Trouble in Congo?

This week’s Economist has an excellent article on the situation in the Democratic Republic of Congo, where tensions seem to be rising again and the threat of large scale violence is increasing.

I suspect most Americans are unfamiliar with the wars in Congo, or have just the vague notion that such wars existed. Probably most know of the Rwandan genocide, but don’t know that it was the kicking off point for a series of conflicts often dubbed ‘Africa’s World War’.

The best book I have read on the topic is Dancing in the Glory of Monsters, and what I really appreciated about it beyond lucid prose was that the author took pains to look at the structural factors that led to such horrors. It’s far too easy to put blame on the character of individuals (‘those people are just uncivilized/animals/etc’) and miss the much larger forces at play.

For one, the actual state capacity of the Congolese state is very limited and basically exists only in the west around the capital Kinshasa. In the east, the closest thing to a state are a series of warlords that operate more or less with the blessing of President Kabila; he couldn’t do much to stop them even if he wanted to.

In fact what makes the book great is that it is in many ways a case study of what types of social structures can lead to genocide and sustained warfare; the lessons he draws are not specific to Africa. Check it out!


Some Thoughts on Altered Carbon

That is the new sci-fi series from Netflix, based on a book of the same name. I’m not particularly interested in picking apart the plot, but some of what I say is probably spoiler-territory, so I’ll put it below the fold.

Continue reading “Some Thoughts on Altered Carbon”

Sketchbook for 02/06/18


Do Immigrants Import Their Economic Destiny?

Why Open Borders is a Dangerous Idea

Twitter thread from Lyman Stone on immigration

Regional Business Cycles

Regional vs Global Business Cycles

Measuring Business Cycles Intra-Synchronization in US

Industrial Organization

Spirit Airlines v. Northwest Airlines (pdf)

Two-Sided Markets – Markets where firms need buyers on both side, e.g. Nintendo needs to attract gamers to attract developers to make games for Nintendo to sell. (Note this actually isn’t the best example because Nintendo does a lot of first party development compared with other game companies.)

US Corporate Profits as Share of GDP

Recently a number of economists have become concerned with an increase in the market power of firms, or conversely, a lack of competition in markets. This is particularly evident in the record levels of corporate profits seen over the past several years. Recall that under perfect competition firms receive no profit, which is not to say they don’t make any money, only that they make no money above and beyond what it takes to run the business and pay salaries. Given that these profits are in fact occurring, it suggests some degree of monopoly power, and monopoly power means deadweight loss. But just how large is this deadweight loss?

In the field of industrial organization, a rule of thumb is that the deadweight loss in a market is roughly half of the monopolist profit (at the profit maximizing P and Q). So a quick and dirty way to gauge this is to look at corporate profits as a share of GDP, and divide by two. Using data from FRED, the latest numbers suggest that the size of deadweight loss in the US economy is around 6%. Is this a large number?

I think it helps to put this in historical context, so below is the time series of US corporate profits as share of GDP; simply mentally divide by 2 to get the rough deadweight loss.

fredgraph (1)

If this in fact a reliable method, there appear to be three regimes: from the post war era to about 1980, the average DWL is around 5%; from 1980 to 2000 around 3-4%; and post 2000 a significant run up to 6%, with a big dip from the Great Recession.

Follow up question: how does this compare to other economies?

Sketchbook for 01/22/18

My purpose in starting this blog was mostly to have a place to sketch down my thoughts on things that interest me before they disappear into Pocket or a bookmark, never to be seen again. However, I find myself being compelled to fully finish an idea before I post anything, which has mostly led to a lot of discarded drafts that never see the light of day. I want to make an effort to be more informal, opting for more quantity than quality in the short term.

So to begin, Planet Earth II has recently made its way to Netflix, which is awesome. In the Cities episode, they examine the effect that these very strange agglomerations of hominids that we find so normal have on other animal populations. See, some animals do very well in cities; if you’re smart enough, cities have amazing reserves of food compared with the ‘natural’ environment. Think mice, birds, raccoons, squirrels, etc. One sequence of the episode highlights an Indian city where the populace deliberately feeds the local primates. In economic terms, we might say this is an exogenous shock or a resource endowment: the primate population in the city is now richer than those outside, but only because of factors outside their control. The troops in the city, thanks to they rich food environment, are able to sustain groups sizes double that of normal; females are even able to support twins.

