China Creates SEZ for Medical Tourism
The Chinese government have set up a special economic zone for medical tourism.
Hainan Boao Lecheng international medical tourism pilot zone, the first of its kind in the country, was approved by the State Council in 2013. It enjoys nine preferential polices, including special permission for medical talent, technology, devices and drugs, and an allowance for entrance of foreign capital and international communications.
The pilot zone also has permission to carry out leading-edge medical technology research, such as stem cell clinical research.
The zone, for example, offers a way to skirt the slow Chinese FDA (and presumably the slow US FDA as well).
Established in 2013, the Hainan program will open up new treatments–including Keytruda–to affluent Chinese residents who can afford the travel and medical costs, while other patients will have to wait for regulators to approve them. In recent years, mainland Chinese patients have increasingly traveled to Hong Kong or elsewhere in the face of lagging drug approvals by the China FDA and high treatment costs.
The zone is too small to have a significant impact on worldwide R&D but China’s original SEZs soon expanded. The SEZ could also encourage some interesting experiments. Keep an eye out for billionaires who travel to the island for a holiday and emerging looking younger and healthier.
What is the best way to attract high-skilled migrants?
Combining unique, annual, bilateral data on labor flows of highly skilled immigrants for 10 OECD destinations between 2000 and 2012, with new databases comprising both unilateral and bilateral policy instruments, we present the first judicious cross-country assessment of policies aimed to attract and select high-skilled workers. Points-based systems are much more effective in attracting and selecting high-skilled migrants than requiring a job offer, labor market tests, and shortage lists. Offers of permanent residency, while attracting the highly skilled, overall reduce the human capital content of labor flows because they prove more attractive to non-high-skilled workers. Bilateral recognition of diploma and social security agreements foster greater flows of high-skilled workers and improve the skill selectivity of immigrant flows. Conversely, double taxation agreements deter high-skilled migrants, although they do not alter overall skill selectivity. Our results are robust to a variety of empirical specifications that account for destination-specific amenities, multilateral resistance to migration, and the endogeneity of immigration policies.
I would urge a bit of caution, however. If you are Canada or Australia, and your country is not going to birth Google, you care most about the average skill level. If you are the United States, you might focus more on policies that boost the far right hand tail of value creation, because the benefits from that will be very high indeed. That means taking more chances on immigrants with an uncertain future but big potential upside, even if only with a small probability.
For the pointer I thank the excellent Kevin Lewis.
What I’ve been reading
1. Erica Benner, Be Like the Fox: Machiavelli’s Lifelong Quest for Freedom. A useful and readable introduction to the practical issues of Florentine politics and how they influenced the life and writings of Machiavelli.
2. Alan Taylor, American Colonies: The Settling of North America. Volume one of the Penguin History of the United States, this book is especially good at tying in “settlement issues” to later “governance issues.” It is compulsively readable and has an excellent annotated bibliography. Circa 1770, exports were about 10% of American gdp (p.311); today exports are a bit over 12% of gdp.
3. Holger Hoock, Scars of Independence: America’s Violent Birth. This is a look at the significance of violence in American history, focusing on the Revolution itself, and it is a good way to remind foreigners how screwed up (and dynamic) we are.
4. Arguments for Liberty, edited by Aaron Ross Powell and Grant Babcock. I do not think the arguments in this book succeed as arguments for liberty, with the exception of some of the utilitarian arguments, noting that I am only a “2/3s utilitarian.” Still, you get Eric Mack, Jason Kuznicki, Kevin Vallier, Neera Badhwar, Michael Huemer, and Jason Brennan, and so this is the rare edited volume that lives up to what you ideally might want it to be.
5. Jok Madut Jok, Breaking Sudan: The Search for Peace. I’ve read a few books on South Sudan lately, to try to figure out, if only in broad terms, what is going on there. This is the one that actually does a good job explaining things! Above all else, I now have some sense of just how historically deeply rooted the current conflict is. Recommended.
Jonathan Schwabish, Better Presentations: A Guide for Scholars, Researchers, and Wonks, is specific in all the right ways, most of all when it comes to Powerpoint slides.
My colleague Philip E. Auerswald has just published the very useful The Code Economy: A Forty-Thousand Year History.
