New issue of Econ Journal Watch
Professional Ethics 101: In the Journal of Economic Literature, Anne Krueger reviewed The Oxford Handbook of Professional Economic Ethics. The volume’s editors George DeMartino and Deirdre McCloskey reply, suggesting that Krueger’s review emblematizes the very concern of the book, the ethical competence of the economics profession.
The Progressive Legacy Rolls On: Also in the Journal of Economic Literature, Marshall Steinbaum and Bernard Weisberger reviewed Thomas Leonard’s Illiberal Reformers: Race, Eugenics, and American Economics in the Progressive Era. Phillip Magness arguesthat Steinbaum and Weisberger treat Leonard unjustly and that they fail in their attempt to excuse the progressive legacy of some of its disgraces.
Will the Real Specification Please Stand Up? Alex Young reports on mysteries in how specification description varies between a working paper and its published form in The Accounting Review, mysteries that data release would resolve. The authors Andrew Bird and Stephen Karolyi respond.
Guns and crime: The right-to-carry debate carries on, with emphasis on the handling of state trends and the crack-cocaine period, with Carlisle Moody and Thomas Marvell criticizing recent work, and lead author John Donohue firing back.
New entries extend the Classical Liberalism in Econ, by Country series to 17 articles:
- Ukraine: Mykola Bunyk and Leonid Krasnozhon treat liberalism in the country’s intellectual and political history and its scene today.
- Ecuador: Pedro Romero, Fergus Hodgson, and María Paz Gómez describe the country’s political fortunes and the role of liberal ideas, notably in dollarization.
EJW moves to the Fraser Institute.
EJW thanks its referees and others who contribute to its mission.
EJW Audio:
Land value capture is an idea whose time has come
That is the topic of my latest Bloomberg column, here is one excerpt:
Using land value capture for New York City subway improvements makes sense because other funding methods have failed politically. Earmarking some of the state income tax to the subway might be better, but people who don’t use the subway — the majority in New York State — just don’t want to pay. So the state must look elsewhere.
In the meantime, new subway lines are rare, even though the population and economic output of the city have grown substantially. The new Second Avenue line opened only last year, though construction started in 1972 and had to overcome numerous fiscal and political obstacles. On the older lines, delays are frequent and the system lacks modern technology. It is not unusual for signal switches to date from the 1930s. By one estimate, a much-needed revamp of the New York City subway system would cost more than $100 billion.
It is also good practice to consider when one’s argument doesn’t hold:
My own locality, Fairfax County in northern Virginia, treats landowners and real estate developers pretty favorably. They have been a dominant special interest group with many state and local politicians. That might not sound ideal, but those individuals have strongly supported the building out of the community, creating jobs and keeping down home prices. If landowners had been asked to foot more of the bill, the local political pressures for pro-growth policies probably would have been less strong and a NIMBY mentality would have prevailed. Unlike with the New York City subway, here the local interests have much greater sway, and thus land value capture could clog up politics rather than inducing new construction.
Recently I spent a day at a conference discussing Henry George’s “Progress and Poverty,” a late 19th century work that is perhaps the best-selling economics book in U.S. history. George spent much of his life campaigning for a relatively high tax on land and thus landlords, developing the fairness and efficiency arguments I mentioned above. By the end of the conference, I concluded that George had some good economic arguments, but also that he was politically naive. At the margin we should move in George’s direction, but ultimately landowners have to be part of the building coalitions rather than pure victims.
Do read the whole thing.
Thursday assorted links
1. Atlas Network covers Marginal Revolution University.
2. Arnold Kling on tournaments and talents.
3. The economics of theme parks, part I and part II.
4. Russ Roberts video, The Paradox of Household Income.
5. LRB on Chinese science fiction.
U.S.A. mood affiliation fact of the day
Democrats’ trust in government data has shrunk over time; Republicans’ trust has grown. Today, with their party in unified control of government, Republicans are slightly more likely than Democrats to believe official government economic stats; 58 percent of Republicans completely or somewhat trust these numbers, compared with 52 percent of Democrats.
That is from Catherine Rampell.
