Readings for Mid-July 2018

Political Philosophy:

Decentralization, Please Hold Your Applause: An interesting argument from Bryan Caplan, in response to ‘For A New Libertarian‘. Studying economics tends to push one in a libertarian direction, and I’ve become interested in the differences within the libertarian political culture, which is a strange brew of characters. A sample: “Libertarianism is a philosophy seeking better libertarians.”  A response might be, ‘if your political philosophy can never be fully realized because of human nature, maybe it isn’t a very good philosophy’. Rationalism, Pluralism, and Freedom seems applicable here.

Did the Enlightenment Give Rise to Racism?: Really great piece, one I’ll have to give a fuller reading to. The answer is no, by the way.

Economics:

A good point from Matt Yglesias:

This is something I think about often when trying to understand some phenomenon in industrial organization. I can craft a story to explain something using only economic principles, but there may just be something else entirely going on, such as legal restrictions, deep cultural barriers, or ‘dark’ institutions.

Science:

What’s the Purpose of Working in the Foundations of Physics?: Answer: The only people who ask that question come from ‘funding bodies and politicians exclusively.’

The New Story of Humanity’s Origins in Africa: Ed Yong is one of the best science communicators there is. The metaphor of the braided river is the best there is for understanding species evolution. While I think the mental device of the replicator is one of the great tools of evolutionary thinking, and is underrated generally as an explanatory principle, it becomes less useful when thinking about systems evolution. The relevance is that a theory of a continent-wide origin of modern humanity in Africa, or ‘African multiregionalism’, is currently being refined which uses this metaphor for its logic. Original study here, open access.

Scientists use caffeine to control genes: Pretty cool, geneticists have been able to create genes that are activated by the presence of a particular stimulus. In this instance, rats were implanted with cells that would produce insulin in the presence of caffeine. Caffeine has great practical properties to be such a stimulus: it has low toxicity, is cheap and prevalent in the market place already (but not so prevalent as to be everywhere). Until gene therapy advances further, such a solution to diabetes could prove far better than the current system of external injections.

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Links for June’s End

Economics

The Elusive Quest for Prosperity in Mexico: Typically excellent article from Dani Rodrik serving as the preface to a surely fascinating book on development in Mexico by economist Santiago Levy.

Using Cladistics in Economics: As a formally trained evolutionary biologist turned economist, I’m always thinking about what economics can learn from biology.

The Dramatic Expansion of Corporate Bonds: It seems that in the post-Recession world of low interest rates and increased bank regulation, investors have turned to other instruments in the search for yield. Whether this is good or bad remains to be seen, but it should remind us that we can’t simply regulate away risk, and trying to clamp down too hard in one part of the economy (here, banks) just funnels activities into other parts of the economy that may be less desirable socially.

Jawboning Makes a Comeback: It wasn’t that long ago that common sense dictated that the control of inflation lay with the government, and not the central bank. Today it seems almost unimaginable for the government to dictate wage or price levels, and yet it was so as recently as the 1970s. Even when not directly controlling price levels, it was common practice for elected officials to conference with business leaders to convince them of the wisdom of a particular path. It is this latter practice that seems to be coming back into vogue, particularly in Japan.

A Bombshell Evaluation of Community Driven Development: CDD has been one of the trends in development policy, and it makes intuitive sense. Rather than dumping money into an outside entity for projects often totally divorced from the desires of a community, CDD aims to directly engage with the local people and work to give them what they need. Alas, outcomes on net don’t seem to have that much impact, though there are some positives.

Politics

How the Watergate Babies Broke American Politics: A really interesting history of the post-Watergate era, perhaps underappreciated in explaining how we got to where we are. File under ‘law of unintended consequences’.

Linguistics and the Second Amendment: Index to a series of posts using linguistic study to interpret the contemporary meaning of the notoriously vague Second Amendment. I love the idea of using the wealth of texts (via ‘big data’) from the end of the 18th century to try and situate the precise meaning of phrases that may have otherwise been lost to time.

