Category: History

*The Radical Fool of Capitalism*

Bentham…appraised the trophies — dismissively dubbed “baked heads” — as technical innovations and recognized their potential for his own plans.  He enthusiastically praised the “savage ingenuity.”  An 1824 draft of his will was the first to contain the score of his wishes: first, to see the corpse as an inheritance…

According to legend, Behtam carried around the glass eyes intended for the Auto-Icon in his pocket in his final years.  (Supposed) attempts to dehydrating body parts in his home oven are said to have yielded satisfactory results.  Bentham believed the [Maori] mokomokai process would discolor facial traits and produce a parchment- or mummy-like appearance (which could be corrected with paint), while maintaining the physiognomy.

But Southwood Smith botched the job.  He sprinkled sulfuric acid onto the head, and in doing so docked Bentham’s nose.  He used an air pump to aid dehydration, which caused the skin to shrivel.  Bentham’s face appeared melted, the physiognomy destroyed.  In spring 1833, Smith commissioned a replacement head of wax…

That is from the new, excellent, and short The Radical Fool of Capitalism: On Jeremy Bentham, The Panopticon, and the Auto-Icon, by Christian Welzbacher.

American dams in the 19th century

To appreciate how essential dams were in the nineteenth century, simply look at the 1840 U.S. Census: It found that almost every river had a dam, and many rivers had dozens.  In total, the twenty-six states that made up the United States at the time had around 65,000 dams.  With a population of only 17 million at that time, the United States had one dam for every 261 people.

That is from the new and often quite interesting Martin Doyle, The Source: How Rivers Made America and America Remade its Rivers.

The economics of cousin marriage

The title of the article is “Cousin Marriage Is Not Choice: Muslim Marriage and Underdevelopment,” by Lena Edlund, and here is the abstract:

According to classical Muslim marriage law, a woman needs her guardian’s (viz. father’s) consent to marry. However, the resulting marriage payment, the mahr, is hers. This split bill may lie behind the high rates of consanguineous marriage in the Muslim world, where country estimates range from 20 to 60 percent. Cousin marriage can stem from a form of barter in which fathers contribute daughters to an extended family bridal pool against sons’ right to draw from the same pool. In the resulting system, women are robbed of their mahr and sons marry by guarding their sisters’ “honor” heeding clan elders.

From the new May American Economic Review.

Is China moving back toward Marx?

And should we celebrate along with Xi Jinping?  That is the topic of my latest Bloomberg column, with plenty on the debates within socialist thought, here is the close:

Do I expect those future political reforms to take a Marxian path of the dictatorship of the proletariat? Probably not. But when it comes to China, Marx is the one theorist who has not yet been refuted. It’s the Western liberals and the Maoists who both have egg on their faces.

If you think of Western liberalism as the relevant alternative, you might feel discomfort at the Chinese revival of Marx. But if you think a bit longer on Maoism, its role in Chinese history and its strong nativist roots, you too might join in the Marx celebrations.

Do read the whole thing.

Entartete Kunst

Beginning today (May 10), Spotify users will no longer be able to find R. Kelly‘s music on any of the streaming service’s editorial or algorithmic playlists. Under the terms of a new public hate content and hateful conduct policy Spotify is putting into effect, the company will no longer promote the R&B singer’s music in any way, removing his songs from flagship playlists like RapCaviar, Discover Weekly or New Music Friday, for example, as well as its other genre- or mood-based playlists.

“We are removing R. Kelly’s music from all Spotify owned and operated playlists and algorithmic recommendations such as Discover Weekly,” Spotify told Billboardin a statement. “His music will still be available on the service, but Spotify will not actively promote it. We don’t censor content because of an artist’s or creator’s behavior, but we want our editorial decisions — what we choose to program — to reflect our values. When an artist or creator does something that is especially harmful or hateful, it may affect the ways we work with or support that artist or creator.”

Over the past several years, Kelly has been accused by multiple women of sexual violence, coercion and running a “sex cult,” including two additional women who came forward to Buzzfeed this week. Though he has never been convicted of a crime, he has come under increasing scrutiny over the past several weeks, particularly with the launch of the #MuteRKelly movement at the end of April. Kelly has vociferously defended himself, saying those accusing him are an “attempt to distort my character and to destroy my legacy.” And while RCA Records has thus far not dropped Kelly from his recording contract, Spotify has distanced itself from promoting his music.