Ben Thompson on the Amazon consortium and health care
What would make more sense to me is that, having first built an interface for its employees, and then a standardized infrastructure for its health care suppliers, is that Amazon converts the latter into a marketplace where PBMs, insurance administrators, distributors, and pharmacies have to compete to serve employees. And then, once that marketplace is functioning, Amazon will open the floodgates on the demand side, offering that standard interface to every large employer in America…
This is certainly ambitious enough — basically intermediating U.S. employers and the U.S. healthcare industry — but in fact this only sets the stage for the wholesale disruption of American healthcare. First, Amazon could not only open up its standard interface to other large employers, but small-and-medium sized businesses, and even individuals; in this way the Amazon Health Marketplace could aggregate by far the most demand for healthcare.
And to close the piece:
My expectation, then, is not that the Internet methodically disrupts industry after industry in some sort of chronological order, but rather that the entire edifice lasts far longer than technologists think, only to one day collapse far quicker than anyone expected.
The ultimate winners of this shakeout, then, are not only companies that are building businesses predicated on the Internet, but just as importantly, are willing and able to build those businesses with the patience that will be necessary to wait for the old order to collapse, particularly if that collapse happens years or decades after the underlying business models are rotten.
Here is more, and I do hope you are all subscribing to Stratechery, which is one of the very best regular reads, worth the money.
What are stochastically the best books to read about Latin America?
This list is aggregating from my reader recommendations:
Jorge Castaneda “Manana Forever” on 21st Century Mexico isn’t as polished but it’s pretty informative.
“To count, the book must have some aspirations to be a general survey of what the country is…” Mexico: Riding, Distant Neighbors, — definitely. Being up to date is not that relevant for attempting to show “what the country is…”. As good or better: Octavio Paz, El laberinto de la soledad (The Labyrinth of Solitude) (1950) and Charles Macomb Flandrau, Viva Mexico! (1908)
El Laberinto also came to my mind as a better candidate on Mexico. And then there is Understanding Mexicans and Americans: Cultural Perspectives in Conflict (Rogelio Diaz-Guerrero and Lorand B. Szalay) originally published in 1991.
https://link.springer.com/book/10.1007%2F978-1-4899-0733-2
If you are going to go with a dated option for Mexico, Paz’ “Labyrinth of Solitude” is considerably better than “Distant Neighbors”.
El Nicaragüense by Pablo Antonio Cuadra (for Nicaragua)
On Mexico: Enrique Krauze’s book “Mexico: Biography of Power” has the reputation of “best book about [modern] Mexico,” but I’ve struggled to read it.
For Peru:
The textbook answer should be “The Peruvian Experiment Reconsidered” ed. Cynthia McClintock & Abraham F. Lowenthal.
My personal favorite is another book by McClintock (the aforementioned editor and GWU Professor of Political Science and International Affairs) titled “Peasant Cooperatives and Political Change in Peru.” Unlike the broad surveys of political and economic history given in the McClintock and Lownthal edited book, “Peasant Cooperatives” gives a great case study of agrarian co-ops and the socio-economic horrors of military rule.
On Nicaragua: Stephen Kinzer’s “Blood of Brothers: Life and War in Nicaragua”
On Guyana: “Wild Coast” by John Gimlette
And Michael Reid’s “Forgotten Continent” is a useful book about South America.
For Brazil: “Brazil – The Troubled Rise of a Global Power” by Michael Reid – http://amzn.to/2CFGYax
Nicolas Shumway, The Invention of Argentina, extended essay on Argentina books here.
Argentina (classic) Facundo: Civilization and Barbarism
Wednesday assorted links
1. Megan McArdle’s 12 rules for life.
2. Richard Florida (WSJ) argues mayors should not compete for Amazon, here is his petition.
3. Claims that Icelanders are very creative.
My Conversation with Charles C. Mann
Here is the audio and transcript, Charles was in superb form. We talked about air pollution (carbon and otherwise), environmental pessimism, whether millions will ever starve and are there ultimate limits to growth, how the Spaniards took over the Aztecs, where is the best food in Mexico, whether hunter-gatherer society is overrated, Jackie Chan, topsoil, Emily Dickinson, James C. Scott, the most underrated trip in the Americas, Zardoz, and much much more.
Here is one excerpt:
COWEN: But if you had to pick a leading candidate to be the fixed factor, I’m not saying you have to endorse it, but what’s the most likely fixed factor if there is one?
MANN: Well, water is certainly a big candidate. There just really isn’t that much fresh water.
