Whose big business? (Europe fact of the day)

by  Tyler Cowen in

In 2000 nearly a third of the combined value of the world’s 1,000 biggest listed firms was in Europe, and a quarter of their profits. In just 20 years those figures have fallen by almost half. Europe is a place for companies such as Amazon and TikTok to find customers, not a base for local firms to conquer the world…

Of the world’s 142 listed firms worth over $100bn, 43 were set up from scratch in the past half-century, 27 in America and ten in China. Only one was in Europe: sap, a German software group founded in 1972. Half of Europe’s richest ten billionaires inherited fortunes spawned long ago; in America nine of the top ten are wealthy solely because of companies they founded.

Here is more from The Economist.  This is all the more reason for the United States to boost allowed emigration from the European Union.  It is also an object lesson in which are the true barriers to trade, often including language, culture, and national borders, even in the presence of (nearly) free trade.

Friday assorted conspiracy links

by  Tyler Cowen

1. Vanity Fair on lab leak, with autistic hero.

2. NYT previews the UFO report (based on leaks, presumably).  USG is still puzzled, reports it is not “their stuff,” so I guess your “p” on alien origin should go up modestly.  Here is how the NYT web headline evolved.  The paper edition has the most accurate “U.S. Concedes It Can’t Identify Flying Objects.”

3. Model this: “A bride collapsed and died at her wedding. The groom then married the woman’s sister with her dead body lying in the next room.”

3. 63 pp. of price theory problems.

Does church keep you away from alcohol?

by  Tyler Cowen in

Based on a panel between 1980 and 2016, I find that one more Sunday with precipitation at the time of church increases yearly drug-related, alcohol-related and white-collar crimes. I do not find an effect for violent or property crimes. These effects are driven by more religious counties. Previous evidence showing negative effects of church attendance on the demand for alcohol and drugs is consistent with a demand-driven interpretation of the results presented.

That is from a new paper by Jonathan Moreno-Medina.  Via the excellent Kevin Lewis.

Masking norms and Wokeism

by  Tyler Cowen in

Here is the close of my latest Bloomberg column:

On a related note: Have you noticed that private universities often have a stronger “woke” culture, and less free speech, than public universities? This fact is also somewhat of an embarrassment for many libertarians. Though libertarian-leaning, I am myself happy to be teaching at a public institution, with its stronger legal and normative free-speech protections.

Might the parallel run deeper here? Perhaps the currently enforced codes of wokeism at many universities and technology companies are like mask-wearing norms. Maybe people would be willing to relax more about these issues once someone gives the signal that it is OK to do so.

That would imply that extreme wokeism, like mask mandates, won’t last long. More than just libertarians, perhaps, can take comfort in that.

There is much more at the link.

Chris Anderson of TED interviews me

by  Tyler Cowen in

Here is the full podcast series and also other ways to listen.

Update on Rapid Tests for COVID

by  Alex Tabarrok in

Nearly a year ago, I wrote Frequent, Fast, and Cheap is Better than Sensitive, arguing for rapid antigen tests:

A number of firms have developed cheap, paper-strip tests for coronavirus that report results at-home in about 15 minutes but they have yet to be approved for use by the FDA because the FDA appears to be demanding that all tests reach accuracy levels similar to the PCR test. This is another deadly FDA mistake.

See also my posts Infected versus Infectious and Rapid Tests. The EMA and then the FDA finally did start approving these tests. So how well are they working? Pretty damn well. Canada has two innovative programs. First, in Nova Scotia pop-up clinics have been using rapid tests for asymptomatic people:

During the third wave that hit Nova Scotia over the past month, the province’s community rapid testing centres have correctly sniffed out at least 285 COVID-19 cases in asymptomatic people, or about 10 per cent of all confirmed cases in this time period, according to the Nova Scotia Health Authority.

While most provinces reserve testing only for symptomatic people or close contacts of a case, Nova Scotia’s pop-up centres allow asymptomatic people to simply show up and get a rapid test for free, with results sent to them within an hour. The whole process relies largely on volunteers without a health-care background.

Furthermore, the true number of cases credited to rapid testing is probably much higher. When a rapid test correctly identifies a positive case, the person’s close contacts such as their family get PCR lab tests that don’t show up in the rapid test statistics.

