nhaliday + markets   144

Overcoming Bias : What’s So Bad About Concentration?
And occurs to me to mention that when these models allow “free entry”, i.e., when the number of firms is set by the constraint that they must all expect to make non-negative profits, then such models consistently predict that too many firms enter, not too few. These models suggest that we should worry more about insufficient, not excess, concentration.
ratty  hanson  economics  industrial-org  contrarianism  critique  models  GT-101  game-theory  examples  market-power  rent-seeking  regulation  increase-decrease  signum  error  markets  biases  efficiency 
6 weeks ago by nhaliday
Harnessing Evolution - with Bret Weinstein | Virtual Futures Salon - YouTube
- ways to get out of Malthusian conditions: expansion to new frontiers, new technology, redistribution/theft
- some discussion of existential risk
- wants to change humanity's "purpose" to one that would be safe in the long run; important thing is it has to be ESS (maybe he wants a singleton?)
- not too impressed by transhumanism (wouldn't identify with a brain emulation)
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april 2018 by nhaliday
Antinomia Imediata – experiments in a reaction from the left
https://antinomiaimediata.wordpress.com/lrx/
So, what is the Left Reaction? First of all, it’s reaction: opposition to the modern rationalist establishment, the Cathedral. It opposes the universalist Jacobin program of global government, favoring a fractured geopolitics organized through long-evolved complex systems. It’s profoundly anti-socialist and anti-communist, favoring market economy and individualism. It abhors tribalism and seeks a realistic plan for dismantling it (primarily informed by HBD and HBE). It looks at modernity as a degenerative ratchet, whose only way out is intensification (hence clinging to crypto-marxist market-driven acceleration).

How come can any of this still be in the *Left*? It defends equality of power, i.e. freedom. This radical understanding of liberty is deeply rooted in leftist tradition and has been consistently abhored by the Right. LRx is not democrat, is not socialist, is not progressist and is not even liberal (in its current, American use). But it defends equality of power. It’s utopia is individual sovereignty. It’s method is paleo-agorism. The anti-hierarchy of hunter-gatherer nomads is its understanding of the only realistic objective of equality.

...

In more cosmic terms, it seeks only to fulfill the Revolution’s side in the left-right intelligence pump: mutation or creation of paths. Proudhon’s antinomy is essentially about this: the collective force of the socius, evinced in moral standards and social organization vs the creative force of the individuals, that constantly revolutionize and disrupt the social body. The interplay of these forces create reality (it’s a metaphysics indeed): the Absolute (socius) builds so that the (individualistic) Revolution can destroy so that the Absolute may adapt, and then repeat. The good old formula of ‘solve et coagula’.

Ultimately, if the Neoreaction promises eternal hell, the LRx sneers “but Satan is with us”.

https://antinomiaimediata.wordpress.com/2016/12/16/a-statement-of-principles/
Liberty is to be understood as the ability and right of all sentient beings to dispose of their persons and the fruits of their labor, and nothing else, as they see fit. This stems from their self-awareness and their ability to control and choose the content of their actions.

...

Equality is to be understood as the state of no imbalance of power, that is, of no subjection to another sentient being. This stems from their universal ability for empathy, and from their equal ability for reason.

...

It is important to notice that, contrary to usual statements of these two principles, my standpoint is that Liberty and Equality here are not merely compatible, meaning they could coexist in some possible universe, but rather they are two sides of the same coin, complementary and interdependent. There can be NO Liberty where there is no Equality, for the imbalance of power, the state of subjection, will render sentient beings unable to dispose of their persons and the fruits of their labor[1], and it will limit their ability to choose over their rightful jurisdiction. Likewise, there can be NO Equality without Liberty, for restraining sentient beings’ ability to choose and dispose of their persons and fruits of labor will render some more powerful than the rest, and establish a state of subjection.

https://antinomiaimediata.wordpress.com/2017/04/18/flatness/
equality is the founding principle (and ultimately indistinguishable from) freedom. of course, it’s only in one specific sense of “equality” that this sentence is true.

to try and eliminate the bullshit, let’s turn to networks again:

any nodes’ degrees of freedom is the number of nodes they are connected to in a network. freedom is maximum when the network is symmetrically connected, i. e., when all nodes are connected to each other and thus there is no topographical hierarchy (middlemen) – in other words, flatness.

