Tyler Cowen on complementarity and gratitude

One fan with a helpful perspective on the Wizards is Tyler Cowen, a professor of economics at nearby George Mason University. He says that even he was surprised they were able to move Wall and then Westbrook’s contracts so effectively. But what’s more interesting to him about the Wizards these days is what’s happening on the court. “They have quite a few players who are ‘good enough’ shooters,” Cowen said in an email. “When everyone on the floor is a ‘good enough’ shooter, the good enough shooters are better than you might think.”

This is a useful way of thinking about the entire team. In a league where the ultimate goal is greatness, the Wizards are showing the power of pretty good. It’s the sort of progress that precedes success.

“Their ceiling still might be pretty low,” Cowen said. “But for the time being, we can enjoy the ride.”

Here is more from Ben Cohen at the Wall Street Journal.

Carlsen vs. Nepo

Here is my Bloomberg column on that topic:

He [Carlsen] recently opined that he is lucky to be facing Nepo rather than two other potential challengers, Fabio Caruana or Ding Liren. That’s the kind of trash talk most sports competitors frown upon for fear of motivating opponents.

Carlsen also has been engaging in online marathons of “bullet chess,” exactly the kind of attention-disrupting, energy-draining stunt contenders are supposed to avoid. In a bullet game, each player has only one minute for all the moves. The pace is so rapid the games are hard to watch, much less play. Carlsen also made a recent appearance in Dortmund, Germany, in part to pose for a photo with a Norwegian soccer player. Nepo, in contrast, claims to have done an “insane amount of work” for the event.

Will the fast thinking of bullet chess help Carlsen see more moves during the much slower time controls of the match with Nepo? (A championship game can easily last four hours or more.) Or maybe the bullet success will intimidate Nepo?

Carlsen also is making it clear that for him, chess is a business proposition. His parents set up a company in his name when he was 16, and the commercial empire since has expanded. Carlsen has worked as a fashion model, endorsed an online sports betting site, and worked with a Norwegian water company. He sponsors a leading chess app and has organized his own series of online chess tournaments, played with more rapid time controls, during the pandemic. Those events arguably have attracted more attention than any of the mainstream tournaments.

Carlsen is probably at the point where even a loss in the match would barely affect his income stream, and that is a dangerous motivational place to be…

Nepo is considered a super-talented but inconsistent player, one who does not bounce back well from adversity. But if he stays focused he could pose a formidable challenge. He was never expected to be a challenger in the first place, so he may feel he has little to lose and, in accord with his naturally aggressive style, he can take all the chances he wants. Carlsen is considered the superior player, perhaps the greatest ever, and remains a heavy favorite with the sports betting sites.

I am picking Carlsen to win.  And on the future of chess:

Carlsen has argued that the mainstream matches of classical chess are too slow and yield too many draws. He would prefer a time limit of around 25 minutes per game per player to become the default. Why shouldn’t the world of chess switch over to a system that spectators seem to prefer?

If Carlsen retains his title, he may well lead such a switch, and it would be hard for the chess establishment to resist. If Nepo wins the match, Carlsen might secede from the current system, causing the chess world to splinter.

What we are seeing in the lead-up to this match is this: A healthy chess world is going to be a more diversely organized chess world, with a lot of disagreement over which forms of chess are most important. Twitch streaming and YouTube already have joined the mix. Chess is likely to retain its recent popularity, but in doing so it will fully realize its destiny as the esport it has already become. The good news is that if you don’t like the outcome of the upcoming chess drama, you can find another one to watch the next day.

Recommended.

The anatomy of gender discrimination

That is the topic of my latest Bloomberg column, here is one excerpt:

Maybe the men, on average, did have greater ambition and thus promotion potential. One reason could be that women, on average, spend more time at home raising children than men. For very demanding executive jobs, even a small difference in time and travel availability could make a big difference in job performance.

