Category: History

My Conversation with Ross Douthat

We do another CWT, here is the audio and transcript (link corrected), a very good installment in the series.  Here is part of the summary:

Ross joined Tyler to discuss why he sees Kanye as a force for anti-decadence, the innovative antiquarianism of the late Sir Roger Scruton, the mediocrity of modern architecture, why it’s no coincidence that Michel Houellebecq comes from France, his predictions for the future trajectory of American decadence — and what could throw us off of it, the question of men’s role in modernity, why he feels Christianity must embrace a kind of futurist optimism, what he sees as the influence of the “Thielian ethos” on conservatism, the plausibility of ghosts and alien UFOs, and more.

A welcome relief from Covid-19 talk, though we did cover Lyme disease.  Here is one excerpt:

COWEN: Does the Vatican have too few employees? There’s a Slate article — it claimed in 2012, the Roman Curia has fewer than 3,000 employees. Walmart headquarters at the time had 12,000. If the Church is a quite significant global operation, can it be argued, in fact, that it’s not bureaucratic enough? They don’t actually have state capacity in the sense that state capacity libertarianism might approve of.

DOUTHAT: Right. State capacity libertarianism would disapprove of the Vatican model. And it reflects the reality that media coverage of the Catholic Church doesn’t always reflect, which is that in Catholic ecclesiology and the theory of the institution, bishops are really supposed to be pretty autonomous in governance. And the purpose of Rome is the promotion of missionary work and the protection of doctrine, and it’s not supposed to be micromanaging the governance of the world Church.

Now, I think what we’ve seen over the last 30 years — and it’s been thrown into sharp relief by the sex abuse crisis — is that the modern world may not allow that model to exist; that if you have this global institution that has a celebrity figure at the center of it, who is the focus of endless media attention, you can’t, in effect, get away with saying, “Well, the pope is the pope, but sex abuse is an American problem.”

And to that extent, there is a case that the Church needs more employees and a more efficient and centralized bureaucracy. But then that also coexists with the problem that the model of Catholicism is still a model that was modern in the 16th century. It’s still much more of a court model than a bureaucratic model, and pope after pope has theoretically tried to change this and has not succeeded.

Part of the reality is, as you well know, as a world traveler, the Italians are very good at running courts that exclude outsiders and prevent them from changing the way things are done. Time and again, some Anglo-Saxon or German blunderer gets put in charge of some Vatican dicastery and discovers that, in fact, the reforms he intends are just not quite possible. And you know, in certain ways, that’s a side of decadence that you can bemoan, but in certain ways, you have to respect, too.

Definitely recommended, a very fun CWT with lots of content.  And again, here is Ross’s (recommended) book The Decadent Society: How We Became a Victim of Our Own Success.

Lessons from the “Spanish Flu” for the Coronavirus’s Potential Effects on Mortality and Economic Activity

That is the subtitle of a new paper by Robert J. Barro, José F. Ursúa,  and Joanna Weng, here is the abstract:

Mortality and economic contraction during the 1918-1920 Great Influenza Pandemic provide plausible upper bounds for outcomes under the coronavirus (COVID-19). Data for 43 countries imply flu-related deaths in 1918-1920 of 39 million, 2.0 percent of world population, implying 150 million deaths when applied to current population. Regressions with annual information on flu deaths 1918-1920 and war deaths during WWI imply flu-generated economic declines for GDP and consumption in the typical country of 6 and 8 percent, respectively. There is also some evidence that higher flu death rates decreased realized real returns on stocks and, especially, on short-term government bills.

I wonder if the economic cost isn’t higher today because we know more about how to limit pandemic spread and we also value human lives more, relative to economic output?

Kudos to the authors for such swift work.

Also from NBER here is Andrew Atkeson on the dynamics of disease progression, depending on the percentage of the population with the disease.  Here is an excerpt from the paper:

Even under severe social distancing scenarios, it is likely that the health system will be overwhelmed, which is indicated to happen when the portion of the U.S. population actively infected and suffering from the disease reaches 1% (about 3.3 million current cases).7 More severe mitigation efforts do push the date at which this happens back from 6 months from now to 12 months from now or more, perhaps allowing time to invest heavily in the resources needed to care for the sick. It is clear that to avoid a health care catastrophe as is currently being experienced in Italy, prolonged severe social distancing measures will need to be combined with a massive investment in health care capacity.

Under almost all of the scenarios considered, at the peak of the disease progression, between 10% and 20% of the population (33 – 66 million people) suffers from an active infection at the same time.

A not entirely cheery prognosis.

