Category: Uncategorized

My excellent Conversation with Jacob Mikanowski

by  Tyler Cowen in

Here is the audio, video, and transcript.  Here is the episode summary:

Jacob Mikanowski is the author of one of Tyler’s favorite books this year called Goodbye, Eastern Europe: An Intimate History of a Divided Land. Tyler and Jacob sat down to discuss all things Eastern Europe, including the differences between Eastern and Western European humor, whether Poles are smiling more nowadays, why the best Polish folk art is from the south, the equilibrium for Kaliningrad and the Suwałki Gap, how Romania and Bulgaria will handle depopulation, whether Moldova has an independent future, the best city to party in, why there are so few Christian-Muslim issues in Albania, a nuanced take on Orbán and Hungarian politics, why food in Poland is so good now, why Stanisław Lem hasn’t gotten more attention in the West, how Eastern Europe has changed his view of humanity, his ideal two week itinerary in the region, what he’ll do next, and more.

Here is one excerpt:

COWEN: Why isn’t Stanisław Lem more popular in the West today as a writer?

MIKANOWSKI: That’s interesting. I grew up on Stanisław Lem like some people grow up on the Grimms’ Fairy Tales. My dad’s a computer scientist. His father set up one of Poland’s first computers. The world of Polish science and science fiction: he used to read the Tales of Pirx the Pilot and the Ijon Tichy stories — the robots, the short, fun ones — like they were fairy tales. I grew up with them.

I think — actually I have trouble going back to those. I’d go back to Solaris, and I think Solaris is a real masterpiece and I think it’s had lasting influence. But there’s something pessimistic about them. They don’t have that thing that Asimov does, or even Dune, of world-building and forecasting the human future far in advance. They are like Kafka in space, and that’s absurd situations, strange turns of events — I think a pretty pessimistic view of progress. Maybe that makes them hard to digest. Also a kind of odd sense of humor with the short stories. Almost a childlike sense of humor that maybe makes them hard to take.

I think there’s been a little bit of a Lem revival, though. I know technologists, some people like them; futurologists like him. I like him.

COWEN: Some of the cybernetics tales, they seem weirdly close to the current state of LLMs. And I think I’ve seen this mentioned once, but it’s not generally known: the idea that you use them to talk to, that they’re weird, they might be somewhat mystical, they serve as therapists or oracles — that’s very much in Lem, quite early.

MIKANOWSKI: I think people should go back to them. I think — I was just thinking of Solaris, which I always thought about as this story about contacting a truly alien alien. Now it’s like, well, this is a little bit of what we’re doing with virtual reality and AI. It’s like, what would happen if you could actually talk to your dreams, if you could revive people? You could have the mimicry of consciousness, the appearance of consciousness, without anything behind it — without a consciousness.

There’s something seductive about it, and there’s something monstrous about it. I think he was there way ahead of anyone else, and people should be going back to them. Maybe they will.

Of course we talk about the Suwalki Gap as well. And this: “Given all your study of Eastern Europe, what is it you feel you understand about the current war in Ukraine that maybe other well-informed people would not?”

Recommended, interesting throughout.  Again, here is Jacob’s new and excellent book Goodbye Eastern Europe: An Intimate History of a Divided Land.

Is Tokyo really a YIMBY success story?

by  Tyler Cowen in

It is common lore in YIMBY circles that Tokyo is such an inexpensive city because Tokyo/Japan has allowed so much freedom to build.  Sometimes it is mentioned that Japanese building and regulatory decisions are made at higher levels than the strictly local, which lowers the power of the NIMBYs to restrict building.

I don’t doubt the key elements of this story, namely that Tokyo real estate is relatively cheap, and also that it is relatively easy to get a certain kind of construction through, including vertical construction, both up and underground.

Yet the more I think about it, the more I tend to believe a very different proposition: Japan is in key ways a very NIMBY country, and its brand of NIMBYism has keeps real estate prices down.

A corollary is this: YIMBYism gets much less credit for low Tokyo real estate prices, and furthermore the low real estate prices are a sign of something having gone wrong on the productivity side, in large part due to regulation.

As a piece of background information, note that Japanese productivity levels are about 60 percent of the United States.  And few have claimed that is because the Japanese do not work hard, or cannot coordinate well.  It is not a low-trust society.

