Category: History

Why don’t nations buy more territories from each other?

Here is a rather underwhelming list of such purchases in recent times.  West Germany buys three islands from the Netherlands in 1963?  Pakistan buys Gwadar from Muscat and Oman in 1958.  America buys the Danish West Indies in 1916.  In 1947, though the Soviet Union bought part of Lapland in Finland to enable a hydroelectric plant.

We all know about the Louisiana Purchase.  But that’s it since 1916!?  Is Wikipedia failing us?  I don’t think so.

Are there really no good Coasean trades between the two Irelands?  Israel and the Palestinians?  Armenia and Azerbaijan?  How about Chile selling Bolivia a wee bit of coastline?  I can think of a few reasons why territory purchases are these days so hard to pull off.

1. Incoming revenue is subject to a fiscal commons effect.  Some crummy noble does not get to spend it on himself.  And voters take government revenue for granted in most cases, and so do not perceive an increase in their expected retirement benefits from selling land to foreign powers.

2. In earlier times, a lot of land transactions were motivated by “they’re going to take it from us anyway, sooner or later.”  Did Napoleon really think he could hold on to all that land?  No.  He wisely got out, though sadly subsequent French governments did not do “buy and hold.”  Not to mention the Florida Purchase Treaty and Guadalupe Hidalgo.  At least until lately, wars of conquest have been in decline and that has meant a corresponding decline in country-to-country land transactions as well.

3. First mass media and then social media have succeeded in making land boundaries more focal to the citizenry.  Say Northern Ireland today wanted to sell a single acre to the Republic of Ireland.  This would be seen as a precedent, rife with political implications, and it would be hard to evaluate the transaction on its own terms.  Trying to sell a county would be all the more so.  Just look at the map — should there really be so much of “Northern” Ireland to the south of ROI?  Donegal, Derry, etc. — status quo bias, are we really at an optimum point right now?

4. Contested territories today often involve low levels of trust.  Selling pieces of the Irelands back and forth is likely enforceable (but does ROI want any of it?), but an Israel-Palestine deal is not.  Israel prefers to simply move the goalposts by increasing the settlements in the westward direction.  What is really the gain from pressuring one of the Palestinian leaders to sign a piece of paper recognizing this?  Most likely it would ensure his assassination and simply enflame tensions further.  Both parties might prefer unilateral action over a deal.

5. Land in general is far less valuable than in earlier times.  In theory, that could make it either easier or harder to sell land, but if some of the transactions costs (see above) are constant or rising in magnitude, that will make it harder.  Let’s say Colombia raised the funds to buy back part of the Darien gap — whoop de doo!  The country has plenty of empty land as it is.  The whole notion of Lebensraum, and I don’t just mean in its evil Nazi form, has taken a beating since World War II.

6. Russia and China block some deals that might make sense, or maybe America blocks them too.  Just run a Google search on “Arctic.”  China is doing the investing, but we won’t let them own it.  Russia doesn’t want America to own it.  Everything thinks Canadian control or ownership doesn’t amount to much.  Indigenous groups claim parts of it, but they cannot exercise effective control.  And so the whole region and issue festers and stagnates.

7. Consider a deal that does make sense: the U.S. buying Greenland from the Greenlanders and also Denmark.  Can we really in essence pay the 56,000 or so residents to give up their country and territory?  I am no expert on the politics there, but I suspect they are unwilling to vote their pocketbook.  (For one thing, I don’t see them posting a price on eBay or holding a garage sale.)  How about skipping the vote and just offering them free condos in Miami?  Let’s do it!  Still, you can see the problem.

What else?  And can you think of any current issues where a transactional approach might actually work?

