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Tuesday assorted non-links and links

1. Cocoman’s Law?: “The more important is an investigation of applied synthetic knowledge, the less useful literature there will be.”

2. E. Glen Weyl summary of RadicalxChange as an intellectual and political program.

3. How to hypothetically hack your school’s surveillance of you.

4. Ledwich and Zaitsev respond on YouTube radicalization.

5. New French board game on wealth gap is a big hit.

6. The value of air filters in classrooms, to limit air pollution.

7. Gertrude Himmelfarb has passed away.

Charles Murray’s *Human Diversity*

His new book is coming out in January, and the subtitle is The Biology of Gender, Race, and Class. I will get to the details shortly, but my bottom-line review is “Not as controversial as you might think,” but do note the normalization at the end of that phrase.

Here is one bit from p.294 toward the end of the book:

Nothing we are going to learn will diminish our common humanity.  Nothing we learn will justify rank-ordering human groups from superior to inferior — the bundles of qualities that make us human are far too complicated for that.  Nothing we learn will lend itself to genetic determinism.  We live our lives with an abundance of unpredictability, both genetic and environmental.

Most of the book defends ten key propositions, laid out on pp.7-8.  The first four of those propositions concern differences between men and women (“Sex differences in personality are consistent worldwide…”) and I do not find those controversial, so I will not cover them.  The chapters on those propositions provide a good survey of the evidence, and a good answer to the denialists, though I doubt if Murray is the right person to win them over.  Let’s now turn to the other propositions, with my commentary along the way:

5. Human populations are genetically distinctive in ways that correspond to self-identified race and ethnicity.

True, but Murray’s analysis did not push me beyond the usual citations of lactose intolerance, sickle cell anemia, adaptation to high altitudes, and the like.  That said, pp.190-195 offer a very dense discussion of target alleles for various traits, such as schizophrenia, and how those target alleles vary across different groups.  I found those pages difficult to follow, and also wished that discussion had been fifty pages rather than five.  Toward the end of that discussion, Murray does write (p.194): “…proof of the role of natural selection for many genetic differences will remain unobservable without methodological breakthroughs.”  With that I definitely agree.

On p.195 he adds “It is implausible to expect that none of the imbalances will yield evidence of significant genetic differences related to phenotypic differences across continental populations.”  That returns to my core point about this book not shifting my priors.  You could agree with that sentence (noting the ambiguity in the word “significant”) and still have a quite modest vision of what those differences might mean.  In any case, nothing in the book pushes me beyond that sentence in the direction of the geneticists.

And here the contrast with the chapters on men and women becomes (unintentionally?) glaring: those biological differences are relatively easy to demonstrate, so perhaps hard-to-demonstrate biological differences are not so significant.  That too is just a conjecture, but there are multiple ways to play the “absence of evidence” and “how to interpret the residuals” cards, and I wish those had received a more extensive philosophy of science-like discussion.

Now let’s move to the next proposition:

6. Evolutionary selection pressure since humans left Africa has been extensive and mostly local.

That one strikes me as a miswording or misstatement, though I do not see that it corresponds to any actual mistakes in the broader text.  You might think that general, non-local evolutionary selection for all humans has been quite large over the millennia, relative to local selection.  I genuinely do not know the ratio here, but Murray does not seem to address the actual comparison of “across all human groups” vs. “local” as loci of selection pressures.

Next up:

7. Continental population differences in variants associated with personality, abilities, and social behavior are common.

Clearly true, but note this proposition does not claim biological roots for those differences.  The real question comes in the next proposition:

8. The shared environment usually plays a minor role in explaining personalities, abilities, and social behavior.

Here I have what I think is a major disagreement with Murray.  If he means the term “shared environment” in the narrow sense used by say twin studies, he is probably correct.  But in the more literal, Webster-derived conception of “shared environment” I very much disagree.  Culture is a truly major shaper of our personalities, abilities, and social behavior, and self-evidently so. For my taste the book did not contain nearly enough discussion of culture and in fact there is virtually no discussion of the concept or its power, as a look at the index will verify.  The real lesson of “twins studies plus anthropology” is that you have to control almost all of a person’s environment to have a major impact, but a major impact indeed can be had.  I behave very differently than my Irish potato famine ancestors, and not because I am genetically 1/8 from the Madeira Islands.  That said, within the narrower range of environmental variation measured in twins studies…well those studies seem to be fairly accurate.

9. Class structure is importantly based on differences in abilities that have a substantial genetic component.

Correct as stated, but I see those differences as much less genetic than Murray does.  For instance, IQ is to some extent heritable, but how much does that shape economic outcomes?  It is worth turning to Murray’s discussion on p.232 and the associated footnote 17 (pp.428-429).  His main source is what is to me a flawed meta-study on IQ and job performance (Murray to his credit does also cite the best-known critique of such studies).  I would opt more directly for the labor market literature on IQ and individual earnings, based on actual measured wages, which shows fairly modest correlations between IQ and earnings (read here, here and here).  So, at the very least, the inherited IQ-based permanent stratification version of The Bell Curve argument is much more compelling to Murray than it is to me.

10. Outside interventions are inherently constrained in the effects they can have on personality, abilities, and social behavior.

Clearly this is literally true, if only because of the meaning of “constrained.”  But mostly I would repeat my remarks on culture from #8.  Cultures change, and over time they are likely to change a great deal.  For instance, early in the 20th century, Korea, Japan, and China often were described as low work ethic cultures.  As cultures change, in turn those cultures can shape the personalities, abilities, and social behaviors of subsequent generations, in significant ways albeit constrained.  So while Murray is correct as stated, I believe I would disagree with his intended substantive point about the weight of relative forces.

