Finland knows how to troll MR commentators
Perhaps that is why I like the country so much:
Ideally, Marianne Korkalainen’s high school in Rautavaara, a tiny town in eastern Finland, would enroll at least 20 new pupils each year. This autumn, her shrinking municipality will send her only about 12. But Ms Korkalainen, the head teacher, has a plan: she intends to invite half a dozen youngsters from poorer countries to help fill her empty seats. Eager adolescents from places such as Myanmar, Vietnam and Tanzania will swap their tropical cities for her snowy bolthole. They will receive a Finnish education, at Finnish taxpayers’ expense.
Here is more from The Economist. Finland soon will have a shrinking population, and worse yet:
By 2030 the country could have nearly 10% fewer children aged 4-18, according to eu projections. By 2040 their ranks might be smaller by a fifth. This spells trouble in particular for rural schools, which suffer both from having few births and from migration to the cities. Hundreds have shut their doors in recent decades. Some now offer local youngsters bungs, such as free driving lessons and small cash “scholarships”, in the hope of keeping them around.
There is even a Finnish start-up, Finest Future, that sells Finnish lessons to poorer students around the world, in the hope of preparing them for a Finnish taxpayer-subsidized education in Finland. The belief is that recruiting individuals this way is easier and more effective than trying to find good job candidates abroad and also train them in Finnish later on. Stuff the Kalevala down their throats!
Finland has a foreign-born population of about 9 percent, well below the Western European average. I don’t know if this schools policy is a good idea, but I do know most people are not good at thinking about it in cost-benefit terms.
Wednesday assorted links
1. Ken Opalo on the Kenyan protests.
2. Cultural policy in the French elections.
3. An abundance agenda for California, by Samuel Trachtman.
4. The Welsh are committing to making lying in politics illegal? Solve for the equilibrium.
5. Paul Graham has Bayesian reasons for predicting a rebellion.
6. Both crypto and LLMs are new kinds of computers, an oft-overlooked point.
What should I ask Nate Silver?
Yes, I will be doing another Conversation with Nate, based in part on his new and forthcoming book On the Edge: The Art of Risking Everything (I have just started it, but so far it is very good, dealing with issues of poker and also risk-taking more generally).
Here is my previous Conversation with Nate Silver. And please note I am not looking to ask him about the election. So what should I ask?
Doggerels for Deplorables
From Doggerels for Deplorables by D.M. Charette, with inspiration from Marginal Revolution.
Hope III: Assortative Mating
I hear how you proclaim the fault
for unequal shares in wealth
arises from the greediness
rich enjoy at poor’s expense.
But if you go through white papers [7,8]
you’ll notice one more factor
when you marry in your class
you increase the income gap.
Now let me call upon you all
who declare as liberal
to regard the bigger picture
when deciding on your future:
Seek outside of your career
ask out the single cashier
skip out on the grad event
hit the bar beside the plant
don’t inquire on film noir
learn to spot a muscle car
pass up on that back-stage tour
plant yourself in the bleachers.
So to decrease income division
you’ll marry someone not envisioned
but since you’re not a hypocrite
I’m certain you’ll be fine with it.
Addendum: Here is me on assortative mating in the economics profession and here is much more.
What I’ve been reading
Frederick C. Beiser, The German Historicist Tradition. Lengthy and dense, but full of good material and written with extreme indeed almost unbelievable clarity. The historicists are these days the underdiscussed approach in the history of German thought. Have you ever wondered why Justus Möser was important, and why he focused on the history of Osnabrück? Or how Leopold Ranke saw his work as an answer to Hegel? How about the difference between Dilthey and Rickert? If nothing else, this book is also excellent background for grasping the development of Austrian School methodology in economics. After reading it, I did proceed to order further books by the same author.
Celine Dietziker and Lukas Gruntz, Aalto in Detail: A Catalogue of Components. I hadn’t realized just how much he was a “micro architect.” This book, for instance, has a fantastic collection of different photos of stairs he designed. There is a chapter “Handrails,” “Door Handles,” and also “Drainage.” This is a book for me.
Zeke Hernandez, The Truth About Immigration: Why Successful Societies Welcome Newcomers, delivers exactly what its title promises.
Neil Taylor, Estonia: A Modern History, is by far the best history I have found on that country. It also has a rave blurb from Robert Service.
Arthur Brown Ruhl, New Masters of the Baltic, a travel book from 1921. If you visit any place, you always should try to read a much earlier travel book on said place. Fantastic for perspective, indefensible but nonetheless insightful generalizations, and these books give you a sense for just how contingent history can be. Who was “the good guys” was often more up for grabs than you might have thought.
