Results for “best book” 1948 found
Public Finance and Public Policy
Public Finance and Public Policy, the new textbook by Jonathan Gruber, is not only the best public finance textbooks I’ve ever read it is one of the best textbooks I’ve read in any field. Gruber and Worth Publishers have clearly put a huge amount of money and effort into this book – the content is superb and so is the presentation (graphs, organization, supplementary material – e.g. check out these cool powerpoint presentations.).
Gruber is especially good at discussing empirical research. What is the effect, for example, of social security on private savings, on the living standards of the elderly, on the incentive to retire? What do we learn from the international evidence?
(Quick answers: Social security crowds out about 35 cents of private savings for every social security dollar. As a result, social security has reduced the eldery poverty rate although not quite as much as naive trends would suggest. Social security does reduce the labor force participation rates of the elderly but less so in the United States than in most European countries where there are huge disincentives for working beyond the normal retirement age. (Get the book or this powerpoint presentation for more details – note you need to view the PP in SlideShow mode to get the full effect.)
Gruber covers all the major programs – education, social security, unemployment insurance, Medicaid and Medicare, the tax system etc. – and in each case he carefully explains the institutional details and then he evaulates the empirical evidence focusing on the most telling pieces of evidence (rather than trying to cover everything that has ever been written as in a review paper).
Gruber is so good on the empirical research that this book would be a useful supplement to an applied econometrics class. Just flipping through it and reading the boxed Empirical Evidence sections gives a good feel for what the cutting edge questions and techniques are in empirical research.
Congratulations to Gruber on a tour de force!
Can we cure world poverty for $150 billion a year?
Jeff Sachs says yes. Daniel Drezner offers excellent links, background, and context. Here is one summary of Sachs’s view:
Africa,
through no fault of its own, is trapped. Held back by geographical
impediments like climate, disease and isolation, it cannot lift itself
out of poverty. What Africa needs, then, is not more scolding from the
West. It needs a ”big push” — a flood of foreign aid — to boost its
prospects and carry it into the developed world.
Sachs’s article in this week’s Time is maddeningly vague — "Commit to the Task" and "Adopt a Plan of Action" count among the policy recommendations. But how far will $150 billion go? By Sachs’s own count, over one billion people live in extreme poverty; the next billion up would count as very poor under any Western standard. Round down grossly to a billion and you have about $150 per head per year to play with.
My take: No way.
I’ll start with two admissions. I have been an admirer of Sachs, and I don’t think all foreign aid fails. But $150 billion a year won’t get us very far.
Let’s say you had ten years’ worth of contributions upfront, and invested the whole $1500. You would be very very lucky to reap 10% a year. That is a flow of $150 in yearly living standards. It will buy some fertilizer and mosquito nets but it probably won’t up returns above the ten percent level. When the East Asian countries made beneficial social investments they grew at about ten percent per annum and that is a best case scenario.
Then come the traditional problems of foreign aid. Not only is there wastage in aid administration and poor spending patterns, but many essential services simply are not there to be purchased. Infrastructure requires complementary goods — tractors need roads, and vice versa — which means that the early stages of growth are slow and cumbersome. Furthermore very poor communities often try to convert their aid into consumption by refusing to perform maintenance on the new capital stock.
I’ll count per capita income of $1000 a year (roughly Guatemala or Morocco) as "no longer very poor." Given this number, I’ll guesstimate that Sachs’s plan would eliminate severe poverty for about five to ten percent of the one billion very poor, provided the money is spent in concentrated fashion.
Should I be reminded of James Glassman’s Dow 36,000? Sooner or later the claim will likely be true. With (or without?) an extra $150 per capita per year, most poverty will someday end. But when?
OK, you can’t judge a whole book by a Time magazine summary, especially not when it is by a thinker of Sachs’s caliber. So I’ve ordered The End of Poverty, and I will pass along any further impressions once it arrives. In the meantime, it looks as if Sachs is overselling on behalf of a noble cause.
Whatever we are going to spend fighting international poverty, I would spend on freer immigration, keeping in mind that ongoing remittances will kick in over time. We also could send a small military mission to Darfur, and focus our aid on one "doable" country or region. I am a believer in demonstration effects; get it right once, and the world will beat a path to your door.
Addendum: Matt Yglesias offers his views, and William Easterly’s review is very critical of Sach’s policy suggestions.