Sunday assorted links
1. The Silicon Valley quest to live forever.
2. How transparency kills information aggregation.
4. Petition to keep Barnes&Noble in Bethesda.
5. First issue of American Affairs.
6. Julia Galef defends rationalism (contra Tyler). Lots of Twitter debate on this too.
Indian Civil Society Pushes Back Against Abuse of Power
Abuse of power isn’t new to India but the latest scandal is taking a different turn.
Outraged at not getting premium seating, a member of parliament belonging to the Shiv Sena, a regional party in Prime Minister Narendra Modi’s ruling coalition, on Thursday refused to deplane after his flight landed in New Delhi.
After repeated entreaties to disembark, the MP allegedly beat an Air India employee and tried to throw him down the landing stairs.
With a sandal, Ravindra Gaikwad repeatedly hit a shift manager who was sent to calm him down, while threatening to throw the man off the aircraft, flag carrier Air India Ltd said in a statement the same day. Video of the incident showed him pushing the airline employee toward the door.
Air India said it had informed the MP’s staff in advance that the aircraft didn’t have a business class. The passenger was accommodated in the first row of the all-economy plane because he wanted to take that particular flight, the carrier said.
The MP later bragged that of course he had beaten up the Air India employee because he’s a Shiv Sena MP who doesn’t put up with disrespect.
“Yes. I hit him. I wanted to throw him out of the plane,” the Shiv Sena MP told TIMES NOW. “Is he really an officer. He is not even a buffalo cart driver. He doesn’t know how to deal with customers,”
[By the way, shabash! to the air India hostess who stops Gaikwad from pushing the other employee down the stairs and then gives Gaikwad a piece of her mind, “you’re a role model, no?” she says defiantly.]
Gaikwad is no stranger to abuse of power:
Gaikwad has seven cases registered against him, including that of culpable homicide not amounting to murder and charges of stopping a public servant from performing his duty, his 2014 election affidavit showed. He was also involved in the infamous incident at the Maharashtra Sadan in New Delhi when he was among 11 Sena MPs who forced a Muslim worker to break his Ramzan fast [i.e. force fed him, AT]…The MPs were complaining of poor quality ‘chapati.’
Air India and its employee have registered a complaint with the Delhi police who have opened an investigation, it will be interesting to see what they do. Civil society, however, is making its views very clear. The Indian media are raking Gaikwad over the coals. The hashtag #GoonGaikwad is popular.
Even more important, Air India, the government owned airline, has refused to fly Gaikwad. Air India and its political masters have long engaged in a mutually profitable relationship of backscratching, featherbedding and kickbacking so for them to put their foot down even against this kind of outrage is remarkable. Moreover, in a show of solidarity, all of the private airlines have followed suit so Gaikwad has been reduced to trying to book flights under various aliases. He’s been stopped every time, however, and in the end he had to drive from Mumbai to Delhi (a nearly 900 mile trip).
This kind of pushback by civil society against the abuse of power is in many ways unprecedented in recent times. It’s an interesting marker of change in India.
Shall we make life easier yet?
Frictionlessness encourages bad habits. For those who resent the time suck of 1-click ordering, Domino’s has pioneered “zero-click” pizza-buying. Simply open the app and, after ten seconds, it automatically places a pre-set order. Domino’s competitors are working on a “direct-to-mouth” drone-delivery service that will send individual slices of pizza into your home via an electronic flap. Pizza experts are seeking ways around the “chewing bottleneck”.
Payments are also subject to facile externality. Three in five Britons say they spend more with a wave of the plastic than they would with cash. Ordering goods using Alexa, a voice-activated assistant, is as easy as saying its name. Tech firms are working on gesture-controlled devices that could enable payments with just a furtive glance of desire.
That is from The Economist, and the pointer is from Tyro.
In defense of northern New Jersey
John V. writes to me:
In your podcast with Ezra Klein, you said your number 1 rule for growing up in New Jersey is “Leave”. I’d encourage you to modify the rule to “Leave…but then Return!”
I grew up in Morris County, lived in the San Francisco area for 10 years after college, and moved back to NJ 3 years ago. I now live just a few towns over from where you grew up in Bergen County.
