Dematerialization: Humanity’s Biggest Surprise

by  Alex Tabarrok in

Andrew McAfee argues that the Earth Day environmentalists correctly diagnosed the problem, a worsening environment, but were wrong about the solution, degrowth. In fact, the drive to reduce costs by making better use of resources has led to a dramatic decrease in resource use even as production has increased, a dematerialization. Poverty not prosperity is the enemy of the environment.

I love this talk for many reasons not the least of which is that Andrew has put all his data online.

 

Kenneth Arrow, weather officer

by  Tyler Cowen in

Following the U.S. declaration of war on December 8, 1941, Arrow, who was certain to be drafted, enlisted in the hope of securing an officer’s commission in the U.S. Army Corps where he believed he would have a chance to use his mathematical and statistical training.  He was quickly approved to attend an aviation training program at New York University in October 1942, taking “active duty” breaks from classes for rifle drill, which he and his colleagues thought rather silly.   Nonetheless, he came out of that program in September 1943 commissioned as a weather officer with the rank of second lieutenant and was assigned to a weather research facility in Asheville, North Carolina; in July 1945 he was transferred to the weather division headquarters of the Army Air Force.  It was during that time in Asheville that he wrote a memorandum that later, in 1949, became his first professional paper (“On the Use of Winds in Flight Planning” in the Journal of Meteorology).  That paper presented an algorithm for taking advantage of winds aloft to save fuel on North Atlantic air crossings, an idea that was not acted upon by the military at that time but became the canonical practice for North Atlantic flight paths in the postwar period.

That is from the new, excellent, and consistently interesting Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit, by Till Düppe and E. Roy Weintraub.  Unlike many history of economic thought books, this one tells you “what actually happened,” such as how an Econometrica editor (Robert Strotz) decided to publish the McKenzie paper before the Arrow-Debreu paper, when he had both in hand.

*Unfabling the East*

by  Tyler Cowen in

That is the new and noteworthy book by Jürgen Osterhammel, and the subtitle is The Enlightenment’s Encounter with Asia.  Here is one good bit of many:

For Alexander Hamilton, there was nothing more acoustically disturbing on his extensive travels in Asia than the bells that tolled through the night in Portuguese Goa.  Asian cities are quieter than European ones because they have hardly any paved roads and there are few, if any, carriages with iron fittings.  Festive banquets are marked by an absence of polite conversation because the hosts are too busy tucking into their food to bother with such niceties.  Court ceremonies generally unfold in an atmosphere that strikes Europeans as eerily hushed.  Few words are exchanged during Siamese and Tibetan audiences.  All is calm around the Chinese emperor too, as courtiers and mandarins glide to and fro in felt-lined slippers.

Definitely recommended.  Here is the book’s home page.

The capitalization of Coinbase

by  Tyler Cowen

Consumers who sign up with Coinbase must feel sure that their online wallets will not be hacked, its executives say. To minimize the risk of a catastrophic data breach, Coinbase stores roughly 99 percent of its customers’ funds in formats that are not connected to the Internet. The remaining 1 percent — the liquid funds that Coinbase uses to carry out trades — comes from the company’s reserves, so that customer funds are never directly connected to the marketplace. That 1 percent is privately insured by Lloyd’s of London, Hirji said, offering another layer of protection.

Here is more from Brian Fung at WaPo.

Markets in everything, metals from dead bodies edition

by  Tyler Cowen in

The recycling bin behind the cremation chamber is the first tip-off that Elgin Mills Crematorium, north of Toronto, is up to something different.

The green bin is full of medical implants, including titanium hips and knees, stainless steel bone screws — even gold teeth.

The pieces gathered here were, until recently, inside the bodies of deceased people. Cremating a body incinerates nearly all biological material, but artificial materials can be collected quite literally out of the ashes.

But the Mount Pleasant Cemetery Group, which operates Elgin Mills Crematorium, has adopted a system not only to safely recover these materials but recycle them with a rather altruistic buyer — who compensates them based on what they pass on.

Here is the story, via Shaun F.

*The Radical Fool of Capitalism*

by  Tyler Cowen in

Bentham…appraised the trophies — dismissively dubbed “baked heads” — as technical innovations and recognized their potential for his own plans.  He enthusiastically praised the “savage ingenuity.”  An 1824 draft of his will was the first to contain the score of his wishes: first, to see the corpse as an inheritance…

According to legend, Behtam carried around the glass eyes intended for the Auto-Icon in his pocket in his final years.  (Supposed) attempts to dehydrating body parts in his home oven are said to have yielded satisfactory results.  Bentham believed the [Maori] mokomokai process would discolor facial traits and produce a parchment- or mummy-like appearance (which could be corrected with paint), while maintaining the physiognomy.

But Southwood Smith botched the job.  He sprinkled sulfuric acid onto the head, and in doing so docked Bentham’s nose.  He used an air pump to aid dehydration, which caused the skin to shrivel.  Bentham’s face appeared melted, the physiognomy destroyed.  In spring 1833, Smith commissioned a replacement head of wax…

That is from the new, excellent, and short The Radical Fool of Capitalism: On Jeremy Bentham, The Panopticon, and the Auto-Icon, by Christian Welzbacher.

Saturday assorted links

by  Tyler Cowen

1. “Morris attacks Kuhn in the time-honored Johnsonian style.”

2. Obituary for Richard Pipes (NYT).

3. “Today, deterrence through classical music is de rigueur for American transit systems.”

4. “Germany spent €37bn on defence last year. If we wanted to spend 2 per cent of GDP on defence by 2024 that would mean almost doubling the budget to around €72bn,” said Hans-Peter Bartels, the armed forces commissioner of the German parliament. “We cannot just double the size of the Bundeswehr. How is this going to work?” Marcel Dickow, a defence expert at the German Institute for International and Security Affairs, makes a similar point: “The Bundeswehr cannot spend that kind of money. It does not have the procedures in place, and it wouldn’t even know what to spend it on.”  FT link here.

