In a paper that just won the JPE’s Robert Lucas Prize, Desmet, Krisztian Nagy and Rossi-Hansberg model the evolution of the world economy over the next 400-600 years! Is it laughable or laudatory? I’m not entirely sure. The paper does have an insight that I think is very important, in addition to a number of methodological advances.
If we look around the world today we see that the places with the densest populations, such as China and India, are poor. But in the long-run of history that doesn’t make sense. As Paul Romer, and others, have emphasized, ideas are the ultimate source of wealth and more people means more ideas. As a result, innovation and GDP per capita should be higher in places and times with more people. The fact that China and India are poor today is an out-of-equilibrium anomaly that happened because they were slower than the West to adopt the institutions of free markets and capitalism necessary to leverage ideas into output. China and India weren’t relatively poor in the past, however, and they won’t be relatively poor in the future. With that in mind, a key long-run prediction of Desmet, Krisztian Nagy and Rossi-Hansberg becomes clear. If people are not allowed to migrate then the places that are densest today will not only equal the West, they will overtake the West in innovation and productivity.
One of the key determinants of these patterns is the correlation between GDP per capita and population density. As we mentioned above, the correlation is negative and weak today, and our theory predicts that, consistent with the evidence across regions in the world to-day, this correlation will become positive and grow substantially over the next six centuries, as the world becomes richer. Two forces drive this result. First, people move to more productive areas, and second, more dense locations become more productive over time since investing in local technologies in dense areas is, in general, more profitable. Migration restrictions shift the balance between these two mechanisms. If migration restrictions are strict, people tend to stay where they are, and today’s dense areas, which often coincide with developing countries, become the most developed parts of the world in the future…. In comparison, most of today’s high-productivity, high-density locations in North America, Europe, Japan, and Australia fall behind in terms of both productivity and population.
Thus, if migration restrictions are strict, density is destiny and the dense parts of the world will rule. But what if migration restrictions are loosened?
… if migration restrictions are lifted, then people today move to the high-productivity regions such as Europe and the United States and these regions become denser and so remain the high-productivity regions in the future. World welfare in this scenario goes up by a factor of three.
It’s much better to remove migration restrictions today because we get to a much richer world, faster. In addition, population is better distributed in accordance with natural amenities. All is not perfectly rosy, however, in the free migration scenario. So let’s conclude with a few sentences that would make Hari Seldon proud.
[in the free migration scenario]…growth in utility drops substantially in the short run as many people move to areas with high real GDP; hence these areas be-come more congested and become worse places to live (lower amenities). This initial loss in growth is, however, compensated in the long run by a large surge in productivity growth after year 2200.
As always, note that the descriptions are mine and reflect my priorities, as the self-descriptions of the applicants may be broader or slightly different. Here goes:
Michelle Rorich, for her work in economic development and Africa, to be furthered by a bike trip Cairo to Capetown.
Jeffrey C. Huber, to write a book on tech and economic progress from a Christian point of view.
Mayowa Osibodu, building AI programs to preserve endangered languages.
David Forscey, travel grant to look into issues and careers surrounding protection against election fraud.
Jennifer Doleac, Texas A&M, to develop an evidence-based law and economics, crime and punishment podcast.
Fergus McCullough, University of St. Andrews, travel grant to help build a career in law/history/politics/public affairs.
Justin Zheng, a high school student working on biometrics for cryptocurrency.
Kyle Eschen, comedian and magician and entertainer, to work on an initiative for the concept of “steelmanning” arguments.
Here is the first cohort of winners, and here is the second cohort. Here is the underlying philosophy behind Emergent Ventures. Note by the way, if you received an award very recently, you have not been forgotten but rather will show up in the fourth cohort.
