Category: Uncategorized
Some implications of monopsony models
More workers ought to be in larger firms, as those firms are afraid to hire more, knowing that bids up wages for everyone. Therefore (ceteris paribus) the large firms in the economy ought to be larger.
Raising the legal minimum wage also reallocates workers into larger firms, and again makes them larger.
Tough stuff if you worry a lot about both monopoly and monopsony at the same time — choose your poison!
I have adapted those points from a recent paper by David Berger, Kyle Herkenhoff, and Simon Mongey, “Labor Market Power.” On the empirics, they conclude: “Our theory implies that this declining labor market concentration increase labor’s share of income by 2.89 percentage points between 1976 and 2014, suggesting that labor market concentration is not the reason for a declining labor share.” So the paper makes no one happy (good!): monopsony is significant, but has been declining in import.
Which are the best autobiographies by women?
That question has been floating around Twitter, here are my picks:
Sylvia Plath, The Bell Jar.
Janet Frame, Autobiography.
Claire Tomalin, A Life of My Own.
Marjane Satrapi, The Complete Persepolis.
Golda Meir, My Life.
Joan Didion, The Year of Magical Thinking.
Zora Neale Hurston, Dust Tracks on a Dirt Road.
Temple Grandin, Thinking in Pictures.
Am I allowed to say Virginia Woolf, corpus?
Nadezhda Mandelstam, Hope Against Hope: A Memoir.
Helen Keller, The Story of My Life.
Anne Frank of course.
What else? Maybe Carrie Fisher? Maya Angelou? Erica Jong? St. Therese of Liseaux? (I Am Rigoberto Menchu turned out to be a fraud.) There are a variety of important feminist books that read like quasi-autobiographies, but maybe they don’t quite fit the category. What is a memoir and what is an autobiography in this context? Do leave your suggestions in the comments.
It is also worth thinking about how these differ from well-known male autobiographies…
*Ash is Purest White* (movie, total spoilers in this post)
A phenomenal movie, by Chinese director Jia Zhangke (A Touch of Sin, 2013), large screen only. The reviews are very positive but mostly nonsense. Here are the two things you need to know to understand this movie:
1. Most of what is on the screen after the Three Gorges scene probably isn’t really happening. The woman is crazy and is dreaming or imagining it. There is plenty of absurd coincidences and contradictory information (the health and mind-state of the ex-boyfriend are various fantasy versions), but the real clincher is when the UFO appears. How can so many reviewers (NYT) be baffled by this?
2. The film is a stinging critique of the CCP, in Straussian fashion, and much of the action is a running commentary on a previous Chinese film, the wonderful The Chinese Mayor (maybe the best movie about how China works?). Both are set in Datong, a quite undistinguished Chinese city in Shanxi, and Ash is Purest White shows how the building of Datong, glorified in the earlier movie, is in fact based on corruption and mob rule. Also check out the surveillance and Xinjiang references for a full understanding of the politics of this movie.
Saturday assorted links
Brexit day has come and gone
I must have read two hundred tweets about how dysfunctional the British government is, or what a bad leader Theresa May has been. Really? That has yet to be demonstrated. I’ve all along been “vote Remain,” but I also recognize Remain works only if British membership in the EU has a certain amount of internal legitimacy.
What might a process of testing that legitimacy look like? Long, extended confusion, lots of back and forth, indecisiveness, and inability to form a durable majority for any other option, perhaps?
Right now the chances of Remain seem to be rising, or perhaps some version of Norway plus, and those are among the better options. I am hardly distraught, noting that I genuinely do not have a strong sense of what will happen next. I am pleased to see that not one of the seven versions of Brexit could command a majority.
Is it really so tragic and terrible to have all this — whatever comes to pass — revealed only at the last moment? Isn’t that often how optimal search looks? Isn’t it how the “to Remainers all-holy EU” so often does its business? Alternatively, how smooth, open, and transparent did the American constitutional convention actually run?
I’m not predicting triumph or victory here, only that I don’t yet see that anything has fallen off the rails. Nor is the British pound being hammered in the markets. Nor do I know many (any?) people who could have done much better than Theresa May.
But now is the time to pay more attention again, these are the proverbial last five minutes of the basketball game…
Friday assorted links
2. A critique of Moral Foundations Theory.
3. Elliott Carter sat next to George Gershwin at the American premiere of Berg’s Wozzeck.
4. MIE: “Chinese Customs Finds Girl With 142 Vials of Pregnant Women’s Blood.”
5. Agnes Varda has passed away.
6. “#EconTwitter seems more hospitable to women than the offline profession.” Link here.