Here are some key ways that Japan has been a NIMBY country, noting that I am not referring so much to construction per se, but rather to high-value, high-productivity construction:

1. Japan has had very tough immigration restrictions.  This has eased considerably, but a) the stock matters not just the flow, and b) current Japanese migrants often are from countries such as Thailand and the Philippines, which fills in for some mid-level jobs, but does not massively boost rents.

2. It is extremely difficult to learn written Japanese.  Among its other effects, this discourages high-value immigrants from settling into very high productivity service jobs in Tokyo or in Japan more generally.

3. Various regulatory and legal decisions have prevented Tokyo from developing into the financial capital of Asia (haven’t you wondered  about this?).  I won’t go into all the detail here, this is the modern world so just ask ChatGPT.  I’m sure you all know that major financial centers usually lead to exorbitant rents, due to the opportunity cost of the land.

4. So, so much of Japanese regulatory policy and culture is geared toward maintaining small retail businesses, super small in scale, and low in productivity.  They do not place much upward pressure on rents.  By the way, this is one reason why tourists find Tokyo so wonderful, but those enterprises lower productivity considerably relative to say Walmarts.  It is no accident that so many Japanese examples populate “Markets in Everything,” that they have cat and furry cafes, and so on.

Now, those are not building restrictions in the sense of passing a law “no such new building may be placed here.”  But they are significant — yes very significant — legal, institutional, and cultural restrictions on building out high productivity, high rent real estate options.  (Are you reminded of the 1980s debates on trade restrictions, when it was pointed out that so many of the Japanese trade barriers were indirect rather than upfront tariffs?  History is repeating itself here.)

The YIMBY movement just doesn’t talk about those indirect NIMBY-like Japanese restrictions so very much, at least not in the context of how they affect rent levels.  Instead, YIMBY wants to take credit for low Tokyo rents, but a much less regulated Tokyo market would in fact be considerably more expensive, not less expensive.

One accurate way to describe Tokyo would be: “They allow a lot of construction, yes.  But they make high value, high productivity construction extremely difficult to pull off.  They have their own Japanese unique blend of YIMBY + NIMBY, where the NIMBY parts of that equation are really a very important reason why Tokyo real estate prices stay so low.  So many factors push construction toward lower productivity construction options.”

And there you go.  Again we see that true YIMBY adds value, or can add value, but it very often raises rather than lowers rents.

*China’s World View: Demystifying China to Prevent Global Conflict*

by  Tyler Cowen in

That is a forthcoming book by David Daokiu Li.  Perhaps it is the very best book explaining “how China works today?”

“What should I read on China?  Which single book?” — those are two of the most common questions I receive.  There are plenty of perfectly fine history books, but I am never sure what I should recommend.  Now I have an answer to that question.  Here is one short excerpt from the text:

Many people in China are concerned with the side effects of the massive anticorruption campaign.  The first side effect is that government officials, especially those dealing with economic affairs, have now become inert.  The reason is that active officials almost surely create enemies or grumbling groups, such as through the demolition of an old building to make room for new investments.  These groups would bring their cases, and perhaps even historical cases, to the party discipline committee.  On their path to promotion and their current positions, most officials have either intentionally or unintentionally engaged in practices that are not in compliance with today’s tighter government rules.  In the Chinese reform process, laws and regulations are gradually implemented and then tightened.  The anticorruption campaign is using today’s tighter regulations to judge the past conduct of officials, which occurred when the rules were either looser or entirely unclear.  As a result, officials today are extremely hesitant to take any action that would make them stand out or draw extra attention, even if those actions are in the best interests of the locale or department they serve.

The author covers much more, including the importance of history, how the CCP works, local governments, SOEs, education, media and the internet, the environment, population, and much more.

There should be a book like this about every country.

I should note that the author lives in Beijing, so he soft pedals some of the more negative interpretations of the data, but ultimately I think this is much more fruitful than the books by journalist outsiders.  The analysis is here, and you can do the moralizing on your own, if that is how you want it.

Definitely recommended, a very real contribution.