in this understanding, the maximization of freedom is the maximization of entropy production, that is, of intelligence. As Land puts it:

https://antinomiaimediata.wordpress.com/category/philosophy/mutualism/
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march 2018 by nhaliday
Prisoner's dilemma - Wikipedia
caveat to result below:
An extension of the IPD is an evolutionary stochastic IPD, in which the relative abundance of particular strategies is allowed to change, with more successful strategies relatively increasing. This process may be accomplished by having less successful players imitate the more successful strategies, or by eliminating less successful players from the game, while multiplying the more successful ones. It has been shown that unfair ZD strategies are not evolutionarily stable. The key intuition is that an evolutionarily stable strategy must not only be able to invade another population (which extortionary ZD strategies can do) but must also perform well against other players of the same type (which extortionary ZD players do poorly, because they reduce each other's surplus).[14]

Theory and simulations confirm that beyond a critical population size, ZD extortion loses out in evolutionary competition against more cooperative strategies, and as a result, the average payoff in the population increases when the population is bigger. In addition, there are some cases in which extortioners may even catalyze cooperation by helping to break out of a face-off between uniform defectors and win–stay, lose–switch agents.[8]

https://alfanl.com/2018/04/12/defection/
Nature boils down to a few simple concepts.

Haters will point out that I oversimplify. The haters are wrong. I am good at saying a lot with few words. Nature indeed boils down to a few simple concepts.

In life, you can either cooperate or defect.

Used to be that defection was the dominant strategy, say in the time when the Roman empire started to crumble. Everybody complained about everybody and in the end nothing got done. Then came Jesus, who told people to be loving and cooperative, and boom: 1800 years later we get the industrial revolution.

Because of Jesus we now find ourselves in a situation where cooperation is the dominant strategy. A normie engages in a ton of cooperation: with the tax collector who wants more and more of his money, with schools who want more and more of his kid’s time, with media who wants him to repeat more and more party lines, with the Zeitgeist of the Collective Spirit of the People’s Progress Towards a New Utopia. Essentially, our normie is cooperating himself into a crumbling Western empire.

Turns out that if everyone blindly cooperates, parasites sprout up like weeds until defection once again becomes the standard.

The point of a post-Christian religion is to once again create conditions for the kind of cooperation that led to the industrial revolution. This necessitates throwing out undead Christianity: you do not blindly cooperate. You cooperate with people that cooperate with you, you defect on people that defect on you. Christianity mixed with Darwinism. God and Gnon meet.

This also means we re-establish spiritual hierarchy, which, like regular hierarchy, is a prerequisite for cooperation. It is this hierarchical cooperation that turns a household into a force to be reckoned with, that allows a group of men to unite as a front against their enemies, that allows a tribe to conquer the world. Remember: Scientology bullied the Cathedral’s tax department into submission.

With a functioning hierarchy, men still gossip, lie and scheme, but they will do so in whispers behind closed doors. In your face they cooperate and contribute to the group’s wellbeing because incentives are thus that contributing to group wellbeing heightens status.

Without a functioning hierarchy, men gossip, lie and scheme, but they do so in your face, and they tell you that you are positively deluded for accusing them of gossiping, lying and scheming. Seeds will not sprout in such ground.

Spiritual dominance is established in the same way any sort of dominance is established: fought for, taken. But the fight is ritualistic. You can’t force spiritual dominance if no one listens, or if you are silenced the ritual is not allowed to happen.

If one of our priests is forbidden from establishing spiritual dominance, that is a sure sign an enemy priest is in better control and has vested interest in preventing you from establishing spiritual dominance..

They defect on you, you defect on them. Let them suffer the consequences of enemy priesthood, among others characterized by the annoying tendency that very little is said with very many words.

https://contingentnotarbitrary.com/2018/04/14/rederiving-christianity/
To recap, we started with a secular definition of Logos and noted that its telos is existence. Given human nature, game theory and the power of cooperation, the highest expression of that telos is freely chosen universal love, tempered by constant vigilance against defection while maintaining compassion for the defectors and forgiving those who repent. In addition, we must know the telos in order to fulfill it.