Here is the full article.  Chuck Berry?  John Lennon?  Michael Jackson?

Observations on the heritability of intelligence

The reason I think polygenicity is important in this case is that it means there is a huge mutational target that natural selection has to keep an eye on. The constant production of new mutations in sperm and egg cells, the fact that so many of them could affect intelligence, and the fact that they will tend to do so negatively, should, in my opinion, make it harder to push intelligence consistently upwards, when new mutations will constantly be pulling it back down.

Again, I would argue this is a different situation to many other traits. For any trait, new mutations are likely to degrade, rather than improve, the developmental program and biological pathways underlying it. But for some traits, the “goal” of that program is to hit a species-optimal set point. Mutations affecting that program could mean you miss high or miss low – there’s no reason to expect to go one way or the other, really (as far as I can see).

For intelligence, following my argument above, the goal is to hit the maximal level possible. New mutations will thus not just replenish genetic variation affecting the trait (in either direction, as in standard models of stabilising selection); they will tend to push it downwards.

Now, maybe someone will tell me why that actually doesn’t matter, but it seems to me that this will tend to oppose any efforts of directional selection to push intelligence upwards in any given population. Whether that is true or not (or the size of the effect it could have) may depend on how much the trait is dominated by the effects of rare mutations. Various lines of evidence suggest that the collective influence of such mutations on intelligence is very substantial.

That is from Kevin Mitchell.  I do not feel qualified to judge his claims, but nonetheless found the discussion of interest.

My Conversation with Bryan Caplan

Bryan was in top form, I can’t recall hearing him being more interesting or persuasive.  Here is the audio and text.  We talked about whether any single paper is good enough, the autodidact’s curse, the philosopher who most influenced Bryan, the case against education, the Straussian reading of Bryan, effective altruism, Socrates, Larry David, where to live in 527 A.D., the charm of Richard Wagner, and much more.  Here is one excerpt:

COWEN: You love Tolstoy, right?

CAPLAN: Yeah. You love Tolstoy because here’s a guy who not only has this encyclopedic knowledge of human beings — you say he knows human nature. Tolstoy knows human natures. He realizes that there are hundreds of kinds of people, and like an entomologist, he has the patience to study each kind on its own terms.

Tolstoy, you read it: “There are 17 kinds of little old ladies. This was the 13th kind. This was the kind that’s very interested in what you’re eating but doesn’t wish to hear about your romance, which will be contrasted with the seventh kind which has exactly the opposite preferences.” That’s what’s to me so great about Tolstoy.

Here is one of my questions:

What’s the fundamental feature in Bryan Caplan–think that has made you, unlike most other nerds, so much more interested in Stalin than science fiction?

Here is another exchange:

COWEN: You think, in our society in general, this action bias infests everything? Or is there some reason why it’s drawn like a magnet to education?

CAPLAN: Action bias primarily drives government. For individuals, I think even there there’s some action bias. But nevertheless, for the individual, there is the cost of just going and trying something that’s not very likely to succeed, and the connection with the failure and disappointment, and a lot of things don’t work out.

There’s a lot of people who would like to start their own business, but they don’t try because they have some sense that it’s really hard.

What I see in government is, there isn’t the same kind of filter, which is a big part of my work in general in politics. You don’t have the same kind of personal disincentives against doing things that sound good but actually don’t work out very well in practice.

Probably even bigger than action bias is actually what psychologists call social desirability bias: just doing things that sound good whether or not they actually work very well and not really asking hard questions about whether things that sound good will work out very well in practice.

I also present what I think are the three strongest arguments against Bryan’s “education is mostly signaling” argument — decide for yourself how good his answers are.

And:

COWEN: …Parenting and schooling in your take don’t matter so much. Something is changing these [norms] that is mostly not parenting and not schooling. And they are changing quite a bit, right?

CAPLAN: Yes.

COWEN: Is it like all technology? Is the secret reading of Bryan Caplan that you’re a technological determinist?

CAPLAN: I don’t think so. In general, not a determinist of any kind.

COWEN: I was teasing about that.

And last but not least:

CAPLAN: …When someone gets angry at Robin, this is what actually outrages me. I just want to say, “Look, to get angry at Robin is like getting angry at baby Jesus.” He’s just a symbol and embodiment of innocence and decency. For someone to get angry at someone who just wants to learn . . .

