*Wrestling with Moses*
The subtitle is How Jane Jacobs Took On New York's Master Builder and Transformed the American City and the author is Anthony Flint. Here is an excerpt:
Through school, Jane's sharp mind and her penchant for challenging authority — her parents raised her to pay attention to ethics but never blindly conform — made her a bit of a loner and slightly quirky. Like many adolescents, she made up imaginary friends to talk to. But hers were Thomas Jefferson and Ben Franklin. Franklin "was interested in lofty things, but also in nitty-gritty, down-to-earth details, such as why the alley we were walking through wasn't paved, and who would pave it if it were paved. He was interested in everything, so he was a very satisfying companion." She explained traffic lights to him, and women's clothes, and the city's system of trash bins and collection. Another imaginary friend was a Saxon chieftain named Cerdic, plucked from the pages of an English historical novel.
The parts of this book about Jacobs are splendid. The parts about Moses are good, though they were more familiar to me. I believe there has otherwise never been much biographical material on Jacobs's life. Here is an excerpt from the book. Here is one review. Did you know about her book A Schoolteacher in Old Alaska?
Markets in Everything: Iraqi Mixed Marriages
Muhanad Talib, a Sunni Muslim, married his Shiite bride because she was a "suitable woman" for him. It also didn't hurt that their vows made them eligible for a $2,000 payout from the government.
Talib and his wife are among more than 1,700 newlywed couples who have accepted cash from a government program that encourages Sunnis and Shiites to tie the knot.
It's encouraging that according to the AP story such marriages are on the rise and the money seems to be treated more like a bonus than a compensating differential for risk.
Hat tip to Daniel Lippman.
China “facts” of the day
All but seven of the regions reported GDP growth rates above the
bureau’s first-half figure of 7.1 per cent. At the start of the year,
Beijing set 8 per cent as China’s growth target for the year.
…In recent years, provincial figures have suggested consistently the
world’s third-largest economy is bigger than Beijing’s published
estimate, but the discrepancy appears to have widened this year.
…The Global Times, controlled by the People’s Daily, the Communist party
mouthpiece, reported that the public reacted with “banter and sarcasm”
to NBS figures showing average urban wages in China rose 13 per cent in
the first half to $2,142.
It is noted that the state worked on the gdp numbers for a full fifteen days. Yet not everyone is happy:
The criticism has prompted the NBS to launch a campaign last week,
entitled “Statistical Feelings: We have walked together – Celebrating
the 60th anniversary of the founding of New China,” to boost confidence
among statisticians.
The campaign has already produced works such
as: “I’m proud to be a brick in the statistical building of the
republic.” In another poem, a contributor writes: “I can rearrange the
stars in the sky because I have statistics.”
“Insight through horribleness”
I find myself wishing for a single word to express this concept.
I sometimes refer to the concept while reading. I think: "this book has insight through horribleness." It requires a certain twisted perceptiveness on the part of the author, but to be sure the author is not usually writing truth.
It differs from "insight through analysis," "insight through description," and related concepts. I am never sure if I should report on books which offer insight through horribleness. Jack Henry Abbott is a (dead) author who has insight through horribleness.
Department of Unintended Consequences, installment #539
We show that these types of international action on child labor tend to
lower domestic political support within developing countries for
banning child labor.
Here is much more.
Edifying editing
One well-known irate author, after a rejection, wrote me “Who are you to reject my paper?” The answer, which I didn’t send, is “I’m the editor.”
That's from R. Preston McAfee, in a short and excellent piece he wrote on what makes for a good journal editor.
I enjoyed the section which started with this sentence:
There are authors who attempt to annoy the editor.
This part was good too:
Pretty much 100% of kooks are theorists; you won’t meet a, say, physicist or physician with a Great Economic Idea that involved running regressions or doing lab experiments, although occasionally there is a table illustrating a correlation between some economic variable like lawyers or fluoridated water and per capita GDP.
And this:
The essential mystery of editing is why the reports I receive as an editor are so much better than the reports I receive as an author.
For the pointer I thank Chris F. Masse.
Pharmaceutical R&D
In an over-the-top post Megan McArdle goes all Xena warrior princess on Ezra Klein and Jerry Avorn. I especially liked this bit: Here's Avorn on why we need not worry that regulating drug prices will reduce innovation:
There are a couple reasons that this is a specious argument. One is that according to their filings with the SEC, the drug companies only spend about 15 cents of every dollar on research and development. That's compared to more than 30 cents in administration and marketing and more than 20 cents on shareholder equity. As an investment in R&D, I think any venture capitalist would say a company spending 15 percent on research is not a robust innovation engine.
and here is McArdle swinging the sword of truth:
This makes about as much sense as saying that Dr. Jerry Avorn cannot be that smart because his brain only weighs about three pounds. Presumably, you can't be really smart–really innovative–unless your brain is at least 30 percent of your body weight!
This is obviously ludicrous–so why would Dr. Avorn say it about an R&D department? Like your brain, the R&D department is part of a complex system that does a lot of important stuff. You can argue that the R&D department is the most important part of a company, not least because it couldn't survive long without it. I think the same thing about my brain–but I'd still be just as dead without my liver. You certainly can't prove anything about my effectiveness as a journalist by pointing out that [my brain] weighs less than my bones. So how big should a "brain" be? Hard to say. But let's look at some companies that are generally recognized as pretty innovative, and their R&D as a percentage of revenue:
Apple: three cents out of every dollar
Google: ten cents out of every dollar
Intel: fifteen cents out of every dollar
Genzyme (innovative biotech startup!): sixteen cents of every dollar
US Government: three cents out of every dollar
I can assure Dr. Avorn that any venture capitalist would be happy to invest in these hidebound laggards who haven't had a new idea in centuries. The first few, anyway.
