Category: Uncategorized
*The Bridge: Natural Gas in a Redivided Europe*
What an excellent book. Imagine somebody — in this case Thane Gustafson — taking all those snippets of gas history you used to read about and turning them into a coherent, well-written narrative. The Dutch disease, Norwegian gas, the origins of Gazprom and Western Siberian reserves, the French decision to go nuclear, and much more. It’s all here. Every topic should have a book like this about it. Excerpt:
Kortunov’s importance as the founder of the Soviet gas industry and the originator of the gas bridge with Europe cannot be overstated. Without his vision and drive, organizational talent, and political skill, the development of West Siberian oil and gas might have been delayed by as much as a generation. Gas exports to Europe would have remained modest, for lack of sufficient ready reserves and a pipeline system through which to ship them. Above all, the rapid displacement of coal and oil by gas in the Soviet primary fuel balance — one of the last successes of the Soviet planned economy — would have taken much longer. By the beginning of the 1990s, when the Soviet Union fell apart and the Soviet oil industry with it, it was the gas industry, by then Russia’s most important source of primary fuel, that kept the Soviet cities heated and lighted, while oil was exported for desperately needed dollars. That was Kortunov’s legacy to the country he so ardently believed in.
Due out in January, you can pre-order your copy here.
Saturday assorted links
1. Australia’s biggest forest fire has now destroyed an area seven times the size of Singapore.
2. Do chimps create rock music by throwing stones? They prefer to throw rocks at trees with a lower, longer-lasting sound.
3. Arnold Kling on the Weinstein and Cowen podcast.
4. Fast. Who will build this index? And how long will it take them?
5. Fighting with China in the Faroes (NYT). By the way, total unemployment there is 183.
Transparent erasers markets in everything there is no great stagnation
To many, Japan seems like a technological wonderland that’s at least a couple of decades ahead of the rest of the world when it comes to innovation. That even applies to something as seemingly mundane as office supplies, as is evident by this new see-through eraser that enhances precision by providing an unobstructed view of what’s actually being erased.
…And with a price tag of around $1.40 for a large version of the Clear Radar, and around 90 cents for a smaller one, Seed isn’t charging an inflated premium for this innovation, so why wouldn’t you upgrade?
Here is the full story, via Samuel Brenner.
Theory of the Nudnik: The Future of Consumer Activism and What We Can Do to Stop it
That is a new paper by Yonathan A. Arbel and Roy Shapira, forthcoming in Vanderbilt Law Review:
Nudniks are those who call to complain, speak with managers, post online reviews, and file lawsuits. Typified by an idiosyncratic utility function and personality traits, nudniks pursue action where most consumers remain passive. Although derided in courtrooms and the court of public opinion, we show that nudniks can solve consumer collective action problems, thereby leading to broad market improvements.
Second, the Article spotlights a disconcerting development: Sellers’ growing usage of Big Data and predictive analytics allows them to identify specific consumers as potential nudniks and avoid selling to or disarm them before they can draw attention to sellers’ misconduct. The Article therefore captures an understudied problem with Big Data tools: sellers can use these tools to shield themselves from market accountability.
Finally, the Article evaluates a menu of legal strategies that would preserve the benefits of nudnik-based activism in light of these technological developments. In the process, we revisit the conventional wisdom on the desirability of form contracts, mandatory arbitration clauses, defamation law, and standing doctrines.
I am posting an on-line review of sorts on this paper, but I am not complaining. But perhaps a few of you are nudniks?
*The Rise of Skywalker* (no real spoilers)
MacGuffins! That said, contrary to many reviews, the plot made perfect sense to me, many scenes were excellent, and the whole thing had a sweep and grandeur that episodes seven and eight completely lacked. It had many of the strengths and flaws (and plot devices) of Return of the Jedi, but after forty-two years of waiting for the series to conclude mostly I went away happy. Believe it or not.
Friday assorted links
1. How big is the space economy?
2. Polemic against Open Source.
3. A Dutch museum that will put out everything it owns, not just the usual five percent (NYT).
4. A simple app to teach regression.
5. David Brooks Sidney Awards (NYT).
Thursday assorted links
1. Losing faith in religion and losing faith in the humanities are somewhat the same thing. The truth of this has not yet been internalized.
2. Sebastian Mallaby reviews Krugman.
3. MIE: Qatar hospital for falcons (NYT).
4. Bowles and Carlin on how to change Econ 101, John Komlos comments. That the 2010s were the best decade in human history is perhaps the first thing they ought to be taught?
5. Yuval Levin best books of the year.
6. “One opinion poll suggested 59% of people believed the Netherlands was now a narco-state…“
Investment CAPM and returns anomalies
We develop a parsimonious general equilibrium production model in which heterogeneity in a small set of firm characteristics coherently explains a wide range of asset pricing anomalies and their linkages. The supply and demand of capital of each firm and equilibrium allocations and prices are available in closed form. Even in the absence of frictions, the model produces a security market line that is less steep than the CAPM predicts and can be nonlinear or downward-sloping. The model also generates the betting-against-beta, betting-against-correlation, size, profitability, investment, and value anomalies, while also fitting the cross-section of firm characteristics.