Camille Paglia on poetry
In my new book, Break, Blow, Burn, I offer
line-by-line close readings of 43 poems, from canonical Renaissance
verse to Joni Mitchell’s Woodstock, which became an anthem for my
conflicted generation. In gathering material, I was shocked at how weak
individual poems have become over the past 40 years. Our most honoured
poets are gifted and prolific, but we have come to respect them for
their intelligence, commitment and the body of their work. They ceased
focusing long ago on production of the powerful, distinctive,
self-contained poem. They have lost ambition and no longer believe they
can or should speak for their era. Elevating process over form, they
treat their poems like meandering diary entries and craft them for
effect in live readings rather than on the page. Arresting themes or
images are proposed, then dropped or left to dribble away. Or, in a
sign of lack of confidence in the reader or material, suggestive points
are prosaically rephrased and hammered into obviousness. Rote formulas
are rampant – a lugubrious victimology of accident, disease, and
depression or a simplistic, ranting politics (people good, government
bad) that looks naive next to the incisive writing about politics on
today’s op-ed pages. To be included in this book, a poem had to be
strong enough, as an artefact, to stand up to all the great poems that
precede it. One of my aims is to challenge contemporary poets to
reassess their assumptions and modus operandi.In
the 1990s, poetry as performance art revived among young people in
slams recalling the hipster clubs of the Beat era. As always, the
return of oral tradition had folk roots – in this case the incantatory
rhyming of African-American urban hip-hop. But it’s poetry on the page
– a visual construct – that lasts. The eye, too, is involved. The
shapeliness and symmetry of the four-line ballad stanza once structured
the best lyrics of rhythm and blues, gospel, Country and Western music,
and rock’n’roll. But with the immense commercial success of rock music,
those folk roots have receded, and popular songwriting has grown weaker
and weaker.
Read more here. And here is the Amazon link, if you are willing to pre-order on the presumption that the book actually appears; Publishers Weekly gives the release date as April 1…
Thanks to www.politicaltheory.info for the pointer.
What I’ve been reading
The Big Picture: The New Logic of Money and Power in Hollywood, by Edward Jay Epstein. Why is opening weekend so important? "The benefits of prolonging a film’s run in the theaters are now negated by the loss that would be sustained by delaying its video opening past the point at which it can benefit from the movie’s advertising campaign." This is the best available work on the economics of cinema. How many books cite both Arnold Schwarzneger and Mises’s discussion of non-pecuniary goods?
King Lear: This is about my fifth reading. I had never fully realized that Lear had incestuous relationships with at least one of his daughters (for instance check out 1:2, 150-152, 1:4, 176-182, plus the entire Oedipus analogy). Furthermore he was ready to sell out his country to the French. Edmund, Goneril and Regan were not so bad after all.
Handbook of Economic Sociology, second edition, edited by Neil Smelser and Richard Swedberg. Yelp if you wish, but I see sociology as the most underrated social science. It is (some) sociologists who are the problem. Most of the advances in economics over the last fifteen years have actually come in sociology done by economists. Just look at Steve Levitt or behavioral economics. Since economists have not discovered any new "core mechanisms" since herd behavior (circa 1989 or so), I expect quantitative sociology to whup our collective behinds over the next twenty years. The only question is who will be doing it, us or them.
Art: A Field Guide, by Robert Cumming. This has been my favorite bedtime reading book of the last twenty years. The book gives two or three succinct paragraphs on why each of about 1500 famous artists is good, bad, or somewhere in between. No cultural relativism here, and obviously the guy should start a blog. Few good pictures are included, so you do need to know the works of the artists.
Pol Pot: Anatomy of a Nightmare, by Philip Short. One of the best studies of the anatomy of evil, the psychology of colonialism, and twentieth century Cambodian history.
What I wish I was reading: Going Sane, by Adam Phillips. I read all his books the day they fall into my hands. Phillips, a psychoanalyst for children, is the master of witty and paradoxical observations about human nature. I am told that this new book offers a partial "recipe for contentment," but so far it is available only in the U.K. and perhaps Commonwealth countries.
Are economists better at games?
"In poker, world champion of poker, Chris "Jesus" Ferguson, has his PhD in Computer Scientist from UCLA and his father teaches game theory there. He and his father have co-authored an article on Borel and von Neumann’s models of poker, and from what I’ve been able to gather, Ferguson’s style of play draws heavily from game theory. He and his father also show why the very best poker players in the world play a very aggressive game (actualy, Borel and Nash showed it, but Ferguson and his dad helped translate it for me) where optimal playing is actually to bluff *a lot* (more than you might think), even though every single book out there that teaches you how to play Texas Holdem recommends a conservative "tight aggressive" strategy. Game theory suggests to raise (in limit poker) with your absolute dead worst hands a lot more than people usually feel comfortable doing – but this is exactly the behavior of the greatest, like Doyle Branson, Gus Hansen, and TJ Coultier. So, I can buy that economics and game theory more generally should make one the better player. But, it’s also interesting to note that the world’s best poker theorists (David Sklansky) is criticized for not being able to pull it off in real play. It’s not enough to actually know the opimal move; it takes a certain level of openness to variance to be truly great at poker. So I suspect it’s a mix of heart and head, and game theory can only take you to the water, but not help you drink."