Overall this is a serious and well-written book that presents a great deal of scientific evidence very effectively.  Anyone reading it will learn a lot.  But it didn’t change my mind on much, least of all the most controversial questions in this area.  If anything, in the Bayesian sense it probably nudged me away from geneticist-based arguments, simply because it did not push me any further towards them.

Murray of course will write the book he wants to, but my personal wish list was two-fold: a) a book leaving most of the normal science behind, and focusing only on the uncertain and controversial frontier issues, in great detail, and b) much more discussion of the import of culture.

Most of all, I am happy that America’s culture of achievement is inducing Murray to continue to produce major works at the age of 76, soon to be 77.

You can pre-order here.

Work on these things

Here are some projects I’d like to see funded, some through my own ventures, or others through alternative mechanisms. On these issues, the right person could have an enormous impact, whether through the research side or directly coming up with actionable ideas, including of course creating and building companies.

More studies of super-effective people. Either individually or collectively. If you take the outliers in any domain, what should our intuitions be for understanding the underlying processes determining how many people could have ended up in those positions? How many people had the right genes but had the wrong upbringing? How many people had the right genes and the right upbringing but the wrong luck, or perhaps society failed them in some other manner? The answers to these questions have significant policy implications.

A comprehensive analysis and critique of the NIH and NSF. The US funds more science research than any other country — about $35 billion per year on the NIH and $8 billion per year on the NSF. How exactly do these institutions work? How have they changed over time and have these changes been for good or bad? Based on what we now know, how might we better structure the NIH and NSF? What experiments should we run or what kind of studies should we perform?

Why is life expectancy so long in Hong Kong? Life expectancy in Hong Kong is 84.23 years, more than five years longer than the US and the highest in the world. Hong Kong is not that wealthy (median household income is $38,000 USD); it’s somewhat polluted; people don’t obviously eat what seems like a healthy diet; and they don’t seem to exercise a great deal. What should we learn from this?

Bloomberg Terminal for everything. This might be a nonprofit, a company, or a government project. To state the obvious, many analyses hinge on having the right data. If you’re in finance, getting the right data is often easy: just pull it up on your Bloomberg terminal. But there is no practical way to ask “what most correlates with life expectancy in Hong Kong?” (See above on that topic.) Figure out a way to build a growing corpus of structured data across the broadest variety of domains.

A comprehensive guide to the American healthcare system. The American healthcare system is by far the world’s biggest and also by a considerable margin the world’s most influential. Yet there is no comprehensive, dispassionate, and analytical disaggregation of how it all works. Who are the actors and what are their incentives? To the degree that the relationships between different entities are in equilibrium, what are the forces ensuring they stay there? What is the Sankey diagram of fund flows within the U.S. healthcare system?

Better answers for how to quantify worker productivity. In most knowledge industries, companies have nothing better than highly subjective measures (i.e., supervisors’ assessments) of worker productivity. In theory, it seems significant improvements should be possible. In the short term, is it possible to measure the productivity or efficacy of individual managers, software engineers, educators, scientists? How about teams, and what size of team? And can we do so without creating Goodhart’s Law problems?

What should Widodo do? Indonesia is a large, populous middle-income country. It faces no major near-term security threats. It has a small manufacturing base and no major non-commodity export sectors. What is the best non-bureaucratic 10 page economic development briefing document and set of prescriptions that one could write for Indonesia’s president? For Indonesia, substitute Philippines, Chile, or Morocco. 

A comparative study of foundations and their efficacy. Philanthropic foundations are behind a lot of important work. But how does a foundation decide what it wants and how the resulting grants should be structured? How effective are the programs of that foundation? In practice, how have its institutional mechanisms evolved? Imagine some kind of resource that answered these questions for the major American foundations.

Institutional critiques. More broadly, there is no discipline of institutional criticism. There is a very rich literature of policy criticism in economics, journalism, and non-fiction books. There is also a rich literature of “corporate criticism”: there are thousands of articles about how Facebook (budget: $20 billion) works and how it might be good or bad. But there is relatively little analysis of the most important institutions in our society: government departments. How is the Department of Agriculture (budget: $150 billion) organized and how effective or not is it? How about the Department of Energy (budget: $32 billion)? And why are not those questions paramount in the minds of policymakers?

Cultures of excellence. If you ask informed Filipinos why the street food is mediocre, they will tell you that Philippines lacks a “culture of excellence”. It seems that some kind of “culture of doing things really well” has very persistent and generalizable effects. South Korea and Japan have developed much more rapidly than many Asian countries, despite many others adopting relatively free “Washington Consensus”-style trade policies. Russia still has higher GDP per capita than Mexico despite Mexico’s economic policies having been much better than Russia’s for many, many decades at this point. How should we think about cultures of excellence?

Regeneration at the government layer. Herbert Kaufman (unsurprisingly) concludes in an empirical study that government organizations don’t die. While we might all agree that this is a problem, actionable solutions are in short supply. What can or should we do about this?

IQ paradox. Ron Unz points out that intergenerational variation of IQ may be much higher than is often assumed, citing Ireland and Croatia as examples. For instance, not long ago Ireland had sub-par measured IQ and now that figure is much higher, following growth and prosperity. The policy implications of IQ disparities across nations may therefore be different to what might otherwise obviously follow: perhaps environment matters much more than is assumed. If so, what should we be doing more or less of?

Credible plans for new top-tier universities. 7 of the best 25 universities in the world (Times ranking) were started in the US between 1861 and 1891 by ambitious reformers. It’s probably harder in many ways to start an impactful new university today… but it’s likely not impossible and the returns to doing so successfully might be very high. What might be a good plan? Why have so few of these plans come to fruition? 

