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.)


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.

Neoliberalism Link Roundup

The past week or so saw a number of pieces on neoliberalism, many in reaction to this Jonathan Chait piece. Like ‘hipster’, neoliberalism has become a term thrown about with such abandon that for many (like Chait) it’s become almost meaningless. But that may speak more to how the ideas in neoliberalism have become so commonplace, particularly among the elite, that they are now the ‘default’ view of how to organize society. This is one of the most active fault lines in the Democratic Party; while both parties once embraced neoliberalism, the Republican Party under Trump is retreating into reactionary territory.

One of the better reactions was this by Karl Smith at the Niskanen Center, the libertarianish think tank whose brand of politics I’ve become increasingly enamored with.

Further left was this response from Corey Robin at Jacobin, and this Vox piece from Mike Konczal of the Roosevelt Institute, both of which are also good perspectives.

Finally, on the more academic side is this excellent bibliographic review of neoliberalism.

In general, it’s hard to find defenders of neoliberalism these days (though there is this reddit community). Most of the enthusiasm in the Democratic Party is further on the left, and again the Republicans are becoming a party that rejects many of the basic principles of the (classical) liberal consensus. Neoliberalism is (fairly or not) associated with the entrenched political class and associated policies that led to the Great Recession.

While I can’t say exactly where I stand in all of this as yet, I can say that I am concerned with the possibility that both parties end up rejecting liberalism (again, classically; the American political use of liberal and conservative is often not helpful). Even if neoliberalism, however properly understood, has problems, it shouldn’t follow that the broader ideas of liberalism are rejected as well.

Link Roundup

There have simply been too many good pieces published lately to keep up with. Here are some that I think are worth reading, with some select quotes and commentary.

First is David Frum’s worrying cover story in the Atlantic, ‘How to Build an Autocracy’, written even before the events of the past weekend. This is essential reading. Frum, the former George W. Bush speechwriter who coined the phrase ‘axis of evil’, is certainly no left wing shill, and people of all political persuasions should take him quite seriously. A short excerpt:

Yet the American system is also perforated by vulnerabilities no less dangerous for being so familiar. Supreme among those vulnerabilities is reliance on the personal qualities of the man or woman who wields the awesome powers of the presidency. A British prime minister can lose power in minutes if he or she forfeits the confidence of the majority in Parliament. The president of the United States, on the other hand, is restrained first and foremost by his own ethics and public spirit. What happens if somebody comes to the high office lacking those qualities?

Over the past generation, we have seen ominous indicators of a breakdown of the American political system: the willingness of congressional Republicans to push the United States to the brink of a default on its national obligations in 2013 in order to score a point in budget negotiations; Barack Obama’s assertion of a unilateral executive power to confer legal status upon millions of people illegally present in the United States—despite his own prior acknowledgment that no such power existed.

Donald Trump, however, represents something much more radical. A president who plausibly owes his office at least in part to a clandestine intervention by a hostile foreign intelligence service? Who uses the bully pulpit to target individual critics? Who creates blind trusts that are not blind, invites his children to commingle private and public business, and somehow gets the unhappy members of his own political party either to endorse his choices or shrug them off? If this were happening in Honduras, we’d know what to call it. It’s happening here instead, and so we are baffled.

The entire piece must be read; Frum soberly lays out all the ways in which a Trump administration could (and probably will) be corrosive to the already very weakened structure of our democracy. But Frum reminds us, this will only come to be if we allow it. This piece should galvanize any concerned citizen into action. Whether you are conservative or liberal, the stakes here are higher than any policy preference:

Those citizens who fantasize about defying tyranny from within fortified compounds have never understood how liberty is actually threatened in a modern bureaucratic state: not by diktat and violence, but by the slow, demoralizing process of corruption and deceit. And the way that liberty must be defended is not with amateur firearms, but with an unwearying insistence upon the honesty, integrity, and professionalism of American institutions and those who lead them. We are living through the most dangerous challenge to the free government of the United States that anyone alive has encountered. What happens next is up to you and me. Don’t be afraid. This moment of danger can also be your finest hour as a citizen and an American.

Next is an excellent piece by Benjamin Wittes from the Lawfare blog, a site that is a well regarded resource on national security law, examining in detail this past weekend’s executive order. (For my own quick take, see here). Spoiler: it doesn’t come out looking good.

The malevolence of President Trump’s Executive Order on visas and refugees is mitigated chiefly—and perhaps only—by the astonishing incompetence of its drafting and construction.

I don’t use the word “malevolence” here lightly. As readers of my work know, I believe in strong counterterrorism powers. I defend non-criminal detention. I’ve got no problem with drone strikes. I’m positively enthusiastic about American surveillance policies. I was much less offended than others were by the CIA’s interrogations in the years after September 11. I have defended military commissions.

Some of these policies were effective; some were not. Some worked out better than others. And I don’t mean to relitigate any of those questions here. My sole point is that all of these policies were conceptualized and designed and implemented by people who were earnestly trying to protect the country from very real threats. And the policies were, to a one, proximately related to important goals in the effort. While some of these policies proved tragically misguided and caused great harm to innocent people, none of them was designed or intended to be cruel to vulnerable, concededly innocent people. Even the CIA’s interrogation program, after all, was deployed against people the agency believed (mostly correctly) to be senior terrorists of the most dangerous sort and to garner information from them that would prevent attacks.

I actually cannot say that about Trump’s new executive order—and neither can anyone else.

Now something shorter from Tyler Cowen at Bloomberg View on bursting the filter bubble. In these times, not only does it seem increasingly difficult but also even more essential, to understand the views of those we disagree with. When many voices in media simply cater to their viewership and have no interest in actually informing the public or engaging in a productive dialogue, how can we burst the filter bubble? Cowen recommends engaging in a version of the Ideological Turing Test. The original Turing Test is a benchmark for artificial intelligence: if an AI can, through conversation, fool a human into thinking that the AI itself is human, then it has passed the Turing Test. Similarly, the Ideological Turing Test asks us to be able to explain an opposing view in such terms that we could fool others into thinking we held that view. It’s sound advice, and I anticipate using this space in the future to experiment with such pieces.

Finally, the Niskanen Center, a libertarian think tank, has been publishing a fantastic series of pieces on liberalism. Jacob T. Levy, whose work I wrote about earlier, in particular has been very good. While nearly everything so far is worth reading, these pieces in particular are essential:

The Future of Liberalism and the Politicization of Everything: A good primer on liberalism.

A Tale of Two Moralities, Part One: Regional Inequality and Moral Polarization: Expands on many of the issues of inequality and sorting I discussed in Our Kids Are Coming Apart.

The Party Declines: A defense of party politics. Novice political observers tend to be very cynical about political parties, and imagine that a universe without party politics would be a better one. Levy mounts a convincing case for strengthening America’s political parties, which are actually very weak, and this weakness is one source of our current political dysfunction.

The Defense of Liberty Can’t Do Without Identity Politics: In the wake the 2016 election, many voices called for the left to abandon the identity politics they felt had come to dominate Clinton’s campaign and subsequently lead to her defeat. Levy assures us that identity politics are instead essential to a functioning democracy. This Vox piece is a useful companion.

The Free Society is an Open Society: In which Levy argues that a war against immigration is at its roots a war against a free society.

That’s all for now!