Then there are bits like this: “I asked if they thought that Latvia would be able to keep her independence when Russia was herself again. Yes, they said, they did; if the non-Russian border peoples got together in a defensive alliance, old Russia would have some trouble in coercing them. But they would like to ask me a question. Did the Allies, who had encouraged them to declare their independence, really believe in it? Or were they merely being used because the Allies thought their own soldiers too good to send against the Bolsheviks?”
New Zealand also is shifting toward the Right
The Ardern era is well and truly over. The National-led coalition that took office in November has set about undoing many of her government’s initiatives. It is following a playbook not unlike “Project 25,” the second-term “battle plan” promoted by pro-Trump think tanks designed to concentrate power in the executive branch and unravel efforts to slow global warming.
It is reversing a ban on oil and gas drilling, and is proposing a “fast-track” for big projects, including mines, that bypasses environmental checks. It has cut climate programs and jobs, scrapped electric vehicle subsidies, abandoned plans for one of the world’s largest marine sanctuaries and set aside a world-leading cow “burp” tax as it questions the science on methane, a potent greenhouse gas...
During coalition talks, [ACT leader] Seymour won concessions for American-style charter schools; a “three strikes” law extending prison terms for repeat offenders; and a deal to rewrite the country’s Arms Act, revisiting a ban on military-style rifles after a 2019 mass shooting. He is pushing for a referendum on New Zealand’s founding document with Indigenous Maori that opponents warn will be divisive.
Here is much more from Rachel Pannett.
Tuesday assorted links
1. A case study of how RAND Corporation succeeded.
2. Beware the phrase “cheap labor” (me for Bloomberg).
3. Can EdTech supersede Neil Stephenson’s notion of the primer?
4. On the Presidential immunity decision.
5. Cass Sunstein on Loper Bright.
6. Greece is moving to a six-day work week? With qualifications of course.
7. More on dollarization in Panama. On its intellectual origins, including through Chicago.
An event study of sorts
Big, sudden changes in election probabilities are unusual in American politics, though it seems we just had one. Here are some results, as reported in the FT:
US closed higher in the first session of the second half of the year, even as Treasury yields hit multi-week highs.
Strong gains in the technology sector helped the benchmark S&P 500 add 0.3 per cent despite almost three quarters of the index’s constituents declining on the day. The Nasdaq Composite rose 0.8 per cent, with every Magnificent Seven tech group finishing higher.
Treasuries sold off as traders weighed higher odds of Donald Trump being elected as US president later this year. The yield on the 10-year bond jumped 0.14 percentage points to 4.48 per cent, its highest level in a month.
“There are several investment implications of Trump back in the White House,” said Jack Ablin, chief investment officer at Cresset Capital. “[Most notable would be] a higher-for-longer Fed, as monetary policymakers increase the likelihood that the corporate tax cuts will be extended next year.”
The immediate S&P 500 reaction was modestly positive too, about half a percentage point up.
Migration policy, and should you favor your own country?
There is a longstanding debate — for centuries in fact — as to whether you should consider only your national (or regional) interest, or whether you should think in cosmopolitan terms when evaluating policies with cross-national ramifications.
Some commentators, for instance, suggest that American immigration policy should be set to serve the interests of current American citizens only. Whether or not one agrees, I can understand where that argument is coming from.
But what if an American is evaluating a French decision to take in or exclude some potential Algerian migrants? You might think the French should take a French point of view, and that the Algerians should take an Algerian point of view. But is the American allowed to be cosmopolitan in his judgment? Even if he or she is otherwise a self-regarding nationalist on questions concerning America?
It seems to me Americans should in fact take the cosmopolitan perspective.
Alternatively, you might argue that there are degrees of relation. American culture, politics, and gdp are much closer to their French equivalents than to anything in Algeria. So perhaps the American can side with France after all.
But then I wonder about two things.
First, this scheme might count Algerians for less, but it doesn’t seem it counts them for zero. Maybe America and Algeria have “better rap music” is common, or some degree of religiosity in common, or other points of similarity.
Second, once you start playing this sliding scale game, why look only at the dimension of nation? You also could classify people by their taste in music, how smart they are, and many other dimensions. I first and foremost might decide to identify with people on the grounds of their openness and their desire to travel. Or how about kindness and generosity as a standard?
As a result, the major moral lines will not cut across nations in any simple way, even if in the final analysis the French people count for more than do the Algerians.
While this is not exactly simple cosmopolitanism in the Benthamite sense, it is just as far from strict nationalism. Once you let partialism in the door, it seems like a tough slog to argue nationality is the only relevant moral fact for partial sentiments.
It is interesting to look at how people choose their friends. Most of us have many friends of the same nation, but that is largely for reasons for convenience. Unless perhaps I were living abroad, it would seem strange to be friends with someone because they were an American. But it is not strange to be friends with them because they are smart, have good taste in music, like to travel, and so on. So when it comes to our actual choices, nationality is just one fact of many, and it is (beyond the dimension of practicality) not an especially important fact for how we choose our partial commitments for our own lives.