When is Nationalism a Good Thing?: Short interview with the author of the new book Nation Building. Those of a liberal persuasion tend to be skeptical of nationalism, but there may be instances where it can be useful. In other words, we should think of nationalism as a means, not an end.

Potpourri

The Zen of Chaos: A theory of experimental/noise music.

Exploring the Digital Ruins of ‘Second Life’: For those of us old enough to remember the first days of the world wide web, the decay of Second Life presented here reminds me of the now lost dream of that early time. A truly free, open web of the kind that Second Life epitomized never came to fruition; instead, it seems more and more likely the future of the internet will be increasingly gated, accessed only through semi-curated platforms: YouTube, Facebook, etc.

 

Readings for June 4

Jiang Shigong: ‘Philosophy and History: Interpreting the “Xi Jinping Era” through Xi’s Report to the Nineteenth National Congress of the CCP: An English translation of a recent work of Chinese scholarship on ‘Xi Jinping thought’; the preface by the translators is probably enough for most, though the text itself is very interesting in seeing a Xi sympathetic scholar lay out his case.

Meanwhile, this week’s Economist cover story is a terrifying piece of reporting on how China has turned Xinjiang into a police state like no other. Truly scary stuff.

And while we’re talking about countries with heavy state intervention in the economy, the Trump administration is considering using wartime rules to prevent coal plants from being closed due to…being unprofitable. That’s right, the President and his Energy Secretary, Rick Perry, feel that ‘national security’ will require power grid operators to buy energy from a list of operators of their choosing, based on ‘reliability’, which they define as being a coal plant. It’s hard not to be cynical when, as this Ars Technica article points out, this is only the latest legal attempt by Perry to favor coal plants:

Initially, Perry issued a politically charged memo commissioning a study to find the regulatory causes of coal retirements. The resulting study, however, said that no particular regulation was causing coal plants to retire: instead the cheap cost of natural gas was convincing power companies to switch over to that fuel. Perry then proposed a rule that would require power purchasers to compensate coal and nuclear plants over and above the compensation they were already due for their part in supplying “baseload” energy. However, the rule had to be approved by the Federal Energy Regulatory Commission (FERC), and that regulatory body found that there wasn’t sufficient evidence to approve Perry’s rule.

Failing that, coal and nuclear plant operator FirstEnergy requested that the DOE use an emergency order to bail out one of the company’s subsidiaries shortly before it declared bankruptcy. In April, E&E News reported that an interagency group was exploring the use of the Defense Production Act, which gives the president broad power to boost industries that are deemed necessary for national defense.

This Washington Post article puts the move in the larger context of Trump’s efforts to more directly pick winners and losers in the economy, such as with recent moves on tariffs and false attacks on Amazon and the USPS. Of course, this is directly at odds with decades of Republican party ideology. But, as we’ve learned from the political sociology literature highlighted in books like Democracy for Realists, it seems that most people come to political economy views after identifying with their party. If so, we should expect that most Republicans actually don’t care that much about government intervention in markets.

 

Clearing out the queue, late spring 2018

Why did the human brain evolve its large size? An answer from ecology and culture. While the need for the brain to accommodate complex social interactions has long been an explanation with intuitive appeal, the authors here argue, using quantitative models, that social cooperation actually decreases the need for a large brain (computation can be shared among peers); instead, a combination of ecological and social challenges leads to increased brain size in their model. It’s fairly well established at this point that early humans inhabited a world of changing climate; the ability to understand, predict, and accommodate a high variability environment was certainly crucial for the survival of our species. It’s nice to see explicit modeling being used here; in evolutionary history, it’s far too easy to come up with multiple, often conflicting, explanations for phenomena using dreaded ‘Just So‘ stories.

