Have you ever visited Zagreb, Ljubljana, or Bratislava, and noticed how boring they are? They still feel like backwaters, not the national capitals they are. That is no accident, because they “grew up” under the Habsburg monarchy and in the Austro-Hungarian empire as second- or even third-tier cities. Vienna and Budapest, the seats of that empire, are correspondingly overgrown, and remain so to this day.
Britain faces this issue in a much more extreme form. London was once the capital of the largest empire the world ever has seen, was it 1/4 of the world’s population at its peak? After that it was the de facto financial and economic capital of the European Union, and it remains the de facto financial and economic capital for Europe more generally. The global ascent of the English language strengthens these tendencies.
That leads to an extreme hypertrophy for London, which indeed is currently the best city in the world but in a modestly populated country. However this central role for the city makes the UK as a broader nation richer to only a limited degree. So the extreme wonders of London lead to a partial (permanent) atrophy for the rest of the country, which is precisely what we observe.
For all the mockery of “Singapore on the Thames” as a concept, southern England and the London-Cambridge-Oxford triangle already have far surpassed Singapore, and I am referring to recent not historic achievements. Does Singapore have innovations that compare to the vaccine and Deep Mind? I don’t see it.
Therein also lies the curse of southern England. The region’s most marvelous achievements are ideas, and the value of those ideas is largely capitalized elsewhere. Unknowingly, southern England is playing the “effective altruist” role for the world as a whole.
Singapore, in contrast, doesn’t generate many new ideas. It invites in MNCs, and the capitalizes much of the value of that production in the form of higher wages and higher land rents, the latter often accruing to the government and which are then (to varying degrees) distributed back to the native population.
And there you go. Whatever you think is the best British fiscal policy, it isn’t going to reverse that state of affairs.
are very good reviews and summaries of where we stand. The third discusses what Brink calls The Anti-Promethean Backlash
…the anti-Promethean backlash — the broad-based cultural turn away from those forms of technological progress that extend and amplify human mastery over the physical world. The quest to build bigger, go farther and faster and higher, and harness ever greater sources of power was, if not abandoned, then greatly deprioritized in the United States and other rich democracies starting in the 1960s and 70s. We made it to the moon, and then stopped going. We pioneered commercial supersonic air travel, and then discontinued it. We developed nuclear power, and then stopped building new plants. There is really no precedent for this kind of abdication of powers in Western modernity; one historical parallel that comes to mind is the Ming dynasty’s abandonment of its expeditionary treasure fleet after the voyages of Zheng He.
This is a chart of U.S. energy consumption per capita, which until around 1970 showed steady exponential growth of around 2 percent a year. The author calls this the “Henry Adams curve,” since the historian was an early observer of this phenomenon. But around 1970, the Henry Adams curve met the anti-Promethean backlash — and the backlash won.
The chart comes from Where Is My Flying Car? by J. Storrs Hall. It’s a weird, wacky book that rambles all over the place; it’s also brilliant, and it changed my mind about a matter of great importance.
Before reading Hall, if I had seen this chart — and maybe I did see something like it before, I’m not sure — I would have had a completely different reaction. My response would have been along the lines of: “Wow, look at capitalism’s ever-increasing energy efficiency. We’re getting more GDP per kilowatt-hour than ever before, thanks to information technology and the steady dematerialization of economic life. All hail postmaterialist capitalism!”
But Hall argues convincingly that the plateauing of the Henry Adams curve didn’t represent the natural evolution of capitalism in the Information Age. The bending of that curve, he claims, constituted self-inflicted injury. Our midcentury dreams of future progress — flying cars, nuclear power too cheap to meter, moon bases and underwater cities — didn’t fail to materialize simply because we were lousy at guessing how technology would actually develop. They failed to materialize because the anti-Promethean backlash, aided by with loss-averse apathy, left them strangled in their cribs.
He is especially convincing on nuclear power. My prior impression was that nuclear power had always been a high-cost white elephant propped up only by subsidies, but Hall documents that back in the 1950s and 60s, the cost of new plants was falling about 25 percent for every doubling of total capacity — a classic learning-curve trajectory that was abruptly halted in the 1970s by suffocating regulation. In 1974 the Atomic Energy Commission was abolished and the new Nuclear Regulatory Commission was established. In the almost half-century since then, there has not been a single new nuclear power plant approved and then subsequently built.