Summaries of the state of knowledge in different fields. As a general matter, a lot of oral knowledge in the world is still not readily available, and reflection on this fact might lead one in many interesting directions. One obvious application is helping people more readily understand the present state of affairs in different domains. If I want to know “how we’re doing” in, say, antiviral drug development, I could spend a few hours hunting for top researchers, email a few, and perhaps get on calls to obtain their candid assessments. Are we making good progress? What are the most important open problems? What’s holding things back? And so on. How can we make all of this knowledge publicly available across all fields?

Mechanisms for better matching. One of the single interventions that could do the most to improve global welfare would be to improve the efficiency of the partner/marriage matching ecosystem. Online dating demonstrates that significant change (and maybe even improvement?) is possible, with some figures suggesting that up to two thirds of relationships in the US may now be initiated through online dating services. Accomplished people often seem to struggle with this challenge. Good solutions would be important.

What should Durkan do? Jenny Durkan is the current mayor of Seattle. As cities become more important loci of economic activity in the world, the importance of effective city governance will increase. As with the Widodo challenge, what is the best 10 page briefing document and set of prescriptions that one could write for her? What about Baltimore and St. Louis?

Is the rate of scientific progress slowing down?

That is the title of my new paper with Ben Southwood, here is one segment from the introduction:

Our task is simple: we will consider whether the rate of scientific progress has slowed down, and more generally what we know about the rate of scientific progress, based on these literatures and other metrics we have been investigating. This investigation will take the form of a conceptual survey of the available data. We will consider which measures are out there, what they show, and how we should best interpret them, to attempt to create the most comprehensive and wide-ranging survey of metrics for the progress of science.  In particular, we integrate a number of strands in the productivity growth literature, the “science of science” literature, and various historical literatures on the nature of human progress. In our view, however, a mere reporting of different metrics does not suffice to answer the cluster of questions surrounding scientific progress. It is also necessary to ask some difficult questions about what science means, what progress means, and how the literatures on economic productivity and “science on its own terms” might connect with each other.

Mostly we think scientific progress is indeed slowing down, and this is supported by a wide variety of metrics, surveyed in the paper.  The gleam of optimism comes from this:

And to the extent that progress in science has not been slowing down, which is indeed the case under some of our metrics, that may give us new insight into where the strengths of modern and contemporary science truly lie. For instance, our analysis stresses the distinction between per capita progress and progress in the aggregate. As we will see later, a wide variety of “per capita” measures do indeed suggest that various metrics for growth, progress and productivity are slowing down. On the other side of that coin, a no less strong variety of metrics show that measures of total, aggregate progress are usually doing quite well. So the final answer to the progress question likely depends on how we weight per capita rates of progress vs. measures of total progress in the aggregate.

What do the data on productivity not tell us about scientific progress?  By how much is the contribution of the internet undervalued?  What can we learn from data on crop yields, life expectancy, and Moore’s Law?  Might the social sciences count as an example of progress in the sciences not slowing down?  Is the Solow model distinction between “once and for all changes” and “ongoing increases in the rate of innovation” sound?  And much more.

Your comments on this paper would be very much welcome, either on MR or through email.  I will be blogging some particular ideas from the paper over the next week or two.

And here is Ben on Twitter.

Friday assorted links

1. “The things that sex workers do to stay safe are almost always the things civilians want to pass laws to stop.

2. Income-sharing agreements are making progress.

3. Arranged marriages with no consent.

4. MIE: Mattel launches gender-neutral dolls.

5. Mary Halvorson, Macarthur winner and jazz guitarist.  And here is my CWT with Emily Wilson, translator and classicist, another Macarthur winner.

6. Chinese housing privatization: the most important economic policy you’ve never discussed?

The Danger of Reusing Natural Experiments

I recently wrote a post, Short Selling Reduces Crashes about a paper which used an unusual random experiment by the SEC, Regulation SHO (which temporarily lifted short-sale constraints for randomly designated stocks), as a natural experiment. A correspondent writes to ask whether I was aware that Regulation SHO has been used by more than fifty other studies to test a variety of hypotheses. I was not! The problem is obvious. If the same experiment is used multiple times we should be imposing multiple hypothesis standards to avoid the green jelly bean problem, otherwise known as the false positive problem. Heath, Ringgenberg, Samadi and Werner make this point and test for false positives in the extant literature:

Natural experiments have become an important tool for identifying the causal relationships between variables. While the use of natural experiments has increased the credibility of empirical economics in many dimensions (Angrist & Pischke, 2010), we show that the repeated reuse of a natural experiment significantly increases the number of false discoveries. As a result, the reuse of natural experiments, without correcting for multiple testing, is undermining the credibility of empirical research.

.. To demonstrate the practical importance of the issues we raise, we examine two extensively studied real-world examples: business combination laws and Regulation SHO. Combined, these two natural experiments have been used in well over 100 different academic studies. We re-evaluate 46 outcome variables that were found to be significantly affected by these experiments, using common data frequency and observation window. Our analysis suggests that many of the existing findings in these studies may be false positives.

There is a second more subtle problem. If more than one of the effects are real it calls into question the exclusion restriction.To identify the effect of X on Y1 we need to assume that X influences Y1 along only one path. But if X also influences Y2 that suggests that there might be multiple paths from X to Y1. Morck and Young made this point many years ago, likening the reuse of the same instrumental variables to a tragedy of the commons.

Solving these problems is made especially difficult because they are collective action problems with a time dimension. A referee that sees a paper throw the dice multiple times may demand multiple hypothesis and exclusion test corrections. But if the problem is that there are many papers each running a single test, the burden on the referee to know the literature is much larger. Moreover, do we give the first and second papers a pass and only demand multiple hypothesis corrections for the 100th paper? That seems odd, although in practice it is what happens as more original papers can get published with weaker methods (collider bias!).