*Coders*, by Clive Thompson
The list of small-person or one-person innovators is long…[long list follows]…
The reason so few people can have such an outsize impact, Andreessen argues, is that when you’re creating a weird new prototype of an app, the mental castle building is most efficiently done inside one or two isolated brains. The 10X productivity comes from being in the zone and staying there and from having a remarkable ability to visualize a complex architecture. “If they’re physical capable of staying awake, they can get really far,” he says. “The limits are awake time. It takes you two hours to get the whole thing loaded into your head, and then you get like 10 or 12 or 14 hours where you can function at that level.” The 10Xers he has known also tend to be “systems thinkers,” insatiably curious about every part of the technology stack, from the way currents flow in computer processors to the latency of touchscreen button presses. “It’s some combination of curiosity, drive, and the need to understand. They find it intolerable if they don’t understand some part of how the system works.”
The subtitle is The Making of a New Tribe and the Remaking of the World, I enjoyed the book very much, you can order it here.
Immigration Status, Immigrant Family Ties, and Support for the Democratic Party
That is a newly published piece by George Hawley, Social Science Quarterly, not yet available on-line as far as I can find:
I test the hypothesis that immigration status itself is a predictor of Democratic Party affiliation and vote choice, even controlling for other attributes. I further test whether having immigrant parents and grandparents has a similar effect. Method.To examine these questions, I created single- and multilevel models of party affiliation and vote choice using the 2016 Cooperative Congressional Election Study. Results. Even after controlling for a myriad of individual and contextual attributes, immigration status was a statistically significant and substantively important predictor of Democratic affiliation. This was also true of the children and grandchildren of immigrants, but this effect weakened over multiple generations. Conclusion. Immigration status itself appears to be an important determinant of voting patterns, which is highly consequential, given the large and growing foreign-born population in the United States.
Perhaps this explains some small part of American politics in recent times.
For the pointer I thank D.
Thursday assorted links
1. My 30-minute podcast with Human Capital Institute on the future of work.
2. Write of Passage, a new on-line writing course by Tiago Forte and David Perell.
3. Michigan’s voluntary gambling blacklist.
5. I try not to be negative, but this is probably the worst piece I will read all week: “What 3 famous philosophers would think about the college admissions scandal.” Too inegalitarian for Plato and Hobbes?
6. Mistakes in data visualization, from The Economist. And state-level economic growth, a good post, focus on the data ignore the framing.
Perceptions of crony capitalism
This paper discusses a national survey of business leaders that sought to deter-mine how government favoritism toward particular firms correlates with attitudes about government, the market, and selectively favorable economic policy. Findings indicate that those individuals who believe they work for favored firms are more likely to approve of free markets in the abstract but also more likely to say the US market is currently too free. These individuals are more skeptical of competition and more inclined to approve of government intervention in markets. They also are more likely to approve of government favoritism and to believe that favoritism is compatible with a free market. Those who have direct experience with economic favoritism or are more attuned to such favoritism are more likely to have distorted perceptions of free- market capitalism and are more comfortable with further favoritism.
That is the abstract of a new Mercatus working paper, by Matthew D. Mitchell, with Scott Eastman and Tamara Winter.
Wednesday assorted links
My Conversation with Emily Wilson
She is a classics scholar and the translator of my favorite edition of Homer’s Odyssey, here is the audio and transcript. Here is part of the CWT summary:
She and Tyler discuss these [translation] questions and more, including why Silicon Valley loves Stoicism, whether Plato made Socrates sound smarter than he was, the future of classics education, the effect of AI on translation, how to make academia more friendly to women, whether she’d choose to ‘overlive’, and the importance of having a big Ikea desk and a huge orange cat.
Here is one excerpt:
COWEN: Let’s jump right in on the Odyssey. I want you to explain the whole book to me, but let’s start small. Does Odysseus even want to return home?
WILSON: [laughs] He does as the poem starts. As the poem starts, he spent the last seven years on the island of a goddess called Calypso, originally, the poem implies, quite willingly. So, it seems as if he’s changed his mind about whether or not he wants to go home. But as the poem begins, he does want to get back home to Ithaca, to his wife, Penelope, and his son, Telemachus.
COWEN: Do you think he means it? Or is he just self-deceiving? Because he takes the detour into the underworld. He hangs around with Circe for many years. There’s a contrast with Menelaus, who acts as if he actually does want to get home. Who’s lying to whom in this story?
WILSON: Odysseus, of course, is lying all the time, so it’s very hard for the reader to get a firm grasp on what are his motives. Also, when he tells Calypso that he desperately wants to get back home, it’s very striking to me that he doesn’t give his motives. He says to Calypso, “You’re much more beautiful than my wife is, and you’ve promised to make me immortal. It’s a great offer, but I want to go home.” He doesn’t explain what is it that drives that desire to go home.
And you’re quite right: he makes many detours. He spends another year, quite willingly, with Circe, another goddess. So it seems as if he’s easily distractible from the quest, for sure.