That was then, this is now

In 1957, when flu swept through Hong Kong, Mr [Maurice] Hilleman identified the virus as a new form to which people had no natural immunity and passed on his findings to vaccine-makers. When the virus reached the United States a few months later 40m doses of vaccine were ready to limit its damage.

Here is more from The Economist, circa 2005, via Brian LaRocca.  How many of you have heard of Maurice Hilleman? He has other accomplishments, and according to Wikipedia “He is credited with saving more lives than any other medical scientist of the 20th century.”  I say he is underrated!

Adam Smith: Libertarian in a Foxhole

In a piece on conservative liberalism, Dan Klein looks at the response of conservatives like Smith, Hume and Burke to crises. For example, when the harvest was poor it was common for England to adopt free trade to import grain. Adam Smith argued that what was good in bad times was good in good times:

The distress which, in years of scarcity, the strict execution of those laws might have brought upon the people, would probably have been very great. But, upon such occasions, its execution was generally suspended by temporary statutes, which permitted, for a limited time, the importation of foreign corn. The necessity of these temporary statutes sufficiently demonstrates the impropriety of this general one. (WN 536.34)

I was reminded of some modern examples:

MedEcon: The federal government will now allow all physicians and other medical personnel to practice across state lines in order to battle the coronavirus (COVID-19) outbreak.

or

KXXV: Governor Greg Abbott has waived state laws that prohibit trucks from the alcohol industry from delivering supplies to grocery stores.

He says this will provide grocers with another private-sector option to keep their shelves stocked during the coronavirus pandemic.

Or how about this “hilarious” headline from the FDA

FDA: FDA Provides More Regulatory Relief During Outbreak, Continues to Help Expedite Availability of Diagnostics

The Lasting Effects of the 1918 Influenza Pandemic

[I’ve never put a trigger warning on a post before but given the current situation the information here is potential upsetting to anyone expecting a child. I do not think that the current pandemic will be as bad as the 1918. I am also hopeful that the weather will work in our favor and that, as Tyler argued, America will start to work. Do also read my post, What Worked in 1918-1919 for a more positive message.]

The 1918 influenza pandemic struck the United States with most ferocity in October of 1918 and then over the next four months killed more people than all the US combat deaths of the 20th century. The sudden nature of the pandemic meant that children born just months apart experienced very different conditions in utero. In particular, children born in 1919 were much more exposed to influenza in utero than children born in 1918 or 1920. The sudden differential to the 1918 flu lets Douglas Almond test for long-term effects in Is the 1918 Influenza Pandemic Over?

Almond finds large effects many decades after exposure.

Fetal health is found to affect nearly every socioeconomic outcome recorded in the 1960, 1970, and 1980 Censuses. Men and women show large and discontinuous reductions in educational attainment if they had been in utero during the pandemic. The children of infected mothers were up to 15 percent less likely to graduate from high school. Wages of men were 5–9 percent lower because of infection. Socioeconomic status…was substantially reduced, and the likelihood of being poor rose as much as 15 percent compared with other cohorts. Public entitlement spending was also increased.

At right, for example, are male disability rates in 1980, i.e. for males around the age of 60, by year and quarter of birth. Cohorts born between January and September of 1919 “were in utero at the height of the pandemic and are estimated to have 20 percent higher disability rates at age 61…”.

Figure 3 at right shows average years of schooling in 1960; once again the decline is clear for those born in 1918 and note that not all pregnant women contracted influenza so the actual effects of influenza exposure are larger, about a 5 month decline in education, mostly coming through lower graduate rates.

Higher disability and lower education translate into greater government payments as show in the final figure below. Almond labels these welfare payments which might be slightly misleading–these are Social Security Disability payments in 1970. Here’s Almond:

Average payments to women and nonwhites in 1970 are plotted in figure 8. The average welfare payment was 12 percent higher for both women and nonwhites born in 1919, or approximately one-third higher for children of mothers who contracted influenza. When we focus on quarter of birth, it is apparent that these increased payments are generated by high payments to those born between April and June of 1919.

Note that men and women who were especially disabled could have died before 1970 and so these are lower bounds on the disability impact.

Fetal exposure seems to be the key as Almond tests for and rejects other possibilities. The 1918 kids, for example, seem about the same as the 1920 kids so it’s not that the flu killed off the weak kids in 1918.

Almond was interested in the 1918 pandemic not simply as a historical episode but to make the case that infant health and infant health programs have high benefit to cost ratios, a still relevant lesson.

Hat tip: Wojtek Kopczuk.