George Bush and Reason
Reason magazine asks well-known libertarian bloggers and others (including Vernon Smith, Nadine Strossen, Virginia Postrel, Jacob Levy, Daniel Drezner, Glenn Reynolds, and yours truly) to state their biggest hopes and fear for the next four years. Thanks to Daniel Drezner for the pointer.
And if you like Reason, check out the new volume Choice: The Best of Reason, edited by Nick Gillespie.
Is Ayn Rand important?
No, I don’t mean historically, but rather as a thinker to read today. Bryan Caplan tells me this is the one hundredth anniversary of her birthday, so here are my bottom lines:
1. Her greatest strength: Her analysis of the mentality of resentment. She is, oddly, best as a sociologist, albeit in fictional settings. Wesley Mouch is a brilliant character in his loathesomeness. Her treatment of cocktail party conversations, while unintentional ridiculous parodies, also point to sad truths.
2. Her worst intellectual tendencies: The competition here is strong. One could list sheer dogmatism, a necessity to make everything black or white, or an unwillingness to read others carefully or charitably. More specifically, I will cite her tendency to redefine any favorable aspect of altruism as something other than altruism.
3. What do you really learn from her? Most of her formal philosophy is wrong or at the very least underargued. The true take-away message is a reaffirmation of how the enormous productive powers of capitalism — the greatest force for human good ever achieved — rely on the driving human desire to be excellent. I don’t know of any better celebration of that combination of forces.
4. Her quirkiest yet correct view: That landing on the moon was an intrinsically wonderful thing to do, and libertarian objections be damned.
5. Her quirkiest yet incorrect view: That Mickey Spillane was a titan of American literature.
Addendum: Here are Bryan’s bottom lines, which with I cannot agree. Try Alex also, directly above. Here is Steve Chapman on whether Rand has gone mainstream. Reason magazine weighs in too. And here isa humorous treatment of Rand on food.
Do MacArthur Awards stimulate genius?
As part of a program widely known as genius grants, the John D. and Catherine T. MacArthur Foundation most years gives one or more authors $500,000, hoping financial freedom will help the writers produce their best work.
An examination of the program, however, reveals that most of the 31 writers chosen since 1981 as MacArthur Fellows had already hit their artistic peak. That conclusion is supported by the 14 major awards – either a Pulitzer Prize, National Book Award, National Book Critics Circle Award or PEN/Faulkner prize – and 37 minor awards the authors received before getting their MacArthur money.
Surveying book reviews, author profiles and the opinions of literary scholars, Crain’s determined that 88% of the MacArthur recipients wrote their greatest works before being recognized by the Chicago-based foundation. The sheer number of books produced by the writers declined, too, after their MacArthur awards.
It would reinforce romantic notions that great art requires personal sacrifice to suggest that, half-a-million dollars in hand, writers get lazy. But something else appears to account for the failure of the MacArthur program to fulfill its promise: Writers are mostly chosen too late in their careers, average age 48, and well after the literary establishment has recognized them for excellence.
Daniel Drezner offers further commentary. I see two options. Either the prizes stimulate genius by paying rewards ex post, or we would be better served by scattering smaller grants to a greater number of unknown writers. Ex ante subsidies do better than ex post prizes when the relevant creators are liquidity constrained. That is, without the upfront grant, a great but still obscure writer might have to drop out of the game for lack of money. Since that is a plausible description of the market for fiction, most prizes and grants in this area should take more chances. Tenured academics, in contrast, are not usually liquidity constrained (unless they have expensive lab bills); ex post prizes will work better for them.
That being said, it is easy to see why foundations — which involve accountability to a board of trustees — might prefer a more conservative approach. Yes a foundation may care about the world, but it must also support its own reputation, generate favorable publicity, and build a "ruling coalition" which reaps reputational awards from making quality grants. All of these factors will militate in favor of awards to established producers. When accountability is in place, who will opt for a very risky investment which fails in at least ninety percent of all cases?
Murakami and Kafka
The most important fact we gleaned from the records was that, medically speaking, the incident had caused no lasting impact on the children. From right after the event to the present day, the examination and tests consistently indicated no internal or external abnormalities. The children were leading healthy lives, just as they had before the incident. Detailed examinations revealed that several of the children had parasites, but nothing out of the ordinary…The one notable thing was that the two-hour span during which the children had been unconscious in the hills was erased from their memory. As if that part had been extracted in toto. Rather than a memory loss, it was more a memory lack.
