4. How captured is our economy? (CapturedEconomy.com, a new website resource from Lindsey and Teles).
7. “Thomas Schelling’s medal went on the block May 31 at a Los Angeles auction house, fetching $187,000. His family donated the proceeds to the Southern Poverty Law Center, a nonprofit that fights hate and bigotry and advocates for civil rights through litigation.” Link here. And: “…his widow, Alice Schelling, says the most influential book he ever read was one for children, the 1927 Newbery Medal winner “Smoky the Cowhorse” by Will James.”
Not fundamentally, no. However terrible our current treatment of animals may be, most of us don’t seem to mind very much, and I suppose that is consistent with what a Darwinian theory would predict. Here are a few facts about the sociologically specific nature of vegetarianism:
They tend to be liberal-leftist politically: in USA, we have a 52% of liberals versus a 14% of conservatives and a 34% of self-styled “neutral” ;
They display an inclination to secular/atheist views on religion matters (e.g., Humane Research Council , where it is shown that about half of the American community of vegans/vegetarians is not religious—a percentage that is considerably higher than that of the general population).
Less predictable may be the fact that a rather high percentage of vegans/vegetarians revert to carnism after a certain amount of time (in US, according to Humane Research Council , 2% of the respondents were vegans/vegetarians, while no less than 10% were former vegans/vegetarians)…
Not by chance, of the mentioned 10%, one third dropped the lifestyle after 3 months or less, one half within a year, and therefore only less than 20% “resisted” for more than a year.
That is from a recent article
Artificial meat? Yes, yes I know. But we already have cauliflower, and drenched in yogurt sauce and green cardamom pods and garam masala that is quite delicious, and yet it doesn’t seem to matter. Vegetarian food in India already tastes better than most meat dishes consumed in the United States.
Hat tip goes to Rolf Degen.
From Pauline Grosjean & Rose Khattar, forthcoming, Review of Economic Studies:
We document the short- and long-run effects of male-biased sex ratios. We exploit a natural historical experiment where large numbers of male convicts and far fewer female convicts were sent to Australia in the 18th and 19th centuries. In areas with more male-biased sex ratios, women were historically more likely to get married and less likely to work outside the home. In these areas today, both men and women continue to have more conservative attitudes towards women working, and women work fewer hours outside the home. While these women enjoy more leisure, they are also less likely to work in high-ranking occupations. We demonstrate that the consequences of uneven sex ratios on cultural attitudes, labor supply decisions, and occupational choices can persist in the long run, well after sex ratios are back to the natural rate. We document the roles of vertical cultural transmission and marriage homogamy in sustaining this cultural persistence.
Hat tip goes to the excellent Kevin Lewis.
1. What makes a country good at soccer? (The Economist)
2. The Coasean Koreas. Important.
4. “The 43% of Democrats who say the U.S. benefits from having a class of rich people is down significantly from six years ago, and Democrats remain much more negative than either Republicans or independents about the impact of a rich class.” Amazing.
5. Does “musical paralysis” set in after age 28? (not for me)
1. The roots of American greatness.
2. The importance of “will” in building a succcessful career.
3. Toleration and individualism and respect for children.
This has to go down as one of the better documentaries, and it seems Mister Rogers was a better and more important thinker than many of the intellectuals of his time. I had not known that Rogers had been trained and ordained as a Presbyterian minister.
On top of all that, the film is Straussian throughout. Definitely recommended. By the way, the documentary doesn’t mention this, but the show actually had its origins in Toronto on CBC.
Gregory Claeys, Marx and Marxism, a better than expected take on where Marxism came from and how Marx’s different intellectual periods fit into his life. One of the better introductions to Marx, noting that it does not stress issues of economic theory.
Tarjei Vesaas, The Ice Palace. Not well known in the United States, but still one of the better Norwegian novels. Short, readable, concerns a boy who goes missing.
Peter Cozzens, The Earth is Weeping: The Epic Story of the Indian Wars for the American West. Very good overall history of the post-Civil War campaigns against Native Americans, still highly relevant for understanding American foreign policy, and attitudes toward guns, among other things.
David Olusoga, Black and British: A Forgotten History. A very strong work about race relations on the other side of the Atlantic. I had not known that “Ob-La-Di, Ob-La-Da” is Yoruba for “life goes on.” The song as a whole was intended by Paul McCartney as a parable of the possibility of West Indian assimilation and it was a direct response to Enoch Powell. Definitely recommended.
Linda Yueh’s What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today’s Biggest Problems, is probably the closest we will come to having an updated version of Robert Heilbroner.
Joshua Keating, Invisible Countries: Journeys to the Edge of Nationhood looks at Abkhazia, Kurdistan, Somaliland, Liberland, and a Mohawk reservation straddilng the U.S.-Canada border, as well as a Pacific Island that might disappear. An interesting book for fans of alternative governance arrangements.
I’ve now see the page proofs for Steven Pearlstein’s Can American Capitalism Survive?: Why Greed is Not Good, Opportunity is Not Equal, and Fairness Won’t Make Us Poor. His view is not mine, but if you want his view this book is the place to get it…
5. Daniel Lemire’s predictions, none of which cite Mister Rogers.
US exports increased 14.4 percent from YTD April 2016 to YTD April 2018, from $725.8 billion to $830.5 billion.
