Bad news, Mises vindicated!
U.S. Commerce Secretary Howard Lutnick is looking into the federal government taking equity stakes in computer chip manufacturers that receive CHIPS Act funding to build factories in the country, two sources said.
Expanding on a plan to receive an equity stake in Intel (INTC.O), in exchange for cash grants, a White House official and a person familiar with the situation said Lutnick is exploring how the U.S. can receive equity stakes in exchange for CHIPS Act funding for companies such as Micron (MU.O), Taiwan Semiconductor Manufacturing Co (2330.TW), and Samsung (005930.KS). Much of the funding has not yet been dispersed.
Here is more from Reuters. It was bad to do this with General Motors, and bad when many of you, way back when, suggested doing this with the bailed out banks. It is still bad, and getting worse.
The Garbage Cafe
Every day, hungry people arrive at this cafe in Ambikapur, a city in the state of Chhattisgarh in central India, in the hope of getting a hot meal. But they don’t pay for their food with money – instead, they hand over bundles of plastic such as old carrier bags, food wrappers and water bottles.
People can trade a kilogram (2.2lb) of plastic waste for a full meal that includes rice, two vegetable curries, dal, roti, salad and pickles, says Vinod Kumar Patel, who runs the cafe on behalf of the Ambikapur Municipal Corporation (AMC), the public body which manages the city’s infrastructure and services. “For half a kilogram of plastic, they get breakfast like samosas or vada pav.”
…”I’ve been doing this work for years,” Mondal says, looking at the small pile of plastic she has gathered. Previously, Mondal used to sell the plastic she collected to local scrap dealers for just 10 Indian rupees (£0.09/$0.12) per kilogram – barely enough to survive on. “But now, I can get food for my family in exchange for the plastic I collect. It makes all the difference in our lives.”
Here is the full story. The Cafe is supported through public funds.
Why is choral music harder to appreciate?
It has struck me that most recommenders and lovers of choral music and themselves singers (or conductors) of choral music. It helps a great deal to be right there. So it occurred to me there are a few reasons why choral music is harder to appreciate than say either symphonies or chamber music:
1. Mixtures of voices do not translate onto recordings as well as do most symphony orchestra instrumental blends. For one thing, the different voices are harder to sort out. They are best understood when you are singing in the midst of the action.
2. A good deal of choral music is sung in a different language, and so most listeners do not understand the words.
3. A good deal of quality choral music has a background religious context. Most listeners have only a modest knowledge of this background context. For instance, how many people know that Elgar’s Dream of Gerontius is about purgatory, and that this was highly controversial in Elgar’s time, as it was viewed as a very Catholic concept?
3b. 6. Choral works may depend on church acoustics, or the surrounding church aura, but we go to church less often these days.
4. A lot of choral music sounds pious, and indeed may be pious. At the very least they tend to be serious. (How many comic choral pieces can you think of from the classical repertoire? Or even comic moments?) That seriousness of mood may appeal less to contemporary listeners.
5. Star vocalists drive a reasonable percentage of classical music sales. But most choral works have a strong collective element, and they may not be set up to showcase soloists. So the celebrity-driven appeal of choral forms can be relatively weak.
6. Many of the best-known choral works are quite long. That may place them at a relative disadvantage.
7. Opera arguably has grown in relative popularity, and that may be serious competition for choral works because it can serve as a substitute.
What else?
Charles Plosser, RIP
Alas, and still an underrated economist.
The AI polity that is Albania?
While the rest of Europe bickers over the safety and scope of artificial intelligence, Albania is tapping it to accelerate its EU accession.
It’s even mulling an AI-run ministry.
Prime Minister Edi Rama mentioned AI last month as a tool to stamp out corruption and increase transparency, saying the technology could soon become the most efficient member of the Albanian government.
“One day, we might even have a ministry run entirely by AI,” Rama said at a July press conference while discussing digitalization. “That way, there would be no nepotism or conflicts of interest,” he argued.
