*The New Koreans*
Back in Gyeongju, Kim had the spy arrested, tortured, and executed…The rest of Kim’s story, as far as we know it, is true: He conquered Baekje in 660 and Goguryeo in 668 with the help of the Tang armies, then had to give the Tang the Manchurian half of Goguryeo.
Modern nationalist historians have criticized Silla for relying on China’s help in the first place, saying it set a historical pattern whereby Koreans instinctively call on outside powers to help solve internal problems.
That is from the new book by Michael Breen, The New Koreans: The Story of a Nation, a very good introductory treatment to that part of the world.
The Spirit of the Law
To get around the Indian Supreme Court’s ban on selling alcohol within 500 meters of a highway, a bar in Kerala added some distance. Here is one case where obeying the letter of the law is producing the spirit of the law. As an added bonus it will be easier to enter the bar than to exit.
Hat tip: Anjan Rao.
What I’ve been reading
1. Mark Zupan, Inside Job: How Government Insiders Subvert the Public Interest. This is now the very best book on how special interest groups subvert the quality of public policy.
2. Historically Inevitable: Turning Points of the Russian Revolution, edited by Tony Brenton, contributors include Dominic Lieven, Orlando Figes, and Richard Pipes. I, for one, often find it easier to learn history through counterfactual reasoning. “What if they hadn’t put Lenin into that train?, and so on, and so this is my favorite from the recent spate of books on 1917 in Russia.
More generally, there are people who very much like counterfactual reasoning (say Derek Parfit), and people who don’t care for it much (say Jim Buchanan). The two types often don’t communicate well. The counterfactual deployer seems like a kind of smart aleck, caught up in irrelevancies and neglecting “the real issues.” In turn, the non-poser of counterfactuals seems stodgy and unable to understand the limitations of principles, how one might handle the tough cases, and what might cause one to change one’s mind. Being able to bridge this gap, and learn from both kinds of thinkers, is both difficult and yields high returns.
3. Mary Gaitskill, Somebody with a Little Hammer, Essays. Short pieces, never too long, strong throughout, mostly on literature (Nicholson Baker, Peter Pan, Norman Mailer, Bleak House) with some essays on movies too. This will make my best of the year list, and she remains an underrated author more generally.
4. Jace Clayton, Uproot: Travels in 21st-Century Music and Digital Culture. An original and consistently interesting extended essay on how “World Music” is evolving in digital times. A must-read for me, at least.
5. Johan Chistensen, The Power of Economists Within the State. I haven’t read this one, but it appears to be a very interesting look at the role of economists within government, for the case studies of New Zealand, Ireland, Norway, Denmark, and other cases (in less detail). “Economists in government” remains an underappreciated topic, so I expect this book is a real contribution.
6. Julie Schumacher, Doodling for Academics: A Coloring and Activity Book. It’s funny, for instance one panel has the heading “Find and color the many readers who will enjoy your dissertation.” The images include a rat and a snake in the grass, but there aren’t even so many of those.
*Machine Platform Crowd*
The authors are Andrew McAfee and Erik Brynjolfsson, and the subtitle is Harnessing Our Digital Future. Arguably McAfee and Brynjolfsson have become America’s leading authors of business/management books (with an economic slant). This one is due out June 27, I am eager to read it.
Saturday assorted links
1. The butterfly killer is convicted.
2. “At Gujarat Technological University, Sachin Sharma and Dharmesh Shah have designed a visual animal detection system that uses algorithms based on histogram of oriented gradients and cascade classifiers running in OpenCV. Cow training data came from public image datasets (like the KTH Animal Dataset), and in total 900 images of cows were input into the classifier.” Link here.
3. Excellent Adam Tooze post on the gravity equation and how to think about the course of globalization and trade over distance. I agree there has been a growth in the relative ability to trade across borders, but still not, given that a border is crossed, a relative boost over greater distances. The entry of some former “zeros” into the global trading system is a once-and-for-all effect due to internal reforms, and the preferred way of measuring the trade elasticity over distance is I think to exclude such cases. These issues are all debated in the literature.
Old globalization, meet the new globalization…
France is careening toward a nail-biter presidential election this month that pits a crowded field against anti-E.U. titan Marine Le Pen. But E.U. funds pay her salary, support her assistants, and underwrite the conferences and books she churns out to attack the 28-nation bloc. Key British leaders of the successful Brexit campaign got their financial lifeline from Brussels euros. Elsewhere in Europe, self-identified fascists are paying for rallies to further the future of the “white race” by breaking up the E.U. — all thanks to E.U. money.