Does economics matter?  I just recently had a conversation along these lines, about how depressing following politics is when you start to understand how the economy works; basically nobody in political power ever talks about any economic issues seriously, ever. But perhaps, as is argued here, this is somewhat of a category mistake. Politics is almost never about policy; it’s about identity, community, morality, who deserves to be raised and lowered in status, etc. For whatever reason, politicians often feel the need to wrap economic language around these topics. Immigration policy, for example, is often framed as an American jobs protection issue, despite the preponderance of evidence that immigration is good for local economies; people are somewhat reluctant to come out and say what they really mean (though Trump is changing that), and using more ‘neutral’ economic language gives them some cover (whether consciously or not).

Adding to the pile of articles on neoliberalism is this one: ‘Neo- and Other Liberalisms‘. A sample:

So the notion that “neoliberalism” has any definite meaning is as misguided as the notion that “liberalism” has any definite meaning. “Neoliberalism” now serves primarily as a term of abuse for leftists to impugn the motives of their ideological and political opponents in exactly the same way that right-wingers use “liberal” as a term of abuse — there are so many of course — with which to dismiss and denigrate their ideological and political opponents.

But despite my disclaimer that there is no fixed, essential, meaning of “liberalism,” I want to suggest that it is possible to find some common thread that unites many, if not all, of the disparate strands of liberalism. I think it’s important to do so, because it wasn’t so long ago that even conservatives were able to speak approvingly about the “liberal democratic” international order that was created, largely thanks to American leadership, in the post-World War II era. That time is now unfortunately past, but it’s still worth remembering that it once was possible to agree that “liberal” did correspond to an admirable political ideal.

As a related aside, I’ve just begun reading Jacob T. Levy’s Rationalism, Pluralism, and Freedom, and plan to be actively working through it here in the near future. It’s a work of political theory that aims to draw out the two strands of liberalism, which as you might guess he deems ‘rationalism’ and ‘pluralism’.

An interesting long read from Politico: How the ‘Watergate Babies’ Broke American Politics. I think an underappreciated political dynamic is the structure of power within the Congress. Often our mental model of politics focuses on getting the ‘right’ person elected, and it then follows that if enough of the ‘right’ people are in a room together, they’ll do the ‘right’ thing. But the structure of how those decisions are made matter just as much, because they add an additional layer of incentives to the politician’s decision. And as we learn in economics, you cannot deduce a person’s preferences from their actions, because no decision is made in a vacuum. The thesis here is that the post Watergate generation changed the internal rules of Congress in such a manner that increased partisanship was more rewarding for politicians, setting in motion the bitter political polarization that began in earnest in the 90s.

Global genetic differentiation of complex traits shaped by natural selection in humans: In any story where a trait in a human subpopulation is to be explained by natural selection, we should always ask ourselves whether selective pressure could be strong enough to explain that trait. There is always the possibility of founder effects, genetic drift, and so on, that could be just as plausible as an adaptive response. This paper claims to show that, at least for two complex traits (height and propensity for schizophrenia), natural selection does better explain the genetic evidence than other hypotheses.

Imperialism and the Final Stage of ‘Capitalism’: Argues that blaming ‘capitalism’ for historical injustices like colonialism. imperialism, and slavery is a mostly incoherent critique. Not only is ‘capitalism’ often undefined in these critiques (and, as with neoliberalism, used more as a term of abuse than as a a signifier of a particular state of affairs), but such claims lack any sort of causal mechanism or counterfactual.

What of the supposed natural connection between “capitalism” and colonialism or imperialism? I will not deny that there is a connection between the Great Enrichment and European imperialism, but it is of an utterly different character than the connection described by Marxists. The idea that imperialism was a natural part of the internal “logic of capitalism” was made famous by J. A. Hobson and translated into the language of Marxism by Vladimir Lenin, and continues to be influential among leftist theorists and historians today. Against this, I will argue that the connection is entirely contingent. If the spread of the Great Enrichment had been wider or simply different, if the specific advances in technology and medicine had occurred with different timing, 19th century imperialism may have been far less dramatic than it in fact was. Unlike the old “logic of capitalism” arguments, in other words, I will argue that it was a matter of circumstances rather than logical necessity.