5. This year, going to school has involved more fatalities than serving in the U.S. military.

6. John List on corporate social responsibility.

Erik Brynjolfsson interviews Daniel Kahneman

by  Tyler Cowen in

Mostly about AI, here is one bit:

My guess is that AI is very, very good at decoding human interactions and human expressions. If you imagine a robot that sees you at home, and sees your interaction with your spouse, and sees things over time; that robot will be learning. But what robots learn is learned by all, like self-driving cars. It’s not the experience of the single, individual self-driving car. So, the accumulation of emotional intelligence will be very rapid once we start to have that kind of robot .

It’s really interesting to think about whether people are happier now than they were. This is not at all obvious because people adapt and habituate to most of what they have. So, the question to consider about well-being and about providing various goods to people, is whether they’re going to get used to having those goods, and whether they continue to enjoy those goods. It’s not apparent how valuable these things are, and it will be interesting to see how this changes in the future.

Kahneman tells us that his forthcoming book is called Noise, though I don’t yet find it on Amazon.  Here is an HBR essay of his on that topic.

The Nanny Tax and the Miracle of Government Loaves

by  Alex Tabarrok in

Before it descends into utter madness, Leslie Forde’s Slate article on Nanny pay opens with a good story:

“I’m sorry … but I can’t,” she told me over the phone. My heart sank. I was confident she’d take the job. Quickly, I went into negotiation mode, “But wait, can we talk about the pay? Do you need more to … ” She said no before I could finish. “I just can’t take a job (that pays) over the table. It’ll mess up my housing. I won’t be able to stay in my apartment. I’m sorry. I’ve already taken another job.” I ended the call. …my entire career was at risk because I couldn’t find a nanny—at least, one willing to be paid legally.

It’s estimated that less than 10 percent of 2 million domestic workers and the families who employ them pay employment taxes.

From that opening I was expecting the author to explain that nannies aren’t willing to work on the books because at the bottom of the income scale income is taxed twice–first by Federal and State direct taxes and second indirectly because higher income causes workers to lose benefits. As a result of this double taxation, in some states it’s possible for poor workers to face effective marginal tax rates above 100 percent. If you had to pay to work, would you work?

High marginal taxes rates on the poor are a problem. We ought to be able to agree on that, even if we disagree on proposals to address the problem such as a universal basic income or a negative income tax. But in Forde’s magical world, up is down and down is up and the problem is that taxes on the poor are too low. But not to worry because this presents a hidden opportunity!

There is, however, a hidden opportunity to provide help to our caregivers and the families who employ them. Right now, these under-the-table arrangements are creating a “tax gap”—billions of dollars in additional funding that would be available to support caregivers, if the majority of families and their caregivers paid into the system.

Did you get that? If nannies were taxed the government would have more money to provide nannies with benefits. Wait, it gets worse. According to Forde, we can make both families and nannies better off by giving them back the money the government takes and still have money left over!

The estimated “gap” from the lost tax revenue is a combination of the federal and state employment taxes typically paid by employees (Social Security, Medicare, and income taxes) and employers (in addition to Social Security and Medicare, they must pay federal and state unemployment taxes.) Imagine if just a portion of this revenue were used to reimburse families for more of their child care expenses and to provide caregivers access to better benefits than they get currently with their under-the-table jobs. (italics added, AT)

Indeed, wouldn’t it be nice to live in a world of pure imagination? One without tradeoffs. Where we could rely on the miracle of government loaves to solve all problems?

Ethiopia is still up and at it

by  Tyler Cowen

Ethiopia, Africa’s second most populated country, is forecast to be the fastest growing economy in Sub-Saharan Africa this year, according to new data from the IMF.

Ethiopia’s economy is predicted to grow by 8.5 percent this year. The figures signal continued economic expansion following a long period of impressive growth. In the last decade, Ethiopia has averaged around 10 percent economic growth, according to the IMF.

To boost the economy, the country is pursuing a number of large-scale infrastructure projects, including the Grand Renaissance Dam and a railway network.

Here is the full story.  Ivory Coast, Rwanda, Senegal, and Ghana are also growing at rapid clips.

*My Morning Routine*

by  Tyler Cowen in

The editors and co-creators are Benjamin Spall and Michael Xander, and the subtitle is How Successful People Start Every Day Inspired.

They were generous enough to include a contribution from me, on my theory of how to get ready in the morning for the day to come:

I make sure I’ve already showered.  Too many people waste some of their most productive morning time showering.  Showering relaxes you and calms you down — why should that happen in the morning?  I prefer to enjoy my shower during the evening, when I know I’m winding down in any case.

And here is Scott Adams on related topics, from the same book:

I’m a trained hypnotist, and when I learned to do hypnosis I learned that self-hypnosis, if you’re trained to do it, is more effective and faster than meditation.

You can order the book here.

The real workplace issue is the elderly not the robots

by  Tyler Cowen in

That is the topic of my latest Bloomberg column.  Here is one bit:

The populations of the U.S. and many other developed nations are aging, and the big surprise has been that older people want to work more than in previous generations. Against many prior expectations, the labor-force-participation rate of older Americans started rising in the 1980s and 1990s. For instance, the labor-force-participation rate for men ages 65 to 69 was 25 percent in 1985 but 37 percent in 2016. By 2020, over one-quarter of the workforce will be over 55 years of age.

And the closer:

Our willingness to banter about the robot apocalypse is yet another sign that, too often, we just don’t want to confront the issues surrounding the elderly.

Do read the whole thing.