…[these parties] get millions because of their heft in elections for the European Parliament, an institution that is short on power but flush with cash.
Here is the Washington Post story by Michael Birnbaum. I say that Hegel, and works of Continental philosophy that use the word “totalizing,” should be raised in status!
Addendum: Here is more from Farrell and Newman.
Bertrand Russell on complacency
A great many of the impulses which now lead nations to go to war are in themselves essential to any vigorous or progressive life. Without imagination and love of adventure a society soon becomes stagnant and begins to decay. Conflict, provided it is not destructive and brutal, is necessary in order to stimulate men’s activities, and to secure the victory of what is living over what is dead or merely traditional. The wish for the triumph of one’s cause, the sense of solidarity with large bodies of men, are not things which a wise man will wish to destroy. It is only the outcome in death and destruction and hatred that is evil. The problem is, to keep these impulses, without making war the outlet for them.
All Utopias that have hitherto been constructed are intolerably dull….[Utopians] do not realize that much the greater part of a man’s happiness depends upon activity, and only a very small remnant consists in passive enjoyment. Even the pleasures which do consist in enjoyment are only satisfactory, to most men, when they come in the intervals of activity. Social reformers, like inventors of Utopias, are apt to forget this very obvious fact of human nature. They aim rather at securing more leisure, and more opportunity for enjoying it, than at making work itself more satisfactory, more consonant with impulse, and a better outlet for creativeness and the desire to employ one’s faculties.
That is from Principles of Social Reconstruction, 1916. The pointer is from Alex, our Alex.
When usury laws are counterproductive
We study the effects of interest rate ceilings on the market for automobile loans. We find that loan contracting and the organization of the loan market adjust to facilitate loans to risky borrowers. When usury restrictions bind, automobile dealers finance a greater share of their customers’ purchases, which allows them to price credit risk through the mark-up on the product sale rather than the loan interest rate. Despite having little effect on who receives credit, usury limits therefore have a substantial effect on who provides credit and on the terms of credit granted. Usury limits may harm defaulting borrowers, who face greater liabilities in default than they would if loan contracts were unconstrained.
That is from a new paper by Brian Melzer and Aaron Schroeder, via Kevin Lewis.
Dave Donaldson has won the John Bates Clark Award
Here is the award citation, here is one excerpt from it:
Donaldson’s paper “Railroads of the Raj: Estimating the Impact of Transportation Infrastructure?” (American Economic Review, forthcoming) investigates the economic benefits from building transportation infrastructure studying the case of railways in 19th century India. This paper is widely viewed as both a methodological breakthrough and substantively important paper in the field. Donaldson assembled a new and rich data set from archival sources about the expansion of railroads in India through the 19th and early twentieth century and the volume of inter-regional trade in the same period. He then uses the data to look the effect of access to railroads on real agricultural incomes. To check that this effect does not come from building railroads where the growth was predicted to be, he uses the fact that a number of proposed lines did not get built or did not get built when they were proposed to be built. Assuming that the proposal was based on what the contemporary experts thought were the areas of greatest demand for transportation, these un-built railroads should also have an effect if they were any good at predicting growth. He finds no such effect.
The second part of the paper builds a quantitative model where the effect of trade on real agricultural GDP is fully captured by one sufficient statistic: the share of expenditure that each Indian district allocates to goods produced in the district. When that share is low, it indicates that the relative price of imports in the district is low, and in turn, that the welfare gains from trade are large. Controlling for shocks to technology (mainly rainfall in this case), he finds that observed changes in real GDP following access to the railroad move almost one for one with the sufficient statistic predicted by the model, thereby making the case that the benefits of the railways is indeed the result of increased trade.
There is much more of interest at the link. Here are copies of the papers, overall I am delighted to see a Clark Award that so prominently features economic history, not to mention India and trade. Donaldson is at Stanford, here is his home page. An excellent pick, but this one was a surprise to me.
Tim Harford on disruption and complacency
Here is one bit:
I am reminded of a study of college friendships conducted by psychologists Angela Bahns, Kate Pickett and Christian Crandall. They found that students in a large, diverse campus sought out and befriended other students very much like themselves. In smaller universities with fewer friendship options, young people had more varied groups of friends because the alternative was to have no friends at all.
Our bias towards the status quo is not new — but perhaps we are taking advantage of new opportunities to indulge it.
Here is the full FT piece.