China’s Bizarre Authoritarian-Libertarian COVID Strategy

It’s difficult to understand China’s COVID strategy. On the one hand, China has confined millions of people to their homes, even to the extent of outlawing walking outside or having food delivered. Many thousands of other people have been taken from their homes and put into quarantine centers. On the other hand, vaccination is not mandatory! I can understand authoritarianism. I can understand libertarianism. I have difficulty understanding how jailing people, potentially without food, is ok but requiring vaccinations is not. (Here’s a legal analysis of China’s vaccine policy.) Moreover, put aside making vaccines mandatory because as far as I can tell, China has only recently started to get serious about non-coercive measures to vaccinate the elderly. The Washington Post notes:

The vaccination drive has been mild compared to some of the other pandemic-control measures and did not prioritize the elderly. Some younger people have been required to get vaccinated for their jobs, but vaccination of retirees remains optional. Incentives like eggs, grains and other foodstuffs — a staple of China’s vaccination drive since last year — are now being bolstered by home checkups, mobile clinics and the widespread mobilization of public servantsto ensure the elderly get shots.

China is shutting down factories costing its economy trillions of dollars and the best they come up with to get elderly people vaccinated is egg incentives???!

It’s difficult to understand what the Chinese leadership is thinking. It’s conceivable that the Chinese vaccines are much less effective than we have been led to believe but that seems unlikely. As far as we can tell the Chinese vaccines are not quite as good as the mRNA vaccines but good enough to prevent severe disease and pass FDA approval in the United States. My best guess is that President Xi Jinping is so powerful and insulated from reality and alternative viewpoints that he is just soldiering on either oblivious to the pain and foolishness of his policies or indifferent, much like Mao before him during the great famine.

My Conversation with the excellent Chris Blattman

Here is the audio, transcript, and video, we did this one face-to-face.  Here is part of the summary:

What causes war?…Chris and Tyler also cover why he doesn’t think demographics are a good predictor of a country’s willingness to go to war, the informal norms that restrain nations, the dangers of responding to cyberattacks, the breakdown of elite bargains in Ethiopia, the relationship between high state capacity and war, the greatest threats to peace in Ireland, why political speech isn’t usually a reliable indicator of future action, Vladimir Putin’s centralized motives for invading Ukraine, why he’s long on Colombia democratically — but not economically, why more money won’t necessarily help the Mexican government curb cartel violence, the single-mindedness necessary for bouldering, how Harold Innis’s insights about commodities led Chris to start studying war, how the University of Chicago has maintained a culture of free inquiry, and more.

And from the dialogue:

COWEN: If you look at the marginal cases — since there are some wars — there’s a bunch of cases, even if unusual, where someone is right at the margin. At the margin, what are the factors that are most likely to account for the explanatory variation in whether or not a country goes to war?

BLATTMAN: For me, the one that people talk the least about that strikes me as the most important is how concentrated is power in the country. What’s holding back someone from considering all of the implications of their actions on other people, should they decide to take their society to war?

It’s maybe the most important margin in history, and it’s maybe the one that no one of my tribes — which are political economists — think and talk the least about. It’s the one that — in journalism, people leap to psychological explanations, and they try to understand the psychology of leaders, but they don’t try to understand the way in which they’re constrained. So, it’s this combination of the most important and the most ignored.

COWEN: So federal societies are less likely to go to war?

Interesting throughout.  And I am very happy to recommend Chris’s new and important book Why We Fight: The Roots of War and the Path to Peace.  And here is my earlier 2018 Conversation with Chris.

What should I ask Leopoldo López?

I will be doing a Conversation with him, do read his whole Wikipedia page but here is part of it:

Leopoldo Eduardo López Mendoza (born 29 April 1971) is a Venezuelan opposition leader. He co-founded the political party Primero Justicia in 2000 with Henrique Capriles and Julio Borges and was elected mayor of the Chacao Municipality of Caracas in the regional elections held in July 2000. He is the National Coordinator of another political party, Voluntad Popular, which he founded in 2009…

In September 2015, he was found guilty of public incitement to violence through supposed subliminal messages, being involved with criminal association, and was sentenced to 13 years and 9 months in prison.

He served seven of those years and now is free and has left Venezuela.  He is also an economist, with a Kennedy School background, and has written a book on energy issues.

So what should I ask him?

