Category: Uncategorized

Thursday assorted links

by  Tyler Cowen

1. The politics of CEOs.

2. My BBS comment with Michelle Dawson on social motivation and autism, full set of comments here.

3. Spain’s economic success.

4. Lama’s questions to ask people (“Skip the small talk”).

5. “Privatization of public goods can cause population decline“: but it’s about microbials.

6. More Magnus.

7. Many academics give advice to their younger selves — many sad, pathetic and whiny, self-pitying answers, really an indictment of sorts.  Why did so few of the respondents say: “I had one of the most remarkable guaranteed jobs in history, and I used it somewhat to help the world, but I wish I had used it so much more”?

Every era’s monetary and financial institutions are unimaginable until they’re real

by  Tyler Cowen in

That is the column subtitle, the actual title is “The Lesson of Bretton Woods.”  Note that yesterday was the 75th anniversary of the signing of the final agreement.  Here is one excerpt:

The Bretton Woods arrangements also seemed highly unlikely until they were in place. They involved a complicated system of exchange rate pegs, capital controls and a “gold pool” (and other methods) to control gold prices and redemption ratios. What’s more, the whole thing was dependent on America’s role as global hegemon, both politically and economically. The dollar still was tied to gold, and the other major currencies tied to the dollar, but as the system evolved it required that no one was too keen to redeem dollars for gold (the French unwillingness to abide by this stricture was one proximate cause of the collapse of Bretton Woods).

I don’t think a monetary economist from, say, 1890 could have imagined that such an arrangement would prove possible, much less successful. Yet the Bretton Woods arrangements had a wonderful track record, as the 1950s and 1960s generated strong economic growth for both the U.S. and Western Europe.

At the same time, once Bretton Woods ended in the early 1970s, few people thought it was possible to turn back the clock. The system required the U.S. to be a creditor nation, to hold much of the world’s gold stock, and for countries such as France to defer to American wishes on gold convertibility. Once again, the line between an “imaginable” and “unimaginable” monetary arrangement proved to be a thin one.

As I point out in the piece, today’s arrangements of fiat currencies and (mostly) floating rates were unimaginable to most previous thinkers, including Keynes.  Here is the column’s closing bit:

So as you consider the legacy of Bretton Woods this week, remember that core lesson: There will be major changes in monetary and institutional arrangements that no one can even imagine right now. Assume the permanency of the status quo at your peril.

Tuesday assorted links

by  Tyler Cowen

1. Health care and Medicaid effectiveness: “We find a 0.13 percentage point decline in annual mortality,
a 9.3 percent reduction over the sample mean, associated with Medicaid expansion for this population. The effect is driven by a reduction in disease-related deaths and grows over time…”

2. Some new Greg Clark results on heritability.

3. David Brooks on top artworks (NYT).  And Ross Douthat on stagnation (NYT).

4. RIP Marylou Whitney, passing of an age.  The NYT obit is better yet.

5. Six-figure deal for Claudia Goldin at Princeton University Press.

6. China’s payments of intellectual property fees over time.

My favorite things New Hampshire

by  Tyler Cowen in

1. Musician.  I don’t love Steve Tyler/Aerosmith, so what am I left with?

2. Author: I find John Irving unreadable, so does it come down to Russell Banks?  Who else is there?  Salinger lived in New Hampshire for a long time, so I’ll pick him, though it is also pretty far from my favorite.  Here is my Catcher in the Rye review.

3. Sculptor: August Saint-Gaudens.

“Law Supported by Power and Love”

 

4. Adam Sandler movie: The Waterboy, Happy Gilmore.

5. Poet: Robert Frost, who seems to be clear winner for the whole state.  There is a scholastic version of Frost which is quite dull, don’t be put off if that is all you know of him.

6. Movie director: Brian DePalma, Dressed to Kill and Mission to Mars being my favorites.

7. Painter: Maxfield Parrish.  I feel I’m being forced into many of these choices — I simply can’t think of anyone else.

8. Secretary of the Treasury: Salmon P. Chase.  Chase is one of the few people to have had a major position in the executive branch, served in Congress, and sat on the Supreme Court.

9. Free trade economist: Douglas Irwin.

The bottom line: For all of my grumbling, for such a small state it does pretty well.

Saturday assorted links

by  Tyler Cowen

1. The culture that is West Palm Beach: “The loop of “Baby Shark” and “Raining Tacos” is a temporary fix to keep homeless people off the patio.”

2. Federal Reserve comic books now on-line.

3. Why are women’s voices deeper today?

4. Alien beauty subverts world of fashion.

5. Could the Apollo moon landing be duplicated today?

6. “We are granting early access to our India local data series: 500k villages, 8000 towns, 4000 constituencies. 25 years of admin data on firms, public goods, consumption, labor, elections, demographics, forest cover, etc.. All hyperlocal.”  Link here.

From the comments, what if big business hated your family?

by  Tyler Cowen in

Suppose Big Business did hate your family, what would that look like?