A few observations from my time back here:
1. More Affordable Than You Think
Given the access to labor markets and the available cultural amenities, Northern New Jersey is surprisingly affordable. It’s still possible to find a reasonable home in a reasonable location for ~$200k, which is close to the national median.
I lived in Palo Alto for most of my time in California. The cheapest 4-bedroom house in Palo Alto right now is $2.6M (https://www.redfin.com/CA/Palo-Alto/687-Florales-Dr-94306/home/1666194).
I live in what is perhaps the most “Palo Alto-like” of Bergen County towns, and my 4-bedroom house cost over 3x less and is almost 2x larger than the Palo Alto house above. I also can walk to the train, a Whole Foods, library, YMCA, town pool, third-wave coffee shop, etc. Not too shabby for the price!
Here’s a nice 4-bedroom house on a 1/3 of an acre for under $500k with a Walk Score of 83, train access to NYC, and good schools:
https://www.redfin.com/NJ/Westwood/363-Kinderkamack-Rd-07675/home/35886002
https://www.walkscore.com/score/363-kinderkamack-rd-westwood-nj-07675
http://www.greatschools.org/new-jersey/westwood/Yes, property and income taxes are high, but isn’t that really just a form of consumption?
2. Quick Access to World-Class Everything
Some travel time anecdotes from my house:
– 35 minutes to Lincoln Center or Central Park on a Saturday
– 20 minutes to this water fall: http://www.teterboro-online.com/images/scenic/falls1/falls02.jpg
– Just over an hour to this beach: https://i.ytimg.com/vi/lpET7nMihwo/maxresdefault.jpgThe food is good too!
– Korean: http://www.saveur.com/korean-food-restaurants-fort-lee-nj
– Hot Dogs: http://www.seriouseats.com/2010/08/hot-dog-of-the-week-rutts-hut.html
– Turkish Bread: http://www.saveur.com/taskin-bakery-turkish-paterson-nj
– Sliders: http://www.seriouseats.com/tags/white%20manna
– Colombian: https://www.yelp.com/biz_photos/villa-de-colombia-hackensack?select=1qyI6IIONUaXi0673YgkkA3. Extremely Diverse Middle-Class
Want to see what a successful American future could look like? Go here on a Wednesday or Saturday afternoon: https://en.wikipedia.org/wiki/Westfield_Garden_State_Plaza
Things you’ll see and hear: Five or six different languages being spoken. Russian grandmothers going for a walk. Packs of teenage girls wearing Hijabs. Orthodox Jewish moms pushing strollers. And many more groups, all reflecting the diversity and success of the surrounding towns:
https://en.wikipedia.org/wiki/Bergen_County,_New_Jersey#Community_diversity
https://en.wikipedia.org/wiki/Passaic_County,_New_Jersey#2010_CensusNorthern New Jersey has undergone a lot of ethnic change and international immigration over the last 30 years. There are problems of course, including plenty of segregation. But it’s still working pretty well. The rest of the country could learn a thing or two.
Saturday assorted links
1. Did migration of the non-complacent to America help make Scandinavian social democracy stable? And Free Exchange on parties and pies.
2. Powers and abilities of Superman.
3. “Turns out that when you live with a federal symbol up close and personal, day in and day out, it’s a little harder to think of them as majestic. Bald eagles show up in the local police blotter alongside reports of drunk fishermen passing out in the wrong bunk or taking off in someone else’s forklift.” Link here.
4. “At 180 grams, Goslow’s egg might be the heaviest on Canadian record…The record for the heaviest chicken egg in the world was reportedly laid by a hen in New Jersey, USA in 1956. That egg was 454 grams.” Link here.
Iron Fist is Weak
Iron Fist, the latest Marvel-Netflix, superhero show, is by far the weakest. [Mild spoilers] The show has been accused of cultural appropriation because it casts a white actor rather than an Asian as a kung-fu superhero (Iron Fist is also white in the comic book but those were unenlightened times). I could live with that if the white actor actually fit the role. Unfortunately, lead actor Finn Jones, whatever his other talents, doesn’t look imposing or powerful. Bruce Lee wasn’t a big guy but he was ripped and you could see at once that despite his charm you didn’t want to mess with this guy. In contrast, Danny Rand, as portrayed by Finn, is a sniveling, crying, whining child who can’t get over the death of his mommy. Despite having supposedly been subjected to beatings, deprivation, and fifteen years of intense martial-arts training, Rand shows none of the hardness that surviving, let alone thriving, in such an environment produces. His fist may be iron but nothing else is.