That is the topic of my latest Bloomberg column, worth reading as an integrated whole. Here is one excerpt:
The stories have so much religious significance that it is easy to miss the embedded tale of technology-led economic growth, similar to what you might find in the work of Adam Smith or even Paul Romer. Adam and Eve eat of “the tree of knowledge, good and evil,” and from that decision an entire series of economic forces are set in motion. Soon thereafter Adam and Eve are tilling the soil, and in their lineage is Tubal-Cain, “who forged every tool of copper and iron.”
Living standards rise throughout the book, and by the end we see the marvels of Egyptian civilization, as experienced and advised by Joseph. The Egyptians have advanced markets in grain, and the logistical and administrative capacities to store grain for up to seven years, helping them to overcome famine risk (for purposes of contrast, the U.S. federal government routinely loses track of assets, weapons, and immigrant children). It is a society of advanced infrastructure, with governance sophisticated enough to support a 20 percent tax rate (Joseph instructs the pharaoh not to raise it higher). Note that in modern America federal spending typically has run just below 20 percent since the mid-1950s.
Arguably you can find a story of quantitative easing in Genesis as well. When silver is hard to come by, perhaps because of deflationary forces, the Egyptian government buys up farmland and compensates the owners with grain.
Most of all, in the Genesis story, the population of the Middle East keeps growing. I’ve known readers who roll their eyes at the lists of names, and the numerous recitations of who begat whom, but that’s the Bible’s way of telling us that progress is underway. Neither land nor food supplies prove to be the binding constraints for population growth, unlike the much later canonical classical economics models of Malthus and Ricardo.
There is much more at the link.
Pentecostalist Churches, like Macedo’s Igreja Universal do Reino de Deus, which promise instant wealth, offer competing live prophecies and other supernatural theatre, and exorcise demons in public. The leading Brazilian polling organisation, Datafolha, estimated them at 30 per cent of the voting population this time around, and they have electoral discipline…
The evangelists are everywhere. In the prisons, in the favelas, among the black poor, but increasingly also appealing to the financially insecure middle classes. Over the last decade, defections from the Catholic population are estimated at 1 per cent per year, but this is arguably accelerating. Bolsonaro may not achieve much else, but he may well prove to be the first president of post-Catholic Brazil, with a new moral order perpetuated by a new television regime. The rest of Latin America is not far behind.
Such is life in Bolsonaro’s Brazil! Here is the full piece, a letter to the LRB by Christopher Lord, via Alexander Papazian.
1. There are more angels.
2. Satan plays a larger role.
3. There is virtually no literary suspense.
4. Adam is not made in God’s image.
5. There is considerably less complexity of narrative perspective.
6. Allah does not speak directly, rather it is all coming from Allah.
7. Noah is more of a prophet of doom, and Abraham (“the first Muslim”) is a more important figure.
8. The Abraham story is more central.
9. Isaac is aware that he is slated for sacrifice, and accepts his fate. (That he is not killed of course you can think of as an “alternative” to the Christ story, namely that the blessed do not have to undergo a brutal, ugly death.)
10. The covenant with God is not national or regional in its origins.
For those points I drew upon my interpretations of Jack Miles, God in the Qu’ran, among other sources.
…compared to some other religions, Mormonism is not doing too badly. Mormonism’s US growth rate of .75 percent in 2017 — kept in positive territory by still-higher-than-average fertility among Mormons — is actually somewhat enviable when compared to, for example, the once-thriving Southern Baptists, who have bled out more than a million members in the last ten years. Mormonism is not yet declining in membership, but it has entered a period of decelerated growth. In terms of congregational expansion, the LDS Church in the United States added only sixty-five new congregations in 2016, for an increase of half a percentage point. In 2017, the church created 184 new wards and branches in the United States, but 184 units also closed, resulting in no net gain at all.
By some estimates (p.7), only about 30 percent of young single Mormons in the United States go to church regularly. The idea of the Mormon mission, however, is rising in import:
More than half of Mormon Millennials have served a full-time mission (55 percent), which is clearly the highest proportion of any generation; among GenXers, 40 percent served, and in the Boomer/Silent generation, it was 28 percent.