Friday assorted links
1. Eli Dourado offers advice to undergraduates. And Scott Sumner tells it like it is.
2. The case for placebo politics.
3. Reemergence of some famine conditions around the world. I take this to be another sign of a broader breakdown of global order.
4. David Brooks on the Cuomo free college plan (NYT). Masterful analysis of an idea that otherwise is being passed around uncritically.
5. Jean Tirole speaks sense on the French election (FT).
6. Is there life on Enceladus, moon of Saturn? I think so. Hi out there!
The Relevance of BR Ambedkar in Modern India
Outside my apartment a cobbler has a sidewalk shop where he sits and fixes shoes. One of the things that interests me in this photo is the picture the cobbler hangs behind him, that’s BR Ambedkar. In the 
independence movement BR Ambedkar was the leader of the Dalit (untouchable) class and the guiding force in writing the Indian constitution, which in India makes him a combination of Martin Luther King and James Madison.
Ambedkar died in 1956 but he continues to be highly regarded, especially, but by no means solely, among the Dalits. Indeed, of the great triumvirate, Gandhi, Nehru, and Ambedkar, only Ambedkar seems to have grown in stature since his death. Gandhi is given lip service but his image no longer carries meaning. As Arundhati Roy put it, “Gandhi has become all things to all people…he is the Saint of the Status Quo.” The image of Ambedkar, however, still signals a demand for justice and an insistent claim that not all is yet right.
Today is Ambedkar’s birthday and at the stroke of midnight my neighborhood, which happens to be on Ambedkar Road, erupted in a party and parade that lasted until two in the morning.
Of the great triumvirate, I’ve always been partial to Ambedkar. He had a PhD in economics from Columbia where he worked under Edwin Seligman and later also graduated from the London School of Economics writing another dissertation under Edwin Cannan. Ambedkar was not a free market advocate and he didn’t write much in pure economics after the 1920s but he was an early supporter of monetary rules because he had a sophisticated understanding of the distributional consequences of monetary interventions and feared government manipulation.
A managed currency is to be altogether avoided when the management is in the hands of the government.
Ambedkar also wrote insightfully on the problem of India’s small farms, a problem that continues to plague India (although some of his solutions such as government ownership of land actually don’t fit the problem, lack of capital, that he emphasized).
So why does Ambedkar continue to resonate in modern India? Ambedkar never had Gandhi’s worship of the village and tradition. He understood that progress would come with cities, industrialization and education. Exactly the forces that are transforming India today. Ambedkar did not mince words:
The love of the intellectual Indian for the village community is pathetic. What is the village but a sink of localism, a den of ignorance, narrow mindedness, and communalism?
Most importantly, quoting Luce’s excellent In Spite of the Gods (still the best introduction to modern India):
Ambedkar gave India’s most marginalised human beings their first real hope of transcending their hereditary social condition. He saw the caste system as India’ greatest social evil, since it treated millions of people as sub-humans by the simple fact of their birth.
But even as the caste system declines in importance (in some ways), there remain those who are marginalized and downtrodden. Ambedkar, for example, resigned as law minister in post independence India when his bill to bring greater equality and property rights to women was rejected. Even today, Ambedkar’s vision is not complete. Ambedkar was a modernist, a rationalist, a believer in the principles of liberty, equality, and the rule of law for all, and for these reasons he remains relevant in modern India.
Are there too many speed bumps?
Probably yes. That is the topic of my latest Bloomberg column, here is one excerpt:
Another economic approach would consider whether the private sector, when trying to accommodate customer demand, finds that speed bumps help or hurt business. That’s a kind of market test of the concept, and indeed I often see speed bumps in shopping mall parking lots, to slow down traffic and ease the risk of accidents, including to pedestrians. The mall and parking lot owners have decided that the benefits of greater safety will attract more customers than the inconveniences of driving more slowly, and other possible costs, will put customers off. That is a seat-of-the-pants cost-benefit test, and it suggests some role for the bumps in the broader world.
That said, my personal impression is that these private-sector speed bumps are smoother and gentler than the ones I often find in neighborhoods. When it comes to local roads, the residents are actively trying to keep outside drivers away, whereas the shopping mall and parking lot owners seek the best overall environment for commercial reasons. As a tentative conclusion, I think some speed bumps are a good idea, but many are too obstructive, and perhaps they are too numerous as well; this view is supported by some recent research.
Another angle of the speed bumps debate is how much it revolves around issues of symbolic value, and that in part explains why the discussion can become so heated.