As I wrote in Why Most Published Research Findings are False we need to address these problems with a variety of approaches:

1) In evaluating any study try to take into account the amount of background noise. That is, remember that the more hypotheses which are tested and the less selection [this is one reason why theory is important it strengthens selection, AT] which goes into choosing hypotheses the more likely it is that you are looking at noise.

2) Bigger samples are better. (But note that even big samples won’t help to solve the problems of observational studies which is a whole other problem).

3) Small effects are to be distrusted.

4) Multiple sources and types of evidence are desirable.

5) Evaluate literatures not individual papers.

6) Trust empirical papers which test other people’s theories more than empirical papers which test the author’s theory.

7) As an editor or referee, don’t reject papers that fail to reject the null.

Paying People to Stay Out of Jail

Should we pay people not to commit crime? Could we? Murat Mungan from GMU Law shows that it could pay in principle:

This article considers the possibility of simultaneously reducing crime, prison sentences, and the tax burden of …financing the criminal justice system by introducing positive sanctions, which are benefits conferred to individuals who refrain from committing crime. Specifically, it proposes a procedure wherein a part of the imprisonment budget is re-directed towards financing positive sanctions. The feasibility of reducing crime, sentences, and taxes through such reallocations depends on how effectively the marginal imprisonment sentence reduces crime, the crime rate, the effectiveness of positive sanctions, and how accurately the government can direct positive sanctions towards individuals who are most responsive to such policies. The article then highlights an advantage of positive sanctions over imprisonment in deterring criminal behavior: positive sanctions operate by transferring or creating wealth, whereas imprisonment operates by destroying wealth. Thus, the conditions under which positive sanctions are optimal are broader than those under which they can be used to jointly reduce crime, sentences, and taxes. The analysis reveals that when the budget for the criminal justice system is exogenously given, it is optimal to use positive sanctions when the imprisonment elasticity of deterrence is small, which is a condition that is consistent with the empirical literature. When the budget for the criminal justice system is endogenously determined, it is optimal to use positive sanctions as long as the marginal cost of public funds is not high.

It’s harder to implement in practice, however. Increasing the minimum wage and the EITC might be easier or maybe not.

Hat tip: Kevin Lewis.

The option value of civilization

Hi Tyler, I’m a longtime reader of MR and your more recent books.  I enjoyed Stubborn Attachments and was particularly interested in your discussion of the social discount rate.  Like you, I’m inclined to think that this rate should be very low, if not zero.  But more importantly, I think discounting is the wrong financial metaphor to use when discussing the moral worth of the present vs. the future.  Instead, we should look to option pricing theory.  As strange as it seems, option theory provides a neat way to unify many of the claims in Stubborn Attachments, and it gives us arguments for other important claims.  I’m a mortgage-backed securities trader, so embedded mispriced (or unpriced) optionality is always on my mind.

The key idea is that the total moral worth of the universe has some positively skewed distribution: there are more ways for things to be good than there are for it to be bad.  Let’s take this as a given for now; towards the end of this message I explore the consequences of relaxing this assumption.  If the moral worth of the universe has a distribution like this, we can draw an analogy to the payout profile of a call option.  We can imagine that we own an option on the underlying process that generates historical outcomes.

The first thing to recognize is that there’s a fundamental difference between the value of the option, and the value of the underlying.  Translated to moral terms, we should distinguish between the value of present, and the ultimate moral worth of the universe.  The former is just one input in calculating the latter, and the latter should be our primary concern.  We are only indirectly exposed to the value of the present.  We are also exposed to other factors, including the volatility of the historical process, and the social discount rate.

Let’s consider these in turn.  Options theory tells us that the value of an option increases in volatility — a trader would say that an option has positive “vega.”  Thus it makes perfect sense to see you arguing in Stubborn Attachments (and TGS and TCC) for increased social dynamism, risk taking, and openness to innovation.  If we can increase upside volatility, or reduce downside volatility, that’s even better than a symmetric increase in volatility.  My sense is that you view human rights as a way to mitigate downside risk.  This framework implies that some degree of downside mitigation can be traded for upside, a view which seems to be consistent with your view of human rights.

In the option-theoretical framework, the value of an option is decreasing in the discount rate.  But while the specific choice of discount rate changes the overall value of the option, it doesn’t change the sign of any of the sensitivities.  One advantage of this framework is that it can incorporate any particular social discount rate, without affecting the broader conclusions.

We can restate other common questions in this jargon.  Let’s start with the question of the value of the present vs. the value of the future.  In my view, that language is confused.  The value of the future is unknowable and can’t be affected directly.  We should stop talking as if we can.  We can only affect things like the value of the present and the volatility and overall trajectory of the historical process.  Rather than asking about the value of the present vs. the future, we should simply ask “how much should we care about the present, relative to the other things we can affect directly?”  In options jargon, the “delta” of an option is the derivative of the option’s value with respect to the value of the underlying process.  In moral terms, delta is interpreted as the derivative of the moral worth of the universe with respect to the value of the present.  “How much should we care about the present?” can be restated as “What is the delta the option?”

In standard theory, delta is positive (obviously) and increasing in the value of the underlying process.  That is, the second derivative of an option’s value with respect to the value of the underlying process is also positive.  Translated to moral terms: the more valuable the present, the more we should care about it.  This is intuitive, at least to me.  If you think the potential value of the future is vastly greater than the value of the present (i.e. if you think our option is only slightly in-the-money) you should care less about the value of the present.  But if the option is deep in-the-money — if civilization is secure and of great value — we should care more about increasing its value.