The Myth of Primitive Communism

AEON: Today, many writers and academics still treat primitive communism as a historical fact. To take an influential example, the economists Samuel Bowles and Jung-Kyoo Choi have argued for 20 years that property rights coevolved with farming. For them, the question is less whether private property predated farming, but rather why it appeared at that time. In 2017, an article in The Atlantic covering their work asserted plainly: ‘For most of human history, there was no such thing as private property.’ A leading anthropology textbook captures the supposed consensus when it states: ‘The concept of private property is far from universal and tends to occur only in complex societies with social inequality.’

A Yagua (Yahua) tribeman demonstrating the use of blowgun (blow dart), at one of the Amazonian islands near Iquitos, Peru. JialiangGao www.peace-on-earth.org

In fact, although some tribes had communal sharing of (some) food, most did not. Private property, far from being unknown, was normal among all hunter-gatherers that have been studied. Manvir Singh writing in Aeon continues:

Agta hunters in the Philippines set aside meat to trade with farmers. Meat brought in by a solitary Efe hunter in Central Africa was ‘entirely his to allocate’. And among the Sirionó, an Amazonian people who speak a language closely related to the Aché, people could do little about food-hoarding ‘except to go out and look for their own’. Aché sharing might embody primitive communism. Yet, Hill admits, ‘the Aché are probably the extreme case.’

More damning, however, is a starker, simpler fact. All hunter-gatherers had private property, even the Aché….Individual Aché owned bows, arrows, axes and cooking implements. Women owned the fruit they collected. Even meat became private property as it was handed out. Hill explained: ‘If I set my armadillo leg on [a fern leaf] and went out for a minute to take a pee in the forest and came back and somebody took it? Yeah, that was stealing.’

Some proponents of primitive communism concede that foragers owned small trinkets but insist they didn’t own wild resources. But this too is mistaken. Shoshone families owned eagle nests. Bearlake Athabaskans owned beaver dens and fishing sites. Especially common is the ownership of trees. When an Andaman Islander man stumbled upon a tree suitable for making canoes, he told his group mates about it. From then, it was his and his alone. Similar rules existed among the Deg Hit’an of Alaska, the Northern Paiute of the Great Basin, and the Enlhet of the arid Paraguayan plains. In fact, by one economist ’s estimate, more than 70 per cent of hunter-gatherer societies recognised private ownership over land or trees.

Moreover, the sharing that some hunter-gatherers practiced was functional rather than ethical.

Whatever we call it, the sharing economy that Hill observed with the Aché does not reflect some lost Edenic goodness. Rather, it sprang from a simpler source: interdependence. Aché families relied on each other for survival. We share with you today so that you can share with us next week, or when we get sick, or when we are pregnant.

take away the function and the sharing disappeared, often brutally:

In their book Aché Life History (1996), Hill and the anthropologist Ana Magdalena Hurtado listed many Aché people who were killed, abandoned or buried alive: widows, sick people, a blind woman, an infant born too soon, a boy with a paralysed hand, a child who was ‘funny looking’, a girl with bad haemorrhoids. Such opportunism suffuses all social interactions. But it is acute for foragers living at the edge of subsistence, for whom cooperation is essential and wasted efforts can be fatal.

None of this should be surprising to anyone familiar with the property-rights tradition of Demsetz and Barzel. The primitive communism of hunter-gatherers is no different in principle from the primitive communism of the wifi service at Starbucks, the modern day police and fire departments, or the use of Shakespeare’s works. As Barzel put it, “New rights are created in response to new economic forces that increase the value of the rights.” Thus, in this respect, there are no major differences among peoples, only differences in transaction costs, externalities, and technologies of inclusion and exclusion.

My excellent Conversation with Thomas Piketty

Lots of disagreement in this episode, though always polite.  Here is the transcript, video, and audio.  Here is part of the summary:

He joined Tyler to discuss just how egalitarian France actually is, the beginning of the end of aristocratic society, where he places himself within French intellectual history, why he’s skeptical of data from before the late 18th century, how public education drives economic development, why Georgism isn’t sufficient to address wealth inequality, the relationship between wealth and cultural capital, his proposal for a minimum inheritance, why he turned down the Legion of Honor, why France should give reparations to Haiti despite the logistical difficulties of doing so, his vision for European federalism, why more immigration won’t be a panacea for inequality, his thoughts on Michel Houellebecq’s Submission, and more.