And:
COWEN: Should we consider electing politicians by lot today? Is it such a crazy idea?
WILSON: I think it’s a great idea.
COWEN: Great idea?
WILSON: Yes, yeah.
And:
COWEN: Now, you have another well-known book. It’s called Seneca: A Life. On reading it, this is my reaction: why are the Stoics so hypocritical? Seneca spends his life sucking up to power. He’s very well off, extremely political, and possibly involved in murder plots, right?
WILSON: [laughs] Yes, that’s right. Yes.
COWEN: What is there about Stoicism? Marcus Aurelius is somewhat bloodthirsty, it seems. So, are the Stoics all just hypocrites, and they wrote this to cover over their wrongdoings? Or how should we think about the actual history of Stoicism?
WILSON: I see Seneca and Marcus Aurelius as very, very different characters. Marcus Aurelius was militaristic, bloodthirsty, and an expander of the Roman Empire. He was happy to slaughter many barbarians. He was fairly consistent about thinking that was a good idea, and also fairly consistent in associating his dream of culture and military imperialism with Stoic models of virtue.
Whereas Seneca was very much constantly unable to fully act out the ideals that he had. One of the reasons he’s so interesting as a writer is that he’s so precise in articulating what it means to have a very, very clear vision of the good life and to be completely unable to follow through on living the good life.
COWEN: But why would you accumulate so much wealth if you’re a true Stoic?
You can buy Emily’s translation of Homer here, and she is now working on doing The Iliad as well.
How NIMBY leads to urination in the streets
That is the topic of my latest Bloomberg column, here is one excerpt:
…step back and consider two 19th-century “classical economists” who focused on high rents: David Ricardo and Henry George. Both built models where land is so scarce that the cost of renting land absorbs most of the social surplus. We are not (yet?) at that point, but these models give insight into where today’s most expensive cities are headed.
Consider an increase in the quality of public services — say, garbage collection, or perhaps in San Francisco the elimination of public urination. You might think that would make life much better for everyone. But in a Ricardo-George model, that is not the case. Mainly what happens is that rents go up and landowners capture most of the newly created surplus.
How would this work? Take the example of San Francisco; with nicer streets, even more people might want to move there. That would push up rents by an amount roughly equal to the value created — putting the gains from the higher quality of life into the pockets of landowners. In a normal market economy, those higher rents would then induce more construction and, eventually, a corresponding decline in rents. But San Francisco is a “not in my backyard” locale where the amount of new construction just isn’t that high, for legal and regulatory reasons. Again, as both Ricardo and George realized, the incidence of the benefit falls upon the very scarce factor, namely land.
The political economy problem now should be obvious: Why exactly would non-landowners press for improvements in their cities? The value of those improvements will be captured mainly by other parties.
There is much more at the link.
Tuesday assorted links
1. Score more points for Martin Gurri.
2. Weather shocks and early state development, with respect to ancient Egypt.
3. Why is the production of machine tools so concentrated?
4. A new paper on automation that actually has some new and interesting results.
5. Buterin on political theory.
Why do states privatize their prisons?
Why Do States Privatize their Prisons? The Unintended Consequences of Inmate Litigation.” (Job market paper).
The United States has witnessed privatization of a variety of government functions over the last three decades. Media and politicians often attribute the decision to privatize to ideological commitments to small government and fiscal pressure. These claims are particularly notable in the context of prison privatization, where states and the federal government have employed private companies to operate and manage private correctional facilities. I argue state prison privatization is not a function of simple ideological or economic considerations. Rather, prison privatization has been a (potentially unintended) consequence of the administrative and legal costs associated with litigation brought by prisoners. I assemble an original database of prison privatization in the US and demonstrate that the privatization of prisons is best predicted by the legal pressure on state corrections systems, rather than the ideological orientation of a state government. PDF of most recent version here, comments welcome. Appendix here.Do Private Prison Companies Suffer When Inmates Win Lawsuits? The central claim of my dissertation argues it is the advent of inmates’ rights and rising prisoner litigation that contributed to the rise of prison privatization in the state. A separate dissertation chapter considers this relationship from the viewpoint of the business: is it the case that the economic future of the company is vulnerable to the announcement of successful court orders? I use event study methodology and find I find that on aggregate, investors are not particularly concerned with these judicial decrees. Rather, investors respond to the lawsuits in those states that are the most consequential for private prison firms’ business. This chapter fleshes out the behavior of private prison companies and provides further empirical evidence for the central claim of the dissertation, that private prison firms are indeed vulnerable to the announcement of court orders.
Those are new papers by Anna Gunderson, Ph.D candidate in political science from Emory, starting at Louisiana State, and I note she just won the Elinor and Vincent Ostrom award from the Public Choice Society. Here is her home page.