Lisa Barrett, an infectious diseases specialist and the driving force behind the rapid testing program, said it’s hard to say for certain, but taken altogether it’s possible rapid antigen testing has helped Nova Scotia find up to 18 per cent of all cases during the third wave.

“This is the early detection system,” Barrett said. Rapid testing tends to catch people early on in their infection when they’re full of virus, meaning positive cases are found and put into isolation fast — likely days before they would have been found with a PCR test, if they were found at all.

Michael Mina argues that since the rapid antigen detected cases are among the most infectious cases, detecting these cases is probably worth half of all the PCR testing.

Second, Canada’s CDL Rapid Screening Consortium is now in 200 sites with 50 large companies and rapidly expanding. A very interesting, just published paper in The Lancet runs an experiment that suggests that these testing regimes can work. The experiment rapidly tested 1000 people and the negatives were then randomly assigned either to be sent-home to conduct their regular life or to attend a multi-hour concert with masks but also singing, dancing, alcohol and no-social distancing. After 8 days there were two infections in the at-home group and no infections in the Concert group which suggests that this type of rapid testing can be used to open and keep-open concerts, schools, universities, airplanes and workplaces.

What’s the point of testing now that we have vaccines? Two reasons. First, most of the world still hasn’t been vaccinated so testing will be a very useful stop-gap measure until vaccination is more widely distributed. Indeed, the success of these programs shows what we lost by not acting more quickly a year ago. Second, although the pandemic is (essentially) over in the United States (as predicted) there will likely be an uptick in the fall among the unvaccinated and you want rapid tests to be available rapidly in hot-spots. In other words, rapid deployment of rapid tests will help us to avoid outbreaks in the future.

Bangladesh fact of the day

by  Tyler Cowen in

This month, Bangladesh’s Cabinet Secretary told reporters that GDP per capita had grown by 9% over the past year, rising to $2,227. Pakistan’s per capita income, meanwhile, is $1,543. In 1971, Pakistan was 70% richer than Bangladesh; today, Bangladesh is 45% richer than Pakistan. One Pakistani economist glumly pointed out that “it is in the realm of possibility that we could be seeking aid from Bangladesh in 2030.”

India — eternally confident about being the only South Asian economy that matters — now must grapple with the fact that it, too, is poorer than Bangladesh in per capita terms. India’s per capita income in 2020-21 was a mere $1,947.

Here is more from Mihir Sharma at Bloomberg.

Can you call this a new service sector job?

by  Tyler Cowen in

Dave Taube has won a computer, a whitewater rafting trip, and several grills. There’s also the kayak, the powder-blue Coors Light onesie, and the Bruce Springsteen tickets. He recently took home $10,000 from Cost Plus World Market in its “World of Joy” sweepstakes. Recently, he found himself in the running for a trip to Antarctica, which would be the thirty-sixth vacation he’s won. His photo and caption, submitted in response to the prompt, “Tell us what you miss about international travel,” got enough votes to make the top 20. Next, the entries went to judging. In Taube’s photo, he’s slung with cameras and wearing safari duds, half-smiling, with a silver goatee. Strategically, he submitted his caption as a poem to make his entry distinct.

Taube, who is 65 and a decades-long resident of the Pacific Northwest, is a sweeper, a term that distinguishes the committed competitor from the casual, onetime entrant. Each day, he enters about 60 sweepstakes—which are random draws—and contests—which are judged.

And this:

Years ago, he entered a contest for “the most boring person in the Pacific Northwest.” He won a whitewater rafting trip, a plane ride, and a certificate for a tandem parachute jump. He sold the certificate.

He is producing…”contest liquidity”?  Publicity?  Contest legitimacy?  In any case he is paid for his labors, albeit in kind.  Here is the full story.

My Conversation with the very very smart David Deutsch

by  Tyler Cowen in

I think this episode came off as “weird and testy,” as I described it to one friend, but I like weird and testy!  Here is the audio, video, and transcript.  Here is one excerpt:

COWEN: How do you think the many-worlds interpretation of quantum mechanics relates to the view that, just in terms of space, the size of our current universe is infinite, and therefore everything possible is happening in it?

