Category: History
The circulation of elites, sort of
Is the top tail of wealth a set of fixed individuals or is there substantial turnover? We estimate upper-tail wealth dynamics during the Gilded Age and beyond, a time of rapid wealth accumulation and concentration in the late 19th and early 20th centuries. Using various wealth proxies and data tracking tens of millions of individuals, we find that most extremely wealthy individuals drop out of the top tail within their lifetimes. Yet, elite wealth still matters. We find a non-linear association between grandparental wealth and being in the top 1%, such that having a rich grandparent exponentially increases the likelihood of reaching the top 1%. Still, over 90% of the grandchildren of top 1% wealth grandfathers did not achieve that level.
That is from a new NBER working paper by Priti Kalsi and Zachary Ward.
Martha
Martha (Netflix): A compelling bio on Martha Stewart. Her divorce from Andrew Stewart happened more than 30 years ago so the intensity of her anger and 
bitterness comes as a surprise. With barely concealed rage, she recounts his affairs and how poorly he treated her. “But didn’t you have an affair before he did?” asks the interviewer. “Oh, that was nothing,” she replies waving it off, “nothing.”
Stewart’s willpower and perfectionism are extraordinary. She becomes the U.S.’s first self-made female billionaire after taking her company public in 1999. Then comes the insider trading case. The amount in question was trivial—she avoided a $45,673 loss by selling her ImClone stock early. Stewart was not an ImClone insider and not guilty of insider trading. However, in a convoluted legal twist, she was charged with attempting to manipulate her own company’s stock price by publicly denying wrongdoing in the ImClone matter. Ultimately, she was convicted of lying to the SEC. It’s worth a slap on the wrist but the lead prosecutor is none other than the sanctiminous James Comey (!) and she gets 5 months in prison.
Despite losing hundreds of millions of dollars and control of her own company, Martha doesn’t give up and in 2015, now in her mid 70s, she creates a new image and a new career starting with, of all things, a shockingly hard-assed roast of Justin Bieber. The Bieber roast leads to a succesful colloboration with Snoop Dogg. Legendary.
Stewart is as compelling a figure as Steve Jobs or Elon Musk. Not entirely likable, perhaps, but undeniably admirable.
Manmohan Singh: India’s Finest Talent Scout
Singh was excellent at identifying young talent, most famously Montek Singh Ahluwalia. Before Montek and Isher Judge would go on to marry, they met Manmohan Singh in Delhi in 1970. At the time, Singh was a professor at the Delhi School of Economics, known for his work on India’s exports. He seemed too soft-spoken and erudite for the couple to imagine him joining the Ministry of Foreign Trade as an economic advisor just a year later. Over the years, Singh offered suggestions to Isher Judge for her macro-econometric model of the Indian economy, which formed the basis of her doctoral thesis at MIT under Stanley Fischer.
During his tenure as chief economic advisor (CEA) to the Government of India, Singh’s relationship with Ahluwalia deepened. Their conversations in Washington D.C., where Ahluwalia worked at the World Bank, became more frequent. When the position of economic advisor at the Finance Ministry opened, Singh saw an opportunity. He guided Ahluwalia into the bureaucracy, marking their transition from mentor and mentee to colleagues.
A worthy protégé, Ahluwalia drafted the famous blueprint for the first stage of reforms in 1991—dubbed the M-Document. Like Singh, he went on to become finance secretary and, later, deputy chairman of the Planning Commission. Ahluwalia was just one among dozens of economists that Singh mentored. But this cycle of mentorship, that Singh set in motion, would repeat well beyond his years in office. Ahluwalia recruited the next generation of talent, most notably Raghuram Rajan.
Here is much more from Shruti Rajagopalan, Shreyas Narla, and Kadambari Shah. Basically you should take the biggest countries in this world and try to know them reasonably well. And here is a very good sentence, relevant for social change virtually everywhere:
“Singh understood that lasting change comes not from solitary genius, but from creating ecosystems of excellence that outlast any individual.”
And here Tanner Greer visits India.
France fact of the day
Consumption of red wine in France has fallen by about 90 per cent since the 1970s, according to Conseil Interprofessionnel du vin de Bordeaux (CIVB), an industry association. Total wine consumption, spanning reds, whites and rosés, is down more than 80 per cent in France since 1945, according to survey data from Nielsen, and the decline is accelerating, with Generation Z purchasing half the volume bought by older millennials.
Here is more from Adrienne Klasa at the FT. You will note these are declines from large numbers:
“With every generation in France we see the change. If the grandfather drank 300 litres of red wine per year, the father drinks 180 litres and the son, 30 litres,” said CIVB board member Jean-Pierre Durand.
In the USA, the Surgeon General is calling for cancer warnings on alcohol (NYT).