And yet even if that’s the case, there could still be a discrimination problem. Even if women and men differ on average, there is a probability distribution for each group, and those distributions usually will overlap. That is, there will be many women who are willing and able to meet any workplace standard thrown at them, and many men with limited ambition.

If you think men and women are different on average, the unfairness can become all the more severe for the potential top performers. In this context, employers will look at the most talented women and, for reasons of stereotyping, dramatically underestimate their potential, including for leadership positions.

Economic reasoning suggests another subtle effect at play. Promotion to the top involves a series of steps along a career ladder, often many steps. If there is a discrimination “tax” at each step, even if only a small one, those taxes can produce a discouraging effect. It resembles the old problem of the medieval river that has too many tolls on it, levied by too many independent principalities. The net effect can be to make the river too costly to traverse, even if each prince is taking only a small amount.

With a citation to Zaua further below!

Did Milton Friedman support bailouts?

Hugh Rockoff does a 72 pp. deep dive on Milton Friedman on bailouts.  This is an excellent paper, as he also considers Friedman’s columns and spoken words over the years and he also fleshes out Friedman’s thoughts on what we now call “shadow banks” (he worried about them).  Friedman was willing to accept a fair number of bailouts, here is one excerpt:

In the bailout of Continental Illinois, a case that Friedman thought had been handled well, depositors and other creditors were protected, but shareholders were mostly wiped out and management was replaced. The protection of depositors and other creditors created an advantage for large banks: they could raise funds more easily because they, like Continental Illinois, were “too big to fail.” However, Friedman thought that as long as shareholders and managers were forced to pay dearly when a financial institution was bailed out there would still be an adequate incentive for bank managers to exercise prudence.

More generally:

For Friedman this meant that in the case of financial institutions the benefits of a bailout might outweigh the costs.

And more speculatively:

No one can channel an economist as brilliant and creative as Milton Friedman. Nevertheless, having come this far I will make an attempt. I believe that it would have been consistent with his earlier views for Friedman to have been reluctant to condemnthe program of bailouts undertaken in 2008, to use the phrase that he used when questioned about the rescue of LongTerm Capital Management. I think he would have recognized that the repos issued by Lehman Brothers and other investment banks were similar to uninsured deposits in commercial banks, thus making possible a destructive panic. In other words, he would have recognized the logic of the contention that 2008 was a run on repos and similar to earlier financial panics (Gorton, Laarits, and Metrick 2018). He might have reminded us of the consequences of the failure to provide help for the BoUS in 1930. However, he might well have been critical of the structure of the bailouts, especially with respect to how various classes of stakeholders were treated.

I recall being excoriated in 2009 for suggesting that Friedman would have endorsed some version of the bailouts of that time.

Via the excellent Douglas Irwin.  And here is my older CWT with Doug.

Tuesday assorted links

1. “Republican or not” (short video, actually funny, and with a very real lesson about polarization).

2. Did our social distancing strategies pack too many people into the wrong places?

3. ConstitutionDAO, the bitter aftertaste?

4. “My Scottish maid could do better!”

5. “Our results show that the introduction and marketing of OxyContin explain a substantial share of overdose deaths over the last two decades.

6. The economics of Magnus Carlsen (NYT).

Best non-fiction books of 2021

What an incredible year for non-fiction books!  But let me first start with two picks from 2020, buried under the avalanche of Covid news then, and missed because I was less mobile than usual.  These books are not only good enough to make this list, but in just about any year they are good enough to be the very best book of that year:

Edward Nelson, Milton Friedman and Economic Debate in the United States, 1932–1972, volumes one and two.

Alexander Mikaberidze, The Napoleonic Wars: A Global History.

Also noteworthy is Reviel Netz, Scale, Space and Canon in Ancient Literary Culture, which I hope to write more about.

Per usual, there is typically a short review behind each, though not quite always.  As for 2021 proper, here were my favorites, noting that I do not impose any quota system whatsoever.  (And yet this list is somehow more cosmopolitan than most such tallies…hmm…)  I don’t quite know how to put this, but this list is much better than the other “best books of the year” lists.  These are truly my picks, ranked roughly in the order I read them:

Jin Xu, Empire of Silver: A New Monetary History of China.