COWEN: And when they get mad at me?

CAPLAN: Eh, I understand that.

Hail Bryan Caplan!  Again here is the link, and of course you should buy his book The Case Against Education.

When was it possible to institute social democracy?

Notably, almost all the foreign programs that American social democrats envy were enacted during Europe’s long post-war economic and demographic boom. That meant that the initial cost of these systems was fairly low — young people don’t need much in the way of health care or pensions, and economies at full employment don’t spend a lot on unemployment insurance or job retraining. As incomes soared, it was comparatively easy for government to skim some of the surplus for their new social insurance schemes, because even as their taxes went up, workers still got to take more money home every week. Governments ran into problems when the boom stopped, of course, but by then, political sentiment had cemented those programs in place.

What was easy in 1960 looks herculean as 2020 approaches. Economic growth has slowed, and populations are aging, which raises the cost of any proposed program and requires you to fund heavy losses on someone to fund it, either workers in those industries, or taxpayers. As psychologists tell us, people are “loss averse” — they care much more about losing something they have than about equivalent potential gains. Given the mammoth cost of socializing the U.S. economy now, and the huge number of people who face substantial losses, I’d argue that we should probably change “herculean” to “impossible.”

That is from Megan McArdle at The Washington Post.

How economists became so timid

From Eric A. Posner and E. Glen Weyl, that was then:

Self-styled American and European radicals, for example, helped end monarchy and expand the franchise. The free-labor ideology of European radicals and American Radical Republicans helped abolish serfdom and slavery and establish a new basis for industrial labor relations. The late 18th and 19th centuries also witnessed the liberal reformism of Jeremy Bentham, Smith, James and John Stuart Mill, and the Marquis de Condorcet; the socialist revolutionary ideologies of Pierre-Joseph Proudhon and Marx; the labor unionism of Beatrice and Sydney Webb; and, influential at the time but now mostly forgotten, the competitive common ownership ideology of Henry George and Léon Walras. This ideology shaped the Progressive movement in the United States, the “New Liberalism” of David Lloyd George in Britain, the radicalism of Georges Clemenceau in France, even the agenda of the Nationalist Chinese revolutionary leader Sun Yat-Sen. The Keynesian and welfare-state reforms of the early 20th century set the stage for the longest and most broadly shared period of growth in human history.

And this is now:

So where are the heirs of the political economists? Political economy has fragmented into a series of disparate fields, none of which has the breadth, creativity, or courage to support the reformist visions that were crucial to navigating past crises.

…Yet even as economists retreated from visionary social theory, the power they wielded over detailed policy decisions grew. A notable feature of this policy guidance was that it shared the narrowness of economists’ research methods. Policy reforms advocated by mainstream economists were almost always what we call “liberal technocratic” — either center-left or center-right. Economists suggested a bit higher or lower minimum wage or interest rate, a bit more or less regulation, depending on their external political orientation and evidence from their research. But they almost never proposed the sort of sweeping, creative transformations that had characterized 19th-century political economy.

How to explain this timidity? As with many professions endowed with power (like the military), economics developed strict codes of internal discipline and conformity to ensure that this power was wielded consistent with community standards…

The upshot is that economics has played virtually no role in all the major political movements of the past half-century, including civil rights, feminism, anticolonialism, the rights of sexual minorities, gun rights, antiabortion politics, and “family values” debates.

There is much more at the link.  I am not sure I have a single endorsement or criticism in response, other than to say that I view MR as, among other things, a fifteen-year running commentary on the economics profession and its ups and downs.  In any case, beware complacency!

And do not forget about the authors’ new and stimulating book Radical Markets.

Hat tip goes to Bonnie Kavoussi.

Anthony Downs on race and urbanism, that was then this is now

It always surprises me that the name of Anthony Downs is not mentioned more often in conjunction with the Nobel Prize in economics.  His An Economic Theory of Democracy is one of the best and most important books on public choice economics, and it is the major source for the median voter theorem. Yet now a new paperback copy of the book is not to be had for less than $100.  Downs also had major contributions to transportation economics (traffic expands to fill capacity) and housing and urban economics and the theory of bureaucracy.