When did sustained economic growth begin?
The subtitle is New Estimates of Productivity Growth in England from 1250 to 1870, and the authors are Paul Bouscasse, Emi Nakamura, and Jón Steinsson. Abstract:
We estimate productivity growth in England from 1250 to 1870. Real wages over this period were heavily influenced by plague-induced swings in the population. Our estimates account for these Malthusian dynamics. We find that productivity growth was zero prior to 1600. Productivity growth began in 1600—almost a century before the Glorious Revolution. Thus, the onset of productivity growth preceded the bourgeois institutional reforms of 17th century England. We estimate productivity growth of 2% per decade between 1600 and 1800, increasing to 5% per decade between 1810 and 1860. Much of the increase in output growth during the Industrial Revolution is explained by structural change—the falling importance of land in production—rather than faster productivity growth. Stagnant real wages in the 18th and early 19th centuries—“Engel’s Pause”—is explained by rapid population growth putting downward pressure on real wages. Yet, feedback from population growth to real wages is sufficiently weak to permit sustained deviations from the “iron law of wages” prior to the Industrial Revolution.
The 17th century truly is the important century.
Some Jimmy Carter observations from the 1970s
Usually I am reluctant to criticize or even write about the recently departed, but perhaps for former Presidents there is greater latitude to do so.
I never loved Jimmy Carter, and I saw plenty of him on TV and read about his administration on a daily basis in The New York Times.
I fully appreciate his legacy of deregulation, which far exceeded that of the Reagan administration. Plus Carter appointed Volcker and stood by him. He was honest right after the Watergate scandals, and Camp David was a major achievement and furthermore it has stood the test of time in Egypt. Those are some significant accomplishments, and at the time I felt he was a decent President.
But I did not like his overall vibes, and for a President that is important.
He struck me as a pious moralizer who did not have a great sense of the differences between good and harmful altruism. Somehow morality had to be packaged with some strange form of gentlemanly, southern, cloying self-abnegation.
He sent his daughter Amy to an inferior public school in Washington, D.C., instead of to a top-quality private school.
He went on TV in a sweater and told us to think in terms of privation rather than opportunity. The Cowen family did indeed turn down the thermostats.
He confessed to lusting after women in his heart in a sincere manner that made him sound absurd and out of touch.
Unlike Ronald Reagan, he was not able to moralize effectively about the Soviet Union and its role as evil empire. Yet I always felt he was lecturing me.
He emphasized “human rights” as important for American foreign policy. I am not opposed to that approach, but he made it sound so preachy and unappetizing. Nor was he able to realize that vision, so the country and its leadership simply became more hypocritical.
He seemed to have exactly the wrong temperament for confronting the various crises in Iran.
His voice grated on me, perhaps because I identified it with a particular kind of unself-conscious, preachy moralizing? I do understand we might do well to have some of that moralizing back. Still, I am not going to like it.
Was he ever funny?
I much preferred Ford, and even the evil Nixon and Clinton, not to mention Reagan. It’s a good thing Carter had some major pluses on his record.
Top MR Posts of 2024!
The number one post this year was Tyler’s The changes in vibes — why did they happen? A prescient post and worth a re-read. Lots of quotable content that has become conventional wisdom after the election:
The ongoing feminization of society has driven more and more men, including black and Latino men, into the Republican camp. The Democratic Party became too much the party of unmarried women.
The Democrats made a big mistake going after “Big Tech.” It didn’t cost them many votes, rather money and social capital. Big Tech (most of all Facebook) was the Girardian sacrifice for the Trump victory in 2016, and all the Democrats achieved from that was a hollowing out of their own elite base.
Biden’s recent troubles, and the realization that he and his team had been running a con at least as big as the Trump one. It has become a trust issue, not only an age or cognition issue.
I would also pair this with two other top Tyler posts, I’m kind of tired of this in which Tyler bemoans the endless gaslighting. Tyler is (notoriously!) open-minded and reluctant to criticize others, so this was a telling signal. See also How we should update our views on immigration in which Tyler notes that serious studies on the benefits and costs of immigration are quite positive but:
…voters dislike immigration much, much more than they used to. The size of this effect has been surprising, and also the extent of its spread…Versions of this are happening in many countries, not just a few, and often these are countries that previously were fairly well governed.
…Politics is stupider and less ethical than before, including when it comes immigration…We need to take that into account, and so all sorts of pro-migration dreams need to be set aside for the time being
In short if you were reading MR and Tyler you would have a very good idea of what was really going on in the country.
The second biggest post of the year was my post, Equality Act 2010 on Britain’s descent into the Orwellian madness of equal pay for “equal” work. It’s a very good post but it wrote itself since the laws are so ridiculous. Britain has not recovered from woke. Relatedly, Britain’s authoritarian turn on free speech remains an under-reported story. I worry about this.