DEUTSCH: It complicates the discussion of probability, but there’s no overlap between that notion of infinity and the Everettian notion of infinity, if we are infinite there, because the differentiation (as I prefer to call what used to be called splitting) — when I perform an experiment which can go one of two ways, the influence of that spreads out. First, I see it. I may write it down; I may write a scientific paper. When I write a paper about it and report the results, that will cause the journal to split or to differentiate into two journals, and so on. This influence cannot spread out faster than the speed of light.

So an Everett universe is really a misnomer because what we see in real life is an Everett bubble within the universe. Everything outside the bubble is as it was; it’s undifferentiated, or, to be exact, it’s exactly as differentiated as it was before. Then, as the bubble spreads out, the universe becomes or the multiverse becomes more differentiated, but the bubble is always finite.

COWEN: How do your views relate to the philosophical modal realism of David Lewis?

DEUTSCH: There are interesting parallels. As a physicist, I’m interested in what the laws of physics tell us is so, rather than in philosophical reasoning about things, unless they impinge on a problem that I have. So yes, I’m interested in, for example, the continuity of the self — whether, if there’s another version of me a very large number of light-years away in an infinite universe, and it’s identical, is that really me? Are there two of me, one of me? I don’t entirely know the answer to that. It’s why I don’t entirely know the answer to whether I would go in a Star Trek transporter.

The modal realism certainly involves a lot of things that I don’t think exist — at least, not physically. I’m open to the idea that nonphysical things do exist: like the natural numbers, I think, exist. There’s a difference between the second even prime, which doesn’t exist, and the infinite number of prime numbers, which I think do exist. I think that there is more than one mode of existence, but the theory that all modes of existence are equally real — I see no point in that. The overlap between Everett and David Lewis is, I think, more coincidental than illuminating.

COWEN: If the universe is infinite and if David Lewis is correct, should I feel closer to the David Lewis copies of me? The copies or near copies of me in this universe? Or the near copies of me in the multiverse? It seems very crowded all of a sudden. Something whose purpose was to be economical doesn’t feel that way to me by the end of the metaphysics.

DEUTSCH: It doesn’t feel like that to you. . . . Well, as Wittgenstein is supposed to have said (I don’t know whether he really did), if it were true, what would it feel like? It would feel just like this.

Much more at the link.  And:

COWEN: Are we living in a simulation?

DEUTSCH: No, because living in a simulation is precisely a case of there being a barrier beyond which we cannot understand. If we’re living in a simulation that’s running on some computer, we can’t tell whether that computer is made of silicon or iron, or whether it obeys the same laws of computation, like Turing computability and quantum computability and so on, as ours. We can’t know anything about the physics there.

Well, we can know that it is at least a superset of our physics, but that’s not saying very much; it’s not telling us very much. It’s a typical example of a theory that can be rejected out of hand for the same reason that the supernatural ones — if somebody says, “Zeus did it,” then I’m going to say, “How should I respond? If I take that on board, how should I respond to the next person that comes along and tells me that Odin did it?”

COWEN: But it seems you’re rejecting an empirical claim on methodological grounds, and I get very suspicious. Philosophers typically reject transcendental arguments like, “Oh, we must be able to perceive reality, because if we couldn’t, how could we know that we couldn’t perceive reality?” It doesn’t prove you can perceive reality, right?

And this:

COWEN: A few very practical questions to close. Given the way British elections seem to have been running, that the Tories win every time, does that mean the error-correction mechanism of the British system of government now is weaker?

DEUTSCH: No. Unfortunately, the — so, as you probably know, I favor the first-past-the-post system in the purest possible form, as it is implemented in Britain. I think that is the most error-correcting possible electoral system, although I must add that the electoral system is only a tiny facet of the institutions of criticism and consent. In general, it’s just a tiny thing, but it is the best one.

It’s not perfect. It has some of the defects of, for example, proportional representation. Proportional representation has the defect that it causes coalitions all the time. Coalitions are bad.

COWEN: You have a delegated monitor with the coalition, right? With a coalition, say in the Netherlands (which is richer than the United Kingdom), you typically have coalition governments. Some parties in the coalition are delegated monitors of the other parties. Parties are better informed than voters. Isn’t that a better Popperian mechanism for error correction?