In contrast, “returning to the temple on behalf of the deceased” is falling (p.54).
Mormons are about a third more likely to be married than the general U.S. population, 66 to 48 percent. But note that 23 percent of Mormon Millennials admit to having a tattoo, against a recommended rate of zero (p.162).
And ex-Mormon snowflakes seem to be proliferating. For GenX, the single biggest reason giving for leaving the church was “Stopped believing there was one church”. For Millennials, it is (sadly) “Felt judged or misunderstood.”
That is all from the new and excellent Jana Riess, The Next Mormons: How Millennials are Changing the LDS Church.
Oxford University Press also sent me a copy of J. Brian O’Roark Why Superman Doesn’t Take Over the World: What Superheroes Can Tell us About Economics, which I have not yet read.
I will be doing a Conversation with him, no associated public event. So what should I ask him?
Here are previous MR entries on Knausgaard. Here is Knausgaard’s forthcoming book So Much Longing in So Little Space: The Art of Edvard Munch.
Missionaries for The Church of Jesus Christ of Latter-day Saints can now call, text or video chat weekly, the First Presidency announced Friday.
This update to guidelines regarding communication between full-time missionaries and their families follows a decades-long tradition of missionaries only calling home twice a year — on Christmas and on Mother’s Day.
Effective immediately, the Church’s 65,000 missionaries are authorized to communicate with their families each week on preparation day by text messages, online messaging, phone calls and video chats, in addition to letters and emails.
Here is the transcript and audio, here is the summary:
Jordan Peterson joins Tyler to discuss collecting Soviet propaganda, why he’s so drawn to Jung, what the Exodus story can teach us about current events, his marriage and fame, what the Intellectual Dark Web gets wrong, immigration in America and Canada, his tendency towards depression, Tinder’s revolutionary nature, the lessons from The Lord of the Rings and Harry Potter, fixing universities, the skills needed to become a good educator, and much more.
Here is one bit:
COWEN: Your peers in the Intellectual Dark Web — the best of them — what is it they’re wrong about?
PETERSON: Oh, they’re wrong about all sorts of things. But at least they’re wrong in all sorts of interesting ways. I think Sam Harris, for example — I don’t think that he understands. I don’t think that he’s given sufficient credence to the role that religious thinking plays in human cognition.
I think that’s a huge mistake for someone who’s an evolutionary biologist because human religious thinking is a human universal. It’s built into our biology. It’s there for a reason. Although Sam is an evolutionary biologist, at least in principle, with regards to his thinking, he’s an Enlightenment rationalist when it comes to discussing the biology of religion, and that’s not acceptable.
It’s the wrong time frame. You don’t criticize religious thinking over a time frame of 200 years. You think about religious thinking over a time frame of 50,000 years, but probably over a far greater time span than that.
COWEN: So if that’s what Sam Harris doesn’t get —
COWEN: If we turn to senior management of large American companies, as a class of people — and I know it’s hard to generalize — but what do you see them as just not getting?
PETERSON: I would caution them not to underestimate the danger of their human resources departments.
Much more than just the usual, including a long segment at the end on Jordan’s plans for higher education, here is one bit from that:
Universities give people a chance to contend with the great thought of the past — that would be the educational element. To find mentors, to become disciplined, to work towards a single goal. And almost none of that has to do with content provision. Because you might think, how do you duplicate a university online? Well, you take lectures and you put them online, and you deliver multiple-choice questions. It’s like, yeah, but that’s one-fiftieth of what a university is doing.
So we’ve just scrapped that idea, and what we’re trying to do instead is to figure out, how can you teach people to write in a manner that’s scalable? That’s a big problem because teaching people to write is very, very difficult, and it’s very labor intensive and expensive. So that’s one problem we’d really like to crack. How can you teach people to speak? And can you do that in a scalable manner as well?
Definitely recommended, even if you feel you’ve already heard or read a lot of Jordan Peterson.