That is from a recent paper by Sebastian Betermier, Laurent E. Calvet, and Evan Jo, “A supply and demand approach to equity pricing.” As with my other posts on investment CAPM, I am not saying this new approach is either correct or useful, as I genuinely do not know. It’s just that I don’t see too many new ideas in economic theory these days, so when I do I am happy to give them attention.
My Portal podcast with Eric Weinstein
Eric and his team describe it as follows:
In this episode, Eric sits down with Tyler Cowen to discuss how/why a Harvard educated chess prodigy would choose a commuter school to launch a stealth attack on the self-satisfied economic establishment, various forms of existential risk, tech/social stagnation and more. On first glance, Tyler Cowen is an unlikely candidate for America’s most influential economist. Since 2003, Cowen has grown his widely read and revered economics blog Marginal Revolutions with lively thought, insight and prose resulting in a successful war of attrition against traditional thinking. In fact, his well of heterodox thinking is so deep that there is an argument to be made that Tyler may be the living person with the most diverse set of original rigorous opinions to be found in any conversation. The conversation takes many turns and is thus hard to categorize. We hope you enjoy it.
I recall it being about 2.5 hours long, and covering a lot of fresh material, Eric of course is superb. Here is the link. Here is the broader set of Portal podcasts, hosted by Eric.
The new, revamped, and expanded Museum of Modern Art
I was bowled over by the boldness of the new conception and the quality of all the additional art out for view. The new MOMA, by mixing genres and periods and styles, comes close to abolishing the canon. Furthermore, they put out much more art by women and minorities and in the process they made it a much better and more compelling museum. It also refutes the notion that contemporary America is somehow artistically or aesthetically stagnant, keeping in mind that art museums reflect more generally the societies that house, fund, and curate them.
The big winners from the new makeover include Mark Bradford, Kara Walker, Haegue Yang, Yoko Ono, Jacques Tati, Romare Bearden, Annie Albers, Jesús Rafael Soto, Helio Oitcica, Wilfredo Lam, Gego, David Tudor, Cecilia Vicuña, Hector Hyppolyte, Duchamp (his influence more than any work out on display), and Picasso, whose best room still dominates the proceedings and comes across as more universal than before.
As a group I would say the Latin American mid- to late 20th century abstract and conceptual artists gain the most in status and impact.
The big losers are the Abstract Expressionists such as Kline, Rothko, Styll, Motherwell, and the like, as much of this work now looks overblown and also tired compared to what surrounds it. Some of the early twentieth century French art comes across as a bit lost, though not lacking in quality.
My biggest complaint is that Chinese contemporary art still is radically underrepresented.
The bottom line is that America’s best art museum ever just opened, and you probably still haven’t seen it.
Wednesday assorted links
My Conversation with Esther Duflo
Self-recommending if there ever was such a thing, here is the audio and transcript. In addition to all of the expected topics, including gender in the economics profession, we even got around to Indian classical music and Bach cantatas (she prefers the latter). Excerpt:
COWEN: Do you worry much that the RCT method — it centralizes authority in too few institutions? You need a certain amount of money. You need some managerial ability. You need connections abroad. It’s not like running regressions — everyone can do it on their PC. Is that, in some way, going to slow down science? You get more reliable results, but there’s much less competition of ideas, it seems.
DUFLO: I think it would be the case if we had not been mindful of this problem from the beginning. And it might still be the case to some extent. But I actually think that we’ve put a lot of effort in avoiding it to be the case.
When you take an organization like J-PAL, just in India we have 200 staff members. And we have, at any given time, 1,000 people running surveys. I say we, but these people are not running my project. These people are running the projects of dozens and dozens of researchers. When I started, I couldn’t have started without having the backing of my team because it was such a risky proposition that you needed to be able to easy risk capital kind of things.
But at this point, because of the infrastructure, it’s much more normal sense. People can get in with no funding of their own, in part because one of the things we are doing as a network is raising a lot of money to redistribute to other people widely. J-PAL has 400 researchers that are affiliated to it, or invited researchers, many of them quite, quite junior.
So that sort of mixture — it was very important to us, and I think we’ve been quite successful at making the tool marginally available. It’s never going to be like running a regression from your computer. But my philosophy is that if you have the drive and you’re willing to put in your own sweat equity, you can do it. And our students and many other students who are not at top institutions are doing it.
And:
COWEN: On the internet, there’s a photo of a teenage Esther Duflo — at least it looks like you — protesting against fascism in Russia on top of a tank, is it?