I also tried to sum up what I think he is all about, and he reacted with scorn.  That was an excellent part of the conversation.  And here is a good Twitter thread from Michael Nielsen about the Conversation.

Wednesday assorted links

by  Tyler Cowen

1. Todd Kashdan criticizing his own work.

2. “The American Economic Journal: Microeconomics (one of the very top journals that isn’t part of the holy Top-5, hallowed be thy names) managed to go an entire year without accepting a paper!”  (out of 415 submissions).

3. How the NIH behaves during an emergency.

4. Increase of women in personnel management.

5. There is no Argentine bola great stagnation.

6. Speculative.

7. Sheilagh Ogilvie does Five Books on the Industrial Revolution.

Two Vaccine Updates

by  Alex Tabarrok

First, in an article on new vaccine boosters in USA today there is this revealing statement:

Any revised Moderna vaccine would include a lower dose than the original, Moore said. The company went with a high dose in its initial vaccine to guarantee effectiveness, but she said the company is confident the dose can come down, reducing side effects without compromising protection.

Arrgh! Why wait for a new vaccine??? Fractional dosing now!

A microneedle patch for vaccines.

The same article also notes:

One of Moderna’s co-founders, MIT professor Robert Langer, is known for his research on microneedles, tiny Band-Aid-like patches that can deliver medications without the pain of a shot. Moderna has said nothing about delivery plans, but it’s conceivable the company might try to combine the two technologies to provide a booster that doesn’t require an injection.

The skin is highly immunologically active so you can give lower doses with a microneedle patch. The microneedles are sometimes made from sugar and don’t hurt. Microneedle delivery, however, can cause scars but I say apply the patch where the sun don’t shine and let’s go!

Second, Canada’s NACI has now endorsed mix and match for the AZ and Pfizer and Moderna vaccines. First Doses First has put Canada in very good shape (now ahead of the US in percent of the population with at least one dose) and this was always part of the FDF plan–delay second doses to get out more first doses and then, when supplies increase, give second doses, possibly with a better vaccine.

Do individuals make more rational decisions when the stakes are higher?

by  Tyler Cowen in

Often yes, but this is a shibboleth of economics that doesn’t always fit the facts, as has been illustrated starkly by our behaviors during the pandemic.  Many people have taken too much risk, or been too risk-averse, even with high stakes on the line.  Here is one excerpt from my recent Bloomberg column:

You might wonder why we are getting these big, important decisions so wrong. I have at least two hypotheses. One is that anxiety causes people to make worse decisions. Facing the danger of a deadly pandemic, for example, the higher stakes might induce me to shift into denial, if only to protect my sanity and peace of mind. I might make worse decisions than if I were simply trying to avoid the common cold, for which the stakes are far lower.

My other hypothesis involves identity and the desire for belonging. It is no accident that red states in the U.S. are under-vaccinated relative to blue states; vaccine skepticism is in part an identity marker for Trump supporters. People tend to see big decisions as more important in shaping their identity than small ones. In essence, the significance of a decision induces all kinds of surrounding social forces to “infect” that decision with partisan influences, and that decision in turn becomes a truly credible signal of what we believe.

For most economic decisions, people do still make better choices when the stakes are higher — but this isn’t a universal principle. Are you so sure, for example, that decisions about who to marry are made more rationally than those about which TV show to watch? Maybe they are, but it’s not entirely obvious.

Note that it is now much easier to make good small stakes decisions, largely because of the internet:

An accompanying change is that low-stakes decisions are easier than ever, due largely to the internet, with one crucial caveat: The decision-maker must be relatively rational. Several decades ago, if you wanted to figure out the best paper towels to buy, you might have asked around and then collated a lot of information yourself. These days it is easy enough to search the internet for the answer. Or consider the example of credit-card rewards, which are far easier to collect, manipulate and use because of the internet.

The danger of course is that the sum of all these smaller triumphs convinces people that they are rational about big dilemmas too — despite the fact that they choose rather poorly on some of them. We are not used to a world where we are worse at big decisions than the small ones. But it has been hurtling our way for some while now.

Recommended.  I also cite this: “Bryan Caplan, a colleague who studies human rationality, has put the individual Covid response in only the second percentile of “my initially mediocre expectations.””