In Christian terms, looks like we got over half of the Ten Commandments (know Logos for the First, don’t defect or tempt yourself to defect for the rest), the importance of free will, the indestructibility of evil (group cooperation vs individual defection), loving the sinner and hating the sin (with defection as the sin), forgiveness (with conditions), and love and compassion toward all, assuming only secular knowledge and that it’s good to exist.

Iterated Prisoner's Dilemma is an Ultimatum Game: http://infoproc.blogspot.com/2012/07/iterated-prisoners-dilemma-is-ultimatum.html
The history of IPD shows that bounded cognition prevented the dominant strategies from being discovered for over over 60 years, despite significant attention from game theorists, computer scientists, economists, evolutionary biologists, etc. Press and Dyson have shown that IPD is effectively an ultimatum game, which is very different from the Tit for Tat stories told by generations of people who worked on IPD (Axelrod, Dawkins, etc., etc.).

...

For evolutionary biologists: Dyson clearly thinks this result has implications for multilevel (group vs individual selection):
... Cooperation loses and defection wins. The ZD strategies confirm this conclusion and make it sharper. ... The system evolved to give cooperative tribes an advantage over non-cooperative tribes, using punishment to give cooperation an evolutionary advantage within the tribe. This double selection of tribes and individuals goes way beyond the Prisoners' Dilemma model.

implications for fractionalized Europe vis-a-vis unified China?

and more broadly does this just imply we're doomed in the long run RE: cooperation, morality, the "good society", so on...? war and group-selection is the only way to get a non-crab bucket civilization?

Iterated Prisoner’s Dilemma contains strategies that dominate any evolutionary opponent:
http://www.pnas.org/content/109/26/10409.full
http://www.pnas.org/content/109/26/10409.full.pdf
https://www.edge.org/conversation/william_h_press-freeman_dyson-on-iterated-prisoners-dilemma-contains-strategies-that

https://en.wikipedia.org/wiki/Ultimatum_game

analogy for ultimatum game: the state gives the demos a bargain take-it-or-leave-it, and...if the demos refuses...violence?

The nature of human altruism: http://sci-hub.tw/https://www.nature.com/articles/nature02043
- Ernst Fehr & Urs Fischbacher

Some of the most fundamental questions concerning our evolutionary origins, our social relations, and the organization of society are centred around issues of altruism and selfishness. Experimental evidence indicates that human altruism is a powerful force and is unique in the animal world. However, there is much individual heterogeneity and the interaction between altruists and selfish individuals is vital to human cooperation. Depending on the environment, a minority of altruists can force a majority of selfish individuals to cooperate or, conversely, a few egoists can induce a large number of altruists to defect. Current gene-based evolutionary theories cannot explain important patterns of human altruism, pointing towards the importance of both theories of cultural evolution as well as gene–culture co-evolution.

...

Why are humans so unusual among animals in this respect? We propose that quantitatively, and probably even qualitatively, unique patterns of human altruism provide the answer to this question. Human altruism goes far beyond that which has been observed in the animal world. Among animals, fitness-reducing acts that confer fitness benefits on other individuals are largely restricted to kin groups; despite several decades of research, evidence for reciprocal altruism in pair-wise repeated encounters4,5 remains scarce6–8. Likewise, there is little evidence so far that individual reputation building affects cooperation in animals, which contrasts strongly with what we find in humans. If we randomly pick two human strangers from a modern society and give them the chance to engage in repeated anonymous exchanges in a laboratory experiment, there is a high probability that reciprocally altruistic behaviour will emerge spontaneously9,10.

However, human altruism extends far beyond reciprocal altruism and reputation-based cooperation, taking the form of strong reciprocity11,12. Strong reciprocity is a combination of altruistic rewarding, which is a predisposition to reward others for cooperative, norm-abiding behaviours, and altruistic punishment, which is a propensity to impose sanctions on others for norm violations. Strong reciprocators bear the cost of rewarding or punishing even if they gain no individual economic benefit whatsoever from their acts. In contrast, reciprocal altruists, as they have been defined in the biological literature4,5, reward and punish only if this is in their long-term self-interest. Strong reciprocity thus constitutes a powerful incentive for cooperation even in non-repeated interactions and when reputation gains are absent, because strong reciprocators will reward those who cooperate and punish those who defect.

...