Yesterday I learned that Downs was a major White House consultant on race and urban affairs in 1967, working with James Tobin and Kermit Gordon and other luminaries on the National Commission on Urban Problems.  What they produced fed into what was described as “The Most Courageous Government Report in the Last Decade,” namely the Kerner Commission report.  Here are some details:

1. Downs did much of the work of the commission and much of the actual writing, including of the Kerner Report, including the section on housing policy and the ghetto.

2. He was very concerned with “white flight” and thought a more radical approach to urban poverty was needed.  He thought Great Society programs had not been tried on a large enough scale.

3. In the view of Downs, major progress already had been made, but he worried that aspirations were rising faster than living standards.

4. He spelt out a “status quo approach,” a “ghetto-improvement strategy,” and a “dispersal strategy” based on integration.  He considered the latter the most ambitious and perhaps the most unikely.  He focused on outlining these alternatives, and their benefits and costs, rather than recommending any one of them.

5. Among the specific proposals considered were a Neighborhood Youth Corps, increasing the minimum wage, job training, public service programs, and a federally enforced fair employment-practices bill.  The draft also encouraged policymakers to think about educational vouchers, decentralizing urban school systems, and educational innovation.  There were arguments as to whether teachers’ unions should be held at fault and weakened.

It is striking how little these debates have progressed since more than fifty years ago.

p.s. Many on the right were critical of the report.

This is all from Steven M. Gillon, Separate and Unequal: The Kerner Commission and the Unraveling of American Liberalism.

From the comments, on reverence for asceticism

…[the] US for instance…worships sex, and…celibates are viewed as “losers”. A Hollywood film that describes this social mindset is “40 year old virgin” that came out a decade or so ago.

India makes an interesting contrast. Though the life of the “married householder” is an ideal in India, celibates are viewed with respect and admired for their self-restraint. This is actually one important contributor to the charm and charisma of Narendra Modi – a celibate man, a teetotaller among other things. He is viewed as someone who has “conquered his senses” and is incorruptible.

This streak of anti-sensuality, very much a part of Indian culture, is not to be found in US.

More westernized Indians on the cultural Left, back in India, mock at the public’s fascination with Modi’s celibacy and his puritanism. There are jokes in this group that Modi is probably gay or asexual. No wonder he can stay single.

Again this highlights the large chasm between the attitudes of the modern western mind which does not choose to view sensual restraint as a virtue, versus more traditional societies where self denial and austerity command a certain awe.

That is from Shrikanthk.

The Royal Economic Society Prize

The 2017 Royal Economic Society prize for best paper in the Economic Journal has been awarded to Robert Warren Anderson, Noel Johnson and Mark Koyama for their paper Jewish Persecutions and Weather Shocks 1100-1800 (non-gated). Noel and Mark are colleagues at George Mason and Robert is a former GMU student. Here’s the abstract:

What factors caused the persecution of minorities in pre‐modern Europe? Using panel data consisting of 1,366 persecutions of Jews from 936 European cities between 1100 and 1800, we test whether persecutions were more likely following colder growing seasons. A one standard deviation decrease in growing season temperature in the previous five‐year period increased the probability of a persecution by between 1 and 1.5 percentage points (relative to a baseline of 2%). This effect was strongest in weak states and with poor quality soil. The long‐run decline in persecutions was partly attributable to greater market integration and state capacity.

The RES is correct, this is an excellent paper with a great combination of theory and original data.

The award is another indication of the stellar quality of GMU’s economics department.

Allende, Pinochet, and the stock market

We document the impact of Allende’s election and subsequent coup on share prices.

A rare natural experiment to identify impacts of institutions on economic outcomes.

The unexpected socialist victory in 1970 reduced share prices by one half.

The 1973 coup launching a business-friendly dictatorship raised share prices by 80%.

These effects reflect Allende’s systemic challenge to private property rights.

That is from Daniele Girardi and Samuel Bowles, here is an ungated version.

Leland B. Yeager has passed away at age 93

Leland was a great monetary economist, a wonderful economist outright, an important early member of the Virginia School, one of the best read people I’ve met, and he could speak and read eight languages, including Swedish.  He was also a wonderful expositor, and a fine gentleman altogether.  He was either an early or a late proponent of market monetarism, depending on how you wish to mark the calendar.  Most memorably to me, he would entertain my pesky questions about economics, without tiring, even when I was at a young age.  I am sorry to see him go.  Here is Leland on Wikipedia and other entries.