*The Middle Kingdoms: A New History of Central Europe*

by  Tyler Cowen in

An excellent book by Martyn Rady, here is the passage most relevant to the history of economic thought:

A Norwegian economist and his wife have published a line of bestsellers in the field of economics written before 1750.  Top is Aristotle’s Economics.  Composed in the fourth century BCE, it is still available in paperback.  Martin Luther’s denunciation of usury (1524) is number three.  But there, in the top ten, is an unfamiliar name — Veit Ludwig von Seckendorff (1626-1692), who was a government official in the duchy of Saxe-Gotha in Thuringia.  Seckendorff’s German Princely State (Teutscher Fürsten-Staat, 1656) is a thousand-page blockbuster that went through thirteen editions and was in continuous print for a century.  Although only ever published in German, it was influential throughout Central Europe, shaping policy from the Banat to the Baltic.

I enjoyed this sentence:

Besides his distinctive false nose (the result of a duelling accident), Tycho Brahe kept an elk in his lodgings as a drinking companion.

And yes the book does have an insightful discussion of Laibach, the Slovenian hard-to-describe musical band.  You can buy it here.

Free Insurance for Everyone!

by  Alex Tabarrok in

President Biden says “We’re planning to make it mandatory for airlines to compensate travelers with meals, hotels, taxis, and cash, miles, or travel vouchers when your flight is delayed or cancelled because of their mistake.”

A classic example of the Happy Meal Fallacy:

Some restaurants offer burgers without fries and a drink. These restaurants cater to low-income people who enjoy fries and drinks but can’t always afford them. To rectify this sad situation a presidential candidate proposes The Happy Meal Act. Under the Act, burgers must be sold with fries and a drink. “Burgers by themselves are not a complete, nutritious meal,” the politician argues, concluding with the uplifting campaign slogan, “Everyone deserves a Happy Meal!”

But will the Happy Meal Act make people happy? If burgers must come with fries and a drink, restaurants will increase the price of a “burger.” Even though everyone likes fries and a drink they may not like the added benefits by as much as the increase in the price of the meal. Indeed, this must be the case since consumers could have bought the meal before the Act but chose not to. Requiring firms to sell benefits that customers value less than their cost makes both firms and customers worse off.

Almost everyone understands this when it comes to burgers and fries but make it burgers, fries and air miles and some people will think this is a good idea. To recap, requiring firms to sell benefits that customers value less than their cost makes both firms and customers worse off. And if customers value the benefits at more than the cost then that’s a profit opportunity and there is no need for a mandate.

How to improve education

by  Tyler Cowen in

We present results from large-scale randomized trials evaluating the provision of education in emergency settings across five countries: India, Kenya, Nepal, Philippines, and Uganda. We test multiple scalable models of remote instruction for primary school children during COVID-19, which disrupted education for over 1 billion schoolchildren worldwide. Despite heterogeneous contexts, results show that the effectiveness of phone call tutorials can scale across contexts. We find consistently large and robust effect sizes on learning, with average effects of 0.30-0.35 standard deviations. These effects are highly cost-effective, delivering up to four years of high-quality instruction per $100 spent, ranking in the top percentile of education programs and policies.

That is from a new NBER working paper by Noam Angrist, et.al.

Is Switzerland right-wing? (from my email)

by  Tyler Cowen in

Dear Tyler,

I came across this study today (https://serval.unil.ch/resource/serval:BIB_236420EB8209.P001/REF) that claims that Switzerland is one of the most right-wing (at least nominally) countries in Europe.The federal government has been in the hands of the right since 1848.The federal parliament is currently dominated by the right.26 out of 26 cantonal parliaments are controlled by the right.25 out of 26 canton governments (with the exception of the Jura) are in the hands of the right.Neither the parliament nor the national government has ever been controlled by the left.

How does it fit with your model of Switzerland?

Still an undeservedly overlooked country!

That is from Krzysztof Tyszka-Drozdowski.

