Who will win the next Nobel Prize in economics?

by  Tyler Cowen in

My prediction is a joint prize for Tim Bresnahan and Ariel Pakes, for Industrial Organization, a mix of game theory and empirical methods.  Usually I am wrong (sorry guys!).

What are your predictions?

Note that for reasons of time zone and travel, I might not be around to cover the Prize this coming Monday, apologies!  We will see.  I believe that Alex in any case will be here…

What I’ve been reading

by  Tyler Cowen in

Naomi Klein, Doppelganger: A Trip into the Mirror World.  Have you ever been confused by Naomi Klein vs. Naomi Wolf?  Intellectually they are both pretty crazy.  And they are both named Naomi.  Some might think they bear some resemblance to each other.  Well, here is a whole book on that confusion!  And it is written by Naomi Klein.  How much insight and self-awareness can one intellectually crazy person have about being confused for another intellectually crazy person?  Quite a bit, it turns out.  Recommended, though with the provision that I understand you never felt you needed to read a whole book about such a topic.

Benjamin Labutut, The Maniac.  Chilean author, he has penned the story of von Neumann but in the latter part of the book switches to contemporary AI and AlphaGO, semi-fictionalized.  Feels vital and not tired, mostly pretty good, thoiiugh for some MR readers the material may be excessively familiar.

J.M. Coetzee, The Pole.  Short, compelling, self-contained, again deals with older men who have not resolved their issues concerning sex.   Good but not great Coetzee.

Gary S. Becker, The Economic Approach: Unpublished Writings of Gary S. Becker.  I am honored to have blurbed this book.

Richard Campanella, Bienville’s Dilemma: A Historical Geography of New Orleans is one mighty fine book.

Shuchen Xiang, Chinese Cosmopolitanism: The History and Philosophy of an Idea.  Chinese cosmopolitanism, there was more of it than you might have thought.  Should we be asking “Where did it go?”  Or is it there more than ever?

A few implications

by  Tyler Cowen in

I am not saying these are rational, or not, in any case they are predictions:

1. The momentum for gun control in the United States will weaken.  There is a claim on Twitter that only two percent of Israeli households have guns at hand.  May or may not be exactly true, but many people will become more attached to the idea of gun ownership as a means of defense.

2. We Americans will indeed build The Wall on our southern border.

3. The doctrine of deterrence has taken a beating. Few doubt that Israel can strike back at Gaza in a very powerful way, and yet that wasn’t enough to stop the attacks.  I am still trying to digest this one.

4. A certain kind of military-flavored AI accelerationism will win out.  Given #3, it no longer suffices to think you can deter a drone attack from your enemies, even if your country is very powerful.  Rather you need your own drones, and your intelligence, to forestall major casualties in the first place.

Saturday assorted links

by  Tyler Cowen

1. Model this.

2. A bunch of claims about nobles, genetics, and violence.

3. New results on interpretability.  And much more detail.  Potentially very good news.  One interpretation.  Some are becoming less pessimistic.

4. Arnold Kling on the trouble with books.  Remedies will come!

5. “We show that the high level of rural income mobility is principally driven by boys of rural-origin, who are more likely than their urban peers to grow up in communities with a predominance of two-parent households.”

6. Might desalinated water ever be cheaper?

7. Alex Cukierman, RIP.

Union Busted

by  Alex Tabarrok in

The International Longshore and Warehouse Union (ILWU) just filed for bankruptcy because it lost a case with a port operator in Portland. The back story is amazing.

The ILWU is one of the most powerful unions in the United States. Since bloody riots in 1934 it has controlled all 29 seaports on the west coast of the United States, giving them monopoly power. The ILWU’s 22 thousand workers are known as the “lords of the dock” and they earn an average of just over $200,000 in salary and another $100,000 in benefits, a bit more than the typical CEO. Some ILWU foremen take home half a million a year.

The ILWU has a lock on dockworkers but there are other rival unions. In Portland, for example, there were two jobs for reefers–electrical workers who handle special refrigerated containers–that since 1974 had been held by members of the International Brotherhood of Electrical Workers. The ILWU, however, wanted control of these jobs and in 2012 one of the heavies of the union, Leal Sundet, threatened the manager of the port operator that if he didn’t help him to take these jobs from the Brotherhood and give them to the Longshoremen he would create havoc. When the port operator didn’t comply–it wasn’t clear even that they could comply as the jobs were not under the port operator’s control–the ILWU followed through on its threat. Repeated shutdowns, slowdowns and discovered “safety violations” disrupted port operations so badly that the entire port closed.

