Saturday assorted links

by  Tyler Cowen

1. When women outrun men.

2. Steven Malanga reviews *Big Business: A Love Letter to an American Anti-Hero*.

3. Anand G. on the new Jared Diamond book (NYT).

4. The other Nordic paradox (violence against women).

5. Podcast with Ajay Royan.

6. “Between 1870 and 1916, over 80 percent of alliance ties were partially or completely covert. Otherwise, hidden pacts are rare. Why was secrecy prevalent in this particular period and not others?”

7. David M. Levy reviews Nancy MacLean.

The internet gang deconversion culture that is Brazil

by  Tyler Cowen in

As gang wars drive Brazil’s homicide rate to historic highs, evangelical pastors — long revered in the nation’s slums and prisons — have come up with a new way to protect members looking for a way out.

Gang leaders say the only way to leave the business alive is to convert to Christianity. So Barros, a televangelist popular here in western Brazil, memorializes a gang member’s embrace of the ancient articles of faith using the most modern of tools: He records the conversion on his smartphone and posts the videos on YouTube, Facebook and WhatsApp. The converts gain immunity against retribution by rival gangs and their own.

Gang leaders and law enforcement officials say it works.

“We aren’t going to go against the will of God,” a local leader of the powerful Comando Vermelho, the gang that was pursuing Viera, told The Washington Post. “God comes first, above everything.”

And there is an enforcement mechanism:

When his attackers saw it [the deconversion video], they dropped their pursuit. But they monitored him for months, checking to see if he was going to church or had contact with his former leaders.

“If I do anything wrong, they will kill me,” Cunha said. “I have to take the video seriously. They don’t tolerate regressions.”

Here is more from Marina Lopes at The Washington Post, interesting throughout.

Harvard and Ronald Sullivan, why Harvard was basically right

by  Tyler Cowen in

I hope your head doesn’t explode, but it seems to me that Harvard and Matt Yglesias are right about the dismissal of Sullivan from his Winthrop House post at Harvard.  Matt explains:

Sullivan isn’t a public defender who’s simply taking the clients assigned to him. He’s not even a full-time criminal defense lawyer who just takes whichever clients happen to come through his door. He’s a busy guy who has classes to teach, a dorm to administer, and various other demands on his time. While it’s obviously true that all criminal defendants have a right to an attorney, it’s equally obvious that criminal defendants don’t have a particular right to Ronald Sullivan’s services.

Now, I don’t doubt that Harvard may have acted for what in part are the wrong reasons, namely asymmetric treatment of left-and right wing causes and cases.  Still, it seems reasonable to me that Harvard insists that its faculty dorm administrators face a minimum of outside distractions, especially controversial distractions, without having to judge whose fault is the controversy (Sullivan’s fault? Harvard’s fault? the fault of the possibly “snowflaky” students?).  Maybe Harvard would have been unfair and inconsistent had another, non-Weinstein defendant been involved, still that does not make Sullivan’s dismissal the wrong decision.

On top of that, having “snowflake” students in the dorm is still a reason to make Sullivan choose either the dorm or the legal case — complainers don’t always have to be correct for their wishes to have some validity.  It really is about helping students focus on their studies, and sometimes that might mean removing distractions which distract for maybe not entirely rational reasons.  Furthermore, in this case maybe the distraction was rational to some extent (I genuinely do not know on that one as I do not have direct information, Matt thinks yes but in my view leaps to quickly to that conclusion).

Let’s say I hired a TA for my Econ 101 class, and then I learned that TA would be defending Edward Snowden in his or her spare time.  Probably I would ask for another TA!  And that has nothing to do with my view of Snowden, one way or the other, or whether my students have rational views of Snowden or not (I genuinely do not know if they do).

With the Sullivan/Weinstein episode, it is not difficult to imagine the media becoming “too interested” in Winthrop House and Sullivan’s role, for media-prurient reasons, and to the detriment of student focus.  It is not crazy for Harvard to choke this off before it gets started, with no animus required toward Sullivan or any particular defendant.