Open source chat, no censorship

by  Tyler Cowen in

Here it is, like it or not…

 

The FDA Still Doesn’t Trust Women

by  Alex Tabarrok in

The FDA has a long history of antipathy towards personal testing. The FDA has opposed personal pregnancy tests, HIV tests, genetic tests, and COVID tests, as I discussed in my article Testing Freedom. Well, the FDA is at it again:

NYTimes: At a hearing Tuesday to consider whether the Food and Drug Administration should authorize the country’s first over-the-counter birth control pill, a panel of independent medical experts advising the agency was left to reckon with two contradictory analyses of the medication called Opill.

During the eight-hour session, the manufacturer of the pill, HRA Pharma, which is owned by Perrigo, and representatives of many medical organizations and reproductive health specialists said that data strongly supported approval. They said that Opill, approved as a prescription drug 50 years ago, was safe, effective and easy for women of all ages to use appropriately — and that over-the-counter availability was sorely needed to lower the country’s high rate of unintended pregnancies.

In contrast, F.D.A. scientists questioned the reliability of company data that was intended to show that consumers would take the pill at roughly the same time every day and comply with directions to abstain from sex or temporarily use other birth control if they missed a dose. The agency seemed especially concerned about whether women with breast cancer or unexplained vaginal bleeding would correctly choose not to take Opill and whether adolescents and people with limited literacy would use it accurately.

Note carefully: The FDA isn’t worried that women won’t take the pill at the same time every day they are worried that women who get the pill without a prescription won’t take it at the same time every day. I guess in the FDA’s view women need some mansplaining to take birth control or at least some doctorplaining.

Dr. Westhoff suggested that for most women, there is no advantage to a doctor prescribing the pills because doctors don’t typically monitor patient adherence and often only see such patients once a year.

Similarly, I suspect that women with breast cancer will be concerned enough about their health to read the warning, Don’t Take This Pill if You Have Breast Cancer. Who knows, women with breast cancer might even ask their cancer physician or Google or their GP(T) about what foods and drugs to take and which to avoid.

If I didn’t know the FDA’s long history of opposing personal testing, I would think this simply bizarre but not trusting people with their own health decisions is practically in the FDA’s DNA.

The Gender Well-being Gap

by  Tyler Cowen in

Overall, are men or women happier?  It is complicated, and it depends on what you mean exactly:

Given recent controversies about the existence of a gender wellbeing gap we revisit the issue estimating gender differences across 55 subjective well-being metrics – 37 positive affect and 18 negative affect – contained in 8 cross-country surveys from 167 countries across the world, two US surveys covering multiple years and a survey for Canada. We find women score more highly than men on all negative affect measures and lower than men on all but three positive affect metrics, confirming a gender wellbeing gap. The gap is apparent across countries and time and is robust to the inclusion of exogenous covariates (age, age squared, time and location fixed effects). It is also robust to conditioning on a wider set of potentially endogenous variables. However, when one examines the three ‘global’ wellbeing metrics – happiness, life satisfaction and Cantril’s Ladder – women are either similar to or ‘happier’ than men. This finding is insensitive to which controls are included and varies little over time. The difference does not seem to arise from measurement or seasonality as the variables are taken from the same surveys and frequently measured in the same way. The concern here though is that this is inconsistent with objective data where men have lower life expectancy and are more likely to die from suicide, drug overdoses and other diseases. This is the true paradox – morbidity doesn’t match mortality by gender. Women say they are less cheerful and calm, more depressed, and lonely, but happier and more satisfied with their lives, than men.

That is from a new NBER working paper by David G. Blanchflower and Alex Bryson.  Those results are broadly consistent with my intuitions and anecdotal observations, noting that men and women probably mean different things when they say they are/are not satisfied with their lives.

Private ownership sentences to ponder

by  Tyler Cowen in

Anyone keen to understand how should look at Brookfield Renewable Partners’ recent investment of up to $2 billion in Scout Clean Energy and Standard Solar. B.R.P. is a vehicle of Brookfield Asset Management, a leading global asset management firm, with around $800 billion of assets under management, and it purchased two American developers and owner-operators of wind and solar power-generating facilities. This took place six weeks after President Biden signed the I.R.A. into law.