And it got me thinking about human development, economic growth, and Malthus. Recall the ultimate message of Malthus is that absent total factor productivity growth, eg scientific advancement, societies can only grow to the carrying capacity of the environment. An increase in the amount of food available will not lead to an increased standard of living; instead, the population will increase until the minimum sustainable level of per capita wealth is reached.

So imagine the troops of early humans, and let’s say the early environment could support groups of a dozen individuals at some population density. Troops had some division of labor, like a firm, that was suited for whatever lifestyle, some kind of hunter/gatherer. Now imagine a troop comes across some land that is particularly fertile; it can support groups of up to 30 in size. Indeed, this is what we see among chimpanzees. (See here for a nice summary of chimpanzee social behavior.)

What humans have been able to do is create their own ‘resource endowments’ through technology. And I mean technology in the broadest sense; property rights are a technology, as are computers. Particularly since the Industrial Revolution, we have been able to increase the carrying capacity of the environment via sustained growth such that we’ve seen an exponential boom in the human population.

Which leads to the questions: What happens when it stops? Will it stop?

Clearing out the queue, Part 2

Examining the Link Between Science and Economic Growth: It’s all in the title.

Mapping the Yemen Conflict: A fantastic series of graphics explaining the current situation in Yemen. Couple with this primer.

Atlas of the Underworld: In another life I would have been a geologist, so I still love stuff like this: an attempt to map the remains of subducted tectonic plates across the globe.

Building Legal Order in Ancient Athens: Argues that ancient Athens was able to build a robust legal order without a centralized rule of law. Has implications for areas of the world without a tradition of a powerful centralized state; economic growth is often understood to require rule of law, and if rule of law depends upon the state, then it follows that economic growth depends upon the formation of the state. But if rule of law can be developed organically, then centralized institutions may not be necessary for growth.

How to think about Social Identities: Relevant to how to move forward from Democracy for Realists.

The Prehistory of Music: Fascinating discussion about the history and relation between language and music, and human communication more generally. Contains the conjecture that humans are the only animals to follow a beat.

On Being Midwestern: The Burden of Normality: Having split my life between the Midwest and the coasts, there was a lot in this piece that resonated with me.



My 2017 in Books

Every year I make it a personal goal to read at least 16 books, tracked with the help of With only a slight bit of cheating (I just finished up the last quarter of a book this first week of 2018), I read 17 books in 2017, and I figure I should reflect on them a bit. Broadly my reading this year fell into three categories: science fiction, history, and society/politics.

Science Fiction

First there was Dan Simmons’ Hyperion and The Fall of Hyperion, which I originally read in maybe middle school. It was interesting to see what pieces of the book I remembered vs what I had completely forgotten. I’d say Hyperion is the better of the two books, but if you don’t like cliffhanger endings you’ll have to read both. I really enjoy the world building and general premise, but I felt a bit let down by the ending. Some of the images in the book are so striking they have stuck with me for nearly two decades.

The other science fiction series I read was the Remembrance of Earth’s Past trilogy, composed of The Three-Body Problem, The Dark Forest, and Death’s End by Chinese author Cixin Liu. This was a really great series, originally published in China about a decade ago and only receiving an English translation in the last couple years. The three books manage to be very different while all telling parts of a larger story of the evolution of humanity after First Contact is made by the Chinese during the Cultural Revolution. They’re definitely worth reading so I don’t want to spoil much, but I do want to note that one thing that is so interesting about them is seeing a non-American’s speculation about how America would behave in this world. For example, in one book there is a character who is mentioned as being Secretary of Defense during America’s invasion of Venezuela. When I first read that, I initially dismissed that as the author not knowing much about US foreign policy; but once I realized the book had been written during the early phase of the Iraq War, I could no longer say it was wholly ridiculous.


Democracy for Realists: I covered in depth here on this very blog.

