What I’ve Been Reading
1. The World is What It Is, by Patrick French. This authorized (yes, authorized) biography digs up all the dirt on V.S. Naipaul; I’ve never read anything like it. Here is a Paul Theroux review. Here is another rave review. Theroux’s own self-loathing, quasi-fictional biography of his "friendship" with Naipaul — Sir Vidia’s Shadow — remains one of my favorite books but this is a wonderful sequel. And if you haven’t read through Naipaul’s ouevre you should, especially A Bend in the River, A Turn in the South, and Among the Believers, among others. There is something to be said for misanthropy raised to an art form and packed with intellectual content.
2. Paradise with Serpents, by Robert Carver. The only question is whether this is the first or the second best book on Paraguay in the English language; here is the other contender.
4. Problems with farm price futures, worth a read.
Answering your questions
Who knows, maybe I’ll try to get to them all. Here’s the first:
What impact will algorithmic game theory have on economics?
I’d start by asking: will game theory pure and simple have (further) impact on economics? And I’d say basically "no." The common concepts and tricks of game theory are invaluable but we already have those and I don’t see any more coming down the pike. Algorithmic game theory will address problems internal to game theory and within that context it will flourish. Finding equilibria, and discriminating among multiple equilibria, are otherwise very difficult problems and AGT is a natural way to crack those nuts. So AGT will have continued practical applications in computer science and problems of engineering. But it won’t much affect how most economists think about the world or do their research.
As for NBA analysis, I’ll just say that a) Boston is still an odds-on favorite, b) No one ever really told us what happened to Andrew Bynum, and c) Even though Phoenix probably won’t make it, the Shaq trade was very clearly a good idea and all you doubters should offer up mea culpas.
Tabarrok on NPR
Here’s me talking about bounty hunters and private prisons with Margot Adler.
Request for requests
Comments are open, so please let us know what you are interested in reading about. The only promise is that of weak monotonicity, namely that your mention won’t lower the chance of the topic being covered.
Million dollar blocks
An innovative analysis by Eric Cadora highlights "million-dollar blocks" — individual city blocks where more than one million dollars per block per year are spent to incarcerate individuals from that block. Some blocks cost over five million dollars per year…A million dollars, coincidentally, is roughly what it would cost to pay for one patrol officer, twenty-four hours a day, every day for one year.
That is from Peter Moskos’s Cop in the Hood: My Year Spent Policing Baltimore’s Eastern District. In Brooklyn of 2003, there were 35 million dollar blocks. Here is more information, plus maps and graphs.
Bad Money
That’s the new book by Kevin Phillips. He concludes:
The thirty- to forty-year tumble from national preeminence that made life more glum for most folk in seventeenth-century Spain, and eighteenth-century Holland, and the Britain from the 1910s to the 1950s may be somewhat moderated for the United States because of a position as a North American continental economic power with a large resource and population base…
Boo hoo, I say; I’ll be crying all the way to Rio. Overall this book is a catalog of the usual arguments about the financial problems of the United States, peak oil, the potential weakness of the dollar, and related worries. Phillips doesn’t seem to think that finance is much of a productive economic sector. He is keen on the "inflation is larger than we realize" line, citing high growth rates for M3 (he doesn’t realize how much the different aggregates can move around and differ from each other) and then the Fed’s discontinuation of that statistic. But who has been tricked? Either the current market estimate of inflation is the best estimate available, or you know that it is wrong and you will be a very rich man. I find the former scenario more plausible.
If there’s anything wrong with gdp statistics, it’s either environmental problems or that we don’t have good measures of the productivity of government itself. Those problems are built into how the number is calculated and there is no conspiracy to make America look much richer than it really is.
There is remarkably little on future expected productivity growth or whether America will solve the problem of educating its non-upwardly-mobile, which are both (the?) major issues for our economic future. The author should spend a week locked in a room with the Solow model. There is also precious little recognition that America in twenty years’ time will almost certainly be a good bit wealthier than today. Given that no other country is about to take us over, does relative international status really matter so much for the happiness of Americans? I don’t think so. The richer the Chinese get, the more I feel good about living in the world’s first country to be a true product of The Enlightenment. If only Phillips could feel the same way.
The future of Toyota
Some of Toyota’s U.S. plans are now more than 20 years old, and a growing number of its workers are paid the top wage of about $25 an hour. That’s less than Detroit’s veteran union hands make now, but a contract inked last fall will enable U.S. automakers to replace many highly paid employees with cheaper workers. By 2011, Toyota’s cost advantage over Detroit could disappear.
By late 2009, Toyota’s assembly plant in Georgetown, Kentucky could have the highest labor costs of any auto factory in the country. Here is the story.