Third, was my post The US Has Low Prices for Most Prescription Drugs a good narrative violation. Don’t fail the marshmallow test!
Fourth was another from me, No One’s Name Was Changed at Ellis Island.
Fifth, the sad Jake Seliger is Dead.
Sixth, I’m kind of tired of this, as already discussed.
Seventh was What is the Best-Case Scenario for a Trump Presidency? Rhetorically Trump isn’t following the script I laid out but in terms of actual policy? Still room for optimism.
Eighth was Tyler’s post Taxing unrealized capital gains is a terrible idea; pairs well with my post Taxing Unrealized Capital Gains and Interest Rate Policy.
Ninth, Venezuela under “Brutal Capitalism”, my post on the insane NYTimes piece arguing that Venezuela is now governed by “brutal capitalism” under Maduro’s United Socialist Party!
Tenth, Tyler’s post Who are currently the most influential thinkers/intellectuals on the Left? More than one person on this list now looks likes a fraud.
Your favorite posts of the year?
Manmohan Singh, RIP
I am sad to hear about the passing of Manmohan Singh at age 92.
Singh was perhaps the most influential Indian policymaker in the last five decades. An Oxbridge educated trade economist, he became India’s most important technocrat in the 1980s and 1990s – occupying every top position in economic policy – finance secretary; deputy chairman of the planning commission; governor of the RBI, and chief economic adviser. And as finance minister in 1991, when he brought the Indian economy out of socialism to embrace markets and global trade. After Modi and Nehru, he is also India’s longest continuously serving prime minister over two terms from 2004-2014.
For more about his work and long career in economic policy read Changing India – a five volume collection on Singh’s work as an academic, policymaker, politician and on the family man, Strictly Personal by his daughter Daman Singh. And to learn more about India’s liberalization and economic reforms, follow the 1991 Project at the Mercatus Center led by Shruti Rajagopalan and her team.
Full-length documentary on the life and legacy of Rene Girard
Very well done.
Is academic writing getting harder to read?
To track academic writing over time, The Economist analysed 347,000 PhD abstracts published between 1812 and 2023. The dataset was produced by the British Library and represents a majority of English-language doctoral theses awarded by British universities. We reviewed each abstract using the Flesch reading-ease test, which measures sentence and word length to gauge readability. A score of 100 roughly indicates passages can be understood by someone who has completed fourth grade in America (usually aged 9 or 10), while a score lower than 30 is considered very difficult to read. An average New York Times article scores around 50 and a CNN
article around 70. This article scores 41…We found that, in every discipline, the abstracts have become harder to read over the past 80 years. The shift is most stark in the humanities and social sciences (see chart), with average Flesch scores falling from around 37 in the 1940s to 18 in the 2020s. From the 1990s onwards, those fields went from being substantially more readable than the natural sciences—as you might expect—to as complicated. Ms Louks’s abstract had a reading-ease rating of 15, still more readable than a third of those analysed in total.
Here is more from The Economist, via the excellent Samir Varma.
Jefferson’s DOGE (that was then, this is now)
Jefferson swiftly undid twelve years of Federalism. He allowed the Sedition Act to expire and adopted a more catholic naturalization law. He reduced the federal bureaucracy — small even by today’s standards — particularly in the Treasury Department (a slap at Hamilton, who had been Secretary under Washington), slashing the number of employees by 40 percent and eliminating tax inspectors and collectors altogether. He cut the military budget in half, which was then 40 percent of the overall federal budget. He eliminated all federal excise taxes, purging the government of what he called Hamilton’s “contracted, English, half-lettered ideas.” Reluctantly he kept the First Bank of the United States, but paid off nearly half the national debt. “No government in history,” the historian Gordon S. Wood has observed, “had ever voluntarily cut back on its authority.”
That is from the new and very good book Martin van Buren: America’s First Politician, by James M. Bradley. Later things were different:
Martin van Buren went into office deermined to avoid Andrew Jackson’s fateful staffing mistakes. The backbiting and intrigue wasted two years of Jackson’s presidency. This van Buren could not afford.
And a wee bit later:
Then the voters had their say. The November elections in New York were an absolute bloodbath for the Democrats. There were 128 elections for assembly in 1837, and the Whigs won 101 of them.
The book is well-written.
*Goethe: A Faustian Life*
By A.N. Wilson, an excellent book and worthy of being addended to the year’s best non-fiction list. In addition to appreciating the work of Goethe, which one can never do enough of, Wilson argues (with reasonable evidence) that Goethe was bisexual, including with Jacobi (!). Goethe also had, at the very least, alcoholic tendencies, at times drinking three bottles a day for extended periods of time.