By its very design, a speed bump is a deliberate obstruction with maximum transparency as such. It is sending a message that the social goals of safety or neighborhood quiet are sufficiently important that it is worth slowing people’s progress when they travel. There are many regulations that try to make our lives safer, but most of them are hidden, with nontransparent costs, such as auto-safety regulations as applied through crash tests. A speed bump, in contrast, can work only if people notice it each time. So to the extent a society accepts speed bumps, it is visibly advertising the notion that limits to fast transportation — a symbol of progress — are acceptable in the name of safety and cozy locality.
Do read the whole thing.
Which colonies fared best under British rule?
In a previous column on India, and how it suffered under colonialism, I mentioned:
If you are looking for the upside of British colonialism, you are more likely to find it in the wealthier and better-treated Singapore or Malaysia.
Why might this have been true? Part of India’s colonial curse was its high population, which meant the British viewed it as a source of soldiers, and a captive market for goods, rather than an area whose value could be internalized through direct economic development.
When it comes the British history in India, I think of “letting the interior fester” as a big part of the core problem. Most of India was and still is interior. You might look at the coastal regions, but given that British policy forced India to accept free trade for British goods, without receiving the same privileges in return, the coastal regions became rent-seeking imperial clusters more than possible rivals to Hong Kong or for that matter Manchester.
Singapore, in contrast, was built around its port, and the British encouraged further developments in that direction, even as early as Raffles in the 1820s. The city didn’t/doesn’t have much of an interior or for that matter much population (about 1,000 when the British took over). Keeping the people servile didn’t seem worth the trouble, because they could neither fight nor buy in great numbers. Instead, you can think of British policy as trying, selfishly, to maximize the value of Singaporean land to the British. But that wasn’t such a nasty process, as the British Navy made Singapore more focal as a trade center, with a later boost from the opening of the Suez Canal. Note that as late as the mid-1960s, just before independence, about 20 percent of Singaporean gdp was British defense spending.
Singapore as port and entrepot developed “the entire nation,” all the more as the induced spirit of enterprise later spread to manufacturing. This in turn gave the territory the possibility of a relatively inclusive and egalitarian future. Unlike with India, the British rulers never imagined a future where Singapore might threaten them economically, or politically, and so they could just let matters rip. The British felt, more or less correctly (until the Japanese invasion), that improvements in the value of Singapore would be captured by them.
So it was “keeping an option on captive buyers and fighters” (India) vs. “maximizing the value of the land for Empire” (Singapore). Both were selfish strategies, but the latter did better for the colony in question. Hong Kong seems to fit comfortably into this framework, though other cases might be considered (Barbados vs. Guyana? Ghana vs. Uganda?).
Singapore also benefited from having most of its relevant colonization come later, whereas India had a damaging East India Company period in the 17th and 18th centuries, when imperialism often was more brutal and less sophisticated.
Non-Singaporean Malaya/Malaysia would require a post of its own. In that case, and also with Singapore more narrowly, an evaluation of British rule cannot be separated from major changes in the exports and also corresponding changes in the ethnic composition of the territory. The Singaporean national anthem is still a song written in Malay, and by law it must be sung as such.
Maximum Government, Minimum Governance?
In 2014, Narenda Modi campaigned on the slogan “maximum governance, minimum government”. It was a brilliant slogan that neatly captured India’s dichotomous problem, too much government and not enough capacity to actually govern. Since then, however, Modi’s government has not done much to fulfill its promise. The latest absurdity is a plan to govern the size of meal portions that restaurants may serve–apparently an attempt to fulfill Modi’s musings on the subject as if they were commands from the Maharaja. Add to this the absurd paid leave maternity bill–something akin to having the US government mandate seatbelts on flying cars, not exactly wrong but not exactly dealing with a problem relevant to most people either. Top off with the Supreme Court’s ban on any liquor sales within 500 meters of a highway (Mumbai, by the way, will follow Rajasthan in recategorizing highways within the city as roads to get around the ban). Put it all together and it looks like we are back to the old India model of maximum government, minimum governance.
In an excellent piece, Rupa Subramanya asks exactly the right question:
…how exactly is intervening in food portion sizes, a matter which in any sensible country would be left to the market system to decide, an example of good governance?
As a first principle of good governance, the government must recognize the limitations of state capacity and prioritize in areas in which it wishes to intervene in the market economy, based on a cost benefit analysis and grounded in a market failure it’s trying to correct.
…Modi campaigned on good governance. It’s time for him to start delivering on that promise.