*Little Did I Know: Excerpts from Memory* the new Stanley Cavell memoir

by  Tyler Cowen in

To recognize the end of the day and get to bed, I developed the ritual of eating a box of Oreo cookies together with a can of applesauce.  But really the ritual is equally describable as an effort to stop myself from eating the entire box of cookies, a sequence of five (was it?) pairs, each pair stacked in a pleated pliable plastic cup, and from finishing the accompanying applesauce, having conceived the idea that this was not a sensible diet.  I slowed the eating by inventing new ways of going through the cookies.  One way was to nibble around the circumference of a cookie before finishing off the remaining rough-edged center; another was to twist apart the two wafers of each Oreo, eat off the sugary middle spread from whichever of the wafers it largely adhered to, intending to eat only that one of that double cookie.  But each night I lost the battle to stop eating before the package and the can were emptied.  I recognize that to this day I unfailingly at the end of a meal leave some portion of food, if sometimes quite small, on my dish — as if to reassure myself that I am free.

I do the same, I should add.  That passage is from Stanley Cavell, one of America's leading philosophers.  If you're looking for a book which steps outside the usual mode of strict narrative, I recommend this highly, but it will leave many people frustrated.  You can buy it here.

For the pointer I thank David Gordon.

Rejection Therapy

by  Tyler Cowen in

Jason Comely writes to me:

Rejection Therapy is a real life game with one rule: to be rejected by someone every single day, for 30 days consecutive. There are even suggestion cards available for "rejection attempts" (although they are not essential to the game).

I designed the game for myself about a year ago because I wasn't getting out of my comfort zone anymore. I was afraid of rejection. Rejection Therapy was a way I "incentivized" getting out of my comfort zone, and being rejected became a desired end result.

Are you comforted to learn that?:

Rejection then must be the sister of death.

And yet…you are not supposed to reject others.  Every blogger should ponder the implications of Rejection Therapy.

Rereading *The Road to Serfdom*

by  Tyler Cowen in

Given all the recent fuss, I picked it up again and found:

1. It was more boring and less analytic on matters of public choice than I had been expecting.

2. Although some of Hayek's major predictions have been proven wrong, they are more defensible than I had been expecting.

3. The most important sentence in the book is "This book, written in my spare time from 1940 to 1943…"  In those years, how many decent democracies were in the world?  How clear was it that the Western powers, even if they won the war, would dismantle wartime economic planning?  How many other peoples' predictions from those years have panned out?  At that time, Hayek's worries were perfectly justified.

4. If current trends do turn out very badly, this is not the best guide for understanding exactly why.

It's fine to downgrade the book, relative to some of the claims made on its behalf, but the book doesn't give us reason to downgrade Hayek.

Bill Bryson’s *At Home*

by  Tyler Cowen in

Indeed, the history of early America is really a history of coping with shortages of building materials.  For a country famed for being rich in natural resources, America along the eastern seaboard proved to be appallingly deficient in many basic commodities necessary to an independent civilization.  One of those commodities was limestone, as the first colonists discovered to their dismay.  In England, you could build a reasonably secure house with wattle and daub — essentially a fraework of mud and sticks — if it was sufficiently bound with lime.  But in America there was no lime (or at least none found before 1690), so the colonists used dried mud, which proved to be woefully lacking in sturdiness.  During the first century of colonization, it was a rare house that lasted more than ten years…A hurricane in 1634 blew away — literally just lifted up and carried off — half the houses of Massachusetts.  Barely had people rebuilt when a second storm of similar intensity blew in…Even decent building stone was not available in many areas.  When George Washington wanted to pave his loggia at Mount Vernon with simple flagstones, he had to send to England for them.

The one thing America had in quantity was wood.

That is all from the new Bill Bryson book, subtitled A Short History of Private Life, which is both entertaining and informative.

Mario Vargas Llosa wins Nobel Prize

by  Tyler Cowen in

That's for literature, sadly he never had the chance to win a prize for economics, as his political career as a Peruvian classical liberal was cut short by electoral defeat.  He has many fine books but I have two particular favorites: The War of the End of the World (serious and epic, concerning a millenarian revolt in Brazil) and Aunt Julia and the Scriptwriter (a fun story and spoof of telenovela culture).  Conversation in the Cathedral is sometimes considered a classic but I find it unreadable.  I suspect his early The Green House will resonate more with Latin Americans.  His last major novel, The Bad Girl, was entertaining but not entirely satisfying and it reminded me a bit too much of an older man writing about sex.  The Feast of the Goat is a very good study of political power.  Here are previous MR mentions of Mario Vargas Llosa.

Here is Wikipedia on Vargas Llosa.  Alex has done a good bit of work with Alvaro Vargas Llosa, son of Mario and a prominent writer on classical liberal themes, and perhaps he will relate some of that to us.

Comali foods: tamales and pupusas from El Salvador

by  Tyler Cowen in

They sent me, gratis, non-frozen tamales from El Salvador.  They sell pupusas too, and with improved technologies:

The retort process uses a combination of heat and pressure to “sterilize” the foods, which are sealed in special pouches similar to military MRE’s (but ours taste a lot better 🙂 ). 

They were excellent (I knew immediately when I smelled them) and no artificial preservatives are required.  They will deliver to your door and their web site is here.  I am told there is a 30 percent off discount with use of the code TCowen30; I receive no kickback.

Don't forget the white sour cream.