We can also think about partial sensitivities.  The most interesting is the sensitivity of delta with respect to volatility: as volatility increases, delta decreases.  In moral terms: the greater the range of historical outcomes, the less we should care about the precise moment we’re in now.  If we think history is highly dynamic, that the space of potential outcomes is very large, and that the far future can be vastly more valuable than the present, we should care less about the specific value of the present.  Similarly, if we think we’re close to the end of history, we should focus on incremental tweaks to improve the value of the present.  The arguments in Stubborn Attachments clearly tend toward the former view.

Finally, we can return to the original assumption, that the value of the future is biased to the upside.  I don’t think you argue for this explicitly, but it’s implied in your idea of Crusonia plants.  What would a negative or inverse Crusonia plant look like?  Could one even exist?  I think it’s vastly more likely for civilization and value to simply be wiped out, than it is for a monstrously evil future to occur.  But if you disagree, you can account for it in the option framework.  The more likely an evil future, the more symmetric (and less option-like) our payout profile.  You can think of humanity as owning some combination of a long call and a short put.  If our portfolio contains equal positions in each, our total delta is 1 — implying that the value of our options position is identical to the value of the underlying.  Translated into moral terms: the more symmetric we think future outcomes are, the more we should care about the present.

This is a new framework for me, but I think it is useful.  I’m sure there are other implications that haven’t yet occurred to me.  I can’t imagine I’m the first to come up with this framework: after all, Cowen’s Second Law states that there’s a literature on everything.  There’s perhaps some precedent in Nassim Taleb’s work and his popularization of options theory and its usefulness in non-financial contexts.  I’m sure someone in the Effective Altruism community has kicked these ideas around; I’m just not aware of it.  If you know of any related work, I’d love to be pointed in the right direction.

That is from MR reader CK.

Hysteria Was Not Treated With Vibrators

You know the story about the male Victorian physicians who unwittingly produced orgasms in their female clients by treating them for “hysteria” with newly-invented, labor-saving, mechanical vibrators? It’s little more than an urban legend albeit one transmitted through academic books and articles. Hallie Lieberman and Eric Schatzberg, the authors of a shocking new paper, A Failure of Academic Quality Control: The Technology of Orgasm, don’t quite use the word fraud but they come close.

Since its publication in 1999, The Technology of Orgasm by Rachel Maines has become one of the most widely cited works on the history of sex and technology (Maines, 1999). This slim book covers a lot of ground, but Maines’ core argument is quite simple. She argues that Victorian physicians routinely treated female hysteria patients by stimulating them to orgasm using electromechanical vibrators. The vibrator was, according to Maines, a labor-saving technology that replaced the well-established medical practice of clitoral massage for hysteria. She states that physicians did not perceive either the vibrator or manual massage as sexual, because neither method involved vaginal penetration.

This argument has been repeated in dozens of scholarly works and cited with approval in many more. A few scholars have challenged various parts of the book. Yet no scholars have contested her central argument, at least not in the peer-reviewed literature. Her argument even spread to popular culture, appearing in a Broadway play, a feature-length film, several documentaries, and many mainstream books and articles. This once controversial idea has now become an accepted fact.

But there’s only one problem with Maines’ argument: we could find no evidence that physicians ever used electromechanical vibrators to induce orgasms in female patients as a medical treatment. We examined every source that Maines cites in support of her core claim. None of these sources actually do so. We also discuss other evidence from this era that contradicts key aspects of Maines’ argument. This evidence shows that vibrators were indeed used penetratively, and that manual massage of female genitals was never a routine medical treatment for hysteria.

… the 19-year success of Technology of Orgasm points to a fundamental failure of academic quality control. This failure occurred at every stage, starting with the assessment of the work at the Johns Hopkins University Press. But most glaring is the fact that not a single scholarly publication has pointed out the empirical flaws in the book’s core claims in the 19 years since its release.

Wow. Read the whole thing.

Hat tip: Chris Martin on twitter.

My Fall Industrial Organization reading list

This is only part one for the class, do not panic over whatever you think might be completely left out. That said, suggested additions are welcome, here goes:

Competition

Bresnahan, Timothy F. “Competition and Collusion in the American Automobile Industry: the 1955 Price War,” Journal of Industrial Economics, 1987, 35(4), 457-82.

Bresnahan, Timothy and Reiss, Peter C. “Entry and Competition in Concentrated Markets,” Journal of Political Economy, (1991), 99(5), 977-1009.

Asker, John, “A Study of the Internal Organization of a Bidding Cartel,” American Economic Review, (June 2010), 724-762.

Whinston, Michael D., “Antitrust Policy Toward Horizontal Mergers,” Handbook of Industrial Organization, vol.III, chapter 36, see also chapter 35 by John Sutton.

“Benefits of Competition and Indicators of Market Power,” Council of Economic Advisors, April 2016.

Jan De Loecker and Jan Eeckhout, “The Rise of Market Power and its Macroeconomic Implications,” http://www.janeeckhout.com/wp-content/uploads/RMP.pdf.  My comment on it is here: https://marginalrevolution.com/marginalrevolution/2017/08/rise-market-power.html

Me on intangible capital, https://marginalrevolution.com/marginalrevolution/2017/09/intangible-investment-monopoly-profits.html.

Traina, James. “Is Aggregate Market Power Increasing?: Production Trends Using Financial Statements,” https://research.chicagobooth.edu/-/media/research/stigler/pdfs/workingpapers/17isaggregatemarketpowerincreasing.pdf

Shapiro, Carl. “Antitrust in a Time of Populism.” UC Berkeley, working draft from 24 October 2017, forthcoming in International Journal of Industrial Organization.

Klein, Benjamin and Leffler, Keith. “The Role of Market Forces in Assuring Contractual Performance.”  Journal of Political Economy 89 (1981): 615-641.