America is historically slow to mobilize, but eventually quite effective

That is the theme of my latest Bloomberg column, and Pearl Harbor, terrorism risk, and the financial crisis stand among the notable examples.  Here is one excerpt:

It is no accident that America is so often so slow out of the starting gate. The federal government is large and complex, and the American people do not always elect the most intellectual or science-minded of leaders. Federalism means American politics has many moving parts, and the government tends to work closely with the private sector, heightening coordination problems and slowing response times. For all America’s reputation as the land of laissez-faire, it is in fact highly bureaucratized, with the health-care sector an especially bad offender.

And:

As time passes, the number of discrete decision points in the U.S. system goes from being a drawback to a strength. For instance, it turns out that the University of Washington had been developing an effective testing kit several months ago, for fear that Covid-19 would spread widely. Washington State is now in the testing lead, and virologists there are working very hard to collect and interpret data, setting an example for others. Commercial companies such as Quest Diagnostics and LabCorp are now developing tests as well, with further interest likely to follow. American institutions are some of the most productive and flexible in the world, at least once they are allowed to operate.

America also has one of the strongest traditions of civil society and volunteerism, and those resources too will be mobilized to help fight the coronavirus as appropriate. The Gates Foundation will soon fund free home-testing kits, initially in the Seattle area.

There is much more at the link.  Of course it is indeed time we got our act together, starting at the very top but by no means limited to that position.

Revisiting Latino economic assimilation

Here is a new paper by Giovanni Peri and Zachariah Rutledge

Using data from the United States spanning the period between 1970 and 2017, we analyze the economic assimilation of subsequent arrival cohorts of Mexican and Central American immigrants, the more economically disadvantaged group of immigrants. We compare their wage and employment probability to that of similarly aged and educated natives across various cohorts of entry. We find that all cohorts started with a disadvantage of 40-45 percent relative to the average US native, and eliminated about half of it in the 20 years after entry. They also started with no employment probability disadvantage at arrival and they overtook natives in employment rates so that they were 5-10 percent more likely to be employed 20 years after arrival. We also find that recent cohorts, arriving after 1995, did better than earlier cohorts both in initial gap and convergence. We show that Mexicans and Central Americans working in the construction sector and in urban areas did better in terms of gap and convergence than others. Finally, also for other immigrant groups, such as Chinese and Indians, recent cohorts did better than previous ones.

Via the excellent Kevin Lewis.

My Conversation with Garett Jones

Here is the transcript and audio, here is part of the opening summary:

Garett joined Tyler to discuss his book 10% Less Democracy, including why America shouldn’t be run by bondholders, what single reform would most effectively achieve more limited democracy, how markets shape cognitive skills, the three important P’s of the repeated prisoner’s dilemma, why French cuisine is still underrated, Buchanan vs. Tullock, Larry David vs. Seinfeld, the biggest mistake in Twitter macroeconomics, the biggest challenges facing the Mormon church, what studying to be a sommelier taught him about economics, the Garett Jones vision of America, and more.

Here is one bit:

COWEN: But let’s say it’s the early 1990s. Eastern European countries are suddenly becoming free, and they ask you, “Garett, what electoral system should we have?” What do you say?

JONES: What I really would go for is presidential systems, if you can handle it, something like a first-past-the-post system, where those people elected from local districts focused on local problems — which have less of a free-rider problem involved — go up to the parliament and actually argue their case. The presidential element is less important than the parliamentary idea of the single-district voting. I tend to think that creates more accountability on the part of the government.

And more:

COWEN: For the United States, what is the most effective way, in your view, that you would want us to have 10 percent less democracy? What’s the one thing you would change?

JONES: I would change the House of Representatives to a six-year term. I picked that because it’s not outside the range of plausibility, and because I think people would instantly understand what it accomplishes — not because it has the highest payoff, but because it balances payoff with plausibility in a democracy.

And on boosting IQ:

COWEN: But what’s the key environmental lever? Whatever Ireland did [to have induced an IQ rise], it’s not that people were starving, right? That we understand.

JONES: No, true.

COWEN: So why don’t we do more of whatever they did, whatever was done to the East Germans, everywhere?

JONES: Exactly.

COWEN: But what is that lever? Why don’t we know?

JONES: I would say that thing is the thing we call capitalism.

COWEN: Capitalism is a big, huge thing. Not all of capitalism makes us smarter.

JONES: Yeah, that’s the thing — figuring out which things within capitalism — what is it about living in a free society with competitive markets where, at least in our youth and middle age, we feel a need to sell ourselves as valuable creators. There’s something about that that probably is what’s most valuable for boosting cognitive skills. It’s a sort of demand-side desire to try to use our minds in socially productive ways. And I think in communism, we can —

COWEN: So marketing makes us smarter?