Local developers could even work toward creating an AI model to elect as minister, which could lead the country to “be the first to have an entire government with AI ministers and a prime minister,” Rama added.
While no formal steps have been taken and Rama’s job is not yet officially up for grabs, the prime minister said the idea should be seriously considered…
AI is already being used in the administration to manage the thorny matter of public procurement, an area the EU has asked the government to shore up, as well as to analyze tax and customs transactions in real time, identifying irregularities.
Here is the whole Politico story, via Holger.
Tuesday assorted links
China Versus the US in the Competition for Global Talent
In my posts The Sputnik vs. DeepSeek Moment and The Answers, I contrasted America’s reaction to Sputnik—expanded funding for education in math, science, and foreign languages; creation of agencies like ARPA; higher federal R&D spending; recruitment of foreign talent; and reduced tariff barriers—with the more recent U.S. response to China’s rise as an economic and scientific power, which has been almost the reverse.
One can also compare America’s choices today with China’s own strategy, where the roles also seem reversed. A striking example is China’s new K visa for science and technology.
BEIJING, Aug. 14 …China will add a K visa to its ordinary visa categories, available to eligible young science and technology professionals.
Compared with the existing 12 ordinary visa types, K visas will offer more convenience to holders in terms of number of permitted entries, validity period and duration of stay, according to a press conference held by relevant authorities on Thursday.
After entering China, K visa holders can engage in exchanges in fields such as education, culture, and science and technology, as well as relevant entrepreneurial and business activities.
…applications for K visas do not require a domestic employer or entity to issue an invitation, and the application process will also be more streamlined.
“China’s development requires the participation of talent from around the world, and China’s development also provides opportunities for them,” according to the press conference.
The decision aims to…facilitate the entry for foreign young sci-tech talent into China, and promote international cooperation and exchanges among young sci-tech professionals, said officials at the press conference.
Keep in mind that this is on top of China’s newly-eased rules for visa-free entry.
In December 2023, China announced visa-free entry for citizens of France, Germany, Italy, the Netherlands, Spain and Malaysia. Almost all of Europe has been added since then. Travelers from five Latin American countries and Uzbekistan became eligible last month, followed by four in the Middle East. The total will grow to 75 on July 16 with the addition of Azerbaijan.
About two-thirds of the countries have been granted visa-free entry on a one-year trial basis.
The United States faces a shortage of high-IQ workers, yet instead of treating international talent as resource, every immigrant is cast as a threat. Today, it can take months to years just to get an interview to visit the US. At the same time, we are deporting international students, making them feel unwelcome, cutting research funding, and, as a result, losing ground in the competition for academic talent.
Attracting global talent is not China’s strength—the world’s best would rather join the United States. But if America abandons the openness that has long underpinned its exceptionalism, it will squander one of its biggest advantages and decline into a second-rate power.
*Capitalism: A Global History*, by Sven Beckert
This 1103 pp. book reflects a great deal of learning, and it is often interesting to read. It is well-written. So virtually everyone can absorb interesting things from it. In that sense I am happy to recommend it.
The book has two major problems however.
First, is “capitalism” the right way of centering a book topic across centuries and 1103 pages? What exactly ties all the different discussions together? And how many of them succeed in making original contributions to the areas they cover? There is a kind of “replacement level” left-wing series of cliches running throughout the narrative, but what else is unifying this story? I would rather read a book on any single one of the covered topics. And in too many cases the coverage seems only OK. For instance, the discussions of Pinochet’s Chile, and neoliberalism, in the book’s final chapter are not above the quality of basic media coverage, as you might find in the NYT.
Second, the author does not know what “capitalism” is. I am not going to insist on my pet definition, but consider a simple example.
