From my email:
We are now starting to get a hint of the future transformative technologies that you guessed were on their way in “The Great Stagnation”. You had not speculated on what they might be, but there are faint hints on what is likely to happen.I believe this article is one leg: extremely fast air travel. The second leg is the Hyperloop and similar: extremely fast ground travel. The third leg is synthetic biology (e.g: https://www.economist.com/leaders/2019/04/04/the-promise-and-perils-of-synthetic-biology). The fourth leg is quantum computing, which is finally starting to show that it might work. And the fifth, and final leg, is fusion energy, which looks eerily like it will actually come to fruition this time.Put those 5 together and you have the makings of a new economy, with a huge burst of growth to come for many decades. These are just faint hints, of course, but they’re starting to get increasingly clear.
Ladders runs an excerpt from my book Big Business: A Love Letter to an American Anti-Hero, here is one part:
Another way to think about the non-pay-related benefits of having a job is to consider the well-known and indeed sky-high personal costs of unemployment. Not having a job when you want to be working damages happiness and health well beyond what the lost income alone would account for. For instance, the unemployed are more likely to have mental health problems, are more likely to commit suicide, and are significantly less happy. Sometimes there is a causality problem behind any inference—for instance, do people kill themselves because they are unemployed, or are they unemployed because possible suicidal tendencies make them less well suited to do well in a job interview? Still, as best we can tell, unemployment makes a lot of individual lives much, much worse. In the well-known study by economists Andrew E. Clark and Andrew J. Oswald, involuntary unemployment is worse for individual happiness than divorce or separation. Often it is more valuable to watch what people do rather than what they say or how they report their momentary moods.
There is much more at the link.
4. “The Travis Corcoran novel (a sequel to last year’s winner) the moon colonists consult a “Cowen wiki” to figure out where to eat, and Corcoran says in the Afterword that this is a hat tip to you.” Or so I am told.
5. Why doesn’t the price of on-line higher education fall more? A very interesting and important symposium.
6. “The data don’t seem to support the claim that human capital investments are most effective when targeted at younger ages.” A very interesting and important post.
One of the goals of the Swachh Bharat or Clean India mission was to achieve an “open-defecation free” (ODF) India by 2 October 2019 (the 150th anniversary of Gandhi’s birth). OD is a big problem in India contributing to child sickness, stunting and a host of permanent problems including lower IQs. As of 2011, half of Indian households didn’t have access to a latrine but since that time millions of latrines have been built and the government has encouraged (sometimes “vigorously”) latrine use.
Unfortunately, the close connection between the Swachh Bharat mission and Prime Minister Modi has made achieving the mission, or claiming to have achieved the mission, not just a political goal but a test of patriotism and support for Modi. The Swachh Bharat website, for example, proclaims that India is now 99% open defecation free, including 100% coverage in Rajasthan, Madhya Pradesh, Utter Pradesh and Bihar.
In Rajasthan and Madhya Pradesh, states that had been declared ODF by the time of the survey, we found rural open defecation rates of about 50% and about 25%, respectively. The vast majority of villages in Uttar Pradesh and Bihar have also been declared ODF; the quantitative survey found open defecation rates of approximately 40% and 60%, respectively, in these states (Gupta et al 2019).
How do villages, and eventually blocks, districts, and states get declared ODF despite high levels of open defecation? One reason is that ODF status is often declared where latrine coverage is, in fact, incomplete: about 30% of households in the four states we studied did not own a latrine. Another reason is that many people who own a latrine still defecate in the open. In fact, latrine use among latrine owners has not changed since 2014: one in four people who own a latrine in the 2018 survey do not use it (Gupta et al 2019).
Ambitious program need not reach their goals to be successful–progress has been made and Modi can take credit–but it’s dangerous when problems are declared solved in order to meet political timelines and narratives. Work remains to be done.
These data reveal that, in half of the Congresses over the past two decades, successful filibustering minorities usually represented more people than the majorities they defeated.
That is from Benjamin Eidelson in Yale Law Review, note that he is covering only 1991-2010.
Somehow I had missed this earlier paper by John Charles Bradbury:
Since the early-2000s, the share of revenue going to Major League Baseball players has been diminishing similar to the decline of labor’s share of revenue observed in the US economy. This study examines potential explanations for the decline in baseball, which may result from related factors and provide information relevant to explaining this macroeconomic trend. The results indicate that the value-added from non-player inputs, collective bargaining agreement terms, and related changes in the returns to winning contributed to the decline of players’ share of income. Competition from substitute foreign labor and physical capital are not associated with the decline in labor’s share of income in baseball.
There is also this sentence:
The decline in labor’s revenue share in MLB is consistent with changes in revenue share in the hospitality and leisure industry that experienced a decrease in labor’s share of income from 65.7 percent to 62.1 percent between 1987 and 2011 (Elsby, Hobijn, and Şahin 2013).
Another hypothesis I have heard is that baseball players are not nearly as good at, or as well-suited for, the use of social media, as compared say to the more visible basketball players. Another (quite speculative) claim is that sabermetrics has commoditized a lot of players and in turn lowered their bargaining power.
