…his German counterpart [finance minister] suggested postponing Greek elections and installing [sic] a new government without political parties.
I do understand the financial motive here, but this is not a good idea! It is even less of a good idea to say so in public. Is the goal simply to irritate the Greeks so much that they leave the Eurozone on their own? Twitter rumors are suggesting that Finland and the Netherlands are raising similar ideas, namely postponing elections and, it seems, simply ruling the country through its budget? I am not sure how this is supposed to work, or to be received in Greece, or why it should be a good precedent for the European Union. The FT story is here.
Thus, in 1954, USDA investigators journeyed from Chicago and Washington, D.C., to the shores of the Rock River to select two test groups, each comprising three hundred families “scientifically representative” of a typical American community. Over the next two years, the market researchers would deploy all the techniques of their emerging field on these six hundred families. They tracked bread purchases, devised means of weighing every ounce of bread consumed by the test population, conducted long interviews with housewives, and distributed thousands of questionnaires. Most important, they created a double-blind experiment that asked every member of every family to assess five different white-bread formulas over six weeks. Four years and almost one hundred thousand slices of bread after the project’s conception, a clear portrait of America’s favorite loaf emerged. It was 42.9 percent fluffier than the existing industry standard and 250 percent sweeter.
…In early twentieth-century consumers’ minds, fluffier bread seemed fresher—even if it wasn’t. Squeezable softness had become consumers’ proxy for knowing when their bread had been baked. By the 1920s, market surveys revealed that consumers didn’t necessarily like eating soft bread, but they always bought the softest-feeling loaf. By the 1950s, softness had become an end in itself, and savvy bakery scientists set about engineering ever-fluffier loaves—like USDA No. 1.
Alex’s response is, as you would expect, right on the mark. But most of the differences in ingredients *can* be traced to underlying economic causes. For reasons of rents, commuting distances, and city design, the French are better situated to consume fresh breads right after consuming them. Cheaper bread alternatives, in the U.S., also stem from economics, although this is a long and complicated story. The best salts come from France, for complex but largely economic and geographic reasons. Non-pasteurization makes French butters better, plus French farm subsidies keep many more small farmers in business. This raises price but also improves quality and shortens supply chains. Freezing foods, including dough, is much cheaper in the United States, again for economic reasons. We have a more dispersed population and longer supply lines, both of which favor freezing, plus we have much cheaper transport.
Again, I would stress that American bread is getting better and French bread is probably getting worse. We are seeing convergence, though I would not expect this to ever be exact.
The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics this June. The program is designed primarily for students in graduate programs in economics. Students will be competitively selected and successful applicants will receive a $2000 stipend for attending, plus free housing and reading materials. Our line-up of speakers is, I think you will agree, impressive. The deadline for applying is March 2. More information on the Summer Institute is available at our website, http://hope.econ.duke.edu/summer2012
In our principles textbook, Modern Principles: Macroeconomics, Tyler and I illustrate the importance of property rights with the incentive effects of collective farming and the secret agreement of Xiaogang village. We write:
Farmers from 18 households in Xiaogang signed a secret life-and-death agreement ending collective farming with their thumbprints. (From Cowen and Tabarrok, Modern Principles: Macroeconomics)
The Great Leap Forward was a great leap backward – agricultural land was less productive in 1978 than it had been in 1949 when the communists took over. In 1978, however, farmers in the village of Xiaogang held a secret meeting. The farmers agreed to divide the communal land and assign it to individuals – each farmer had to produce a quota for the government but anything he or she produced in excess of the quota they would keep. The agreement violated government policy and as a result the farmers also pledged that if any of them were to be killed or jailed the others would raise his or her children until the age of 18. [The actual agreement is shown at right.]
The change from collective property rights to something closer to private property rights had an immediate effect, investment, work effort and productivity increased. “You can’t be lazy when you work for your family and yourself,” said one of the farmers.
Word of the secret agreement leaked out and local bureaucrats cut off Xiaogang from fertilizer, seeds and pesticides. But amazingly, before Xiaogang could be stopped, farmers in other villages also began to abandon collective property. In Beijing, Mao Zedong was dead and a new set of rulers, seeing the productivity improvements, decided to let the experiment proceed.
For more background, NPR’s Planet Money has a great story on this secret agreement including this:
“Back then, even one straw belonged to the group,” says Yen Jingchang, who was a farmer in Xiaogang in 1978. “No one owned anything.”