Here is one excerpt:

COWEN: If I visit every major country in Europe, what I observe is the highest living standard is arguably in Switzerland — Norway and Luxembourg aside. Switzerland has one of the smallest governments, and they attempt relatively little redistribution. What is your understanding of Switzerland? What if someone said, “Well, Europe should try to be more like Switzerland. They’re doing great.” Why is that wrong?

PIKETTY: Oh, Switzerland. It’s a very small country, so it’s about the size. . . . Actually, it’s smaller than Île-de-France, which is a Paris region. Now, if you were to make a separate country out of Île-de-France, GDP per capita, I think, would actually be higher than Switzerland. Of course, you can take a wealthy region in your country and say, “Okay, I don’t want to share anything with the rest of the country. I’m going to keep my tax revenue for me. I’m going to be a tax haven based on bank secrecy.” That’s going to make you 10 percent or 20 percent richer. I’m not saying —

COWEN: It’s been a long time since Switzerland relied on bank secrecy, right? Following 9/11, that Swiss advantage largely went away.

PIKETTY: Oh, that’s wrong. Oh, you’re wrong on this.

We talk about Matt Rognlie and Greg Clark as well.  Recommended, this was fun for me to reread.

Additive Growth

That is a new and quite interesting paper by Thomas Philippon.  Here is the abstract:

Growth theory is based on the assumption of exponential total factor productivity (TFP) growth. Across countries and time periods I find that TFP growth is actually linear. Unlike the exponential model, the additive growth model provides useful medium-term forecasts of TFP. It also explains the TFP slowdown and the volatility puzzle, and predicts falling real interest rates. For the distant future the model predicts ever increasing increments in standards of living but with growth rates that converge to zero. For the distant past the model suggests that the size of TFP increments has changed in the late 1600’s, the early 1800’s, and around 1930.

Or consider this presentation:

Initial trend growth is around 2.5%. After 40 years, TFP doubles, and since increments are constant, the trend growth rate is half of what it used to be. After 60 years later, it is only one percent.

And:

…the process of US TFP increments has only one break over the past 130 years, around 1930, following the large-scale implementation of the electricity revolution…For the UK, I find two breaks between 1600 and 1914. The first is between 1650 and 1700, when growth becomes positive. The second is around 1830. These breaks are consistent with historical research on the first and second industrial revolutions…

The author argues that linear TFP growth holds for Thailand, Taiwan, and Korea as well, and indeed for all recent countries with data for TFP.

As Philippon puts it informally “New ideas add to our stock of knowledge; they do not multiply it.”

As stated above a very interesting paper, but I do have some worries.  First, his model fits “TFP” better than gdp growth per se, which (at least until recently) does appear to be exponential in advanced economies.  If I read the author’s pp.21-22 correctly, he is suggesting (speculatively) that 20th century gdp growth received an artificial inflation from improvements in educational achievement that perhaps are unlikely to be replicated.  Maybe, but the broader predictions of the theory — including on gdp growth — require further consideration.

Second, is TFP even “a real thing”?  Or is it a meaning-poor residual, based on arbitrary distinctions between “innovation” and “investment”?  Maybe the ongoing trend is simply that more innovation is embodied in concrete investments, thus causing TFP to measure lower?  Too much of the paper takes the TFP concept for granted.

Nonetheless worth a real ponder.

It isn’t just Putin — Russia vs. Ukraine

From Wikipedia, here is a description of the views of Nobel Laureate Joseph Brodsky on Ukraine:

According to many historians, despite the fact that Brodsky had anti-Soviet views, for which he was eventually forced to leave Soviet Russia and emigrate to the United States, he, with all that, had pronounced Russian-imperial views, which resulted in his rejection of the existence of Ukrainians as a nation separate from Russians. According to Russian literary critic and biographer and friend of Brodsky Lev Losev, Brodsky considered Ukraine “the only cultural space with Great Russia”, and the Polish historian Irena Grudzinska-Gross [pl] in her book “Milosz and Brodsky” (2007) Brodsky firmly believed that Ukraine and has always been “an integral part of Great Russia”. According to Grudzinskaya-Gross, “Brodsky’s Russian patriotism is also evidenced by … the poem “The People” and another poem “On the Independence of Ukraine”, attacking Ukraine from imperial and Great Russian positions.”