COWEN: But we can price it more, and since we have growing wealth — global economy grows at 4 percent a year — we can subsidize those who need subsidies…
MANN: You’re right. But water’s obviously one of them. But hovering over it is these questions about whether these natural cycles . . . is kind of a fundamental question about life itself. Is an ecosystem an actual system with an integrity of its own, with rules of its own that you violate at your peril? Which is the fundamental premise of the environmental movement. Or is an ecosystem more like an apartment building in which it is just a bunch of people who happen to live in the same space and share a few common necessities?
I don’t think ecology really has settled on this. There’s a guy in Florida, Dan Simberloff, who is a wonderful ecologist who has kind of made a career out of destroying all these models, these elegant models, one after another. So that’s the fundamental guess.
If it turns out that it’s just a collection of factors that we can shift around, that nature’s purely instrumental and we can do with it what we want, then we have a lot more breathing room. If it turns out that there really are these overarching cycles, which seems to be the intuition of the ecologists who study this, then we have less room than we think.
And:
COWEN: Jared Diamond.
MANN: I think an interesting guy who really should learn more about social sciences.
COWEN: Economics in particular.
MANN: Yes.
COWEN: Theory of common property resources.
MANN: Yeah.
And finally:
MANN: …What I think is the underrated factor is that Cortez was much less a military genius than he was a political genius. He was quite a remarkable politician, really deft. And what he did is . . . The Aztecs were an empire, the Triple Alliance, and they were not nice people. They were rough customers. And there was a lot of people whom they had subjugated, and people whom they were warring on who really detested them. And Cortez was able to knit them together into an enormous army, lead that army in there, have all these people do all that, and then hijack the result. This is an act of political genius worthy of Napoleon.
Self-recommending, and I am delighted to again express my enthusiasm for Charles’s new The Wizard and the Prophet: Two Remarkable Scientists and Their Dueling Visions to Shape Tomorrow’s World. Here is Bill Easterly’s enthusiastic WSJ review of the book.
Skyscrapers, Slums, and the Floor Space Index
Rent control is not the only problem plaguing housing in Mumbai, India. Mumbai also makes it very costly to build skyscrapers. In this video, I discuss the floor space index (FSI), a regulatory tool used around the world to tradeoff plot size and height. Higher FSI lets builders economize on land, reduces sprawl, and increases the value of public transportation. The lessons in urban economics go well beyond Mumbai. Check out the video. It’s one of the best in MRUniversity‘s India series.
My personal moonshot
That is a short piece I wrote for the inauguration of a new Mercatus website The Bridge. The focus of the piece is how I think about my own career and “moat”, excerpt:
My view, or at least hope, is that these diverse outputs [listed at the link] exploit two synergies. First, my work in any one of these areas publicizes what I am doing in the others. Second, what I learn from each task boosts my productivity in the others. Overall, I think of these activities as a kind of collective intellectual blitzkrieg.
I will step out of my modest demeanor for a moment and suggest that relatively few people can construct and manage such a broad portfolio, and so this gives me some kind of competitive advantage or “moat” in the world of ideas. My moonshoot, in essence, is trying to push as hard as possible on that advantage with this blitzkrieg.
And:
By the way, I love it when people describe writing a blog, or writing on the internet, as “popularizing” economics or something similar. That is a sign they don’t understand what is going on, that they don’t understand there is such a thing as “internet economics,” and also a sign they will not be effective competition. It’s really about “the internet way of writing and communicating” vs. non-internet methods. The internet methods may or may not be popular, and may or may not be geared toward a wide audience, so they are not the same as popularizing. One point of the internet is to find an outlet for super-unpopular material. What’s important right now is to develop internet methods of thinking and communicating, and not to obsess over reaching the largest possible numbers of people.
I would note that tylercowensethnicdiningguide.com fits into the picture too, although this essay was too short to explain the larger schema with that one.
Tuesday assorted links
1. The new elephant fable of the bees (NYT).
2. MIE: Two new ax-throwing bars are coming to Boston. And Mr. Rogers biopic starring Tom Hanks.
3. The Whisper Opera (NYT). And more here.
What should I ask Chris Blattman?
I will be having a Conversation with Chris soon, alas no associated public event. What should I ask him?