At one meeting with communist party officials, a farmer asked: “What about the teeth in my head? Do I own those?” Answer: No. Your teeth belong to the collective.
In theory, the government would take what the collective grew, and would also distribute food to each family. There was no incentive to work hard — to go out to the fields early, to put in extra effort, Yen Jingchang says.
“Work hard, don’t work hard — everyone gets the same,” he says. “So people don’t want to work.”
…Before the contract, the farmers would drag themselves out into the field only when the village whistle blew, marking the start of the work day. After the contract, the families went out before dawn.
“We all secretly competed,” says Yen Jingchang. “Everyone wanted to produce more than the next person.”
It was the same land, the same tools and the same people. Yet just by changing the economic rules — by saying, you get to keep some of what you grow — everything changed.
I was scouring your blog for Fyodor Dostoevsky and was surprised to see no mentions. I was just wondering your thoughts on him. Currently reading the Brothers Karamazov and it’s fantastic.
Brothers Karamazov spent seven or so years as my favorite book, starting in high school. I’m not suggesting it is juvenile, only that I find it hard to go back and enjoy things at lower levels than I did before (I also don’t like to eat in still-good but declining restaurants). I no longer find Notes from Underground interesting, as I regard its questions as a dead end. I’d sooner reread Pascal. I never got through The Idiot or Demons in the first place. About two years ago I read House of the Dead and liked it, though it felt like a respite from the more typical conception of Dostoyevsky.
How much can you like Dostoyevsky anyway? My sense is that he is probably underrated as a pure writer (much of it comes across as garbage in English translation, but perhaps is quite biting or comic or interestingly manic), and overrated as a source of the “novel of ideas.”
I’m baffled by people who blame declining marriage rates on poverty. Why? Because being single is more expensive than being married. Picture two singles living separately. If they marry, they sharply cut their total housing costs. They cut the total cost of furniture, appliances, fuel, and health insurance. Even groceries get cheaper: think CostCo.
These savings are especially blatant when your income is low. Even the official poverty line acknowledges them. The Poverty Threshold for a household with one adult is $11,139; the Poverty Threshold for a household with two adults is $14,218. When two individuals at the poverty line maintain separate households, they’re effectively spending 2*$11,139-$14,218=$8,060 a year to stay single.
But wait, there’s more. Marriage doesn’t just cut expenses. It raises couples’ income. In the NLSY, married men earn about 40% more than comparable single men; married women earn about 10% less than comparable single women. From a couples’ point of view, that’s a big net bonus. And much of this bonus seems to be causal.
More plausibly it is the rise in female income (among other factors, including the rise of birth control, read more here) which is behind the decline in marriage, but that doesn’t fit with traditional mood affiliation, which finds the rise in female income to be good (which it is), and the decline in marriage to be — neither good nor bad per se but not exactly worth celebrating. If you can blame capitalism and wage stagnation for the decline of the family among lower earners, so much the better for ideology but as a sociological proposition that is a very weak hypothesis (do you see convincing links to real sociological evidence, showing this to be the dominant factor? No) and as Caplan shows it doesn’t fit with the economics either.
Remind me again, how is wage stagnation supposed to explain the pronounced decline in religiosity, among lower earners, as shown by Murray? It’s well-known that a secular outlook is a normal good, and that on average poorer countries are more religious than wealthier countries.
I’m struck by how many people are offering negative comment on the new Murray book who have not read it, or who do not appear to have read it. I found it to be a much less controversial book than the commentary makes it seem, and actually I had stopped thinking about it, except for all the negative reviews I see it getting. It is unpopular because it disrupts current moral narratives about economic and social decline, as much on the right as on the left I might add, not because it is relying on dubious facts. It is simply redescribing inequality through a somewhat different lens. There’s much less at stake here than meets the eye.
It is a wide-ranging dialogue with Timothy Snyder, you can buy it here. I will gladly recommend this book, but I have mixed feelings about it. It is Judt’s “deathbed conversations” with Snyder, when he was paralyzed.
Is it fascinating? Yes. Did I read it straight through without pausing? Yes. Did I learn a lot? Yes.