The I.R.A. will help accelerate the growing private ownership of U.S. infrastructure and, in particular, its concentration among a handful of global asset managers like Brookfield. This is taking the United States into risky territory. The consequences for the public at large, whose well-being depends on the quality and cost of a host of infrastructure-based services, from energy to transportation, are unlikely to be positive.

A common belief about both the I.R.A. and 2021’s Infrastructure Investment and Jobs Act, President Biden’s other key legislation for infrastructure investment, is that they represent a renewal of President Franklin Roosevelt’s New Deal infrastructure programs of the 1930s. This is wrong. The signature feature of the New Deal was public ownership: Even as private firms carried out many of the tens of thousands of construction projects, almost all of the new infrastructure was funded and owned publicly. These were public works. Public ownership of major infrastructure has been an American mainstay ever since…

So it would be truer to say that in political-economic terms, Mr. Biden, far from assuming Roosevelt’s mantle, has actually been dismantling the Rooseveltian legacy. The upshot will be a wholesale transformation of the national landscape of infrastructure ownership and associated service delivery.

That is from Brett Christophers (NYT), who is disapproving.  For an alternative view, see this WSJ Op-Ed by Katherine Boyle and David Ulevitch.

Lessons from the COVID War

by  Alex Tabarrok in

In preparation for a National Covid Commission a group of scholars directed by Philip Zelikow (director of the 9/11 Commission) began interviewing people and organizing task forces (I was an interviewee). The Covid Commission didn’t happen, a fact that illustrates part of the problem:

The policy agenda of both major American political parties appear mostly undisturbed by this pandemic. There is no momentum to fix the system….The Covid war revealed a collective national incompetence in governance….One common denominator stands out to us that spans the political spectrum. Leaders have drifted into treating this pandemic as if it were an unavoidable national catastrophe.

The results of this early investigation, however, are summarized in Lessons from the COVID WAR. Overall, a good book, not as pointed or data driven as I might have liked (see my talk for a more pointed overview), but I am in large agreement with the conclusions and it does contain some clarifying tidbits such as this one on the Obama playbook.

Innumerable speeches, books, and articles have stated that the Obama administration gave the incoming Trump administration a “playbook” on how to confront a pandemic and that this playbook was ignored. The Obama administration did indeed prepare and leave behind the “Playbook for Early Response to High-Consequence Emerging Infectious Disease Threats and Biological Incidents.”

But this playbook did not actually diagram any plays. There was no “how.” It did not explain what to do…when it came to the job of how to contain a pandemic that was headed for the United States in January 2020, the playbook was a blank page.

I also appreciated that Lessons has some some unheralded success stories from the state and local level. You may recall Tyler and I blogging repeatedly in 2020 about the advantages of pooled tests. Eventually pooled testing was approved but I haven’t seen data on how widely pooling was adopted or the effective increase in testing capacity that was produced. Lessons, however, offers an anecdote:

In San Antonio, a local charitable foundation paired with a blood bank to create a central Covid PCR testing lab (antigen tests were not yet readily available) that could combine samples (pooling) for efficiency and cost reduction, but also determine which individual in a pool was positive. Importantly, results were available within about twelve hours. That meant results were available before the start of school the new day.

The program helped San Antonio get kids back into the schools.

More generally, it’s striking that US schools were closed for far longer than French, German or Italian schools. See data at right on the number of weeks that “schools were closed, or party closed, to in-person instruction because of the pandemic (from Feb. 2020-March 2022)”. (South Korea, it should be noted, had some of the most advanced online education systems in the world.)

One general point made in Lessons that I wholeheartedly agree with this is that the school closures and many of the other controversial aspects of the pandemic response such as the lockdowns and mask mandates “were really symptoms of the deep problem. Without a more surgical toolkit, only blunt instruments were left.” With better testing, biomedical surveillance of the virus and honest communication we could have done better with much less intrusive and costly policies.

Addendum: See my previous reviews of Gottlieb’s Uncontrolled Spread, Michael Lewis’s The Premonition, Slavitt’s Preventable and Abutaleb and Paletta’s Nightmare Scenario.

Addendum 2: A typo in Lessons had France closing schools for 2 weeks instead of 12 weeks. Corrected.