US imports increased 16.5 percent from YTD April 2016 to YTD April 2018, from $886.2 billion to $1,032.3 billion.
The amount of computational power devoted to anonymous, decentralized blockchains such as Bitcoin’s must simultaneously satisfy two conditions in equilibrium: (1) a zero-profit condition among miners, who engage in a rent-seeking competition for the prize associated with adding the next block to the chain; and (2) an incentive compatibility condition on the system’s vulnerability to a “majority attack”, namely that the computational costs of such an attack must exceed the benefits. Together, these two equations imply that (3) the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock versus stock) if both (i) the mining technology used to run the blockchain is both scarce and non-repurposable, and (ii) any majority attack is a “sabotage” in that it causes a collapse in the economic value of the blockchain; however, reliance on non-repurposable technology for security and vulnerability to sabotage each raise their own concerns, and point to specific collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked if it became sufficiently economically important — e.g., if it became a “store of value” akin to gold — which suggests that there are intrinsic economic limits to how economically important it can become in the first place.
I like the framework of this paper, though I wonder if there shouldn’t be more on the coordination costs of mounting a “double spending” attack, namely how exactly the returns from the attack should be divided. Perhaps the most positive scenario for Bitcoin is if those coordination costs rise with the returns to the attack itself, in which case a much higher market value for Bitcoin still might be stable.
3. The gig economy is not a big deal (NYT).
That is the topic of my latest Bloomberg column, here is one bit:
A lot of the recent cross-border migration is planting a hugely positive, pro-trade legacy that will yield dividends for decades to come. The Chinese, Indians, Nigerians and many other groups around the world will continue to build economic connections, even when the countries involved aren’t always so geographically close. I expect the positive trade gains from these connections and personal networks will outweigh the downside from some higher tariffs in the meantime. Ultimately the opportunities are there, and the biggest problem is the lack of human talent to execute on them.
I do however see one big problem:
The internet shows some signs of breaking down into separate networks, connected only imperfectly. The Chinese “Great Firewall” has proved robust, and recently the European Union has moved toward creating its own set of stringent privacy and data protection laws, such as the new General Data Protection Regulation standards. Sitting here in Norway for a conference, I find I am unable to access many American websites, such as the Chicago Tribune, which are not (yet?) GDPR-compliant. There is thus a danger that the internet will become carved into three or more separate systems, to the detriment of trade, data flows and eventually personal connections.
Do read the whole thing.
In my post, The Education Tax Reduces Inequality and the Incentive to Work, I illustrated how the high cost of college combined with income based pricing have turned education pricing into a tax with potentially significant effects on work and savings incentives. David Henderson pointed me to a paper by Martin Feldstein in 1992, College Scholarship Rules and Private Saving which states the issues very well.
This paper examines the effect of existing college scholarship rules on the incentive to save. The analysis shows that families that are eligible for college scholarships face “education tax rates” on capital income of between 22 percent and 47 percent in addition to regular slate and federal income taxes. The scholarship rules also impose an annual tax on previously accumulated assets. Through the combination of the implied tax on capital income and the associated tax on previously accumulated assets, the scholarship rules that apply to a middle-income family reduce the value of an extra dollar of accumulated assets by 30 cents in four years. A similar family with two children who attend college in succession will see an initial dollar of assets reduced to 50 cents. Such capital levies of 30 to 50 percent are a strong incentive not to save for college expenses but to rely instead on financial assistance and even on regular market borrowing, Moreover, since any funds saved for retirement are also subject to these education capital levies. the scholarship rules discourage retirement saving as well as saving for education. The empirical analysis developed here, based on the 1986 Survey of Consumer Finances, implies that these incentives do have a powerful effect on the actual accumulation of financial assets. More specifically, the estimated parameter values imply that the scholarship rules induce a typical household with a head aged 45 years old, with two precollege children, and with income of $40,000 a year to reduce accumulated financial assets by $23,124 approximately 50 percent of what would have been accumulated without the adverse effect of the scholarship rules.
Dick and Edlin made a similar point in 1997 but, as far as I can tell, there have been only a handful of papers on this issue since that time. The cost of college, however, is about twice as high today as in the 1980s and price discrimination is much more extensive so the effects are likely larger today.
Siphoning carbon dioxide (CO2) from the atmosphere could be more than an expensive last-ditch strategy for averting climate catastrophe. A detailed economic analysis published on 7 June suggests that the geoengineering technology is inching closer to commercial viability.
The study, in Joule, was written by researchers at Carbon Engineering in Calgary, Canada, which has been operating a pilot CO2-extraction plant in British Columbia since 2015. That plant — based on a concept called direct air capture — provided the basis for the economic analysis, which includes cost estimates from commercial vendors of all of the major components. Depending on a variety of design options and economic assumptions, the cost of pulling a tonne of CO2 from the atmosphere ranges between US$94 and $232. The last comprehensive analysis of the technology, conducted by the American Physical Society in 2011, estimated that it would cost $600 per tonne.