Lots of economic history in this one, with the underlying themes of persecution and tolerance, here is the audio and video.
We talk about the evolution of anti-Semitism, how the Black Death influenced Europe, the economics and politics of volcanic eruptions, how much prejudice will come back, amateur astronomy, Jared Diamond, cousin marriage and the origins of the West, why England was a coherent nation-state so early, the origins of the Industrial Revolution, Schindler’s List, and more. I split the time between the two, here is one excerpt:
JOHNSON: Mark and I have done a lot of work on building datasets of Jewish persecution and Jewish expulsions at the city level and the country level in Europe over a very long period of time. And a question that I, for one, don’t fully understand is, you don’t need to actually kill all the Jews or expel them in order to extract resources from them. In fact, in some way, this is off the equilibrium path. You’re no longer in some optimal equilibrium for both the ruler and for the Jewish community.
Oftentimes, these Jewish communities would be expelled from a city, they would be invited to come back, and they would come back — in 5, 10, 15 years, sometimes even shorter. But that’s a little bit easier to understand.
In the case I gave you in England in 1290s, I think I understand a little bit about why it might have happened that way. I think it was signaling credibility in some political compact between the king and the nobles, but I’m not sure. But that’s an example of top down.
Other times, clearly, people are . . . You have, say, guilds moving against these Jewish communities. An example of this would be in 1614, when the most well-known Jewish persecution was in Frankfurt am Main. It was called the Fettmilch Massacre. Fettmilch was a baker. He was in guild, and he was upset about the terms of the political deal between the city rulers — the city council — and what the guilds were getting. One of the things that the guilds wanted were the Jews to be expelled. This was competition in some sense.
There was this bit from me:
COWEN: If the Black Death raised wages, does that mean that immigration today lowers wages?
COWEN: Large volcanic eruptions earlier in history. From an economic point of view, what’s the single most interesting thing we know about them?
JOHNSON: I think what’s very interesting about the volcanic eruptions is that we are discovering more and more that they may have played a large role in political change that occurred. Joe Manning at Yale, and I believe his graduate student (Bruce M.S. Campbell) have been doing work on . . . They looked at a series of volcanic eruptions that led to the end of the pharaonic empire. That ended around 30 or 60 BC, I forget. Right around that time.
That was an empire that lasted for 300 years, but they experienced all these crop failures. And then once you look at it, you see that in Indonesia, all these major volcanic eruptions were happening in perfect timing with these crop failures that were taking place. Actually, they can tell from looking at the Nile and how much it’s flooding and things.
COWEN: Politics becomes nastier when the volcano goes off?
And from Mark Koyama:
COWEN: Why was China, as a nation or territory, so large so early in world history?
KOYAMA: Yeah, that’s a great question. There are several potential explanations, one of which is geographic. Another one would be an argument from the writing system. But I think the geography story is quite important. Jared Diamond, building on people like Eric Jones, argued that China’s geography . . .
Essentially there are two core geographic regions in China around the Yellow and Yangtze river deltas, which produced a huge amount of grain or rice. If you control those core regions, you can raise large armies. You can have a large population and dominate the subsequent regions.
Whereas, the argument is for Europe that these core regions are, perhaps, arguably more separated by geographical boundaries. The limitation of that argument on its own is that geography is static, so it doesn’t really tell you anything about the timing.
The interesting thing about China, in my view, is not just that it was once unified, or unified early. But it’s persistently unified. It reunifies. Interestingly enough, the periods of de-unification get consistently smaller. So there are always periods where it’s fragmented, like the warlord period in the early 20th century, but over time may become smaller.
Europe doesn’t seem to have that centrifugal force, so a lot of Europe is unified by the Romans, but it’s not able to come back together along those lines later.
And the argument that I put forward in an article with Tuan-Hwee Sng and Chiu Yu Ko of National University of Singapore is that it’s not just the core geographical reason. That’s part of it. But actually, the periodic threat from a nomadic steppe is another key factor.