Birkerts (p.180) is keen to describe mid-17th century Barbados as capitalism, indeed as a kind of extreme or ideal capitalism. Well, in some regards. Yes there were markets. But King Charles I gave all the land to the Earl of Carlisle to distribute, and of course land was a centrally important asset back then. Might that be called…heaven forbid…statism? There was slavery too, at various stages of development, depending which years one is looking at. Is that really “an almost perfectly Smithian economy”? Smith hated slavery, and also considered it economically inefficient. The Navigation Act of 1651 limited trade with the Dutch, and could be considered a further deviation from Barbadian capitalism. The whole system was mercantilism built on land theft and slavery, and none of that is synonymous with capitalism. Nor are these distinctions clearly unpacked in the discussion.
Or look to the book’s epilogue. Cambodia is held up as the embodiment of current capitalism. Really? Not Poland or Ireland or Singapore? Or even the Dominican Republic? Better yet, how about multiple contrasting examples to conclude the book? Cambodia was ruled by vicious communists, suffered under a major murderous holocaust, still has an absolute dictator, ranks 98th in the Heritage index of economic freedom (“mostly unfree“), and lies in the thrall of Chinese domination, economic, political, and otherwise. I do understand there is now more FDI there, but this is hardly the proper representation of contemporary capitalism or its future, as the title of the final chapter seems to indicate.
The main problem is that the author has very little sense of what he does not understand. Above all else, it is an example of just how insular our institutions of elite higher education have become.
How is fertility behavior in Africa different?
Sub-Saharan Africa’s fertility decline has lagged behind that of other regions. Using large-scale, individual-level data, I provide new evidence on how fertility in sub-Saharan Africa compares with that in East Asia, South Asia, and Latin America by examining differences in fertility outcomes by grade level across regions. Unlike prior research that compared aggregate fertility and education outcomes, I estimate fertility outcomes separately for each combination of region, area of residence, age group, and grade level. I find that differences in fertility between sub-Saharan Africa and other regions increase with education up to the end of primary school and then rapidly decrease. There is little consistent evidence of differences among women with secondary education or higher. Moreover, for grade levels where fertility is significantly higher in sub-Saharan Africa than in other regions, the differences are substantially smaller for surviving children than for children ever born. Using women’s literacy as a proxy for school quality, I show that the results for literacy rates follow a similar pattern to the fertility outcomes. Overall, the results suggest that higher offspring mortality and lower quality of primary schooling contribute to higher fertility in sub-Saharan Africa compared with other regions.
That is from a recently published article by Claus C. Pörtner.
Monday assorted links
1. Arlington travel notes, by Henry Oliver.
2. Class and air conditioning in Germany.
3. Nate Silver Department of Yup.
4. The importance of adaptive prompt behavior.
5. Weapons is an excellent movie (trailer at the link). There are (very) modest signs of Hollywood movies undergoing a quality revival of sorts.
6. The Argument, a new media venture from Jerusalem Demsas. Recommended.
Polycentric Status Contests
As societies become richer, and basic needs are satisfied, zero-sum positional contests gain more prominence, while the regular positivesum benefits of markets subside in the background. As long argued by Hirsch, Frank and others, the institutions for managing resource scarcity and spurring economic growth, i.e. the institutions of capitalism, may not be particularly well-suited for managing the type of scarcity associated with positional goods. The long-term equilibrium of rich societies may not be as peaceful as many assume if they become overrun by status competitions. This paper provides a typology of positional goods, explaining why some positional competitions are worse than others, and a rent-seeking model of the supply response to positional goods’ price changes. The model leads to surprisingly optimistic predictions: markets tend to fragment the worst kinds of positional goods into competing hierarchies of status, tend to dissipate and eliminate some positional goods, and tend to turn the most damaging status competitions into more beneficial prestige competitions. Government interventions, by contrast, often attempt to prop-up monopolistic status hierarchies.
That is from a new paper by Vlad Tarko.