So why should it be such a dominant factor for how we make moral decisions when it concerns other countries?
Monday assorted links
1. Ronan McGovern on Finland and two Baltics.
2. Was housing overbuilt in Nevada?
3. How much of the universe is legible to intelligence?
4. What are the bottlenecks for actually applying evidence to policy decisions?
5. Adrian Wooldridge says beware of Labour rule (Bloomberg).
8. Revenge of the generalist?: “Prediction: Over the next decade there will be a revenge of the generalist. Generalists will be rewarded as organizations shrink and employees are asked to do more with less. AI will accelerate this trend as specialized tasks become more and more automated.” Gagan Biyani.
Deep roots, the persistent legacy of slavery on free labor markets
To engage with the large literature on the economic effects of slavery, we use antebellum census data to test for statistical differences at the 1860 free-slave border. We find evidence of lower population density, less intensive land use, and lower farm values on the slave side. Half of the border region was half underutilized. This does not support the view that abolition was a costly constraint for landowners. Indeed, the lower demand for similar, yet cheaper, land presents a different puzzle: why wouldn’t the yeomen farmers cross the border to fill up empty land in slave states, as was happening in the free states of the Old Northwest? On this point, we find evidence of higher wages on the slave side, indicating an aversion of free labor to working in a slave society. This evidence of systemically lower economic performance in slavery-legal areas suggests that the earlier literature on the profitability of plantations was misplaced, or at least incomplete.
That is from a new NBER working paper by Hoyt Bleakley and Paul Rhode.
How the German welfare state punishes performance
The German welfare state is generous but this leads to implicit tax rates for those on welfare that can exceed 100%. Here’s a useful summary from the German newspaper Handelsblatt. (The original is in German, this is a Google translation.)
Poorly coordinated state benefits such as the citizen’s allowance, housing benefit or child allowance often mean that additional work is not worthwhile or, in extreme cases, even leads to lower net income. The Ifo Institute has calculated this for various household types for the Handelsblatt newspaper – and shown how anti-performance the system sometimes is.
..A dual-income couple with two children aged five and nine, who work full-time and each earn 2000 euros gross per month, have a net income of 2686 euros with rent and heating costs of 1235 euros.
The couple therefore only has 887 euros more at their disposal per month than the household receiving citizen’s allowance. The absurd thing is that if the model working couple increases their joint income to 5,000 euros, the household’s net income falls by 43 euros to 2,643.
The graph shows that from a gross monthly income of 2000 Euro ($2150) (gray bars) to 6000 Euro ($6450) the net income gradient (orange bars) is nearly flat and in some regions it actually falls–meaning the couple would be better off by not working.
It’s hard to solve these problems. A negative income tax in which benefits would fall more slowly with income can restore incentives but at the price of having many more people on some welfare and a a much higher budgetary cost.
How we should update our views on immigration
I am writing this post on a somewhat bumpy plane ride, so I will try doing it without links. Most of the relevant sources you can find through perplexity.Ai, or even on MR itself. Google too.
Overall, I am distressed by the contagion effects when it comes to immigration views. A large number of people are much more anti-immigration than they used to be, in part because yet others are more anti-immigration. All sorts of anecdotes circulate. But let’s look more systematically at what we have learned about immigration in the last ten years or so. Not all of it should count as pro-immigration, but a lot of it should, with one huge caveat.
When it comes to the wage effects of immigration, there is very modest additional evidence in the positive direction. I wouldn’t put much weight on that, but it certainly is not pointing in the other direction.
The United States is showing it can have a higher stock of immigrants and also falling crime rates. I am not suggesting a causal model there, but again that should be more reassuring than not.
There is additional evidence for the positive fiscal benefits of immigrants, including less skilled immigrants. Some of this is from the CBO, some of it I outlined in a Bloomberg column maybe a month or so ago. I don’t view those results as major revisions, but again they are not pointing in the wrong direction.
There is reasonable though not decisive macroeconomic evidence that immigrant labor supply was a significant contributor to America’s strong post-pandemic recovery.
If you are a right-winger who was worried that incoming Latinos would vote Democratic in some huge percentage, you can set your mind at ease on that one. You also can take this as evidence of a particular kind of assimilation.
Fertility rates are falling much more than we had expected, including in the United States. This makes the case for immigration much stronger.
It is increasingly evident that immigrant-rich Florida and Texas are doing just great. The picture is decidedly less positive for many parts of California, but I suppose I see evidence that the white Progressive Left is mainly at fault there, not the immigrants. Still, I do think you can make a reasonable argument that immigrants and the Progressive Left interact in a dysfunctional manner. It is no surprise to me that so many of the leading anti-immigrant voices come from California.