The Center for Strategic Translation translates and annotates material of strategic and historical value that currently exists only in the Chinese language.
Ken joined Tyler to discuss how facial expressions in photos have changed over time, where in the American past he’d like to visit most, the courage of staying in place, how he feels about intellectual property law, the ethical considerations of displaying violent imagery, why women were so prominent in the early history of American photography, the mysteries in his quilt collection, the most underrated American painter, why crossword puzzles are akin to a cup of coffee, why baseball won’t die out, the future of documentary-making, and more.
And an excerpt:
COWEN: Why are women so prominent in the early history of American photography — compared, say, to painting or sculpture?
BURNS: It’s interesting, I think, because at the beginning we’re recording ourselves, our families. The first one is a self-portrait. (Of course, being an American it would be a self-portrait.) But families are involved.
There’s so many ways in which we transcend — the Declaration of Independence did not apply to any women. It’s 144 years after the Declaration that women get the right to vote: basic thing. When the Declaration and the Constitution were there, they had no rights. But they were part of the landscape.
They are a majority of the population, and have been. What you have is the beginning of photographs being a much more democratic and accessible medium, that is going to be populated by the people who actually exist. I think it’s that that’s helpful to break down.
As you see in this book, there are lots of images of women from the earliest time involved in things like abolition, involved in things like slavery unions, involved in things like women’s suffrage, involved in just playing, having a good time on the beach in Massachusetts in your bloomer swimming suits dancing, or three gals stealing a cigarette in the early part of the 19th century.
This film is about darkness and light, about black and white — both in the photographic process but in the American dynamic: there are many Native Americans, there’s lots of landscapes of the beauty of the country. There’s lots of horrible signs of discrimination and war and death and suffering and grief.
And that’s us. That’s the story of us. I’ve been trying to tell that complicated history with my films, and this was an opportunity to stop and allow the viewer this time to be the director. That is to say, in most performance art, as film is, I set the time that you get to look at that photograph and you see what you’re able to see in that. If you want to spend an hour with one photograph in this book, you’re welcome to.
If you want to go through this over-amount of time, these photographs, and then hold your thumb in the back matter and go back and forth between the full page of the photograph, that might say “Gettysburg, 1863,” and then the description of people reading the list of the dead outside a newspaper in New York City just after the Battle of Gettysburg in July of ’63 — you can learn a lot more about the photograph, but in a different way. I first wanted the photographs to speak for themselves, un- . . . diminished — I guess, is the word — by words.
The required recapitalization of the NHS is a major pending expenditure, and it is not playing a sufficiently large role in budget discussions. The system was never as cheap as it looked, and now the bill is coming due.
If you think austerity is required (NB: not my view), the Hunt plans seem to be doling this out in dribs and drabs. Better to rip off the band-aid and get it all over with. Conditional on the view that austerity is correct, the current plans would not be nearly enough.
Even the U.S. Treasuries market is not entirely liquid and stable at the moment, so any market reaction to any policy in Britain has to be given a very careful forensics. Don’t assume that you know what the market is telling us.
Here they are, so many figures well-known to MR readers. The Peter Thiel talk was quite interesting, you can think of it as his concessions to Greta, with a new twist on the great stagnation and its causes. My ten-minute talk is in here, following Niall Ferguson and John Cochrane, and it was my favorite of the conference (not always the case). I had great fun trolling Steven Pinker, most of all.
The author is John Higgs, and the subtitle is Bond, the Beatles and the British Psyche. I loved this book, and reading it induced me to order the author’s other books, the ultimate compliment. It is not for everyone, nor is it easy to describe, but imagine the stories of The Beatles and James Bond films told as “parallel careers.” After all, “Love Me Do” and Dr. No were released on the same day in 1962.
It is striking that they have been making James Bond films for sixty years now, and every single one of them has made money. We are still talking about the Beatles too. Will anything from current Britain have such staying power?
From the book here is one excerpt:
Had Paul not then finally found success outside the band, it is possible they may have agreed to a reunion. The success of ‘Live and Let Die’, followed by the album Band on the Run, made Paul McCartney and Wings a going concern at exactly the point when a Beatles reunion looked most plausible. Bond didn’t kill the Beatles, but it is a strange irony that once they had split , he kept them dead.