Of course there are the extensive Nicholas Boyle volumes (in the works) as well, fortunately you do not have to choose. Recommended, noting that many of Goethe’s best works make sense only in German. Here is a Henry Oliver podcast with Wilson.
Recreating the past isn’t easy (but is possible)
Hidden above the stone vaults of Notre-Dame de Paris, the 13th-century timber structure that once supported the cathedral’s steep lead roof was so extensive it was known as “the forest”. When the cathedral caught fire in 2019, the flames spread quickly through the lattice of oak beams, each one hewn from an individual tree by medieval carpenters. Around two-thirds of the roof was destroyed in the blaze.
By March 2024, the entire roof frame—la charpente in French—had been identically reconstructed by a small army of 21st-century carpenters trained in the traditional technique of working freshly harvested “green wood” by hand with an axe. (This time, however, the frame is protected against fire risks by an automatic misting system, thicker roof battens and fire-resistant trusses separating the spire from the nave and choir on either side of it.)
After generations of mechanisation, this ancient skill had almost disappeared in France when an association called Charpentiers Sans Frontières (Carpenters Without Borders) began promoting its revival in 1992. The movement’s workshops now attract volunteers from around the world. Among their members are father and son Rémy and Loïc Desmonts, whose specialist family business in Normandy shared the winning bid to restore Notre-Dame’s charpente with Ateliers Perrault, a large carpentry company near Angers with a track record of restoring historic monuments.
*The Triumph of Politics*
The author is David A. Stockman, and the subtitle is Why the Reagan Revolution Failed. This is for me a re-read, all DOGErs and aspiring DOGErs should give this book an initial read, as it covers why the Reagan attempts to pare back government largely failed. Excerpt:
But I hadn’t recoked that there would be so much opposition on our side of the aisle. I was shocked to find that the Democrats were geting so much Republican help in their efforts to keep the pork barrel flowing and the welfare state intact. I had been worried because the votes didn’t add up, not the economic plan.
I had also come to realize that in my haste to get the Reagan Revolution launched in February, we had moved too fast. There were numerous loose ends. The spending reductions needed to pay for the tax cuts had turned out to be even bigger and tougher than I had originally thought.
And:
Over the next eight months, the President’s pen remained in his pocket. He did not veto one single appropriations bill, all of which combined came in $10 billion [sic] over the line. Come to think of it, he did use his pen — to sign them.
Stockman of course was what you might call the DOGE leader of the early 1980s. His final take is that the Reagan Revolution failed because it misunderstood what the American people truly want from their government. For better or worse, they want privilege and also protection from misfortune, not efficiency or maximum economic growth.
Essential reading, for some of you.
My Conversation with the excellent Paula Byrne
Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler and Paula discuss Virginia Woolf’s surprising impressions of Hardy, why Wessex has lost a sense of its past, what Jude the Obscure reveals about Hardy’s ideas about marriage, why so many Hardy tragedies come in doubles, the best least-read Hardy novels, why Mary Robinson was the most interesting woman of her day, how Georgian theater shaped Jane Austen’s writing, British fastidiousness, Evelyn Waugh’s hidden warmth, Paula’s strange experience with poison pen letters, how American and British couples are different, the mental health crisis among teenagers, the most underrated Beatles songs, the weirdest thing about living in Arizona, and more.
This was one of the most fun — and funny — CWTs of all time. But those parts are best experienced in context, so I’ll give you an excerpt of something else:
COWEN: Your book on Evelyn Waugh, the phrase pops up, and I quote, “naturally fastidious.” Why can it be said that so many British people are naturally fastidious?
BYRNE: Your questions are so crazy. I love it. Did I say that? [laughs]
COWEN: I think Evelyn Waugh said it, not you. It’s in the book.
BYRNE: Give me the context of that.
COWEN: Oh, I’d have to go back and look. It’s just in my memory.
BYRNE: That’s really funny. It’s a great phrase.
COWEN: We can evaluate the claim on its own terms, right?
BYRNE: Yes, we can.
COWEN: I’m not sure they are anymore. It seems maybe they once were, but the stiff-upper-lip tradition seems weaker with time.
BYRNE: The stiff upper lip. Yes, I think Evelyn Waugh would be appalled with the way England has gone. Naturally fastidious, yes, it’s different to reticent, isn’t it? Fastidious — hard to please, it means, doesn’t it? Naturally hard to please. I think that’s quite true, certainly of Evelyn Waugh because he was naturally fastidious. That literally sums him up in a phrase.
COWEN: If I go to Britain as an American, I very much have the feeling that people derive status from having negative opinions more than positive. That’s quite different from this country. Would you agree with that?
Definitely recommended, one of my favorite episodes in some while. And of course we got around to discussing Paul McCartney and Liverpool…