That is from Haruki Murakami’s new Kafka on the Shore.
He is one of the few contemporary writers always worth reading. His Underground: The Tokyo Gas Attack and the Japanese Psyche is a minor (and neglected) classic of social science. Or do you love intellectual-geeky science fiction, but think you have run dry? Try his Hard-Boiled Wonderland and the End of the World. The best "literary" introduction is probably A Wild Sheep Chase.
If I believed in Austrian business cycle theory
1. I would think that Asian central banks, by buying U.S. dollars, have been driving a massive distortion of real exchange and interest rates.
2. I would think that the U.S. economy is overinvested in non-export durables, most of all residential housing.
3. I would think that we have piled on far too much debt, in both the private and public sectors.
4. I would think these trends cannot possibly continue. Asian central banks may come to their senses. Furthermore the U.S. would be like an addict who needs an ever-increasing dose of the monetary fix. This, of course, would eventually prove impossible.
5. I would think that the U.S. economy is due for a dollar plunge, and a massive sectoral shift toward exports. Furthermore I would think it will not handle such an unexpected shock very well.
6. I would buy puts on T-Bond futures and become rich.
7. I would think that Hayek’s Monetary Nationalism and International Stability, now priced at $70 a copy, is the secret tract for our times.
Of course that is not me. But at least someone appears to believe in Austrian business cycle theory. By the way, here is one summary of the theory, although I do not agree with the characterization in all respects.
The Alphabet Diet
Eric Husman writes to me:
I have a personal theory I call the Alphabet Diet. I always begin with the fact that everyone who is eating anything is "on" a diet, and that when people do what is considered to be "going on" a diet, they are really *changing* their diet. I think the reason that most diets work at first is that they require you to change your eating habits. Since you are unfamiliar with the new rules, you basically cut back on the number of calories because you don’t know what’s "legal" and are confined to collections of suggested recipes based on a best-selling author’s preferences. As you discover foods within the diet that you like, you gradually get back to your previous calorie intake, i.e. you learn to "game" the diet. So I suggest that if you picked five letters at random from the alphabet and confine your diet to foods whose name does not contain those letters, you will see the same initial effects as the Atkins or any other diet. If the diet ceases to be effective, pick 5 new letters. It’s hard to write a best-selling book based on a principle that simple because there is no pseudo-scientific justification for random letters that will dazzle your would-be readership.
This is simple to graph with indifference curves. If you deny a person her ideal point, given previous income and prices, that person will then eat less. Over time, learning effects can counteract this tendency to some degree.
Here is my previous post on why the diet you choose does not seem to matter much.
Freezing social security benefits in real terms
Wednesday I reported on the Bush Administration plan to check the growth of social security benefits. To take an extreme version of the idea, what if nominal benefits rose with the price index rather than with the general level of wages? Real benefits then would be constant rather than rising over time.
I see the following possible problems:
1. Perhaps the elderly face rates of price inflation (e.g., health care, personal servants) above and beyond the measured CPI.
2. It is unjust to keep our real contribution to the elderly constant over time.
3. The elderly will suffer a negative relative status effect. Everyone else will have nanotechnology robots, but the elderly in 2075 will not. They will be left behind.
4. The value of the social security program will grow small, in real terms, relative to the economy as a whole.
On #1, we should be willing to make all required differential adjustments (email me if you know a good source on rates of price inflation faced by the elderly, and yes it must adjust for changes in medical technology). On #2, I will grant the point but dollars can be used to fight many injustices. Rising real benefits, although "automatic" on today’s books, are in fact a new expenditure and should be evaluated as such. It is unlikely that this is the best anti-poverty program we can devise. Plus the elderly will enjoy a rising standard of living, over time, as the economy grows wealthier and they can save more when young. #3 boils down to #2. #4 is not a problem per se, if it results from growing riches. And note that price indexing would not kick in until the more distant future.
The real issue, I suspect, boils down to medical care. Many life-saving improvements are falling in price in real terms (what did a triple bypass cost in 1940? — infinity). So we encounter more opportunities to prolong lives. But if benefits are fixed in real terms, not all of these opportunities can be exploited. That is, more people will use the new improvements, but constant benefit levels mean that access will be more differential than if real benefits would rise. Are you prepared for this?
If you are a critic, here is the real problem. The most important service for many of the elderly is health care. Yet price indices are notoriously inaccurate and unjust when many prices are falling from levels of "infinity" to "very high."