In 1985, even before writing the scandalous Ukrainian-phobic poem “On the Independence of Ukraine“, he entered into a debate with the Czech-French poet Milan Kundera, in which he showed his Russian-imperial views.

The most famous public manifestation of Brodsky’s Ukrainophobia was the poem “On the Independence of Ukraine”, written, tentatively, in 1992. In this poem, Brodsky sarcastically described Ukraine’s independence in 1991 and scolded Ukrainian independence fighters for abandoning the Russian language. Brodsky did not publish this poem in any of his lifetime collections, and, until his death in 1996, he managed to read only a few times at various Muscovite and Judeophile meetings in America. In particular, there is documentary evidence that Brodsky read this poem on October 30, 1992 at a solo evening in the hall of the Palo Alto Jewish Center and on February 28, 1994 in front of a group of the Russian diaspora at New York University’s Quincy College. Through this poem, critics saw in Brodsky manifestations of Russian chauvinism and accused him of Anti-Ukrainian sentiment and racism.

These views are deeply rooted in Russian culture and history.  Here Brodsky reads the poem in Russian.  He is excited.  Here is a 2011 Keith Gessen New Yorker piece on the poem.  Again, ideas really matter!  And not always for the better.

*Streets of Gold*

In one of our research  projects, we followed pairs of brothers born in Norway, one of whom left for the United States by 1900 while the other remained behind…Brothers who immigrated to the United States earned nearly twice as much as their siblings back home.

That is from the new and excellent Streets of Gold: America’s Untold Story of Immigrant Success, by Ran Abramitzky and Leah Boustan.

That was then, this is now

The Red Army collapsed in the first weeks of the war.  This is no criticism of its individual troops.  It is a statement about bureaucratic rule, coercion, lies, fear, and mismanagement.  The problems were not new, nor were they unfamiliar.  Lack of transport, for instance, which was identified by nearly every front-line officer as the reason the retreat turned into a route that June, was a long-standing concern of units based along the Soviet border.  “It is absolutely unknown to us where and when we will receive the motorized transport we need for newly mobilized units”…Spare parts, fuel, and tires were impossible to guarantee.

Circa 1941, that is from the very good Catherine Merridale, Ivan’s War: Life and Death in the Red Army, 1939-1945.  Do not arrive too readily at conclusions about the current situation in Ukraine!  And Merridale books are in general a good place to read about Russian history.

Television gets you to spend money

Especially on cars (and other durable goods):

I compare growth in retail sales between areas with and without local TV service over the unanticipated Federal Communications Commission (FCC) Freeze, which halted the licensing of new TV stations from 1948–52. I find three results that corroborate TV’s long-attributed role in American consumerism. First, during the Freeze, total retail sales in counties with TV access increased by 3–4% more on average than in counties without access. Second, the effect of TV was concentrated in the automobile sector, which alone accounted for a third of the total difference.

Here is the full paper by Woojin Kim, via the excellent Kevin Lewis.

What true conservatives should care about

That is the theme of my latest Bloomberg column, here is the opening bit:

If you are a true conservative — and I use the term not as Ted Cruz might, but in its literal sense, as in conserving what is of value in the modern world — then you should be obsessed with three threats to the most vital parts of our civilizational heritage, all of which are coming to the fore: war, pandemic and environmental catastrophe.

These three events have frequently caused or contributed to the collapse or decline of great civilizations of the past. After being seriously weakened by pandemics and environmental problems, the Roman Empire was taken over by barbarian tribes. The Aztecs were conquered by the Spanish, who had superior weapons and also brought disease. The decline of the Mayans likely was rooted in water and deforestation problems.