Would it mean adopting a working culture that made it ever harder to rise to power within it while also having said family? Would it require those with career ambitions to geographically abandon extended family and to live in areas notoriously difficult for raising families? Would it mean requiring long delays on family formation while you got credentialed, worked with little remuneration while getting your foot in the door, and then place huge amounts of time and effort on career growth rather than investing in your family? Does corporate culture act like it hates your family?

Would it mean selling products which have strong correlations with family strife and dissolution? Would it market products known to be destructive to thousands of families relentlessly? Would it market products that consume time in great quantities at the expense of family time investment? Would it routinely mock and denigrate your family roles for cheap publicity?

Would it mean lobbying for policies which are good for the business, but bad for your family? Would it support seeking a larger supply of labor via immigration? Would it support visa restricted immigration of labor that is less able to defy corporate diktat without having legal or financial issues? Would it argue for child care subsidies for the people it wishes to employee rather than for all Americans and all child care arrangements?

I believe businesses are amoral and are just maximizing money, power, and prestige for those in positions of power within them. Yet, this formal indifference seems to be giving rise to a lot of behaviors that are, at best, perceived to be hostile to families. I mean what exactly are the pro-family things that business endeavors to do? Provide a cornucopia of goods and services? I guess, but that seems pretty neutral at best for supporting families as opposed to other societal arrangements.

Because everything is political these days, and particularly because Big Business has decided to be political we might ask how corporations compare to families. The majority of American families (even if we include everything except single adults living alone) have priorities that diverge significantly from business. If we take a slightly stricter view of “family” as either parents or married, we find business diverges even more from the median family.

After all, both the median parent and the median spouse are vastly more religious than the country as a whole. Both are vastly more likely to vote Republican. And even within the Democratic party, marrieds or parents tend to be right of their unmarried and childless peers. When it comes to the expressed preferences of the median “family”, the median corporation is in opposition most of the time. On the many issues where the nation is split near 50/50, business comes down on the side with more single, childless people the vast majority of the time. And hence they are ever more often backing the partisan politics opposed to the wishes of the majority of families.

There is nothing wrong with this, and certainly nothing illegal about it, but I would be shocked if large organizations that are disproportionately filled with the single and childless who are located in regions that are disproportionately single and childless and who are busy virtue signalling to academia, politics, and other left bastions that are disproportionately single and childless managed to somehow not end up at cross purposes for the majority of families. And frankly I would be shocked if this antagonism did not spill over into emotional terms.

Certainly, I am always told that this sort of analysis is why [Structure X] is antagonistic, if only implicitly, against racial minorities. I see no reason why parents or spouses would feel any differently.

That is from Sure.

Rhino bond markets in everything

by  Tyler Cowen

Conservationists have started marketing a five-year rhino bond, which bankers say will be the world’s first financial instrument dedicated to protecting a species.

Investors in the $50m bond will be paid back their capital and a coupon if African black rhino populations in five sites across Kenya and South Africa increase over five years. The yield will vary depending on changes in the rhino population, which has fallen rapidly since the 1970s.

The bond is likely to have different categories of investment, with some investors taking a “first loss” position. If rhino numbers drop, those investors will lose their money depending on the scale of the decline and the terms of their investment, while investors in other categories will be repaid.

That is from John Aglionby at the FT.

Thursday assorted links

by  Tyler Cowen

1. They think these are the 25 most important contemporary artworks (NYT).  Someone is in trouble, and I do not think it is me.  I will endorse Kara Walker, however.

2. “...irrelevant non-mathematical knowledge interferes with the identification of basic, single-step solutions to arithmetic word problems, even among experts who have supposedly mastered abstract, context-independent reasoning.”

3. Full video of the new Peter Thiel talk.  And Eric Weinstein and Peter Thiel podcast.

4. Is the restaurant revolution over?

5. Interview with Enrico Moretti.

6. Where do self-driving vehicles stand now? (NYT)

7. Matt Levine on Libra.

My Conversation with Neal Stephenson

by  Tyler Cowen in

Here is the transcript and audio, and here is the CWT summary:

If you want to speculate on the development of tech, no one has a better brain to pick than Neal Stephenson. Across more than a dozen books, he’s created vast story worlds driven by futuristic technologies that have both prophesied and even provoked real-world progress in crypto, social networks, and the creation of the web itself. Though Stephenson insists he’s more often wrong than right, his technical sharpness has even led to a half-joking suggestion that he might be Satoshi Nakamoto, the shadowy creator of bitcoin. His latest novel, Fall; or, Dodge in Hell, involves a more literal sort of brain-picking, exploring what might happen when digitized brains can find a second existence in a virtual afterlife.