Canada’s budget triumph

by  Tyler Cowen in

From a new paper by David Henderson:

A federal government runs a large deficit. Deficits are so large that the ratio of federal debt to Gross Domestic Product (GDP) approaches 70 percent. A constituency of voters have gotten used to large federal spending programs. Does that sound like the United States? Well, yes. But it also describes Canada in 1993. Yet, just 16 years later, Canada’s federal debt had fallen from 67 percent to only 29 percent of GDP. Moreover, in every year between 1997 and 2008, Canada’s federal government had a budget surplus. In one fiscal year, 2000–2001, its surplus was a whopping 1.8 percent of GDP. If the U.S. government had such a surplus today, that would amount to a cool $263 billion rather than the current deficit of more than $1.5 trillion.

Status plateaus

by  Tyler Cowen in

Colin, a loyal MR reader, writes to me:

My girlfriend and I were having dinner at a swanky place…and noticed everyone had essentially the same phones–either an iPhone or some version of a Blackberry–which are the same models I see all over campus…It seems to me that with most items like cars, handbags, or houses, there are always more expensive/prestigious items one can get to signal a new tier of wealth, but with phones this is not the case (iPhones and Blackberrys look to be the end of the line, and are not particularly exclusive to the wealthy). We were curious if you could come up with any other items or industries that plateau like this–the only other we could really think of was media/entertainment (plateau at the NYT/WSJ; everyone sees roughly the same new released movies or tv shows). Thanks for your consideration and thanks for keeping up the excellent blog! 

Other than reading blogs, what are further examples?  By the way, here is the world's most expensive cellphone (beware: the pop-up at the link offers audio), at 300k, but I think your wealthy friends will simply laugh at you. Only 28 of them have been produced.

Status plateaus may be profit-maximizing when large numbers of upper-middle class customers wish to believe that they are enjoying the truly cutting edge technology and they are willing to pay for it.  Creating the "iPhone plus for billionaires" would lower the demand for iPhones proper.

Economics Nobel odds at iPredict

by  Tyler Cowen in

iPredict is running contracts on who will win this year's Nobel Prize in Economics. As I write Oliver Hart heads the field with a 25% chance, Robert Schiller, Richard Thaler, Martin Weitzman come next, all with an 18% chance of winning.

Also listed are William Nordhaus, Jean Tirole, Angus Deaton, Richard Posner, Gene Grossman, Ernst Fehr, Gordon Tullock, Avinash Dixit, Sam Peltzman, Eugene Fama and Robert Barro.

It does seem to be a market based on real money payments, though I am not sure how much liquidity is there.  The direct link to the contracts is here and right now Thaler is leading.  The link cited above is here and for the pointer I thank Eric Crampton.

Should they have let the guy’s house burn down?

by  Tyler Cowen in

David Henderson blogs some of the basic information (Cohn at TNR comments here).  Here is the upshot:

He refers to a story about a man who failed to pay an annual fee for fire protection and then, when his house caught on fire and he called the fire department, the fire department refused to show up.

They wouldn't even let him pay up ex post.  David notes that this is a government-run fire department and thus the story is not much of a moral reductio on the market.  Arguably a private company would behave the same way, sometimes, but it 's odd to claim that government failure reminds you market failure is possible and so let's damn the market.  By the way, markets do pretty well at setting up schemes with a penalty for late payment; that's how my mortgage works.

I would make a broader point.  Any social system must, at some stage of interactions, impose some morally unacceptable penalties.  If you are very hungry, and you shoplift food, they still might prosecute you.  If you don't pay your taxes, and resist wage garnishes, they might put you in jail.  If you resist arrest, they might, at some point in the chain of events, shoot you while trying to escape.  Somewhere along the line there is a doctor who can treat your rare disease except he doesn't feel like working so much, and so he lets you die or suffer; you can find both private and public sector examples here. 

Social systems proceed by (usually) covering up the brutalities upon which they are based.  The doctor doesn't let you get to his door and then turn you away, rather his home address is hard to find.  The government handcuffs you so they don't have to shoot you trying to escape.  And so on.

To borrow language from Thomas Schelling, social systems involve costs in terms of both "known" and "statistical" lives.  It's the sum total of costs which is important.  It's fine (though controversial) to argue that a "known" life should be more important than a "statistical" life, but it's not dispositive to pull out one example of a "known" life and draw a significant conclusion from that anecdote.  That's what we teach students not to do in first year principles, sometimes citing Bastiat, the seen and the unseen, and so on.

I don't favor the policies of this fire department, but simply pointing out the vividness one of these social brutalities doesn't much influence me about the broader principles at stake.

Will America come to envy Japan’s lost decade?

by  Tyler Cowen in

That's Ezra's question, read this too.  Moving away from traditional macro, I would add two points:

1. Japan has seen numerous quality improvements over the last twenty years, and Japanese consumers are renowned for valuing quality.  The CPI mismeasurement problem may be greater for Japan and real Japanese living standards perhaps have risen a bit more rapidly than the numbers indicate.

2. Japanese politics is less competitive and Japanese rent-seeking is less competitive than in the United States.  Sustained near-zero growth in the United States would mean that interest groups tear apart the social fabric and grab too lustily at the social surplus.  Whether we like it or not, we are "built to grow" and we use the fruits of that growth to buy off interest groups as we go along.  Japan in contrast has greater capacity to stifle these grabs for new redistributions because their politics is more of an insider's game.

Imagine a future world history where, fifty years from now, we look back and decide that Japan was the one country that made a semi-success of near-zero growth.  Which means we are now watching a Golden Age there of sorts.  I'm not betting on that, but if you're looking for strange scenarios that's my suggestion for the day.