The fight scenes with Jones are, with one exception, lackluster. The exception is a fight between the Iron and Drunken fist. Drunken Fist (Zhou Cheng) portrayed by Lewis Tan steals the scene. Not only does he clearly give Iron Fist a beat down (despite the nominal outcome) he does so with humor, intelligence and charisma. Watching this scene you cannot help but think, heh, they should have made Lewis Tan the Iron Fist. In fact, Tan was considered for the role! Ironically, after meeting Danny Rand, many characters ask, “Why did this guy get chosen to be the Iron Fist?” It’s a very good question.
https://youtu.be/EB30OV6VXGU
The politics of Iron Fist are also annoying. Danny Rand inherits a powerful firm and in one of his first acts as owner he forces it, over the objections of the board, to sell its new drug at cost. What a sweet guy. Blech! The show does give some pretty good arguments for why this is a bad idea–namely it will reduce R&D and because of subsidies from charities and governments the drug will in any case go to everyone who needs its–so you could give Iron Fist a Straussian reading but I don’t give the writers that much credit.
The most serious failing of Iron Fist is that it breaks the cardinal rule: superheroes need supervillains. Outstanding performances by Vincent D’Onofrio as Kingpin and David Tennant as Kilgrave made for riveting conflict in Daredevil and Jessica Jones respectively. Luke Cage disappointed for its lack of a supervillain. Iron Fist is even worse as it jumps from villain to villain to villain, none of whom are especially super and some of whom are not even all that villainous.
The “hand” are supposed to be the supervillains but they come in (of course) right and left versions. The “left” hand are drug dealers and assassins. But the motives, actions, and consequences of the right hand are difficult to see. Although it’s not clear how the hand operates, their leader makes a case that their actions improve society. The Iron Fist almost joins the hand until he discovers that they have a bunch of computers and surveillance equipment. Then he and sidekick Colleen Wing go on an all out killing spree. What??? I’m no fan of the NSA but surveillance isn’t necessarily evil, Batman also had his sources of information. Iron Fist, however, has difficulty controlling his anger. He acts rashly and with little thought. He sees the world in childish ways. His actions often have unintended consequences and that is why in any battle between the Iron Fist and the invisible Hand, I will take the invisible Hand.
Excerpt from my chat with Ezra
Here is one bit, from the rapid fire back-and-forth:
Ezra Klein
The rationality community.
Tyler Cowen
Well, tell me a little more what you mean. You mean Eliezer Yudkowsky?
Ezra Klein
Yeah, I mean Less Wrong, Slate Star Codex. Julia Galef, Robin Hanson. Sometimes Bryan Caplan is grouped in here. The community of people who are frontloading ideas like signaling, cognitive biases, etc.
Tyler Cowen
Well, I enjoy all those sources, and I read them. That’s obviously a kind of endorsement. But I would approve of them much more if they called themselves the irrationality community. Because it is just another kind of religion. A different set of ethoses. And there’s nothing wrong with that, but the notion that this is, like, the true, objective vantage point I find highly objectionable. And that pops up in some of those people more than others. But I think it needs to be realized it’s an extremely culturally specific way of viewing the world, and that’s one of the main things travel can teach you.
There is much more at the link, entertaining throughout, with links to the full podcast as well.
Problems with destination-based corporate taxes and the Ryan blueprint
That is a recent paper by Reuven S. Avi-Yonah and Kimberly Clausing. It has content throughout, but this struck me as the most interesting section:
1. A U.S. pharmaceutical with foreign subsidiaries could develop its intellectual property in the United States (claiming deductions for wages, overhead and R&D), and then sell (i.e., export) the foreign rights to its Irish subsidiary (at the highest price possible). The proceeds would not be taxable. Ireland would allow that subsidiary to amortize its purchase price. This creates tax benefits in each jurisdiction by reason of the different regimes. If the Irish subsidiary manufactures drugs, the profits could be distributed up to the U.S. parent tax-free under a territorial system. If the Irish subsidiary is in danger of becoming profitable for Irish tax purposes, the U.S. parent would just sell it more IP.