Police Union Privileges, Officer Misconduct and Systems Thinking
In Police Union Privileges I explained how union contracts and police bill of rights give police officers privileges not afforded to regular people. What differences do these privileges make? A new paper, The Effect of Collective Bargaining Rights on Law Enforcement: Evidence from Florida, suggests that police union privileges significantly increase the rate of officer misconduct:
Growing controversy surrounds the impact of labor unions on law enforcement behavior. Critics allege that unions impede organizational reform and insulate officers from discipline for misconduct. The only evidence of these effects, however, is anecdotal. We exploit a quasi-experiment in Florida to estimate the effects of collective bargaining rights on law enforcement misconduct and other outcomes of public concern. In 2003, the Florida Supreme Court’s Williams decision extended to county deputy sheriffs collective bargaining rights that municipal police officers had possessed for decades. We construct a comprehensive panel dataset of Florida law enforcement agencies starting in 1997, and employ a difference-in-difference approach that compares sheriffs’ offices and police departments before and after Williams. Our primary result is that collective bargaining rights lead to about a 27% increase in complaints of officer misconduct for the typical sheriff’s office. This result is robust to the inclusion of a variety of controls. The time pattern of the estimated effect, along with an analysis using agency-specific trends, suggests that it is not attributable to preexisting trends. The estimated effect of Williams is not robustly significant for other potential outcomes of interest, however, including the racial and gender composition of agencies and training and educational requirements.
This is important research but although I’m not surprised that collective bargaining rights lead to more misconduct I do find the size of the effect implausibly large. One reason is that police union privileges are only one brick in the blue wall. Juries, for example, often fail to convict police even when faced with video evidence that would be overwhelming in any other context [e.g. Philando Castile]. Police union privileges are unjust and should be abolished but solving the problems with policing requires more than a change in naked incentives.
To solve this problem we need to adopt the same kind of systems wide thinking that has led to large reductions in fatal accidents in anesthesiology, airplane crashes, and nuclear accidents. Criminologist Lawrence Sherman writes:
The central point Perrow (1984) made in defining the concept of system accidents is that the urge to blame individuals often obstructs the search for organizational solutions. If a system-crash perspective can help build a consensus that many dimensions of police systems need to be changed to reduce unnecessary deaths (not just but certainly including firing or prosecuting culpable shooting officers), police and their constituencies might start a dialog over the details of which system changes to make. That dialog could begin by describing Perrow’s central hypothesis that the interactive complexity of modern systems is the main target for reform. From the 1979 nuclear power plant near-meltdown at Three Mile Island in Pennsylvania to airplane and shipping accidents, Perrow shows how the post-incident reviews rarely identify the true culprit: It is the complexity of the high-risk systems that causes extreme harm. Similarly, fatal police shootings shine the spotlight on the shooter rather than on the complex organizational processes that recruited, hired, trained, supervised, disciplined, assigned, and dispatched the shooter before anyone faced a split-second decision to shoot.
Gerrymandering encourages social liberalism
That is the topic of my latest Bloomberg column, here is one excerpt:
For instance, if you are a Democrat who is strongly pro-abortion rights, gerrymandering might be very much in your interests. That’s because the sharp polarization of today’s politics favors a lot of outcomes that are either the status quo or are easier to implement and enforce. That can favor social liberalism.
Note that many Republican representatives don’t actually want strong legal enforcement of the toughest social conservative positions — can you really imagine the government trying women for murder if they try to have abortions?
Whether you like it or not, American society seems to have hit on a pretty comfortable equilibrium — comfortable for our elected representatives that is. Democrats will strongly support liberal positions on social issues, and the Republicans will stake out more conservative positions. And Republicans will tolerate the Democrats getting their way for the most part. You can debate whether this mix is what a majority of voters want or should want, but it is the easiest outcome for us to agree upon.
Do read the whole thing.
More on talent optimization and where it is weak and strong
Hi Tyler, one point you didn’t mention in your talent optimization post was career path dependence. Getting an assistant professorship might require some of the skills required to being a great professor, but it absolutely does not require any degree of interest in or talent at management, even though (at least in STEM) managing a lab, including people management, attraction of talent, administration, etc., is the critical skill.
One generalization is that any sort of administrative job that selects among a highly filtered group (senior medical administration at a hospital that mostly fall to MDs, executives within technical organizations such as CTOs) is likely forced to ignore the best talent.
Nick_L in the comment section provides another interesting example: “Talent selection in the Armed Forces is in an interesting category. The only way to achieve the rank of General (in G7 forces, at least), is by entry as a 2nd lieutenant. Due to the (understandable) narrowing of opportunities the higher you go in the armed forces, the best talent frequently leaves around the time they make Colonel.” Note that that comment assumes that the skills that make a great 2nd lieutenant or colonel are the same skills that make a great general.
That is from an email by John McDonnell.