Breit, William. “Resale Price Maintenance: What do Economists Know and When Did They Know It?” Journal of Institutional and Theoretical Economics (1991).

Bogdan Genchev, and Julie Holland Mortimer. “Empirical Evidence on Conditional Pricing Practices.” NBER working paper 22313, June 2016.

Sproul, Michael.  “Antitrust and Prices.”  Journal of Political Economy (August 1993): 741-754.

McCutcheon, Barbara. “Do Meetings in Smoke-Filled Rooms Facilitate Collusion?”  Journal of Political Economy (April 1997): 336-350.

Crandall, Robert and Winston, Clifford, “Does Antitrust Improve Consumer Welfare?: Assessing the Evidence,”  Journal of Economic Perspectives (Fall 2003), 3-26, available at http://www.brookings.org/views/articles/2003crandallwinston.htm.

FTC, Bureau of Competition, website, http://www.ftc.gov/bc/index.shtml., an optional browse, perhaps read about some current cases and also read the merger guidelines.

Parente, Stephen L. and Prescott, Edward. “Monopoly Rights: A Barrier to Riches.”  American Economic Review 89, 5 (December 1999): 1216-1233.

Demsetz, Harold.  “Why Regulate Utilities?”  Journal of Law and Economics (April 1968): 347-359.

Armstrong, Mark and Sappington, David, “Recent Developments in the Theory of Regulation,” Handbook of Industrial Organization, chapter 27, also on-line.

Shleifer, Andrei. “State vs. Private Ownership.” Journal of Economic Perspectives (Fall 1998): 133-151.

Xavier Gabaix and David Laibson, “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=728545. 

Strictly optional most of you shouldn’t read this: Ariel Pakes and dynamic computational approaches to modeling oligopoly: http://www.economics.harvard.edu/faculty/pakes/files/Pakes-Fershtman-8-2010.pdf

http://www.economics.harvard.edu/faculty/pakes/files/handbookIO9.pdf

 

Economics of Tech 

Farrell, Joseph and Klemperer, Paul, “Coordination and Lock-In: Competition with Switching Costs and Network Effects,” Handbook of Industrial Organization, vol.III, chapter 31, also on-line.

Weyl, E. Glenn. “A Price Theory of Multi-Sided Platforms.” American Economic Review, September 2010, 100, 4, 1642-1672.

Tech companies as platforms, Tyler Cowen chapter, to be distributed.

Gompers, Paul and Lerner, Josh. “The Venture Capital Revolution.” Journal of Economic Perspectives (Spring 2001): 145-168.

Paul Graham, essays, http://www.paulgraham.com/articles.html, and on Google itself, http://www.slate.com/blogs/blogs/thewrongstuff/archive/2010/08/03/error-message-google-research-director-peter-norvig-on-being-wrong.aspx

Acemoglu, Daron and Autor, David, “Skills, Tasks, and Technologies: Implications for Employment and Earnings,” http://econ-www.mit.edu/files/5607

Robert J. Gordon and Ian Dew-Becker, “Unresolved Issues in the Rise of American Inequality,”http://www.people.fas.harvard.edu/~idew/papers/BPEA_final_ineq.pdf

Song, Jae, David J. Price, Fatih Guvenen, and Nicholas Bloom. “Firming Up Inequality,” CEP discussion Paper no. 1354, May 2015.

Andrews, Dan, Chiara Criscuolo and Peter N. Gal. “Frontier firms, Technology Diffusion and Public Policy: Micro Evidence from OECD Countries.”  OECD working paper, 2015.

Mueller, Holger M., Paige Ouimet, and Elena Simintzi. “Wage Inequality and Firm Growth.” Centre for Economic Policy Research, working paper 2015.

Readings on blockchain governance, to be distributed.

Haltiwanger, John, Ian Hathaway, and Javier Miranda. “Declining Business Dynamism in the U.S. High-Technology Sector.” Ewing Marion Kauffman Foundation, February 2014.

 

Organization and capital structure

Ronald Coase and Oliver Williamson on the firm, if you haven’t already read them, but limited doses should suffice.

Gibbons, Robert, “Four Formal(izable) Theories of the Firm,” on-line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=596864.

Van den Steen, Eric, “Interpersonal Authority in a Theory of the Firm,” American Economic Review, 2010, 100:1, 466-490. 

Lazear, Edward P. “Leadership: A Personnel Economics Approach,” NBER Working Paper 15918, 2010.

Oyer, Paul and Schaefer, Scott, “Personnel Economics: Hiring and Incentives,” NBER Working Paper 15977, 2010.

Tyler Cowen chapter on CEO pay, to be distributed.

Cowen, Tyler, Google lecture on prizes, on YouTube.

Ben-David, Itzhak, and John R. Graham and Campbell R. Harvey, “Managerial Miscalibration,” NBER working paper 16215, July 2010.

Glenn Ellison, “Bounded rationality in Industrial Organization,” http://cemmap.ifs.org.uk/papers/vol2_chap5.pdf 

Miller, Merton, and commentators.  “The Modigliani-Miller Propositions After Thirty Years,” and comments, Journal of Economic Perspectives (Fall 1988): 99-158.

Myers, Stewart. “Capital Structure.” Journal of Economic Perspectives (Spring 2001): 81-102.

Hansemann, Henry.  “The Role of Non-Profit Enterprise.” Yale Law Journal (1980): 835-901.

Kotchen, Matthew J. and Moon, Jon Jungbien, “Corporate Social Responsibility for Irresponsibility,” NBER working paper 17254, July 2011.