The bottom line: I am ready to push the "yes button" on this change. That being said, I would use the money to address our broader fiscal problems, and not to finance a transition to government-run personalized accounts. As the economy grows, over time, we would in any case move toward a greater importance for private saving. And if you wish, bundle the whole thing with greater means-testing.
Here is a good discussion on how social security indexing works and would work under possible reforms. Here is further useful commentary. Here is Matt Yglesias on tinkering with the retirement age, another good idea. Russ Roberts offers general comments on the problem of social security, try Arnold Kling as well. Brad DeLong lays down the party line.
MarginalDevolution.com?
…if the atoms obeyed Newton’s laws, they would disintegrate whenever they bumped into another atom. What keeps two atoms locked in a stable molecule is the fact that electrons can simultaneously be in so many places at the same time that they form an electron "cloud" which binds the atoms together. Thus, the reason why molecules are stable and the universe does not disintegate is that electrons can be many places at the same time.
But if electrons can exist in parallel states hovering between existence and nonexistence, then why can’t the universe? After all, at one point the universe was smaller than an electron. Once we introduce the possibility of applying the quantum principle to the universe, we are forced to consider parallel universes.
That is from Michio Kaku’s Parallel Worlds: A Journey Through Creation, Higher Dimensions, and the Future of the Cosmos. The book offers the best popular explanation I have seen of why we may be living in a hologram. But if you wish to feel better about your intellect, and baffle your friend with a Ph.d. in physics, buy him Douglass North’s new Understanding the Process of Economic Change.
What I’ve been reading
Garry Kasparov – Garry Kasparov on Fischer, My Great Predecessors, volume 4 – Fascinating, just imagine if Beethoven had written a book on Mozart. Most of the page is chess games, but the remaining text is alone worth the price. Kasparov makes a convincing case that Fischer relied heavily on his opponent’s major blunders, and that he would have a hard time beating many of the best post-1972 players. Can a subsequent champion make such an argument and keep a gracious tone? That is just part of what makes the book so interesting. Here is one review, including an interview.
Ron Chernow – Alexander Hamilton – I’ve reached the point where I hate books on the Founding Fathers, and I vowed I would not touch this one. But I weakened and it won me over. It stands as one of the best biographies I have read, plus it is full of economic history.
Greg Behrendt and Liz Tuccillo – He’s Just Not That Into You – Natasha reads me excerpts from this at night. Recast in rational choice terms, the main point is that women suffer from weakness of will, and require exhortation to adopt higher standards. They should split up with more guys, most of whom have no intention of marrying them.
Is the postulated problem — namely excessively low female standards — well-suited for genetic fitness but not utility maximization? Or was it well-suited for hunter-gatherer society but no longer today? How elastic is the supply of quality manhood, in response to higher standards from females? Must we revise the standard economic account that males will invest too much in signaling quality?
Gregory Conko and Gregory Miller – The Frankenfood Myth: How Protest and Politics Threaten the BioTech Revolution – The title says it all, recommended. Here is a summary interview.
Temple Grandin and Catherine Johnson – Animals in Translation: Using the Mysteries of Autism to Decode Animal Behavior – Main point: animals are smarter and more sensitive than you think, most of them just happen to be autistic. After you read the book, this suddenly seems intuitively obvious. This book I could not put down, and note that one of the authors is herself autistic.
Was there an Industrial Revolution?
…the best estimates now available suggest no acceleration in the rate of growth of national product per head in the later eighteenth and early nineteenth centuries, and that one of the implications of this revision of the previous orthodoxy is that the English economy…was much more productive in the middle of the eighteenth century than was once supposed…it is unlikely that England enjoyed any advantage over her neighbours in this regard in the sixteenth century. It would be a major surprise, therefore, if the revised view of the situation c.1750 did not imply that the rate of growth of national product per head for a century or more before 1750 was as high as, or higher than, it was in the century next following.
This turns the spotlight on agriculture, whose centrality to all organic economies is clear by definition. It must figure prominently in any quest for the industrial revolution, despite its apparent exclusion by the oddities of nomenclature.
There are more shocks. Between 1600 and 1800 English per capita income rose by no more than 0.35 percent a year. (At the same time population was roughly doubling, from about 4.2 to 8.7 million.) Such a measured growth rate may sound low but by the standards of the time it was miraculously high. Other economies tended to hold steady or shrink in per capita income, especially in light of growing population.
Could it be that England’s ability to manage per capita growth above zero percent, for an extended period of time, is what give birth to the modern world? Was the Netherlands, with its earlier period of growth and urbanization, in fact the true leader?
On all these issues, and many others, read the new and fascinating collection of essays by E.A. Wrigley, Poverty, Progress, and Population.