So what’s the implicit theology of a simulated world? Might we be living in one, and does it even matter? Stephenson joins Tyler to discuss the book and more, including the future of physical surveillance, how clothing will evolve, the kind of freedom you could expect on a Mars colony, whether today’s media fragmentation is trending us towards dystopia, why the Apollo moon landings were communism’s greatest triumph, whether we’re in a permanent secular innovation starvation, Leibniz as a philosopher, Dickens and Heinlein as writers, and what storytelling has to do with giving good driving directions.

Here is one excerpt:

COWEN: If we had a Mars colony, how politically free do you think it would be? Or would it just be like perpetual martial law? Like living on a nuclear submarine?

STEPHENSON: I think it would be a lot like living on a nuclear submarine because you can’t — being in space is almost like being in an intensive care unit in a hospital, in the sense that you’re completely dependent on a whole bunch of machines working in order to keep you alive. A lot of what we associate with freedom, with personal freedom, becomes too dangerous to contemplate in that kind of environment.

COWEN: Is there any Heinlein-esque-like scenario — Moon is a Harsh Mistress, where there’s a rebellion? People break free from the constraints of planet Earth. They chart their own institutions. It becomes like the settlements in the New World were.

STEPHENSON: Well, the settlements in the New World, I don’t think are a very good analogy because there it was possible — if you’re a white person in the New World and you have some basic skills, you can go anywhere you want.

An unheralded part of what happened there is that, when those people got into trouble, a lot of times, they were helped out by the indigenous peoples who were already there and who knew how to do stuff. None of those things are true in a space colony kind of environment. You don’t have indigenous people who know how to get food and how to get shelter. You don’t have that ability to just freely pick up stakes and move about.

And:

COWEN: What will people wear in the future? Say a hundred years from now, will clothing evolve at all?

STEPHENSON: I think clothing is pretty highly evolved, right? If you look at, yeah, at any garment, say, a shirt — I was ironing a shirt today in my hotel room, and it is a frickin’ complicated object. We take it for granted, but you think about the fabric, the way the seams are laid out.

That’s just one example, of course, but you take any — shirts, shoes, any kind of specific item of clothing you want to talk about — once you take it apart and look at all the little decisions and innovations that have gone into it, it’s obvious that people have been optimizing this thing for hundreds or thousands of years.

New materials come along that enable people to do new kinds of things with clothing, but overall, I don’t think that a lot is going to change.

COWEN: Is there anything you would want smart clothing to do for you that, say, a better iPad could not?

STEPHENSON: The thing about clothing is that you change your clothes all the time. So if you become dependent on a particular technology that’s built into your shirt, that’s great as long as you’re wearing that shirt, but then as soon as you change to a different shirt, you don’t have it.

So what are you going to do? Are you going to make sure that every single one of your shirts has that same technology built into it? It seems easier to have it separate from the clothing that you wear, so that you don’t have to think about all those complications.

There is much more at the link, including discussions of some of his best-known novels…

Pessoa, *Philosophical Essays*

by  Tyler Cowen in

The half-sceptic speaks like Socrates, I know only that I know nothing.  The whole sceptic speaks like Francisco Sanches: Haud scio me nihil scire, I do not even know if I know nothing.

And:

The end of reason is a weariness of thinking.  Yet reason is so strong that even its weariness is a part of its strength and we dream rationally if we have learnt reason.

Those bits are from this (uneven) volume.

What is the America-China trade war all about?

by  Tyler Cowen in

That is the subject of my latest Bloomberg column, and here are the closing bits:

So that means the trade war is really all about Huawei and Taiwan. If the U.S. persists in trying to eliminate Huawei as a major company, by cutting off its American-supplied inputs and intimidating foreign customers and suppliers for Huawei equipment, it will be difficult for the Chinese to accept. In this case, the reluctance to make a deal will be on the Chinese side, and the structure and relative power of the various American interest groups are not essential to understanding the outcome.

The question, then, is whether the U.S. national security establishment, and in turn Congress (which has been heavily influenced on this question), will accept a compromise on Huawei. Maybe that means no Huawei communications technologies for the U.S. and its closest intelligence-sharing allies, but otherwise no war against the company. That is the first critical question to watch in the unfolding of this trade war. The answer is not yet known, though it seems Trump is willing to deal.

The second major question, equally important but less commented upon, is Taiwan. China has long professed a desire to reunite Taiwan with the mainland, using force if necessary. If you belong to the U.S. national security establishment, and you think a confrontation with China is necessary sooner or later, if only because of Taiwan, you would prefer sooner, before China gains in relative strength. And that militates in favor of the trade war continuing and possibly even escalating, as the U.S. continues to push against China and there is simply no bargain to be had.

It is far from clear what a U.S.-China deal over the status of Taiwan could look like. How much Americans actually care about Taiwan is debatable, but the U.S. is unlikely to abandon a commitment that would weaken its value as an ally around the world. And unlike with Huawei, it is difficult to see what a de-escalation of this issue might look like.

So: If the Huawei and Taiwan questions can be resolved, then the trade war should be eminently manageable. Now, does that make you optimistic or pessimistic?

There is much more at the link.