We will show that the interaction between selfish and strongly reciprocal … [more]
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march 2018 by nhaliday
China’s Ideological Spectrum
We find that public preferences are weakly constrained, and the configuration of preferences is multidimensional, but the latent traits of these dimensions are highly correlated. Those who prefer authoritarian rule are more likely to support nationalism, state intervention in the economy, and traditional social values; those who prefer democratic institutions and values are more likely to support market reforms but less likely to be nationalistic and less likely to support traditional social values. This latter set of preferences appears more in provinces with higher levels of development and among wealthier and better-educated respondents.

Enlightened One-Party Rule? Ideological Differences between Chinese Communist Party Members and the Mass Public: https://journals.sagepub.com/doi/abs/10.1177/1065912919850342
A popular view of nondemocratic regimes is that they draw followers mainly from those with an illiberal, authoritarian mind-set. We challenge this view by arguing that there exist a different class of autocracies that rule with a relatively enlightened base. Leveraging multiple nationally representative surveys from China over the past decade, we substantiate this claim by estimating and comparing the ideological preferences of Chinese Communist Party members and ordinary citizens. We find that party members on average hold substantially more modern and progressive views than the public on issues such as gender equality, political pluralism, and openness to international exchange. We also explore two mechanisms that may account for this party–public value gap—selection and socialization. We find that while education-based selection is the most dominant mechanism overall, socialization also plays a role, especially among older and less educated party members.

https://twitter.com/chenchenzh/status/1140929230072623104
https://archive.is/ktcOY
Does this control for wealth and education?
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Perhaps about half the best educated youth joined party.
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march 2018 by nhaliday
Effects of Education on Political Opinions: An International Study | International Journal of Public Opinion Research | Oxford Academic
Education and Political Party: The Effects of College or Social Class?: https://www.jstor.org/stable/2778029
The impact of education on political ideology: Evidence from European compulsory education reforms: https://www.sciencedirect.com/science/article/pii/S0272775716301704
correlation is with leftism, causal effect is shift to right

Greg thinks there are some effects: https://pinboard.in/u:nhaliday/b:5adca8f16265

https://twitter.com/GarettJones/status/964209775419457536
https://archive.is/oFELz
https://archive.is/f1DBF
https://archive.is/5iiqn

http://econlog.econlib.org/archives/2008/12/education_ideol.html

https://twitter.com/pseudoerasmus/status/963451867912130561
https://archive.is/sHI7g
https://archive.is/B5Gdv
https://archive.is/hFERC
https://archive.is/8IUDm
Bryan Caplan has written a very persuasive book suggesting that retention/transfer of learning is very low. how do we know it’s not the same with the “PoMo ethos”
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february 2018 by nhaliday
Unaligned optimization processes as a general problem for society
TL;DR: There are lots of systems in society which seem to fit the pattern of “the incentives for this system are a pretty good approximation of what we actually want, so the system produces good results until it gets powerful, at which point it gets terrible results.”

...

Here are some more places where this idea could come into play:

- Marketing—humans try to buy things that will make our lives better, but our process for determining this is imperfect. A more powerful optimization process produces extremely good advertising to sell us things that aren’t actually going to make our lives better.
- Politics—we get extremely effective demagogues who pit us against our essential good values.
- Lobbying—as industries get bigger, the optimization process to choose great lobbyists for industries gets larger, but the process to make regulators robust doesn’t get correspondingly stronger. So regulatory capture gets worse and worse. Rent-seeking gets more and more significant.
- Online content—in a weaker internet, sites can’t be addictive except via being good content. In the modern internet, people can feel addicted to things that they wish they weren’t addicted to. We didn’t use to have the social expertise to make clickbait nearly as well as we do it today.
- News—Hyperpartisan news sources are much more worth it if distribution is cheaper and the market is bigger. News sources get an advantage from being truthful, but as society gets bigger, this advantage gets proportionally smaller.

...

