Dille.
P.S. I didn’t actually zoom bomb the class. I was invited but it was a surprise to the students.
Emergent Ventures, a project of the Mercatus Center at George Mason University, is leading a new “Fast Grants” program to support research to fight Covid-19. Here is the bottom line:
Science funding mechanisms are too slow in normal times and may be much too slow during the COVID-19 pandemic. Fast Grants are an effort to correct this.
If you are a scientist at an academic institution currently working on a COVID-19 related project and in need of funding, we invite you to apply for a Fast Grant. Fast grants are $10k to $500k and decisions are made in under 48 hours. If we approve the grant, you’ll receive payment as quickly as your university can receive it.
More than $10 million in support is available in total, and that is in addition to earlier funds raised to support prizes. The application site has further detail and explains the process and motivation.
I very much wish to thank John Collison, Patrick Collison, Paul Graham, Reid Hoffman, Fiona McKean and Tobias Lütke, Yuri and Julia Milner, and Chris and Crystal Sacca for their generous support of this initiative, and I am honored to be a part of it.
Meanwhile, elsewhere in the world (FT):
The president of the European Research Council — the EU’s top scientist — has resigned after failing to persuade Brussels to set up a large-scale scientific programme to fight Covid-19.
During World War II, the NDRC accomplished a lot of research very quickly. In his memoir, Vannevar Bush recounts: “Within a week NDRC could review the project. The next day the director could authorize, the business office could send out a letter of intent, and the actual work could start.” Fast Grants are an effort to unlock progress at a cadence similar to that which served us well then.
We are not able at this time to process small donations for this project, but if If you are an interested donor please reach out to [email protected].
One of the best books on the history of American higher education, author Miguel Urquiola of Columbia argues for the importance of market competition in the rise and dominance of the American system. Strongly argued and full of good evidence and stories, here is one excerpt I found of interest:
That Columbia would be among the first successful American research universities would have surprised many observers around 1850, as the school had seen real oscillations in its fortunes. For the first decades after its creation in 1754, Columbia was a wealthy but small school. In 1774 it had the highest collegiate endowment, but only 36 students, while Harvard and Yale had four or five times as many…in 1797 the college had eight faculty members, during most of the 1800s it had four. In 1809, an inquiry warned that Columbia College “was fast becoming, if it has not become already, a mere Grammar School”; between 1800 and 1850, even as New York City grew, the school’s enrollment stagnated, and even in 1850 the average entering age was 15.
Among wealthy countries, the United States is unusual in letting its university sector operate as a free market. Self-rule, free entry, and free scope are much less prevalent in Europe.
Recommended, you can pre-order here.