Strictly optional but recommended for the serious: Ponder reading some books on competitive strategy, for MBA students.  Here is one list of recommendations: http://www.linkedin.com/answers/product-management/positioning/PRM_PST/20259-135826

 

Production

American Economic Review Symposium, May 2010, starts with “Why do Firms in Developing Countries Have Low Productivity?” runs pp.620-633. 

Dani Rodrik, “A Surprising Convergence Result,” http://rodrik.typepad.com/dani_rodriks_weblog/2011/06/a-surprising-convergence-result.html, and his paper here http://www.hks.harvard.edu/fs/drodrik/Research%20papers/The%20Future%20of%20Economic%20Convergence%20rev2.pdf

 Serguey Braguinsky, Lee G. Branstetter, and Andre Regateiro, “The Incredible Shrinking Portuguese Firm,” http://papers.nber.org/papers/w17265#fromrss. 

Nicholas Bloom, Raffaella Sadun, and John Van Reenen, “Recent Advances in the Empirics of Organizational Economics,” http://cep.lse.ac.uk/pubs/download/dp0970.pdf.

Nicholas Bloom, Raffaella Sadun, and John Van Reenen, the slides for “Americans do I.T. Better: US Multinationals and the Productivity Miracle,” http://www.people.hbs.edu/rsadun/ADITB/ADIBslides.pdf, the paper is here http://www.stanford.edu/~nbloom/ADIB.pdf but I recommend focusing on the slides.

Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. “Management as a Technology?” National Bureau of Economic Research working paper 22327, June 2016.

Syerson, Chad “What Determines Productivity?” Journal of Economic Literature, June 2011, XLIX, 2, 326-365.

David Lagakos, “Explaining Cross-Country Productivity Differences in Retail Trade,” Journal of Political Economy, April 2016, 124, 2, 1-49.

Casselman, Ben. “Corporate America Hasn’t Been Disrupted.” FiveThirtyEight, August 8, 2014.

Decker, Ryan and John Haltiwanger, Ron S. Jarmin, and Javier Miranda. “Where Has all the Skewness Gone?  The Decline in High-Growth (Young) Firms in the U.S. National Bureau of Economic Research working paper 21776, December 2015.

Furman, Jason and Peter Orszag. “A Firm-Level Perspective on the Role of Rents in the Rise in Inequality.” October 16, 2015.

http://evansoltas.com/2016/05/07/pro-business-reform-pro-growth/

Furman, Jason. ”Business Investment in the United States: Facts, Explanations, Puzzles, and Policy.” Remarks delivered at the Progressive Policy Institute, September 30, 2015, on-line at https://m.whitehouse.gov/sites/default/files/page/files/20150930_business_investment_in_the_united_states.pdf.

Scharfstein, David S. and Stein, Jeremy C.  “Herd Behavior and Investment.”  American Economic Review 80 (June 1990): 465-479.

Stein, Jeremy C. “Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior.” Quarterly Journal of Economics 104 (November 1989): 655-670.

 

Sectors: finance, health care, education, others

Gorton, Gary B. “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007,” http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1401882, published on-line in 2009. 

Erel, Isil, Nadault, Taylor D., and Stulz, Rene M., “Why Did U.S. Banks Invest in Highly-Rated Securitization Tranches?” NBER Working Paper 17269, August 2011. 

Healy, Kieran. “The Persistence of the Old Regime.” Crooked Timber blog, August 6, 2014.

More to be added, depending on your interests.

Wednesday assorted links

1. MIE: “Travel to the summit of Africa’s highest peak, Mount Kilimanjaro, where Three Twins Ice Cream’s founder will hand-churn a batch of ice cream with glacial ice from the mountain’s summit. The mountain’s glaciers are predicted to disappear within the next 10-15 years due to climate change – and your purchase helps raise awareness of this fact with a five-figure contribution to an African environmental non-profit. The sundae’s price also includes first class airfare to Tanzania, five-star accommodations, a guided climb, as much ice cream as you can eat and a souvenir t-shirt made from organic cotton.”

2. New South Wales town mobbed by thirsty emus.

3. Cowen’s Second Law there is a literature on everything including autistic zebrafish (110 papers).

4. It matters how seriously students take PISA testing.

5. Superb Samuel Hammond piece on codetermination.

6. Annie Lowrey on is pot too strong?

7. My Farnham Street podcast, mostly about how to reason, came out very well I thought.  And you can buy a transcript at the link.

My Conversation with Michelle Dawson

Here is the transcript and audio, I am very pleased (and honored) to have been able to do this.  She is an autism researcher, and so most of the discussion concerned autism, here is one excerpt:

COWEN: What would be the best understanding of autism, from your perspective?

DAWSON: The best understanding is seeing autism as atypical brain functioning, resulting in atypical processing of all information. So that’s information across domains — social, nonsocial; across modalities — visual, auditory; whatever its source, whether it’s information from your memory, information coming from the outside world, that is atypical. So that is very domain-general atypicality.

What autistic brains do with information is atypical. How it’s atypical, in my view, involves what I’ve called cognitive versatility and less mandatory hierarchies in how the brain works, such that, for example, an autistic brain will consider more possibilities, will nonstrategically combine information across levels and scales without losing large parts of it, and so on. And that applies to all information.

That is strictly my view. I’m not sure anyone would agree with me.

And:

COWEN: Now often, in popular discourse, you’ll hear autism or Asperger’s associated with a series of personality traits or features of personality psychology — a kind of introversion or people being nerdy in some regard. In your approach, do you see any connection between personality traits and autism at all?