For these reasons, I think it’s quite plausible that humans are fundamentally unable to have a “good” society with a population greater than some threshold, particularly if all these people have access to modern technology. Humans don’t have the rigidity to maintain social institutions in the face of that kind of optimization process. I think it is unlikely but possible (10%?) that this threshold population is smaller than the current population of the US, and that the US will crumble due to the decay of these institutions in the next fifty years if nothing totally crazy happens.
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february 2018 by nhaliday
Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies? by Sean Foley, Jonathan R. Karlsen, Tālis J. Putniņš :: SSRN
Cryptocurrencies are among the largest unregulated markets in the world. We find that approximately one-quarter of bitcoin users and one-half of bitcoin transactions are associated with illegal activity. Around $72 billion of illegal activity per year involves bitcoin, which is close to the scale of the US and European markets for illegal drugs. The illegal share of bitcoin activity declines with mainstream interest in bitcoin and with the emergence of more opaque cryptocurrencies. The techniques developed in this paper have applications in cryptocurrency surveillance. Our findings suggest that cryptocurrencies are transforming the way black markets operate by enabling “black e-commerce.”
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february 2018 by nhaliday
What Peter Thiel thinks about AI risk - Less Wrong
TL;DR: he thinks its an issue but also feels AGI is very distant and hence less worried about it than Musk.

I recommend the rest of the lecture as well, it's a good summary of "Zero to One"  and a good QA afterwards.

For context, in case anyone doesn't realize: Thiel has been MIRI's top donor throughout its history.

other stuff:
nice interview question: "thing you know is true that not everyone agrees on?"
"learning from failure overrated"
cleantech a huge market, hard to compete
software makes for easy monopolies (zero marginal costs, network effects, etc.)
for most of history inventors did not benefit much (continuous competition)
ethical behavior is a luxury of monopoly
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february 2018 by nhaliday
National Defense Strategy of the United States of America
National Defense Strategy released with clear priority: Stay ahead of Russia and China: https://www.defensenews.com/breaking-news/2018/01/19/national-defense-strategy-released-with-clear-priority-stay-ahead-of-russia-and-china/

https://twitter.com/AngloRemnant/status/985341571410341893
https://archive.is/RhBdG
https://archive.is/wRzRN
A saner allocation of US 'defense' funds would be something like 10% nuclear trident, 10% border patrol, & spend the rest innoculating against cyber & biological attacks.
and since the latter 2 are hopeless, just refund 80% of the defense budget.
--
Monopoly on force at sea is arguably worthwhile.
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Given the value of the US market to any would-be adversary, id be willing to roll the dice & let it ride.
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subs are part of the triad, surface ships are sitting ducks this day and age
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But nobody does sink them, precisely because of the monopoly on force. It's a path-dependent equilibirum where (for now) no other actor can reap the benefits of destabilizing the monopoly, and we're probably drastically underestimating the ramifications if/when it goes away.
--
can lethal autonomous weapon systems get some
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january 2018 by nhaliday
Self-Serving Bias | Slate Star Codex
Since reading Tabarrok’s post, I’ve been trying to think of more examples of this sort of thing, especially in medicine. There are way too many discrepancies in approved medications between countries to discuss every one of them, but did you know melatonin is banned in most of Europe? (Europeans: did you know melatonin is sold like candy in the United States?) Did you know most European countries have no such thing as “medical school”, but just have college students major in medicine, and then become doctors once they graduate from college? (Europeans: did you know Americans have to major in some random subject in college, and then go to a separate place called “medical school” for four years to even start learning medicine?) Did you know that in Puerto Rico, you can just walk into a pharmacy and get any non-scheduled drug you want without a doctor’s prescription? (source: my father; I have never heard anyone else talk about this, and nobody else even seems to think it is interesting enough to be worth noting).

...

And then there’s the discussion from the recent discussion of Madness and Civilization about how 18th century doctors thought hot drinks will destroy masculinity and ruin society. Nothing that’s happened since has really disproved this – indeed, a graph of hot drink consumption, decline of masculinity, and ruinedness of society would probably show a pretty high correlation – it’s just somehow gotten tossed in the bin marked “ridiculous” instead of the bin marked “things we have to worry about”.
🤔🤔
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january 2018 by nhaliday
What explains the formation and decay of clusters of creativity? - Marginal REVOLUTION
Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? In this paper we match data on thousands of notable individuals born in Europe between the XIth and the XIXth century with historical data on city institutions and population. After documenting several stylized facts, we show that the formation of creative clusters is not preceded by increases in city size. Instead, the emergence of city institutions protecting economic and political freedoms facilitates the attraction and production of creative talent.