Note also this from Matt:

At least some of the heat around this topic stems from a measure of confusion among the general public as to what the job of faculty dean amounts to. It sounds like a lofty academic post but actually is closer to being a kind of glorified RA — though even this is arguably an overstatement of the role.

Overall, I don’t think this is the right cause for free speech advocates, opponents of PC in universities, etc.  It seems to me like a private institution making an entirely defensible governance decision, on a matter which does quite genuinely fall under its governance purview.

Friday assorted links

by  Tyler Cowen

1. Megan McArdle on Roe vs. Wade.

2. “We find a positive relationship between intelligence scores and fertility, and this pattern is consistent across the [Swedish] cohorts we study.”

3. WalkAway: Observational Data on 150 Erstwhile Democrats.

4. New TWA hotel at JFK airport.

5. Yonatan Berman: “We also find that absolute mobility decreases with income. Individuals and families occupying thelower ranks of the income distribution have a higher probability of increasing their income over short time periods than those occupying higher ranks. This also occurs during periods of in-creasing inequality. Our findings stem from the importance of the changes in the composition of income percentiles. These changes are over and above mechanical labor market dynamics and life cycle effects. We offer a simplified model to mathematically describe these findings.”  More here.

What is the optimal tax rate on restaurants?

by  Tyler Cowen in

bhauth asks me:

What do you think the optimal tax rate on restaurants would be? The current rates seem high to me:

1) The marginal substitution rate between restaurants and cooking at home is high.

2) Cooking at home uses untaxed labor. Cooking in restaurants uses taxed labor, and then customers pay sales taxes on that taxed labor. Those sales taxes are often *higher* than normal sales taxes, because food from restaurants is a “luxury good”.

Putting aside general fiscal considerations (e.g., to which other taxes are we comparing it?), I see a few main questions here:

a. Yes, eating in restaurants contributes to weight gain, but how much is that a self-control problem vs. an internalized decision of cost vs. benefit?

b. How much do cheap restaurants encourage families to have more children, a social positive in my view?

c. How much do cheap restaurants take away the bonding that arises from the family dinner table experience?  And how often is that bonding a net negative with lots of fights and screaming?

d. Will taxing restaurant meals — as opposed to specific taxes on meat — on net lower beef-eating and carbon/methane problems?

e. Do restaurant food suppliers treat farm animals better or worse than do suppliers of home-cooked meals?

I say a-e are mostly hard to measure, so this gives us a common problem in economics: you have one clear, and significant, effect, and a bunch of hard to measure effects which are hard to assign a net value to.  Should you be willing to recommend policy on the basis of the one effect you can clearly see, and then widen the confidence bands?  Or should you just keep your mouth shut altogether?

What if your audience finds a blog post like this one too complicated or too annoying?

Average is Over, installment #437

by  Tyler Cowen in

Taking logs of computer activity, or even screenshots, and running them through big data analytics programs allows these firms to create detailed reports for executives about productivity, they claim. How employers use the data, they add, is up to them.

According to Gartner, more than half of companies with over $750m in annual sales used “non-traditional” monitoring techniques on staff in 2018, while the workforce analytics industry will be worth nearly $2bn by 2025, according to San Francisco’s Grand Review Research.

Products developed by companies such as Activtrak, which raised $20m in a series A funding round in March 2019, allow employers to track which websites staff visit, how long they spend on sites deemed “unproductive” and set alarms triggered by content considered dangerous.

And:

If combined with personal details, such as someone’s age and sex, the data could allow employers to develop a nuanced picture of ideal employees, choose whom they considered most useful and help with promotion and firing decisions.

Here is more from Camilla Hodgson at the FT.