By the way, I liked Jerry Avorn's book Powerful Medicines (see also here) but I thought it was weak on economics, a fact which really shows in this interview (he does make a few good points about comparative effectiveness research).
Measuring Economic Growth from Outer Space
Here is a clever new idea from Henderson, Storeygard, and Weil:
GDP growth is often measured poorly for countries and rarely measured at all for cities. We propose a readily available proxy: satellite data on lights at night. Our statistical framework uses light growth to supplement existing income growth measures. The framework is applied to countries with the lowest quality income data, resulting in estimates of growth that differ substantially from established estimates. We then consider a longstanding debate: do increases in local agricultural productivity increase city incomes? For African cities, we find that exogenous agricultural productivity shocks (high rainfall years) have substantial effects on local urban economic activity.
Here is the paper. WSJ blogs added:
They also noted how data from night lights can be focused to provide
data on a local level. In Southern Madagascar large deposits of rubies
and sapphires were discovered in late 1998 near the towns of Ilakaka
and Sakaraha, leading to an economic boom. But the data from the
satellites tell the story of where the benefits were felt most deeply.
“Over the next five years there was a sharp growth in the number of
pixels for which light is visible at all, and in the intensity of light
per pixel,” the economists said. “The other town visible in the figure,
Ihosy, shows no such growth. If anything, Ihosy’s light gets smaller
and weaker, as it suffers in the competition across local cities for
population.”
Assorted links
1. Heterogeneous benefits from medical interventions, a new paper by William Evans and Craig Garthwaite.
2. Why your spleen is important.
3.The culture that is Japan: ramen robots.
4. A countercyclical asset, right in the restaurant itself.
Bryan Caplan, scream this from the rooftops
If you measure people's thoughts, rather than asking them about their feelings, it seems they really enjoy the time they spend with their kids. Here is an excerpt from BPS Research Digest:
In terms of pleasure, the results confirmed earlier findings,
suggesting that we spend an awful lot of time doing things we don't
find pleasurable, including "work" and "shopping". Out of 18 key
activities, "time with children" and "sex" both came in around
mid-table, far below "outdoor activities" and "watching TV". However,
consideration of the ratings for "reward" (as opposed to pleasure) told
a rather different story, with "work" now the top scorer, and "time
with children" not far behind.
Commuting, however, cannot be saved by a similar move.
Markets in everything but not yet?
Could digital books could produce [a] class of "pro readers" so insightful you pay to download their notes?
That's a tweet from Andrew Hazlett.
High speed trading swimming
Next year the innovative swimming suits that are causing world records to fall at rapid pace will be banned. Michael Mandel wonders if this is the beginning of the counterrevolution against technological progress and Tyler argues “essentially on innovation we’re seeing a flipping of the burden of proof and I don’t think it is possible to easily fine-tune that flipping in a way to capture good innovations and rule out bad ones.” Believe it or not, Mandel really was talking about swimsuits. Tyler, however, was talking about high speed trading but is there much difference between the two? I don’t think so.
High-tech swimming suits and trading systems are primarily about distribution not efficiency. A small increase in speed over one’s rivals has a large effect on who wins the race but no effect on whether the race is won and only a small effect on how quickly the race is won. We get too much investment in innovations with big influences on distribution and small (or even negative) improvements in efficiency and not enough investment in innovations that improve efficiency without much influencing distribution (i.e. innovations in goods with big positive externalities).
One difference between swimsuits and trading systems is that the former are regulated by FINA, the federation that administers international competition in aquatic sports. We have some hope that a group like FINA can internalize the major externalities both because it encompasses the primary players in the market and because externalities outside of the market are likely to be small (swimming rules are unlikely to cause non-swimmers many problems.) Thus, FINAs rules on swimsuits have some claim to efficiency. Note that we see similar “anti-innovation” rules in many other sports such as car racing. NASCAR, for example, does not allow stock cars to use fuel injectors even though this innovation is now standard on production cars.
NASDAQ (and the other exchanges) are the logical equivalent to NASCAR and FINA in that they can internalize the externalities among the primary players. Thus, if the exchanges were to regulate various high-speed trading strategies I wouldn’t have any problems with that.
But would exchange regulation go far enough? Unfortunately we have learned that the exchanges don’t internalize systemic risk. Trading rules can cause non-traders many problems. As a result, I think there is a case to be made for greater regulation than the exchanges would provide. There is good reason to be skeptical about regulation in general but since this product, “financial innovation,” is primarily about distribution I’m less worried about regulation in finance than in fields where innovation is more closely tied to efficiency.
How to sign your emails
I enjoyed this article, here is an excerpt:
"If you have been writing to someone 'Best' this and 'Best' that, and
you get an e-mail that is a little colder, a little hostile, and they
sign 'Sincerely,' that does mean things aren't so good," Schwalbe says.
" 'Sincerely' is the one that says, 'There's a problem here.' "
And, one may well wonder, does "Cordially" ever mean anything other than "My hostility is only thinly veiled"?
And when, e-mail-wise, is it too early for "Love"? Does "Fondly"
ever belong in business? Is "Cheers" too mock-Brit? Too alcoholic?
Fondly,
Tyler
Assorted link
1. Rant about agriculture, hat tip goes to Ezra Klein.