Tuesday assorted links

by  Tyler Cowen

1. Can a political candidate promise “no taxes”?  (The culture that is Argentina)

2. Embryologists inundated with requests for sperm retrieval from the fallen and dead.

3. More on chess-playing GPT.

4. Does free play for kids lead to happier adults?

5. New science blog by Ulkar Aghaeva, first post on Merton and multiple discoveries.  NB: Proper link here: https://measureformeasure.co/blog/multiple-discoveries/

6. Dengue outbreak in Italy.

The Effect of Organizations on Physician Prescribing Opioids

by  Tyler Cowen in

Here is one of the more important IO papers in recent times:

In theory, there are several reasons why physician organizational form might affect the price, quantity, and quality of physician services. In this paper, we examine the effect of three aspects of physician organizational form on opioid prescribing: the number of physicians in the physician’s group (if any); the physician’s integration with or employment by a hospital or hospital system; and the average age of the other physicians in the physician’s group. We present three key findings. First, all else held constant, group physicians prescribe far fewer opioids, and prescribe them more appropriately, than do solo physicians. Second, although physicians who are employed by a hospital or practice in a hospital-owned group prescribe fewer opioids than do independent physicians, there is evidence that this difference may be due to differences in the other characteristics of physicians who are hospital-integrated rather than a causal effect. Third, we find substantial peer effects on opioid prescribing. Physicians in groups with a higher average age (excluding the physician him- or herself) prescribe more intensively and are more likely to write inappropriate opioid prescriptions than physicians in younger groups – holding constant the physician’s own age and other characteristics of his or her group.

That is from a new NBER working paper by M. Kate Bundorf, Daniel Kessler, and Sahil Lalwani.

The Great Spanish Estancamiento (from my email)

by  Tyler Cowen in

I’ve read an interesting article over at “El Pais” on the Spanish stagnation ( https://cincodias.elpais.com/opinion/2023-10-10/por-que-no-cambia-el-modelo-productivo-espanol.html , paywalled). Some interesting bits:

–  Spain’s GDP per capita, measured at constant prices in 2022, has shown minimal growth compared to 2007, with just a 0.8 per cent increase over 15 years. Meanwhile, other European countries have seen significant growth: France by 7 per cent, the Netherlands by 10.7 per cent, and Germany by 13.7 per cent.

– Spanish productivity is being dragged down by small businesses, while medium and large companies perform closer to the EU average.The article claims that “la particularidad española es que el peso relativo de estas empresas pequeñas en el tejido productivo es mucho mayor que en los países vecinos”.

My digression: some (https://cepr.org/voxeu/columns/italys-productivity-conundrum-role-resource-misallocation) point out that in Italy TFP is declining because of large firms.

– In 2022, the rate of “early leavers from education and training” has reached 13.9 per cent. In the EU only Romania surpasses Spain in this regard. The authors point to tourism as the main culprit. But in the two EU countries where tourism contributes the largest share to GDP – Croatia and Greece  – the percentage of such young people is the lowest (  https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:V2-early-leavers-230523.png ).

The authors support some sort of industrial policy for Spain as a way to overcome the stagnation. Even with the changing climate of opinion in Brussels and a more mercantilist mindset, I doubt that a full-blown, national industrial policy is possible within the EU. Probably, as with Italy (see: https://www.tandfonline.com/doi/full/10.1080/09538259.2022.2091408 ), without constraints imposed by Brussels, the stagnation wouldn’t be as deep as it is.

It would be great to see a comparative analysis of TFP stagnation in the European South!

That is from Krzysztof Tyszka-Drozdowski.

That was then, this is now, Maori fashion edition

by  Tyler Cowen in

The outfit is distinctly Victorian. A high, vintage lace collar with ruffles cascades over the lapel of a black tailcoat. But it is not meant to be a throwback.

For Debbie Ngarewa-Packer, the co-leader of Te Pati Maori, a New Zealand political party, it is a reclamation of the era when her ancestors first engaged with the British, who began colonizing New Zealand in the early 1800s. She has worn this attire, plus a top hat, in Parliament.

“When you want to get a message out fast, fashion is a way to do it,” she said.

Here is the full NYT story.  Here are further NZ fashion pictures.  I told you the new world was going to be strange…

Monday assorted links

by  Tyler Cowen

1. Those new service sector jobs.  East vs. west coast money.

2. Scottish NIMBY vs. Stella McCartney.  Environmental review is out of control.

3. 104-year-old woman jumps from plane, dies in her sleep a week later.

4. Why not look at fake views in your digital windows?

5. Should Britain “outsource” by sending prisoners abroad to other nations?  If so, to which ones?

6. “One thing that the rise of social media (particularly Twitter) did is to suddenly put Americans in direct contact with people from all over the world, without Americans realizing this. A lot of the radicalization of Americans over the last decade came from overseas.”  From Noah Smith.

7. Marc Andreessen with his Techno-Optimist Manifesto.