The Complacent Class: I always enjoy reading Tyler Cowen, and this book was no exception. While a little lighter than I had hoped, I realize I may not be the book’s intended audience.

Achieving Our Country: This book, by the late philosopher Richard Rorty, was mentioned in a lot of pieces in the wake of Trump’s election thanks to a particular prescient quote about the likelihood of a strongman politician taking power, but that was more of an aside in a book focused on healing the internecine divides on the American Left (which also turned out to be highly prescient!). I had intended to do an in depth review here, and worked quite a bit on it, but could never quite get it to gel as I wanted and abandoned it. I may try to take another crack at it, or at least clean it up and post what I can.

The Fourth Revolution: I was really disappointed in this one. It was written by two Economist writers, and it showed; that’s not bad in itself, but for a book about ‘The Global Race to Reinvent the State’, there was a distinct lack of imagination. There was some good stuff in here, but ultimately I felt let down because their idea of the Fourth Revolution of the state (the first 3 being the creation of the nation state, the creation of the liberal state, and the creation of the welfare state) was just wishy washy arguments that the state would have to become more efficient…and that was about all.

A Colony in a Nation: I thought this was fantastic. I really like Chris Hayes; while he ends up further on the left for many issues than myself, he’s always come across to me as a very thoughtful and self aware commentator. There’s a great anecdote in this book about participating in a police training simulation where he, the liberal MSNBC television host who covered the Ferguson riots in detail, ends up pulling his gun on an unarmed civilian within just a couple minutes. His earlier book, the Twilight of the Elites, probably did a better job of understanding the underlying forces leading to our current political moment than anything else written in the past 6 years, so if you want to be ahead of the curve, this book is essential as well.

The Great Transformation: This book, by Karl Polyani, lies on the boundary between society/politics and history. I’ve seen some describe it as a foundational work for the center-left akin to how Hayek’s ‘The Road to Serfdom” is for libertarians. The main thing I took away from the book is that we have to understand that the transition to a market economy can be a very painful thing for the people living through it. There’s a tendency to look fondly back on the Industrial Revolution as an era of great opportunity that pulled people away from the countryside into the cities, but Polyani reminds us that the actual history is much messier; in England a series of laws were passed that essentially forced people off their lands and into the cities to participate in the new economy. While interesting, you could probably get away with just reading a few chapters to get the most important ideas.


SPQR: An excellent single volume history of Rome that aims to capture all aspects of Roman life, not merely a chronology of rulers. One idea in here that has stuck with me is this concept of the proto-bureaucracy present in the early Imperial period. That is, the Emperor could not just do whatever they wanted; in many ways they were mostly administering the state, ensuring that it was running effectively. Certainly Rome did not possess a large and robust bureaucracy in the way we do, but there were the beginnings of one, and it seemed to be important for the functioning of the wider Roman economy.

Free Soil, Free Labor, Free Men: By historian Eric Foner, this is a classic work that I found fascinating, and was all the more illuminating to read after Democracy for Realists. This work tells the story of the formation of the Republican Party – the last time in American history that a new major party has been created. Before this book, I held the vague impression that Republicans were basically rebranded Whigs, but Foner shows this is not at all the case. Recall that Democracy for Realists argues that much of democratic politics is based around identity concerns, not policy preferences in and of themselves. So what was able to unite disparate interests under the Republican banner? How was such a coalition assembled?

Before the Storm: A compelling narrative of the 1964 election. I wrote a little bit about it previously.

The Great Upheaval: Another narrative history, by Jay Winik. The author has a real gift for engaging prose; usually I like a little more economic and sociological interpretation of historical events rather than a focus on individuals, but Winik is so good at transporting you across time and space that I didn’t mind much. It’s just a great history, though I don’t fully buy the claims that the era of 1788-1800 was ‘the’ turning point to the modern world. Take that with a grain of salt, and enjoy being transported to a world that is far more globalized than we are used to thinking about.


Steppenwolf: I suppose I could have stuck this under science fiction, given its somewhat magical aspects, but this 1927 novel, like all of Herman Hesse’s work, stands apart. Hesse is an interesting author, and his books have the virtue of brevity; I’d recommend reading at least one in your lifetime.