Overall, I am struck by the fact that immigration critics do not send me cost-benefit studies, nor do they seem to commission them. If the case against immigration is so strong, why aren’t these studies created and then sent to me? You could have a good one for a few hundred thousand dollars, right? Instead, in my emails and the like I receive a blizzard of negative emotion, and all sorts of anecdotal claims about how terrible various things are, but never a decent CBA. I take that to be endogenous. I think it is widely accepted that America having taken in the people who are now Italian-Americans would pass a cost-benefit test, even though the Mafia ruled New Jersey and Rhode Island for decades. Somehow people are less keen to apply this same kind of reasoning looking forward, though they are happy to regale you with tales of crimes by current immigrants.
I do see good evidence that trust in American government is falling, but I attribute that mainly to the Martin Gurri effect. I mean look at the current gaslighters in the White House and in the media — they are not primarily immigrants, quite the contrary. Or all the Covid mistakes, were they due to “the immigrants”? I don’t see it.
Now let us look at knowledge updates on the other side of the ledger, namely new knowledge that should make us more skeptical about immigration.
We now see that external hostility to Israel and Taiwan is stronger than we had thought. So the case for a looser immigration policy in Israel is much weaker than it used to be. As for Taiwan, they should be more careful about letting in mainland Chinese. Estonia needs to be more wary about letting in Russians, and indeed they are. And there might be other countries where this kind of logic applies. Do I really know so much about the situation between Burundi and Rwanda? In general, as the level of conflict in the world rises, there will be more of these cases. It is also a major consideration for anywhere near Ukraine. Small countries need to worry about this most of all.
I should note this problem does not seem to apply to North America, though you might require tougher security clearances for some jobs currently held by Chinese migrants.
The second issue, and it is a biggie, is that voters dislike immigration much, much more than they used to. The size of this effect has been surprising, and also the extent of its spread. I am writing this post on Election Day in France, and preliminary results suggest a very real risk that France ends up ungovernable. Immigrants are clearly a major factor in this outcome, even under super-benign views that do not “blame” the immigrants themselves at all.
Versions of this are happening in many countries, not just a few, and often these are countries that previously were fairly well governed.
I think it is better for countries in such positions to be much tougher on immigration, rather than to suffer these kinds of political consequences.
But let’s look honestly at the overall revision to our views. Politics is stupider and less ethical than before, including when it comes immigration (but not only! Fellow citizens also have become more negative about other fellow citizens of differing views, and I view negativism as the root of the problem all around). We need to take that into account, and so all sorts of pro-migration dreams need to be set aside for the time being, at least in many countries. Nonetheless the actual practical consequences of immigration, political backlash excluded, are somewhat more positive than we had thought. For some smaller countries, however, that may not hold, Israel being the easiest example to grasp but not the only. In the longer run, we also would like to prepare for the day when higher levels of immigration might resume, even if that currently seems far off. So we shouldn’t talk down immigration per se. Instead we should try to combat excess negativism in many spheres of life.
Somehow that view is too complicated for people to process, and so instead they instinctively jump on the anti-immigration bandwagon. Too much negativism. But in fact my view is better than theirs, and so they ought to hold it.
Sunday assorted links
1. Newswire data set from Melissa Dell.
3. Matt Lakeman on Tajikistan.
4. Was Hayek an accidental Freudian? (New Yorker).
The Gary Becker Papers
The Gary Becker Papers (117.42 linear feet, 223 boxes) are now open at the University of Chicago:
The collection documents much of Gary Becker’s intellectual history. One of his autobiographical essays, “A Personal Statement About My Intellectual Development” (see Box 120, Folder 10 and Box 189, Folder 1), traces his academic career from his youth to his origins as a student at Princeton University, to his graduate student years and professorship at the University of Chicago, and his extra collegial engagement on corporate advisory boards, political participation, and governmental councils. The essay could have been written based on some of the records collected here. The collection documents an intellectual trajectory primarily through intellectual productions, research files, and communications. His approach to the research and writing, his publishing history, his engagement with others in the field of economics and other individuals in public service and global politics are contained here. Though the collection primarily concerns his professional life, there is also mention of his relationship with Guity Nashat, his wife, as they traveled together to the many conferences and events in the United States and abroad, and other incidents of his life for a minor study or treatment of his biography.
The collection materials include Becker’s handwritten and printed copies of his scholarship, including notes (and bibliographic cards), papers (and drafts), diagrams and charts, data sheets, correspondence, periodical reprints, magazines, newspapers and clippings, grant documents, reports, referee files, course and instructional materials, photographs, VHS tapes, DVD’s, and related ephemera.
Hat tip: Peter Istzin.