DUFLO: That was a bus, and it was me. It was me. So that was in 1991. This was not when I lived for one year there. I lived one year in ’93–’94. But this was in ’91. I had gone to Russia about every year since I was a teen to learn Russian. I happened to be there the summer where there was this putsch against Gorbachev. That summer…
And someone gave me that fashizm ne poletit placard and asked me to hold it. And I’m like, “Sure, I’m going to hold it.” So I’m holding my placard. We stayed there for a long time when things were happening. Next time I saw in the evening, my parents called me, “What are you doing?” Because it turned out that that image was on all the TVs in the world. [laughs] And that’s how I very briefly became the face of this revolution.
And:
COWEN: Does child-rearing in France strike you as more sensible than child-rearing in the United States?
DUFLO: Oh very much so, very much so.
COWEN: And why?
DUFLO: You know that book, Bringing Up Bébé?
COWEN: Yes.
DUFLO: I think she picked up on something which rings so true to me, which maybe is a marginal point about the US versus France. In France people are reasonably content to just go with the flow and do what everybody does. Every kid eats the same thing at 4:30, has dinner at the same time, has gone through the same experiences, learned the same songs, and everybody thinks they are totally free. But in fact, they are all on this pretty sensible railroad. And also, they don’t agonize about it.
In the US, child-rearing is one more occasion to make a statement about your identity. You’re the kind of mother that carries the baby, or you’re the kind of mother that puts the baby in a stroller. And somehow it almost can predict what you’re going to think about Donald Trump. That’s crazy. Some people are so concerned about what they do. Not only they feel that they have to invest a ton in their children, and they feel inadequate if they are not able to, but also, exactly what they do creates them as people.
In France that’s not there, and I think that makes everybody so much more laid back, children and adults.
Recommended throughout.
The cultures that are northern Europe
Here are some extensive travel notes, taken from two years living in Munich, working for a Danish company. Excerpts:
I also think I might just sound negative; like theres a negativity bias in frank descriptions about what people and places are like.
And:
The US, its common wisdom that a resume should only be one page. This is like a basic rules of Resumes, and at places I worked, we would throw out resumes that exceed one page. In Europe, it is uncommon for resumes to be merely one page.
European people will put a picture of their portrait on their resume. I found that weird. It seems to imply they think their looks matter, or that I, the resume reviewer, am the kind of person who thinks their looks matter.
And:
My Danish coworkers were complaining about how young people today find nudity awkward. Both of them viewed the acceptance of nudity and human bodies as a traditional value that was disappearing in the modern danish world. One of them said that their sports club makes it a point to do big group bathing together after practice to set a good example for their children. The other told me that at a job he had long ago, the employees went on a ski trip together and they would share beds with their coworkers. He said his bed was so small and his sleeping partner was so big he had to physically hang on to him to stay in the bed. He presented this as a kind of ideal; that thats how things were in the good old days.
And:
I read an article on Scandanavian dating norms, which basically said “Scandanavian people dont date”. The article said in a comedic tone, that Scandanavian people dont date, they just get really drunk with their opposite sex friends, have drunken sex, and then thats it: its a relationship. One of my Scandanavian coworkers said exactly the same thing.
Entertaining throughout, written by Chad, via Lama.
China trade negotiation fact of the day
Brussels has been striving to secure the deal for six years, as it seeks to prove it has the negotiating muscle to broker meaningful agreements with Beijing that can defend European companies from unfair competition.
The European Commission and the bloc’s foreign policy chief signalled a tougher approach to China in March in a landmark document that branded it a “systemic rival” in some areas — an allegation Beijing denies. Ms Weyand, the chief official working for Phil Hogan, the EU’s trade commissioner, said that “we are moving at a snail’s pace on the investment agreement”.
That is from the FT., and of course that hardly counts as much progress. Elsewhere you will see Paul Krugman suggesting Trump has lost the trade war, but I don’t think he comes close to even seeing what the trade war with China is about. No matter what Trump says, the trade war is not about lowering the trade deficit. It is about (for a start) two major considerations: a) ensuring that national security-motivated partial economic decoupling takes place on terms not so unfriendly to America, and b) giving America levers to make sure China does not make such significant inroads into the world’s tech infrastructure, most notably with 5G but not only.
The stipulation of Chinese purchases of American exports, which probably they will not and cannot meet, is in fact a lever to give the United States enforcement power over the less tangible parts of agreement, which is indeed most of the agreement. We want China to be in default of the agreement terms, so we may threaten them with tariffs to enforce compliance elsewhere, and so that is a better rather than worse outcome for the United States.
On the trade war, agnosticism is still the correct opinion, at least so far, as we are not even sure we know of the full agreement, or if America and China are visualizing signing literally different versions of the “same” agreement. And even once (or if) the full text(s) is revealed, we still won’t for some while know how either a) or b) are going, much less relative to the relevant counterfactuals.
In general, I am finding that commentary on the trade war is of relatively dubious value, in part for partisan reasons. The key here is to set aside your political views, and spend a lot of time talking with national security people.
Tuesday assorted links
1. An occupational satisfaction index?
4. Stephen L. Carter best books picks. And Australian best book of the year picks, hardly any overlap with any other lists. Or try these Irish lists. El Pais picks books of the century, very good selections.