1. Andrea O’Sullivan reviews Big Business for Reason magazine: “In true Cowenesque fashion, the book starts out with a markedly contrarian premise that by the last page seems so evident that you wonder why it first felt outlandish at all. I expect that even the most dogged big business critic will feel just a little tenderer towards today’s titans by the end (whether they want to admit it or not).”
2. Boeing and innovation (NYT).
COWEN: You’ve trained in chemistry, physics, electrical engineering, and neuroscience, correct?
BOYDEN: Yeah, I started college at 14, and I focused on chemistry for two years, and then I transferred to MIT, where then I switched into physics and electrical engineering, and that’s when I worked on quantum computing.
COWEN: Five areas, actually. Maybe more.
BOYDEN: Guess so.
COWEN: Should more people do that? Not the median student, but more people?
BOYDEN: It’s a good question.
COWEN: Are we less creative if all the parts of our mind become allies? Maybe I’m afraid this will happen to me, that I have rebellious parts of my mind, and they force me to do more interesting things, or they introduce randomness or variety into my life.
BOYDEN: This is a question that I think is going to become more and more urgent as neurotechnology advances. Already there are questions about attention-focusing drugs like Ritalin or Adderall. Maybe they make people more focused, but are you sacrificing some of the wandering and creativity that might exist in the brain and be very important for not only personal productivity but the future of humanity?
I think what we’re realizing is that when you intervene with the brain, even with brain stimulation, you can cause unpredictable side effects. For example, there’s a part of the brain called the dorsolateral prefrontal cortex. That’s actually an FDA-approved site for stimulation with noninvasive magnetic pulses to treat depression. But patients, when they’re stimulated here . . . People have done studies. It can also change things like trust. It can change things like driving ability.
There’s only so many brain regions, but there’s millions of things we do. Of course, intervening with one region might change many things.
COWEN: What kind of students are you likely to hire that your peers would not hire?
BOYDEN: Well, I really try to get to know people at a deep level over a long period of time, and then to see how their unique background and interests might change the field for the better.
I have people in my group who are professional neurosurgeons, and then, as I mentioned, I have college dropouts, and I have people who . . . We recently published a paper where we ran the brain expansion process in reverse. So take the baby diaper polymer, add water to expand it, and then you can basically laser-print stuff inside of it, and then collapse it down, and you get a piece of nanotechnology.
The co–first author of that paper doesn’t have a scientific laboratory background. He was a professional photographer before he joined my group. But we started talking, and it turns out, if you’re a professional photographer, you know a lot of very practical chemistry. It turns out that our big demo — and why the paper got so much attention — was we made metal nanowires, and the way we did it was using a chemistry not unlike what you do in photography, which is a silver chemistry.
COWEN: Let’s say you had $10 billion or $20 billion a year, and you would control your own agency, and you were starting all over again, but current institutions stay in place. What would you do with it? How would you structure your grants? You’re in charge. You’re the board. You do it.
COWEN: If you’re designing architecture for science, what do you do? What do you change? What would you improve? Because presumably most of it is not designed for science. Maybe none of it is.
BOYDEN: I’ve been thinking about this a lot, actually, lately. There are different philosophies, like “We should have open offices so everybody can see and talk to each other.” Or “That’s wrong. You should have closed spaces so people can think and have quiet time.” What I think is actually quite interesting is this concept that maybe neither is the right approach. You might want to think about having sort of an ecosystem of environments.
My group — we’re partly over at the Media Lab, which has a lot of very open environments, and our other part of the group is in a classical sort of neuroscience laboratory with offices and small rooms where we park microscopes and stuff like that. I actually get a lot of productivity out of switching environments in a deliberate way.
There is much more of interest at the link.
I found this email from the GMU Police about GMU and terrorism surprising and somewhat disturbing:
On Wednesday, March 20, 2019, Mason Police informed the Mason community about an individual who had threatened harm to the University in a video posted on social media. At the time of the threats, the suspect was located in Morocco and was not an immediate or credible threat to the Mason community. However, because the suspect’s actions violated Virginia criminal law, Mason Police secured five felony warrants of arrest related to bomb threats against the University. Additionally, Mason Police worked with Interpol and several federal law enforcement agencies to track the suspect through several countries in the Middle East before he was ultimately arrested on the Virginia warrants while trying to enter Israel.
The suspect, Nassim Darwich, was extradited back to the US through JFK International Airport in New York City. Yesterday, Mason Police were in New York to take custody of Mr. Darwich and return him to Virginia. He is currently in the Fairfax County Adult Detention Center where he is being held on $100,000.00 secured bond.
Mason Police would like to thank Interpol, the US Customs Service, Homeland Security Investigations, and the FBI/NY for assisting Mason Police with monitoring and arresting the suspect. We also appreciate the Mason community members who saw Darwich’s internet-based threats and acted to alert Mason Police. If anyone has any additional information about this case, please give the Mason Police Department a call at (703) 993-2810.