JONES: That’s what I would say, yeah.

There is much more at the link, an excellent Conversation.  Here you can order Garett’s book 10% Less Democracy: Why You Should Trust the Elites a Little More and the Masses a Little Less.  You can read the introduction to the book on-line.

That was then, this is now — pandemic response capabilities

From 2005:

Before adjourning last week, the US Senate passed and sent to President Bush a bill providing $3.8 billion for pandemic influenza preparedness and a controversial liability shield for those who produce and administer drugs and vaccines used in a declared public health emergency.

The preparedness funding and liability protection were part of the fiscal year 2006 defense spending bill passed by the Senate on the evening of Dec 21. The bill had cleared the House 2 days earlier.

The $3.8 billion for pandemic preparedness is a little more than half of the $7.1 billion Bush had requested in early November. House Republican leaders said last week the measure would fund roughly the fiscal year 2006 portion of Bush’s request.

As reported previously, the amount includes $350 million to improve state and local preparedness and directs the Department of Health and Human Services (HHS) to use most of the rest on “core preparedness activities,” including increasing vaccine production capacity, developing vaccines, and stockpiling antiviral drugs.

The liability provision offers broad legal protection for the makers of drugs, vaccines, and other medical “countermeasures” used when the HHS secretary declares an emergency. The provision says people claiming injury from a medical countermeasure can sue only if they prove “willful misconduct” by those who made or administered it. The bill calls for Congress to set up a compensation program for injuries, but it provides no funds for that purpose.

…But Sen. Edward Kennedy, D-Mass., and some other Democrats, along with consumer groups such as Public Citizen, derided the liability provision as a giveaway to the drug industry.

I am pleased to have argued for this in the time period leading up to this legislation, let us continue to hope we do not need it.

An argument for weaker copyright in books

From Barbara Biasi and Petra Moser:

Copyrights, which establish intellectual property in music, science,and other creative goods, are intended to encourage creativity. Yet, copyrights also raise the cost of accessing existing work – potentially discouraging future innovation.This paper uses an exogenous shift towards weak copyrights(and low access costs) during WWII to examine the potentially adverse effects of copyrights on science. Using two alternative identification strategies, we show that weaker copyrights encouraged the creation of follow-on science, measured by citations.This change is driven by a reduction in access costs, allowing scientists at less affluent institutions to use existing knowledge in new follow-on research.

The paper title is “Effects of Copyrights on Science: Evidence from the WWII Book Republication Program.”

The bureaucratization of U.S. foreign policy

The NSC [National Security Council] was established in the 1947 National Security Act, which named the members of the council: president, vice president and secretaries of state and defense. The function of the council “shall be to advise the president with respect to the integration of domestic, foreign, and military policies relating to the national security.” The law required regular meetings…

Mr. Kissinger grew the council to include one deputy, 32 policy professionals and 60 administrators. By my count, alumni of his NSC include two secretaries of state, four national security advisers, a director of national intelligence, a secretary of the Navy, and numerous high-ranking officials in the State, Defense and Treasury departments as well as the Central Intelligence Agency.

But the NSC has only continued to expand. By the end of the Obama administration, 34 policy professionals supported by 60 administrators had exploded to three deputies, more than 400 policy professionals and 1,300 administrators.

The council lost the ability to make fast decisions informed by the best intelligence.

Here is more from John Lehman (WSJ).

Is the world fortunate that the coronavirus hit China first?

Is the world fortunate that the coronavirus hit China first? China’s government has totalitarian impulses but that–for the most part– is working to its favor in combating the virus. What other country in the world could quarantine a city of 11 million people on the basis of (at the time) 17 reported deaths?

CNN: Across China, 15 cities with a combined population of over 57 million people — more than the entire population of South Korea — have been placed under full or partial lockdown.

Wuhan itself has been effectively quarantined, with all routes in and out of the city closed or highly regulated. The government announced it is sending an additional 1,200 health workers — along with 135 People’s Liberation Army medical personnel — to help the city’s stretched hospital staff.

China’s response to the virus has been unprecedented and one cannot help but be a little bit impressed.

I was in India recently and if the coronavirus hits India it could spread very rapidly and millions could die not just in India but around the world. India does not have a strong public health system (it has invested instead in sickness treatment, another example of premature imitation), it also has plenty of other opportunistic diseases and bacteria which would magnify viral sickness and overwhelm the public health system, and India does not have a state strong enough to effectively lock down cities. India’s only big advantage versus China is that it’s relatively free press and communication system could make an outbreak more quickly spotted. China, in contrast, tried to hide the initial outbreak. This does, however, cut both ways. India’s 1994 outbreak of the plague quickly became news, which led to official action, but hundreds of thousands of people quickly left the epicenter in Surat–smart action at the time but deadly if those fleeing are infectious.