It’s time for liberals to get over Citizens United: I’ve felt for a long time Americans on the left have put way too much stock into the impact of Citizens United, and this article does a good job of making the argument that 1) Citizens really wasn’t that big a shift in the law 2) Transparency of money flows is far more important than magnitudes, and 3) the American left should engage with the law as it exists to reform public participation in campaigns. I don’t know that I agree with the author’s specific proposals, but I do appreciate the starting point.

 

Sketchbook for 02/06/18

Immigration

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.)

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.

 

 

Clearing out the queue

Having been preoccupied the last few months, I’ve accumulated quite a pile of links that I never got around to writing anything about. Rather than forget about them entirely, I want to try to at least write a little bit about them.

Five questions for Hal Varian: This is an abridged transcript of a podcast interview with Hal Varian, author of a classic economics math text and currently Google’s chief economist.

A Brief History of the Corporation: I haven’t fully digested this but I’ve gotten interested in the history of firm organization and this seems to do a good job. It can be easy to forget that the corporation had to be invented; as such, it could be that in the future, other modes of organizing economic activity may be more productive.

The General Social Complexity Factor: Discusses one of my favorite maps, the Inglehart-Welzel cultural map of the world, its relation to population history, and more generally argues for the use of more quantitative methods in history, which I am absolutely down with.

Mini-Trumps are coming up all over Europe: A short interview with Francis Fukuyama, along the lines of a previous article I wrote about here.

How Starcraft Tournament Unlocks Future of AI: I think developments in AI with gaming are underreported and suggest the potential for huge advances. The biggest example here is of course AlphaGo, the most recent iteration of which was able to completely learn and master the games of Go and Chess merely by playing against itself for a period of a few hours. Mastery of Starcraft would represent another level of abstract reasoning.

The Disney-Fox merger: I have a philosophical tension I need to resolve: on the one hand, I think the current intellectual property regime is very poorly used, and I’m very skeptical of the usefulness of patents. In particular, I think extended copyright timeframes for artistic creations like music, stories, and characters, is unnecessary and probably harmful for long term creativity. On the other hand, the very driving force behind the eternal extension of copyright, Disney, which is accused of possessing monopoly power with its impending acquisition of Fox, has been putting out really high quality stuff of late. In 2016 alone, Disney released Moana, Zootopia, and a live action Jungle Book remake, all of which are very high quality. Disney has mostly let its acquired studios like Pixar, Marvel Studios, and Lucasfilm do their own thing and release generally high quality films. Anyone with a toddler and a Netflix account knows that there is a lot of plain crap out there when it comes to children’s entertainment. So this doesn’t appear to be a simple smash and grab corporate maneuver, with a large company buying out smaller competitors and draining them of their lifeforce in search of greater profits; I suspect that in a world of easy access to entertainment, quality matters much more than it used to, and it could be that bigger studios are in a better position to deliver that.

Related to that is this blogpost on the message of Moana, which I found a rather striking inversion of the usual hero’s journey story; the post also features the idea of Tyler Cowen. Can we just pause to think how great it is that we have a giant corporation producing commercial content featuring messages of diversity, understanding, and non-complacency?

18 Signs You’re Reading a Bad Criticism of Economics: This is older but still highly relevant, particularly number 6: “Uses the word ‘neoliberal’ for any reason.”

I’m not sure how to summarize ‘Imagine All the Virtues‘ other than to say it’s a discussion of the need for practical ethics and morality in society, contra idealized versions; featuring a guest appearance of the classic Star Trek: TNG episode “Darmok”.

I thought these colorized math equations were really neat and helpful. I’ve always been able to do math without much problem, but as I’ve gotten deeper into economics I’ve wanted to get a stronger intuition into how lots of these equations work.

And along those lines, I recently discovered this playlist of videos on Linear Algebra, and it’s no exaggeration to say this has been more helpful to me than any math class I have ever taken. If I ever have to teach linear algebra, you can bet these videos will be assigned.