I hadn’t known that the Soviet edition of the Band on the Run album replaced the title track with “Silly Love Songs” as the lead song, as the lyrics to the “Band on the Run” song were considered too subversive. There is for instance talk of a prison break in the song. And when Paul much later performed a short solo concert for Vladimir Putin, he chose to play “Let It Be.”
The book excels in its portraits of George Harrison, especially in his solo career. I enjoyed this tidbit about the Harrison family:
In 1978, George married Olivia Arias and in the same year they had a son, Dhani. Dhani only discovered his father’s past when he was at school. ‘I came home one day from school after being chased by kids singing “Yellow Submarine”, and I didn’t understand why,’ he has said. ‘It just seemed surreal: why are they singing that song to me? I came home and freaked out to my dad: “Why didn’t you tell me you were in the Beatles?” And he said: “Oh, sorry. Probably should have told you that.” It’s impossible to imagine, John, Paul or Ringo neglecting to mention they were in the Beatles to their children.
A second problem with the Keynesian recommendations is that governments did not do enough to build up surpluses in good times. Many governments therefore are running out of fiscal space, or at least markets perceive that to be the case. Even if Keynesian theory says they ought to be expanding with their fiscal policy, they can’t always do so with impunity.
The recent history of the UK government is a paradigmatic example. Under Prime Minister Liz Truss, the plan was to boost spending on energy subsidies and cut some taxes. Whatever else you might say about the details of those policies, they did fit the Keynesian recipe for fiscal expansion in tough times (though it is noteworthy that many leading Keynesian economists strongly opposed them).
The problem is that markets didn’t like the policies, and the British pound fell and borrowing rates on government bonds rose. Financial markets were roiled, and now the Truss days are over.
Now Rishi Sunak is prime minister. What exactly is he supposed to do? He might try the opposite of the Truss plan, namely raise some taxes and cut some spending, or at least bend downwards the trajectories for future spending. In Keynesian terms, however, that policy is ill-advised. The UK is likely entering a recession, and the Bank of England has declared it may be the longest recession on record. Is it really wise to engage in austerity when times are turning bad?
Furthermore, the extant numbers do not indicate that the UK has to engage in austerity. Its debt-to-GDP ratio is about 80%, which is not astronomical. For a while economists Carmen Reinhart and Kenneth Rogoff tried to convince the profession that debt levels are dangerously high at 90% of GDP, but those arguments were shot down for having data errors and now those claims are discredited. It is not easy to now argue that a debt-to-GDP of 80% requires austerity.
Anthony Trollope, Herman Melville, and the 19th century novel. Books more generally.
U.S. regulation of domestic exchanges – it is one of the things we seem to do best, and they created little trouble during 2008-2009, or for that matter during the pandemic
CBDC, and sadly so
Crypto forensics
Twitter and weird anon accounts
When would the trouble have been exposed if not for Twitter? And much of the best coverage came from accounts with names like Autism Capital.
Some critics (like Aaron Levie), too.
Bitcoin
After a cataclysm for the crypto sector, it’s down about 15% over the past month. That’s less than the S&P 500 lost during the worst month of the GFC.
Falls
Effective Altruism
A totalizing worldview that has enabled some undesirable weirdness in different places.
Valorizing “scope sensitivity” and expected value leads people violently astray.
How should one incentivize creativity when being creative is costly? We analyze a model of delegated bandit experimentation where the principal desires the agent to constantly switch to new arms to maximize the chance of success. The agent faces a fixed cost of switching. We show that the principal’s optimal reward scheme is maximally uncertain—the agent receives transfers for success, but their distribution has an extreme variance. Despite being stationary, the optimal reward scheme achieves the principal’s first-best outcome provided that the agent’s outside option is sufficiently valuable. Our results shed light on the non-transparent incentives used by online platforms, such as YouTube, and guide how to design incentives for creativity in such applications.
One feature of this model is that extreme uncertainty about rewards motivates project-switching, which is what the principle wants. Most projects should offer low rewards, but a small percentage of winners should offer very high rewards. In this model it is also the case that opaque bonus schemes perform better than transparent ones. As I understand this result, the principal wants the agent to keep on switching and thus does not want to offer any kind of “safe haven” where the agent can rest securely.