This is geographic because China has a very sharp slope from really productive agricultural land to land which is only fit for horses, for Eurasian steppe. China could be invaded very easily from the north by these steppe nomads, whereas Europe — it was much less vulnerable to this. And that helps to explain why the Chinese state is often a northern state.
So if I can add, if you think about China today, or even China in the past, the really productive land — a lot of it’s in the quite far south, in Shanghai, Yangtze delta. But the political center of China is near Beijing, or it’s in the north. And that’s due to this political economy threat from the steppe. And it’s these periodic steppe invasions which we argue are responsible for the centralization, an almost militarized character of the Chinese state through history.
COWEN: Max Weber. Overrated or underrated?
KOYAMA: Because most people just know the Protestant theory, and they misreport it. Whereas, actually, his most interesting stuff is on Chinese religion and ancient Judaism. And the role of —
COWEN: The history of music, right?
There is much more at the link. I am very happy to recommend their forthcoming book Persecution and Tolerance: The Long Road to Religious Freedom.
They are my colleagues, and both are economic historians, and they have an important forthcoming book Persecution and Toleration: The Long Road to Religious Freedom. I will be doing a Conversation with them.
More generally they have worked on state capacity, nation building, why China evolved into such a large political unit, the Black Death, scapegoating, usury prohibitions in history, the economic impact of volcanic eruptions, and more. I am always happy to see them.
Here are some notices. In addition to her duties for the Church, she was an art historian “for the people.” I thought she had a remarkably good eye, and was especially strong in explaining the virtues of late medieval/early Renaissance art, most of all works “from a school” or attributed to a pseudonym. She was “a thing” in the 90s, so if you don’t know her work I would recommend all of her books, they are full of life and love for art and yes love for the reader too. Here is the NYT obituary.
Research in the Journal of Cognition and Development in 2011 shows that 83% of 5-year-olds think that Santa Claus is real, the study’s lead author, Jacqueline Woolley, wrote in The Conversation last year.
“We have found in more recent studies that that number of 85% sounds about right,” said Thalia Goldstein, assistant professor of applied developmental psychology at George Mason University in Fairfax, Virginia.
“Children’s belief in Santa starts when they’re between 3 and 4 years old. It’s very strong when they’re between about 4 and 8,” she said. “Then, at 8 years old is when we start to see the drop-off in belief, when children start to understand the reality of Santa Claus.”
What about across the pond? They seem to be asleep over there:
Of 161 parents in the United Kingdom, 92.5% thought Father Christmas was real for their children up to the age of 8, according to a research paper presented at the annual meeting of the European Early Childhood Education Research Association in Finland in 1999.
And here is a study vulnerable to the replication crisis:
The interviews revealed that 39.2% of the children believed that the man they visited was the same Santa who came down their chimneys…1.3% had a somewhat “adult belief,” Goldstein said, in which they said that the man was not Santa and did not live at the North Pole but could communicate with the real Santa.
That is a CNN article from last year. Why is the word “marginal” declining in popularity? How many seven year olds know what “marginal” means? How many know not to believe everything the President says? How many understand hedging?
Are majority-Muslim countries laggards when it comes to developing liberal economic institutions? Using an Index of Economic Freedom and its component parts, this study finds that Muslim-dominant countries (>50% of the population) are positively associated with free-market capitalism. Protestant dominance is also positively correlated, but the association stems from just two components of the index, mainly “legal security and property rights protection.” Surprisingly, Protestant countries correlate negatively with “small government” and “freedom to trade,” two critical components of free-market capitalism. Muslim dominance shows positive correlations with all areas except for “legal security and property rights.” The results are consistent when assessing similar variables measuring property rights and government ownership of the economy collected by the Varieties of Democracy Project. Capitalistic policies and institutions, it seems, may travel across religions more easily than culturalists claim.