2. If an Irish parent owns a U.S. subsidiary, the Irish parent can issue debt to fund the purchases of the IP. The U.S. subsidiary then invests the cash to generate more IP (expensing all equipment and deducting all salaries) and sells the IP to its parent.
3. If an Irish parent has purchased the U.S. IP rights, it would not want to license the rights to the U.S. subsidiary (income for Irish parent under Irish tax law and no deduction for U.S. subsidiary). So it just contributes the rights to another U.S. subsidiary. Could the U.S. subsidiary amortize the parent’s basis under the Blueprint? When one U.S. subsidiary licenses to another, no net tax would be paid. Any royalties would be taxable to the licensor but deductible for the payor.
4. How does the Blueprint work for services? If a U.S. hedge fund manager provides services to an offshore hedge fund, is that considered an export that is tax exempt? What if the U.S. manager develops a trading algorithm and sells it (or licenses) it to an offshore hedge fund? Are the proceeds and royalties exempt? If so, then the hedge fund becomes a giant tax shelter to the manager, because he would not pay 25% on this income–he would pay zero, with no further tax. This is much better than the current carried interest provision, which has attracted bipartisan condemnation because it enables individuals with income of many millions to pay a reduced rate. The Blueprint result is much worse.
Jeff Mcmahan on Derek Parfit
Above all else, dedicated:
Parfit had a native genius for philosophy. But he also devoted more time and concentrated effort to the development of his ideas than any other philosopher I have known. He once mentioned a passage in a book of economic history that noted that the concept of work had sometimes been understood in such a way that work was necessarily unpleasant. On this understanding, Parfit almost never worked. Yet throughout his adult life he did little other than think about, read, and write philosophy. When I visited Oxford in January and February of 2014, I stayed in his house. During those months, he left the house only a few times. In all but one instance, he left only to walk a few blocks to buy fruits and vegetables for his spartan meals. The other instance was when he walked with me to an appointment I had so that we could continue the philosophical discussion we were having. The one exception to his monomaniacal commitment to his philosophy was his architectural photography, samples of which appear on the covers of his four books. But he gave that up many years ago when he came to fear that he might not live long enough to complete his remaining work in philosophy.
There are many anecdotes about the ways in which Parfit simplified his life to take as little time as possible away from his work. He ate only twice a day, with almost no variation in what he had at each meal. He ate cold food only, mostly fruits and vegetables without any preparation. Even when he could have had freshly ground coffee with only a minute’s additional preparation, he drank instant coffee, often with water straight from the tap. He sometimes kept a book open on the chest-of-drawers so that he could read while putting on his socks. His speed in reading was phenomenal, in part because his power of concentration was prodigious. Wanting to preserve his mental and physical capacities, he took an hour every evening during his last decade to get vigorous exercise on a stationary bicycle, but never without reading philosophy (or occasionally physics) while furiously pedalling.
Parfit’s kindness and generosity, not only to his students and friends but to others as well, are legendary. The comments he gave to people on their manuscripts were sometimes longer than the manuscripts themselves, and the comments were invariably articulated in the gentlest, most tactful, encouraging, and constructive way possible. He frequently wept, not for himself but always from compassion for others.
Here is the full piece, the final two paragraphs are a complete gem. That is via Joshua Cohen, and various retweeters.
Friday assorted links
Complacent Confessions
How many direct reports should an American president have?
Arnold Kling writes:
One way to improve government operations would be through re-organization. I once wrote,
“the total number of executive entities is 157. I cannot think of any corporation in which the CEO has so many direct reports. This number ought to be fewer than ten.”
I proposed consolidation. Ideally, this would be done through legislation. However, if Congress balks, the President could informally choose to make some Cabinet officials and agency heads subordinate to others
Such informal hierarcies arise in any case, but can you imagine a private corporation that tried to run on such a basis? NB: You can and should be horrified by this organizational detail, without adhering to the (false) view that “government should be run as a business.” If you wish, take a large non-profit and ask how many people are direct reports to the CEO, or ask how such organizations would fare if the hierarchies of responsibility were never outlined explicitly.