Cat Jarman, River Kings: A New History of the Vikings from Scandinavia to the Silk Roads.

Michela Wrong, Do Not Disturb: The Story of a Political Murder and an African Regime Gone Bad.

Ryan Bourne, Economics in One Virus: An Introduction to Economic Reasoning Through Covid-19.

Colin Bryar and Bill Carr, Working Backwards: Insights, Stories, and Secrets from Amazon.

Ivan Gibbons, Partition: How and Why Ireland Was Divided.

Serhii Plokhy, Nuclear Folly: A History of the Cuban Missile Crisis.

Alan Taylor, American Republics: A Continental History of the United States, 1783-1850.

William Deresiewicz, The Death of the Artist: How Creators are Struggling to Survive in the Age of Billionaires and Big Tech, brief discussion of it here.

Roderick Matthews, Peace, Poverty and Betrayal: A New History of British India.

Alejandro Ruiz, Carla Altesor, et.al., The Food of Oaxaca: Recipes and Stories from Mexico’s Culinary Capital.

Tomas Mandl, Modern Paraguay: South America’s Best Kept Secret.

Kara Walker, A Black Hole is Everything a Star Longs To Be.

Tony Saich, From Rebel to Ruler: One Hundred Years of the Chinese Communist Party.

Adeeb Khalid, Central Asia: A New History from the Imperial Conquests to the Present.

Richard Zenith, Pessoa: A Biography.

John B. Thompson, Book Wars: The Digital Revolution.

Scott Sumner, The Money Illusion: Market Monetarism, the Great Recession, and the Future of Monetary Policy.

Architectural Guide to Sub-Saharan Africa.

Joanne Limburg, Letters to My Weird Sisters: On Autism and Feminism.

McCartney, Paul. The Lyrics.  A remarkably high quality production, again showing McCartney’s skill as manager and entrepreneur.  Perhaps the biggest revelation is when Paul insists that if not for the Beatles he would have been an English teacher.  He also claims that he and not John was the big reader in The Beatles.  It is also striking, but not surprising, when explaining his lyrics how many times he mentions his mother, who passed away when Paul was fourteen.  There is a good David Hajdu NYT review here.

Bob Spitz, Led Zeppelin: The Biography.  They always end up being better than you think they possibly could be, and this is the best and most serious book about them.

gestalten, Beauty and the East: New Chinese Architecture.  Self-recommending…

Is there a “best book” of 2021?  The categories are hard to compare.  Maybe the seven volumes of Architectural Guide to Sub-Saharan Africa?  But is it fair they get seven volumes in this competition?  The McCartney?  (He took two volumes.)  The Pessoa biography?  Roderick Matthews on India?  So much to choose from!  And apologies to all those I have forgotten or neglected…

Read more!  And here is my favorite fiction of 2021 list.  And I will write an addendum to this list as we approach the very end of 2021.

By any other name

The Northern Territory’s Covid-19 outbreak is expected to grow beyond locked-down areas after nine new cases were detected in the remote community of Binjari, about 320km south of Darwin.

Binjari and nearby Rockhole have been placed into strict lockdown in response to the outbreak, and the Australian defence force has been called in to help with transferring positive cases and close contacts [sic].

The NT’s chief minister, Michael Gunner, on Sunday said a 78-year-old woman was being treated in Royal Darwin hospital, while the other eight cases had been taken to the Howard Springs quarantine centre.

Here is the full story.  And from another story:

“We’ve shared our supply of vaccine with Aboriginal health organisations so they had enough consistent supply for everyone in their care to have a chance to be vaccinated over the past seven months,” Gunner said in a statement.

I wonder what they think Gibraltar should do.  Didn’t all the Australians tell me on Twitter that things would be back to normal soon, once enough vaccines were distributed?