When I visited Utah, I rented a Hyundai and I have to say it drove very nicely…
Assorted links
2. Income inequality, from Greg Mankiw
3. How much appearing on Colbert helps your book
4. India’s "brain gain"
Ain’t My America
The author is Bill Kauffman and the subtitle is The Long, Noble History of Antiwar Conservatism and Middle-American Anti-Imperialism. Here is one excerpt:
Above all, they feared empire, whose properties were enumerated well by the doubly pen-named Garet Garrett: novelist, exponent of free enterprise and individualism, and a once-reliable if unspectacular stable horse for the Saturday Evening Post. Writing in 1953, he set down a quintet of imperial requisites.
1. The executive power of the government shall be dominant.
2. Domestic policy becomes subordinate to foreign policy.
3. Ascendancy of the military mind to such a point at last that the civilian mind is intimidated.
4. A system of satellite nations.
5. A complex of vaunting and fear.
He could have listed this too. In my view this book goes wrong by failing to consider that the right-wing, anti-militarist tradition was wrong on some pretty critical cases. Nonetheless if you are looking for a well-informed, well-written, and up-to-date book on that tradition, consider this your go-to source.
Non-profit prediction markets
At Bet2give, an online electronic prediction market, anyone can “bet”
real money on the outcome of these events but with a twist – the
“winnings” go to a charity of the person’s choice.
Here is the full article, and here is Bet2give.com. One of the "problems" with prediction markets is that they are zero-sum investments and traders cannot on average hope to come out ahead. So why trade? If only people really "in the know" trade liquidity will be low. If too many "betting for fun" fools trade, the prices don’t mean that much. You might get the right mix of informed and uninformed but who knows? So the idea of doing these in charitable form might make some sense.
Why are gun owners so happy?
Arthur Brooks reports:
Who are all these gun owners? Are they the uneducated poor, left
behind? It turns out they have the same level of formal education as
nongun owners, on average. Furthermore, they earn 32% more per year
than nonowners. Americans with guns are neither a small nor downtrodden
group.Nor are they "bitter." In 2006, 36% of gun owners said they were "very
happy," while 9% were "not too happy." Meanwhile, only 30% of people
without guns were very happy, and 16% were not too happy.In 1996, gun owners spent about 15% less of their time than nonowners
feeling "outraged at something somebody had done." It’s easy enough in
certain precincts to caricature armed Americans as an angry and
miserable fringe group. But it just isn’t true. The data say that the
people in the approximately 40 million American households with guns
are generally happier than those people in households that don’t have
guns.The gun-owning happiness gap exists on both sides of the political
aisle. Gun-owning Republicans are more likely than nonowning
Republicans to be very happy (46% to 37%). Democrats with guns are
slightly likelier than Democrats without guns to be very happy as well
(32% to 29%). Similarly, holding income constant, one still finds that
gun owners are happiest.
By the way, if you are curious, I have never even touched a gun.
Addendum: Arthur has a new (and very good) book out, Gross National Happiness.
A trip to El Bulli
Air Genius Gary Leff crossed the Atlantic for one purpose alone and now the voyage is blogged, gripping throughout. My favorite passage is this:
Two women walked in ahead of us, they had been meandering around the
grounds and then presented themselves (in sweatshirts and tennis shoes)
and asked to be seated for dinner… without reservations. They were
turned away in an exceptionally polite way.
Sentences of wisdom
What’s missing is a recognition of how mysterious the secret of
economic growth remains, despite all the energy that economists have
poured into solving it.
That’s James Surowiecki, reviewing Ha-Joon Chang’s Bad Samaritans and writing on free trade; the piece is interesting throughout. The pointer is from Ben Casnocha.
Ontdek je innerlijke econoom
The Dutch edition is out now, or at least I have copies in my hands. You can buy it at these places. The Korean edition is out as well, but I don’t know how to Google the title.
Good Letter, Wrong Address
Mark Thoma has an An Open Letter to ABC about the Presidential Debate signed by Brad DeLong, Kevin Drum, Henry Farrell, Eric Alterman and many others.
The debate was
a revolting descent into tabloid journalism and a gross disservice to Americans
concerned about the great issues facing the nation and the world….
For 53 minutes, we heard no question about public policy from either
moderator. ABC seemed less interested in provoking serious discussion than in
trying to generate cheap shot sound-bites for later rebroadcast. The questions
asked by Mr. Stephanopoulos and Mr. Gibson were a disgrace…
I agree. The only thing the signatories got wrong was where to send the letter. The letter should have been addressed to the American public. After all, this debate, which came in the flurry of all the tabloid journalism of the past several weeks, was the most-watched of the 2008
presidential campaign. The public got what it wanted.