I think of true conservatism as most of all the desire to learn from history. So let us take those lessons to heart.

Two further points:

1. I don’t think of this as existential risk, rather humanity could be set back very considerably, with uncertain prospects for recovery.  In the median year of human history, economic growth is not positive.  A few thousand years of “Mad Max” would be very bad.

2. I think you should aspire to be more than just a “true conservative.”  You should be a liberal too!  So there is more to the picture than what the column outlines.  Nonetheless I see it as a starting point for reformulating a morally serious conservative movement…

Recommended.

*Blood and Ruins*

The author is Richard Overy and the subtitle is The Last Imperial War, 1931-1945.  There are two categories of Richard Overy books, the good and the tremendously good.  So far this book falls into the latter camp, noting that some of the introductory material (while fine) was excessively familiar to me.  The eventual focus is on North Africa, the Turkey-Persia region and the Caucasus, how Japan ran its new colonies, how the British empire started collapsing, and much more along those lines.  The history of the war is told through what are usually regarded as the peripheries, though Overy makes us rethink that as well. I am only on p.240, but so far this one is strongly recommended.

As a general rule you can never read enough good books about World War II, even after you feel you have read enough good books about World War II.  Its lessons never go stale, and the scope of the war itself has attracted remarkable talents to write about it.

My excellent Conversation with Roy Foster

Here is the audio, video, and transcript.  Here is part of the episode summary;

Roy joined Tyler to discuss why the Scots got off easier than the Irish under British rule, the truths and misconceptions about Ireland as a policy laboratory for the British government, why spoken Irish faded more rapidly than Welsh, the single question that drove a great flowering of Irish economic thought, how Foster’s Quaker education shaped his view of Irish history, how the Battle of the Somme and the 1916 Easter Rising cemented the rift between the Northeast and the rest of the country, what went wrong with Irish trade policies between the 1920s and 1970s, the power of Irish education, why the re-emergence of The Troubles in the 1960s may not have been as inevitable as many people believe, the cultural effects of Ireland’s pro-Allied neutrality in World War II, how Irish visual art is beginning to be looked at in a similar way to Irish literature, the social and economic changes of the 1970s that began to radically reshape Irish society, the reasons for Ireland’s openness to foreigners, what Irish Americans misunderstand, and more.

Here is an excerpt:

COWEN: If we think of the 19th century, as you know, I think it’s in 1831 that free universal schooling comes to Ireland. Are there ways in which, in the 19th century, Ireland is more modern than Britain?

FOSTER: That’s a very interesting and subtle question.

There is a theory that Ireland is used as a laboratory for British government and that they will apply further afield, in India and the Caribbean, models and lessons that they’ve learned in Ireland, which is sometimes referred to as Britain’s oldest or England’s oldest colony.

I have a slight problem with that, because Ireland is a very special kind of colony, if it’s a colony: it’s a metropolitan colony. The original inhabitants remain, one could say, in a far stronger position than in many of the areas of the British Empire, where they are effectively either enslaved or wiped out. But the point is really that what’s happening in Ireland in the 18th and 19th century is, as I’ve said earlier, a kind of dispossession.

But at the same time, there are elements — and this is true from the Act of Union, which abolishes the old, very elite Irish Parliament in 1800 — there are elements of experimentation in the British government of Ireland which aren’t (I have to say this) entirely malign, and you zero in on education. The attempt that was being made in the early 1830s was to introduce a nondenominational form of primary education for the Irish people.

Ireland being Ireland, it was rapidly denominationalized: the Catholics used it for their purposes and the Protestants used it for their purposes. But the theory of it was that you had to overcome the religious differences, which by the early 19th century seemed to dictate everything that was happening in Ireland.

The great novelist William Thackeray, who was married to an Irish woman, said when he did a tour of Ireland and wrote his Irish Sketch Book, “Where to get at the truth in this country: it is not possible. There are two truths, the Catholic truth and the Protestant truth.” By the early 19th century, this seemed all too true.

Substantive throughout, in my view one of the very best CWTs in some while.