It is the slacker writers who need agglomeration most of all

by  Tyler Cowen in

Do note the latter part of the last sentence, but the entire thesis is interesting:

This paper utilises a unique, purpose-built panel dataset on prominent authors in the UK and Ireland born 1700–1925 to estimate the productivity gains associated with agglomeration of an industry with few capital requirements and no apparent need to cluster geographically. I find the average author experiences productivity gains of 11.94% per annum when residing in London, the only major literary cluster – a gain not associated with living in any of the minor literary clusters. I find evidence of negative selection with respect to productivity, indicating the results are not driven by the self-selection of highly productive authors to London. I find heterogeneity of returns to living in London by birth cohort and Impact Index quartile (a measure of author quality) and that the cohorts who receive the greatest gains from locating in London are those for which there is the strongest evidence of negative selection with respect to productivity.

That is by Sara Mitchell in the Journal of Urban Economics, via the excellent Kevin Lewis.

Don’t relax about nuclear war

by  Tyler Cowen in

That is the theme of my latest Bloomberg column, here is one bit:

Each generation has its own form of recency bias, as it is called in behavioral economics. Just after Sept. 11, for example, there was great concern about follow-up attacks. (Thankfully, nothing comparable followed.) Now we worry a lot — maybe too much — about insolvent banks, insufficiently high inflation, and the Chinese shock to U.S. manufacturing.

So what about nuclear war? Looking forward, the reality is that the risks of such a war are quite small in any particular year. But let the clock run and enough years pass, and a nuclear exchange of some kind becomes pretty likely.

I have found that people with a background in financial market trading are best equipped to understand the risks of nuclear war. An analogy might be helpful: Say you write a deeply out-of-the-money put, without an offsetting hedge. This is in fact a very risky action, though almost all of the time you will get away with it. When you don’t, however — when market prices move against you — you can lose all of your wealth quite suddenly.

In other words: Sooner or later the unexpected will come to pass.

And:

Meanwhile, a generation of hypersonic delivery systems, being developed by China, Russia and the U.S., will shorten the response time available to political and military leaders to minutes. That raises the risk of a false signal turning into a decision to retaliate, or it may induce a nation to think that a successful first strike is possible. Remember, it’s not enough for the principle of mutual assured destruction to be generally true; it has to be always true.

Do read the whole thing, which includes a discussion of Steven Pinker as well.

The company that is Amazon

by  Tyler Cowen in

Let’s pause to reflect that the company that has made one-day shipping of tens of millions of items the industry standard is also the global leader in cloud computing services, owns the Whole Foods grocery stores (and is building a second chain), helps police departments identify criminals, is building its own air cargo fleet, has an $11 billion-a-year advertising business, is working on a plan to give everyone on Earth internet from space, has put always-on microphones in at least 1 in 10 U.S. homes, built an Oscar-winning film and TV studio from scratch, and is competing directly with UPS, FedEx, Google, Facebook, Apple, Microsoft, IBM, the entire book-publishing industry, Netflix, HBO, Disney, Walmart, Target, Costco, Kroger, CVS, Walgreens and countless startups.

I don’t like Alexa, and wouldn’t take one for free!  Still, this is overall a remarkable record of both innovation and competition across many markets.  That said, I wonder for how long Amazon can keep this up without becoming a bloated, inefficient conglomerate.

Here is more from Christopher Mims at the WSJ.  You will note also that Walmart is several times larger in U.S. retail than is Amazon.

The deregulatory polity that is Idaho

by  Tyler Cowen in

Something rather remarkable just happened in Idaho. The state legislature opted to—in essence—repeal the entire state regulatory code. The cause may have been dysfunction across legislative chambers, but the result is serendipitous. A new governor is presented with an unprecedented opportunity to repeal an outdated and burdensome regulatory code and replace it with a more streamlined and sensible set of rules. Other states should be paying close attention.

The situation came about due to the somewhat unconventional nature of Idaho’s regulatory process. Each year, the state’s entire existing body of regulations expires unless reauthorized for an additional year by the legislature. In most years, reauthorization happens smoothly, but not this year.

Instead, the legislature wrapped up an acrimonious session in April without passing a rule-reauthorization bill. As a result, come July 1, some 8,200 pages of regulations containing 736 chapters of state rules will expire. Any rules the governor opts to keep will have to be implemented as emergency regulations, and the legislature will consider them anew when it returns next January.

Here is more from James Broughel at Mercatus.