Twin studies data and the link between social media and well-being
This recently published paper by Selim Sametoğlu, Dirk H. M. Pelt, and Meike Bartels, is based on a clever idea, namely to look at twin studies to see if heavy social media users have innate tendenciees toward lower social well-being. Overall the results are not encouraging for seeing a strong causal connection here:
Meta-analyses report small to moderate effect sizes or inconsistent associations (usually around r = -0.10) between wellbeing (WB) and social media use (SMU) and between anxious-depressive symptoms (ADS) and SMU (also around r = 0.10). This study employs the classical twin design, utilizing data from 6492 individuals from the Netherlands Twin Register, including 3369 MZ twins (893 complete twin pairs, 1583 incomplete twin pairs) and 3123 DZ twins (445 complete, 2233 incomplete) to provide insights into the sources of overlap between WB/ADS and SMU. Both hedonic and eudaimonic WB scales were used. SMU was measured by (1) the time spent on different social media platforms (SMUt), (2) the frequency of posting on social media (SMUf), and (3) the number of social media accounts individuals have (SMUn). Our results confirmed the low phenotypic correlations between WB and SMU (between r = -0.09 and 0.04) as well as between ADS and SMU (between r = 0.07 and 0.10). For SMU, heritability estimates between 32 and 72% were obtained. The small but significant phenotypic correlations between WB/ADS and the SMU phenotypes were mainly determined by genetic factors (in the range of 80-90%). For WB and SMU, genetic correlations were between -0.10 and -0.0, and for ADS and SMU genetic correlations were between 0.10 and 0.23. Genetic correlations implied limited but statistically significant sets of genes that affect WB/ADS and SMU levels. Overall, the results indicate that there is evidence that the small associations between WB/ADS and SMU are partly driven by overlapping genetic influences. We encourage researchers and experts to consider more personalized approaches when considering the association between WB and SMU, as well as understanding the reasons for individuals’ observed SMU levels.
One lesson (once again) is that the correlation between well-being and social media usage is modest. A second and newer lesson is that the existing connection is partly driven by overlapping genetic influences.
What do intelligence analysts do?
The people who are really good understand sourcing and how important it is for critical thinking. The education should be focused on helping people recognize and refute bullshit. Step one is the critical thinking necessary to say, “This makes no sense,” or “This is just fluff.” The people who are professionally trained to be really good at understanding the quality and history of a source, and to understand the source’s access to information or lack of, are librarians. We should probably steal shamelessly from librarians. Data journalism, same thing. There are lots of parallel professions where we could be learning more to improve our own performance.
The folks that I’ve seen who crush it, they’re like a dog with a bone. They will not let go. They’ve got a question, they’re going to answer the question if it kills them and everybody else around them. It’s a kamikaze thing. Those people, the tenacious ones who care about sources and have critical thinking skills, or at least tools to help them think critically, seem the highest performers to me. As a rule, they all keep score. It’s part of their process.
That is from Santi Ruiz interviewing Rob Johnston, interesting throughout.
Sunday assorted links
1. Australia’s great stagnation.
2. Ezra Klein interviews Natasha Sarin (NYT). She is not only an excellent economist, but she avoids exaggeration, an increasingly rare trait in public discourse.
4. Economists are using ChatGPT to write their abstracts.
5. “Our findings challenge the common assumption that automation exposure equates to wage losses.”
6. Two sheep dogs and their marginal product.
7. Bolivia might be shifting to the right at the pending election.
The Danger from Japan
Every generation launches a new competitor to America and the people who don’t like capitalism and America’s individualist, free market economy trumpet that now the American way is being left in the dust. In the progressive era it was the Germans (how did that work out?), then it was the Russians (remember Sputnik?), then it was the Japanese (buying up Rockefeller center! the horror!), then it was the Chinese (look at those high speed rail lines!). My message to Americans is to double down on America. Double down on immigration, entrepreneurship, innovation, building for tomorrow, free markets, free speech and individualism and America will take all new competitors as it has taken all comers in the past. The world should be more like America not the other way around.
Hat tip: Mike Bird.