Yet it doesn’t show Judt in such an overwhelmingly favorable light. He is cranky, unfair to his intellectual opponents, and he repeatedly misrepresents thinkers such as Hayek on some fairly simple points. He conducts unsubstantiated attacks on various New York Times columnists, as if they had once beaten him in a debate and this was his revenge. It shows his lifelong and mostly unhealthy obsession with what Daniel Klein has called “The People’s Romance.” Unlike in some of his previous writings, his proposals for a one-state solution to the Israel-Palestine problem come off as an irresponsible and somewhat flip symbolic gesture, easy enough to make because he doesn’t have to live with the outcome. As a reader and reviewer it is hard to not wonder whether/how Judt was medicated during these conversations, and how well he had thought through his lack of editing options before publication. Or is this the real Judt? Are we all really like this? Pondering that question is as interesting as the dialogue itself.
The Austrians will be happy when Judt writes: “The three quarters of century that followed Austria’s collapse in the 1930s can be seen as a duel between Keynes and Hayek.” Yet he has the odd view that free market ideas were “imported to the U.S. in the suitcases of a handful of disabused Viennese intellectuals.” Others may underrate the importance of central/eastern Europe but in these dialogues he overrates it.
Hayek is quite explicit on this count: if you begin with welfare policies of any sort — directing individuals, taxing for social ends, engineering the outcomes of market relationships — you will end up with Hitler.
My favorite part of the book comes at Kindle location 1294, here is part of that discussion:
But even when Blunt was outed as a Soviet spy, in 1979, his standing in high society, and in the distinctive codes of that society in England, still protected him…Thus Blunt — a spy, a communist, a dissembler, a liar and a man who may have actively contributed to the exposure and death of British agents — was nonetheless deemed by some of the his colleagues to be guilty of no crime serious enough to justify depriving him of the fellowship of the British Academy.
If you are seeking to “normalize” this review, I consider Judt’s Past Imperfect to be one of the best books of the last few decades, his Postwar to be one of my favorite books ever, and his late essays to be some of the best writing, in any genre, in a long time. (Though I didn’t like Ill Fares the Land.) I can recommend this too, as something worth consuming and pondering and spending money on, but I still have a slightly queasy feeling in my stomach.
Responsible for one of the most stupid shipping accidents of all time, not to mention the death of thirty or so passengers, Schettino was nevertheless greeted in his home town of Meta di Sorrento (on the south side of the bay of Naples) by a crowd waving banners in his favor and complaining, priest included, that the man’s bad press was the result of a general prejudice against their community. “Every Italian,” Giacomo Leopardi dryly remarked in 1826 “is more or less equally honored and dishonored.”
In 1789, the political price for our federal constitution included a bailout of the 13 indebted states. But it was by refusing to bail out the states a second time in the 1840s that the United States preserved its federal system, with substantial fiscal independence for state governments. Facing a similar moment, Europe might learn from our experience.
…Appealing to the precedent set by the 1789 bailout, state creditors asked the federal government to bail out the states once again. After an enlightening debate, in the early 1840s Congress declined, so many states repudiated their debts.
In the aftermath of those repudiations, many states rewrote their constitutions to require year-by-year balanced budgets, something they had never done before. As noted, fiscal crises, like the one in Europe today, often produce political rearrangements—at best peaceful ones like these.
There is more here. If that WSJ link doesn’t work for you, type “Thomas Sargent” into news.google.com.
…is it really true that back in 1963 the “upper tribe” and the “lower tribe” were more similar than they are today? It might seem that way in retrospect, but it sure didn’t at the time. It didn’t seem that way to Gunnar Myrdal or Michael Harrington, anyway. Overall, I can pretty easily buy the “Apart” piece of the title, but I’m a lot less sure about the “Growing” piece. For every example of a way in which top and bottom have diverged over the past 50 years, I suspect that you could also find an example of ways in which they’ve converged. It’s just that Murray wasn’t looking for any of those.
Perhaps electronic communications is one example, or maybe air conditioning, paging Don Boudreaux. Sharing a greater number of absolute benefits is an extra commonality, for instance sharing “telephone plus internet” is more in common than just “everyone has a telephone,” even if the absolute number of differences is rising too.
Murray can’t tell you what really caused the class divide in marriage because the class-based changes in families he laments closely track the class warfare of the 1%. Up through the mid-’80s, upper class and working class divorce rates rose and fell together. Starting in 1990, the lines diverged, with the divorce rates of college graduates falling back to the level of the mid-sixties (before no-fault divorce) while the divorce and non-marital birth rates of everyone else continued to rise.