From John Harland on Quora

Identity confusion is a potential hazard for autistic people. Neurotypical people characteristically develop a “personality” that they use to define and to ground themselves. That is the mask through which they interact with society. Autistic people do that to a much lesser extent and that can be a major strength, as well as a risk.

A muted sense of identity can make it much easier for an autistic person to become and effective contributor to a group because it makes them more adaptable. They carry less personal baggage about what ideas define them.

It can also make them very good at acting and at creating humour. However we might think of several famous actors and comedians who have killed themselves, seemingly because they were haunted by questions about who they “really” were behind all those adopted personas.

Learning to be ready for those questions, and learning why that trait can be a strength, are important lessons to impart to autistic children and adults.

Here is the link, with other interesting bits.

Monday assorted links

1. DAOs, a canon.  And the future of NFT art?  With an NFT by David Salle.

2. Wolves are very, very good for motorists.

3. On Praan and Emergent Ventures India.

4. Are the zebra stripes the whites or the blacks?

5. Reddit thread on which is the world’s most evil company.

6. New biography of Stanislaw Lem now translated into Spanish.

7. Who is followed most on various social media platforms?

The Scientific Cost of Immigrant Quotas

In the 1920s immigration to the United States was restricted with quotas which were designed to reduce the number of immigrants from Italy and Eastern Europe, then considered to be low-quality immigrants. One unintended consequence was that the number of immigrant scientists from these areas also declined. The awesome Petra Moser and Schmuel San have an excellent new paper documenting the cost on US innovation and patenting.

Naturalization data indicate a dramatic decline in the arrival of new ESE-born scientists after the quotas. Until 1924, arrivals of new ESE-born immigrant scientists were comparable to arrivals from Northern and Western Europe (WNE), who were subject to comparable pull and push factors of migration.1 After the quotas, arrivals of ESE-born scientists decline significantly while arrivals from Northern and Western Europe continue to increase. Combining data on naturalizations with information on scientists’ university education and career histories, we estimate that 1,165 ESE-born scientists were lost to US science under the quota system. At an annual level, this implies a loss of 38 scientists per year, equivalent to eliminating the entire physics department of a major university each year between 1925 and 1955. For the physical sciences alone, an estimated 553 ESE-born scientists were lost to US science.

To estimate the effects of changes in immigration on US inventions, we compare changes in patenting per year after 1924 in the pre-quota fields of ESE-born US scientists with changes in patenting in other research fields in which US scientists were active inventors before the quotas. This identification strategy allows us to control for changes in invention by US scientists across fields, for example, as a result of changes in research funding. Year fixed effects further control for changes in patenting over time that are shared across fields. Field fixed effects control for variation in the intensity of patenting across fields, e.g., between basic and applied research.

Baseline estimates reveal a large and persistent decline in invention by US scientists in the pre-quota fields of ESE-born scientists. After the quotas, US scientists produced 68 percent fewer additional patents in the pre-quota fields of ESE-born scientists compared with the prequota fields of other US scientists. Time-varying effects show a large decline in invention by US scientists in the 1930s, which persisted into the 1960s. Importantly, these estimates show no preexisting differences in patenting for ESE and other fields before the quotas.

Canada which did not implement quotas did not see a similar decline. One interesting case study which is quite astounding in its way:

A case study of co-authorships for the prolific Hungarian-born mathematician Paul Erdős illustrates how restrictions on immigration reduced collaborations between ESE-born scientists and US scientists. Erdős moved to the United States as a post-doctoral fellow at Princeton, and became a professor at Notre Dame, travelling and collaborating with many US scientists. As a Hungarian citizen, however, Erdős was denied a re-entry visa by the US immigration services in1954, and not granted re-entry until 1963. To examine how these denials affected Erdős’ collaborations with US scientists, we collect the location of Erdős top 100 coauthors at the time  of their first collaboration. These data show that Erdős’ collaborations shifted away from the United States when he was denied re-entry. Between 1954 and 1963, 24 percent of Erdős’ new co-authors were US scientists, compared with 60 percent until 1954. These patterns are confirmed in a broader analysis of patents by co-authors and co-authors of co-authors of ESEborn scientists, which indicates a 26 percent decline in invention by scientists who were directly or indirectly influenced by ESE-born scholars. 