The email was from April 5 so a university police department was able to reach out to the Middle East, arrest and extradite an individual to the United States in about two weeks. Impressive. As a potential target, I guess I am pleased. But it’s somewhat frightening to see how long the arm of the law has become, at least for terrorism related crimes.
…modest genetic selection/concentration was evident for teen pregnancy and poor educational outcomes, suggesting that neighbourhood effects for these outcomes should be interpreted with care.
Findings argue against genetic selection/concentration as an explanation for neighbourhood gradients in obesity and mental health problems.
Here is the full piece, via K.
Amazon’s plan to launch thousands of internet satellites to connect billions of people around the world represents a serious and underappreciated entrant in the space business, multiple analysts and industry executives told CNBC.
The company is in talks to develop an underwater data cable that would encircle the continent, according to people familiar with the plans, an effort aimed at driving down its bandwidth costs and making it easier for the social media giant to sign up more users.
Both developments promise to contribute to the central achievement of our age, namely tying people to information, and to other people, at a hitherto unprecedented scale, mobile devices included of course.
No, I do not favor a gold standard, for reasons explained in this Bloomberg column. Still, it is sad/funny to watch the mood affiliation circus of those trying to suggest, in more or less the same breath, that Trump’s Fed picks are dangerous and terrible, and also that the gold standard is the worst idea ever. Here is one point of mine:
Historical data indicates that industrial production volatility was not higher before 1914, when the U.S. was on the gold standard, compared to after 1947, when it mostly wasn’t. And there are similar results for the volatility of unemployment. That’s not quite an argument for the gold standard, but it should cause opponents of the gold standard to think twice. Whatever the imperfections of a gold standard might be, monetary authorities make a lot of mistakes, too.
And here is the closer:
Most generally, I still think central bank governance can do a better job than a gold-based system that sometimes creates excess deflationary pressures.
Nonetheless, the contemporary world is always testing my belief in central banking. Exactly how will matters unfold when so many world leaders are not behaving as responsibly as they should? Might that irresponsibility seep into monetary policy? After all, populations are aging and debt is accumulating. Surely it is reasonable to worry that some of these governments will seek to monetize their debts and move toward excessively easy money.
Oh, but wait — I forgot one big new argument in favor of a gold standard: President Trump himself. Perhaps his management of central bank affairs is somewhat … erratic? Might it not be a good idea to have the operation of monetary policy protected by a greater reliance on rules? My personal preference is for a nominal GDP rule, but the irony is this: At the end of the day, the advocates of the gold standard, and their possible presence on the Federal Reserve Board, are themselves the best argument for … the gold standard.
3. Earlier 20th century criticisms of the Electoral College, maybe not what you think.
4. “Two-thirds of roads in Sweden are privately operated and managed by local Private Road Associations (PRAs).” Link here.
5. High-speed rail Addis Ababa to Djibouti (NYT, recommended).
By George Melloan, here is one bit:
So Mr. Cowen’s book is timely, and his writing style is a refreshing contrast to the strident left-wing declamations that are so common today. He is calm and conversational, splashing cool water on the firebrands. He writes: “All of the criticisms one might mount against the corporate form—some of which are valid—pale in contrast to two straightforward and indeed essential virtues. First, business makes most of the stuff we enjoy and consume. Second, business is what gives most of us jobs. The two words that follow most immediately from the world of business are ‘prosperity’ and ‘opportunity.’”
Here is the full review, very well done in my admittedly biased view.
Camden NJ has thrice been named the most dangerous city in America. Camden suffered not only from high crime but from poor policing under a rigid union contract. Jim Epstein described the situation in 2014:
Camden’s old city-run police force abused its power and abrogated its duties. It took Camden cops one hour on average to respond to 911 calls, or more than six times the national average. They didn’t show up for work 30 percent of the time, and an inordinate number of Camden police were working desk jobs. A union contract required the city to entice officers with extra pay to get them to accept crime-fighting shifts outside regular business hours. Last year, the city paid $3.5 million in damages to 88 citizens who saw their convictions overturned because of planted evidence, fabricated reports, and other forms of police misconduct.
In 2012, the murder rate in Camden was about five times that of neighboring Philadelphia—and about 18 times the murder rate in New York City.
In May of 2013, however, the entire police department was disbanded nullifying the union contract and an entirely new county police department was put into place.
The old city-run force was rife with cops working desk jobs, which Cordero saw as a waste of money and manpower. He and Thomson hired civilians to replace them and put all uniformed officers on crime fighting duty. Boogaard says she didn’t see a single cop during the first year she lived in the city. “Now I see them all the time and they make friendly conversation.” Pastor Merrill says the old city-run force gave off a “disgruntled” air, and the morale of Metro police is noticeably better. “I want my police to be happy,” he says.
Without the expensive union contracts the new force added officers and also introduced more technology such as Shotspotter. So what has been the result? Violent crime is down and clearances are up (charts from Daniel Bier, who also notes that the fall in violent crime and increase in convictions far exceed that in comparison to New Jersey more generally or Philadelphia.)
As I have long argued, we need more police and better policing in America.