The port operator, however, took the ILWU to court, arguing that the labor actions were illegal. The jury agreed giving the port operator an award of $93.6 million for its losses, later reduced to $19 million. The Union doesn’t have the $19 million, hence the bankruptcy.

Thus, the union has been bankrupted, the port closed, hundreds of millions of dollars lost and shipments slowed all because of a dispute over 2 jobs.

In related news, the just approved ILWU contract raises wages for ILWU workers and ensures that there will be no serious automation of the ports for at least another six years, again putting the United States behind the rest of the world in efficient shipping and logistics.

I am reminded of the day Ronald Reagan fired the air traffic controllers for their illegal strike.

Are domesticated animals dumber than their wild relatives?

by  Tyler Cowen in

Highlights

  • Domestication is often thought to have a negative impact on the cognition of animals.

  • Domesticated animals deemed less cognitively capable than their wild relatives.

  • We reviewed 88 studies comparing cognitive abilities in domesticated and wild animals.

  • No clear impact of domestication on cognition was found.

  • Need to consider some constraints when interpreting domestication-cognition links.

That is from a new paper by Vitor Hugo Bessa Ferreira et.al., via Michelle Dawson.

Do Nice Guys Finish Last? Prosociality in the CEO Labor Market

by  Tyler Cowen

Prosocial CEOs increase employee motivation but are often slower to implement layoffs. We present a model of CEO-firm matching wherein negative industry shocks that require downsizing asymmetrically reduce the match quality for prosocial CEOs and drive turnover. We find that prosocial CEOs are more likely to be dismissed and replaced with less prosocial successors during periods of intensifying import competition. Prosocial CEOs who are retained receive greater bonus-based pay relative to less prosocial CEOs, consistent with increased financial incentives to engage in downsizing. Our findings highlight a novel selection channel (i.e., increased dismissal) and treatment channel (i.e., increased bonus pay) that decrease CEO prosociality during industry downturns. We also highlight that foreign competition affected not only the firm’s economic activities but also the CEO’s psychological characteristics.

That is from a new paper by Daniel Keum and Nandil Bhatia, via the excellent Kevin Lewis.

*The Genius of Israel*

by  Tyler Cowen in

That is the new book by Dan Senor and Saul Singer.  The authors argue that Israel has higher solidarity and also higher social capital than recent media reports might indicate.  They are thus optimistic about the country, and the subtitle is The Surprising Resilience of a Divided Natoin in a Turbulent World.

I do not go to Israel enough to have a strong opinion on this, but their thesis is consistent with my casual observation, and also with my intuition about negative bias in media.  The book comes out November 7.

That was then, this is now (median voter edition)

by  Tyler Cowen in

Homeland Security Secretary Alejandro Mayorkas said this week that the Biden administration planned to waive 26 environmental, public health and cultural preservation laws in order to fast-track constructing sections of the border wall in South Texas.

…The administration would use funds from a 2019 appropriation designated by Congress to construct the wall, which was spurred by a disaster declaration by the Trump administration…

“There is presently an acute and immediate need to construct physical barriers and roads in the vicinity of the border of the United States in order to prevent unlawful entries into the United States.”

Here is the full story, via Rich Dewey.  And note that an actual jaguar is crossing the border.

On U.S. life expectancy disparities

by  Tyler Cowen in

From the excellent Dylan Matthews:

Case and Deaton are highlighting a real problem, confirmed by other researchers: Americans with different levels of education die at different rates, and the least-educated Americans have seen their death rates surge in a way that more-educated Americans have not.

But the relevant divide does not seem to be between people who earned a bachelor’s degree — who remain a minority among American adults — and people who didn’t. Other research suggests that the problem is concentrated in specific areas of the US, and between the very least-educated Americans (particularly high school dropouts) and the rest of the country, rather than between college grads and non-grads.

Moreover, the cause of the divergence between high school dropouts and the rest of the country does not seem to be caused by “deaths of despair.” There is no doubt that the opioid epidemic in particular has wrought spectacular damage in the US. But some researchers are finding that stagnating progress against cardiovascular disease is an even bigger contributor to US life expectancy stalling out, and to mortality divides between the most- and least-educated Americans.

A lot of what you read about “deaths of despair” is in fact wrong or misguided.