Do all the other social indicators follow this same pattern? Did religiosity decline because of privileges for the wealthy and class warfare? Are we supposed to think that broadly stagnant incomes for the lower classes caused more divorce for those individuals? Didn’t stagnant incomes set in around 1973, with parts of the 1990s being relatively good times for the labor market? In other words, those divorce rate and other social indicator changes are not the fault of the top one percent as this review would have you believe. This latter point in the review makes more sense to me, though I don’t read it as contra Murray:
Third, women’s employment increased in the same period and women’s wages gained the most vis-à-vis men at the bottom of the income scale. As recently as 1990, women of all educational levels earned about the same percent of the hourly wages of men with the same education. To the extent the gendered “wage gap” varied, college educated women enjoyed slightly more parity with men than working class women. By 2007, the wage gap varied dramatically by class. College-educated women earned a smaller percentage of the hourly income of their male counterparts, while the wage gap between working-class men and women shrunk substantially.
…The result: a change in family norms. College-educated women postpone childbearing, invest in their careers, and conduct a long search for a compatible and reliable mate.
But does he have the stones to write “A hypergamy theory of changing social indicators”?
The liberation of American women also damaged the quality of public education, by removing the implicit subsidy of so many “captive” and smart female laborers. I would say that the non-wealthy did not have good norms to deal with women’s liberation and maybe they could not have had such norms. It’s time to come to terms with that history. I am willing to embrace it, though I am not sure Murray is.
I’ve now read the book and I think it is very good, very well-written, and considerably more bulletproof than some of the critics are suggesting. That said, not much in it surprised me or changed my views; admittedly these are areas where I’ve been doing a lot of reading lately.
Conversely, I would argue that the quality of governance in the US tends to be low precisely because of a continuing tradition of Jacksonian populism. Americans with their democratic roots generally do not trust elite bureaucrats to the extent that the French, Germans, British, or Japanese have in years past. This distrust leads to micromanagement by Congress through proliferating rules and complex, self-contradictory legislative mandates which make poor quality governance a self-fulfilling prophecy. The US is thus caught in a low-level equilibrium trap, in which a hobbled bureaucracy validates everyone’s view that the government can’t do anything competently. The origins of this, as Martin Shefter pointed out many years ago, is due to the fact that democracy preceded bureaucratic consolidation in contrast to European democracies that arose out of aristocratic regimes.
Roughly 7 percent of the white kids in the upper tribe are born out of wedlock, compared with roughly 45 percent of the kids in the lower tribe. In the upper tribe, nearly every man aged 30 to 49 is in the labor force. In the lower tribe, men in their prime working ages have been steadily dropping out of the labor force, in good times and bad.
People in the lower tribe are much less likely to get married, less likely to go to church, less likely to be active in their communities, more likely to watch TV excessively, more likely to be obese…
It’s wrong to describe an America in which the salt of the earth common people are preyed upon by this or that nefarious elite. It’s wrong to tell the familiar underdog morality tale in which the problems of the masses are caused by the elites.
The truth is, members of the upper tribe have made themselves phenomenally productive. They may mimic bohemian manners, but they have returned to 1950s traditionalist values and practices. They have low divorce rates, arduous work ethics and strict codes to regulate their kids.
Members of the lower tribe work hard and dream big, but are more removed from traditional bourgeois norms. They live in disorganized, postmodern neighborhoods in which it is much harder to be self-disciplined and productive.
Remember when “rage” used to mean “Radical Alternatives to Government Enterprise”? Murray’s book will bring rage of a different kind, because it strikes rather directly at how political views are based on emotional feelings about the deserved status of various social groups (RH: “Politics isn’t about policy.”) Here is more. If you are wondering, my copy of the book arrives today. Perhaps my review will consider whether economic forces are driving the social ones, or vice versa.
In the Elizabethan period, business was sneered upon. In Shakespeare’s plays, the only major bourgeois character, Antonio, is a fool because of his affection for Bassanio. There is no need to dwell on how the other bourgeois character in “The Merchant of Venice,” Shylock, is characterized.
She contrasts this with attitudes 200 years later. When James Watt died in 1819, a statue of him was erected in Westminster Abbey and later moved to St. Paul’s cathedral. This would have been unthinkable two centuries earlier. In Ms. McCloskey’s view, this shift in perceptions was central to the economic take-off of the West.