We need a Manhattan Project to research, develop and produce new vaccines at a faster pace; the US is best placed to be the world leader in this regard. On other actions, the United States stands somewhere in between China and India. US quarantine action would certainly be slower than in China but it could happen, probably through the military, as we are seeing now.

The US approach of slow but eventually decisive action is probably best but how slow is too slow? Right now most people assume that the coronavirus is a blow to China but if does create a serious pandemic then China may be the first to recover and stabilize.

Hat tip: Lunch discussions with Robin, John and Ajay.

The importance of family structure — was the nuclear family a mistake?

If you want to summarize the changes in family structure over the past century, the truest thing to say is this: We’ve made life freer for individuals and more unstable for families. We’ve made life better for adults but worse for children. We’ve moved from big, interconnected, and extended families, which helped protect the most vulnerable people in society from the shocks of life, to smaller, detached nuclear families (a married couple and their children), which give the most privileged people in society room to maximize their talents and expand their options. The shift from bigger and interconnected extended families to smaller and detached nuclear families ultimately led to a familial system that liberates the rich and ravages the working-class and the poor.

That is from David Brooks writing in The Atlantic, do read the whole thing, so far the best essay of the year with many fine and subtle points.

Directed Innovation in the Artificial Limb Industry

A. A. Marks advertising card, showing a customer holding and wearing his artificial legs, late 1800s Courtesy Warshaw Collection, Archives Center, National Museum of American History. http://www.civilwarmed.org/prosthetics/

Innovation responds to both demand and supply. New scientific discoveries can arise exogenously and lower the cost of some types of innovation. Innovation, however, also responds to demand. The patenting of new energy devices increases as the price of oil increases. Similarly, new pharmaceuticals to treat diseases of old age increase as the number of elderly increase.

Similarly, the Civil War and World War I created a boom in the demand for artificial limbs and that in turn created a boom in innovation that led to better artificial limbs. The demand for new prosthetics was in some cases personal, as MacRae writes:

…the person who launched the era of modern prosthetics was also the first documented amputee of the Civil War–Confederate soldier James Edward Hanger. Hanger, who lost his leg above the knee to a cannon ball, was first fitted with a wooden peg leg by Yankee surgeons. Unhappy with the cumbersome appendage, Hanger eventually designed and built a new, lightweight leg from whittled barrel staves. Hanger’s innovative leg had hinges at the knee and foot, which helped him to sit more comfortably and to walk with a more natural gait. Hangar won the contract to make limbs for Confederate veterans. The company he founded–Hanger, Inc.–remains a key player in prosthetics and orthotics today.

In a highly original paper, Jeffrey Clemens and Parker Rogers document the increase in patents during the war eras but they also show that the type of innovation not just the quantity also responded to economic incentives.

In the Civil War era, the quantity of limbs demanded increased but the government was quite stingy in paying for artificial limbs. As a result, innovators focused on process innovations that enabled the production of more limbs at lower cost. In contrast, WWI payments were more generous and the government emphasized reintegrated soldiers into society which made appearance a more dominant feature in limb patenting.

More generally, Clemens and Rogers show how the type of procurement contracts directs not just the quantity but the form of innovation. The lessons are relevant for modern health care costs. Many people, for example, have wondered why innovation tends to lower costs in most fields but raise costs in health care. Clemens and Rogers point to the nature of procurement contracts as a possible important influence.

A simple argument for state capacity libertarianism

Again and again—and in countries all over the world—declines in trust of government correlate strongly with calls for more government regulation in more parts of our lives. “Individuals in low-trust countries want more government intervention even though they know the government is corrupt,” explain the authors of a 2010 Quarterly Journal of Economics paper. That’s certainly the case in the United States, where the size, scope, and spending of government has vastly increased over exactly the same period in which trust and confidence in the government has cratered. In 2018, I talked with one of the paper’s authors, Andrei Shleifer, a Harvard economist who grew up in the Soviet Union before coming to America. Why do citizens ask a government they don’t believe in to bring order? “They want regulation,” he said. “They want a dictator who will bring back order.”

Counterintuitively, the relative size and spending of government in the United States actually flattened or dipped during periods when trust and confidence in government picked up…

That is Nick Gillespie, via Arnold Kling.