As you might suspect from the Erdos example, scientists in the US became less not more productive without the benefits of cooperation with Eastern European scientists.

Some of the scientists denied entry to the US in the 1920s went to Israel instead and innovated there so their genius was not entirely lost to the world.

Photo: Paul Erdos with Terrence Tao. Attribution, either Billy or Grace Tao, CC BY-SA 2.0 <https://creativecommons.org/licenses/by-sa/2.0>, via Wikimedia Commons

The next Fed chair

Although the betting markets favor Powell, I’m at the point where I think the Biden people are more likely to throw him overboard for Brainard and blame him for the inflation; if they opt for reappointment, it feels like they have to “own” the inflation  I favor Powell because I think he is less likely to institute a disastrous version of the “central bank digital currency” idea, and because he is better at dealing with Congress and generating support for Fed policies.  He might also be better at allowing crypto innovation to proceed, although that is just a guess, not based on solid information.

p.s. The word is that it will be Powell!

My favorite fiction of 2021

Marcel Proust, The Mysterious Correspondent: New Stories.  Not the very best Proust, but even so-so Proust is pretty superb.  These are fragments to be welcomed.

Andy Weir, Project Hail Mary.  At least as good as The Martian, and arguably more conceptual.

Judith Schlansky, Verzeichnis einiger Verluste [Inventory of Losses].  Conceptual German novel with roots in Borges, not as good in English.

Patrick McGrath, Last Days in Cleaver Square.  Unreliable narrator!

Karl Knausgaard, The Morning Star.  The master returns with a full-scale novel, with theology galore.

Anne Serre, The Beginners.  Short, French, about relationships, fun.

Sally Rooney, Beautiful World, Where Are You? She is quite the conservative, don’t be put off by the left-wing rhetoric.

Mario Levrero, The Luminous Novel.  The best Uruguayan novel of all time?

Domenico Starnone, Trust.  The better of the two “Elena Ferrante” novels released in English this year?

As for retranslations of classics, I very much like the new Oedipus Rex trilogy and the new translation of the Kalevala.  I hope they are fiction!  And kudos to Sarah Ruden’s work on the Gospels, I am not sure where to put them…

Overall I thought this was an excellent year for reading fiction, much better than the few years preceding.  My number one pick here would be the Andy Weir, noting that, for purposes of your norming, I do not usually select science fiction for this designation.  (Here is my earlier CWT with Andy Weir.)

Note that I just ordered a whole new batch of appealing-sounding novels (FT link), and I will read some before year’s end, so I will give you an update when appropriate, most likely toward the very end of the calendar year.  And my non-fiction list will be coming soon.  And also note: “missing” titles from this list are very often missing on purpose!

Read more!

Where to dine in Austin

The city is right now one of America’s better food scenes, and perhaps America’s most dynamic city overall?  It is radically different from even my recent visit a few short years ago.  Here are a few recommendations:

Loro: Asian fusion and smoked meats, don’t forget to get the sweet corn and also the cabbage.

LeRoy and Lewis: Outside dining from a food truck, first-rate beef cheeks.  Get there early.

Sammie’s: Doesn’t seem like it should be good, but excellent Italian with a Texas emphasis.

Comedor: Nouvelle Mexican, the quesadillas were the surprise with the biggest upside.

Sunday assorted links

1. Listen to the science! (of hugging…”You’re probably going to want to use your arms.”)  Do we actually all want longer hugs?

2. New data and results on wealth inequality over time.

3. Richard Hanania on the weakness of conservative anti-Wokeness.

4. The constitution of the DAO of the Constitution.

5. Michael Mina is leaving Harvard for the private sector.

6. Library Athena — a better way to read free classic texts on-line.