DAWSON: There is a small literature that shows some connection. I think it’s very weak, and I say no, I don’t think autism is about personality. Autism is sort of orthogonal to personality. The two are not related. Whatever relation there is does not . . . arises from some third factor, let’s say. If there is one — and again, the evidence is, I think, very weak connecting autism to personality — so just say that maybe, if there’s something, let’s say that personality in autistics might be more high variance. That would be my totally wild guess, but I don’t think autism itself is about personality.

And here is Michelle again:

We don’t — I hope we don’t look at a blind person who is a successful lawyer and assume that he is only very mildly blind or barely blind at all, and then look at a blind person who has a very bad outcome and assume that they must be very severely blind.

We do make those kinds of judgments in autism, saying, “The more atypical the person is, the worse they must be in some sense.” That kind of bias has not only harmed a lot of autistic people, it really has impeded research.

Here is Michelle on Twitter.  We discuss and link to some of her research in the discussion.

Theo asks, and I intersperse my answers

Dear Tyler,

Due to the asymmetry of fame I feel that I know you quite well so I am just going to bombard you with random questions and hope that you see fit to answer some of them.

You seem to value journalism very highly. Is it just out of necessity as a generalist, or does popular writing on a topic have important information that can’t be learned from the academic/scholarly side?

Journalists have to try to explain things that actually happened to other human beings, often educated ones but not specialists either.  It is hard to overrate the importance of that process to developing one’s thoughts and self, no matter what you may think of particular journalists in today’s MSM.

Related: Which elite profession or slice of society is most opaque to journalists and “book-learning” in general? (Oddly some of the categories that come to mind are those which are some of the most written-about – food, sex, friends, law, politics. But it’s probably maths.)

Making things.  Archaeology.  These days, tech.  Maths.  Journalism.

How much less interesting would it be to read Shakespeare if no-one else ever had? Does the answer differ much across top-tier “great” artists?

It would not be less interesting at all, maybe more interesting, because the shock of discovery would be all the greater.  Admittedly, many artists require lots of discussion with other people, maybe rock and roll most of all?  But not Shakespeare.

Overrated vs underrated: The New Yorker. How about Samin Nosrat?

The New Yorker has had a consistent voice and remarkable brand for more decades than I can remember (I recall Patrick Collison making a similar point, perhaps in a podcast?).  Since I am now above the median age for the United States, that makes them underrated.  The literariness of the historical New York and Northeast and the integration of American and European culture also have become underrated topic areas, and The New Yorker still does them, so that too makes the magazine underrated.

And who is Samin Nosrat?  She must therefore be underrated.

Does the world have too many writers, or not enough? What about comparative literature professors? How should we think about the future of literary culture when the written word is becoming so much more culturally dominant at the same time as books and journalism are falling apart?

What variable are we changing at the margin?  If people watch less TV and write more, that is probably a plus.  I also would favor fewer photographs and more writing.  But I wouldn’t cut back on charity to increase the quantity of writing.  If only comparative literature professors were people who simply loved books — at the margin a bit more like used book store owners and somewhat less like professors — and would compare them to each other…then I would want more of them.  Until then, I don’t know how to keep the extra ones busy.

Why does the USA not have open borders with Canada?

I believe America should have open borders with any nation that has a more generous welfare state than we do.  That covers Canada, even though Canadian insurance coverage for mental health and dentistry isn’t nearly as good as you might think.  As to why we don’t have open borders with Canada, I don’t think American voters would see that as solving any concrete problem (can’t we get many of the best Canadians anyway?), and it would feel a bit like giving up control, so why do it?

To what extent are Trump, Brexit, Orban, Erdogan, rising murder rates and stalling trade growth worldwide part of the same phenomenon? If they aren’t completely separate, which way does the contagion run?

Yes, no, and maybe so, get back to me in a few years’ time.

Have a great day…

You too!

Wednesday assorted links

1. The Norwegian century continues (WSJ): “When Norwegian athletes take to the ice and snow at the Olympics, they don’t mess around: the Scandinavian nation of just 5 million has won the most medals of any country in the history of the Winter Games.”

2. NYT profile of Vargas Llosa, not just the usual.

3. Are we running out of trademarks?  Recommended, worthy of its own post, but not easy to excerpt.

4. Ideas for improving peer review.

5. Japanese plans for the tallest wooden skyscraper.

Tyler Cowen’s 12 rules for life

After reading Jordan Peterson’s 12 rules, a few people asked me what my list would look like.  I would stress that what follows is not a universal or eternally valid account, but rather a few ideas that strike me in the here and now, perhaps as the result of recent conversations.  I suspect the same is true for everyone’s rules lists, so please keep this in perspective.  Here goes:

1. Assume your temperament will always be somewhat childish and impatient, and set your rules accordingly, knowing that you cannot abide by rules for rules sake.  Hope to leverage your impatience toward your longer-run advantage.

2. Study the symbolic systems of art, music, literature. and religion, if only to help yourself better understand alternative points of view in political and intellectual discourse.  Don’t just spend time with the creations you like right away.  Avoid “devalue and dismiss.

3. When the price goes up, buy less.  Try to understand what the price really is, however, and good luck with that.

4. Marry well.

5. Organize at least some significant portion of your knowledge of the world in terms of place, whether by country, region, or city.  If you do that, virtually every person will be interesting to you, if only because almost everyone has some valuable knowledge of particular places.

6. When shooting the basketball, give it more arc than you think is necessary.  Consistently.

7. Learn how to learn from those who offend you.

8. Cultivate mentors, and be willing to serve as mentors to others.  This never loses its importance.

9. I don’t know.

10. Heed Cowen’s Three Laws.

11. Do not heed Cowen’s Three Laws.

12. Every now and then read or reread Erasmus, Montaigne, Homer, Shakespeare, or Joyce’s Ulysses, so that you do not take any rules too seriously.  The human condition seems to defeat our attempts to order it.