IOW, the opposite of what Dick Florida said.
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january 2018 by nhaliday
The Grumpy Economist: Bitcoin and Bubbles
Bitcoin is not a very good money. It is a pure fiat money (no backing), whose value comes from limited supply plus these demands. As such it has the huge price fluctuations we see. It's an electronic version of gold, and the price variation should be a warning to economists who long for a return to  gold. My bet is that stable-value cryptocurrencies, offering one dollar per currency unit and low transactions costs, will prosper in the role of money. At least until there is a big inflation or sovereign debt crisis and a stable-value cryptocurrency not linked to government debt emerges.

https://twitter.com/GarettJones/status/939242620869660672
https://archive.is/Rrbg6
The Kareken-Wallace Cryptocurrency Price Indeterminacy theorem will someday receive the attention it deserves

https://www.mercatus.org/system/files/cryptocurrency-article.pdf
Cryptocurrencies also raise in a new way questions of exchange rate indeterminacy. As Kareken and Wallace (1981) observed, fiat currencies are all alike: slips of paper not redeemable for anything. Under a regime of floating exchange rates and no capital controls, and assuming some version of interest rate parity holds, there are an infinity of exchange rates between any two fiat currencies that constitute an equilibrium in their model.

The question of exchange rate indeterminacy is both more and less striking between cryptocurrencies than between fiat currencies. It is less striking because there are considerably more differences between cryptocurrencies than there are between paper money. Paper money is all basically the same. Cryptocurrencies sometimes have different characteristics from each other. For example, the algorithm used as the basis for mining makes a difference – it determines how professionalised the mining pools become. Litecoin uses an algorithm that tends to make mining less concentrated. Another difference is the capability of the cryptocurrency’s language for programming transactions. Ethereum is a new currency that boasts a much more robust language than Bitcoin. Zerocash is another currency that offers much stronger anonymity than Bitcoin. To the extent that cryptocurrencies differ from each other more than fiat currencies do, those differences might be able to pin down exchange rates in a model like Kareken and Wallace’s.

On the other hand, exchange rate indeterminacy could be more severe among cryptocurrencies than between fiat currencies because it is easy to simply create an exact copy of an open source cryptocurrency. There are even websites on which you can create and download the software for your own cryptocurrency with a few clicks of a mouse. These currencies are exactly alike except for their names and other identifying information. Furthermore, unlike fiat currencies, they don’t benefit from government acceptance or optimal currency area considerations that can tie a currency to a given territory.

Even identical currencies, however, can differ in terms of the quality of governance. Bitcoin currently has high quality governance institutions. The core developers are competent and conservative, and the mining and user communities are serious about making the currency work. An exact Bitcoin clone is likely to have a difficult time competing with Bitcoin unless it can promise similarly high-quality governance. When a crisis hits, users of identical currencies are going to want to hold the one that is mostly likely to weather the storm. Consequently, between currencies with identical technical characteristics, we think governance creates something close to a winner-take-all market. Network externalities are very strong in payment systems, and the governance question with respect to cryptocurrencies in particular compounds them.

https://twitter.com/GarettJones/status/939259281039380480
https://archive.is/ldof8
Explaining a price rise via future increases in the asset's value isn't good economics. The invisible hand should be pushing today's price up to the point where it earns normal expected returns. +
I don't doubt the likelihood of a future cryptocurrency being widely used, but that doesn't pin down the price of any one cryptocurrency as the Kareken-Wallace result shows. There may be a big first mover advantage for Bitcoin but ease of replication makes it a fragile dominance.

https://twitter.com/netouyo_/status/939566116229218306
https://archive.is/CtE6Q
I actually can't believe governments are allowing bitcoin to exist (they must be fully on board with going digital at some point)

btc will eventually come in direct competition with national currencies, which will have to raise rates dramatically, or die

http://www.thebigquestions.com/2017/12/08/matters-of-money/
The technology of Bitcoin Cash is very similar to the technology of Bitcoin. It offers the same sorts of anonymity, security, and so forth. There are some reasons to believe that in the future, Bitcoin Cash will be a bit easier to trade than Bitcoin (though that is not true in the present), and there are some other technological differences between them, but I’d be surprised to learn that those differences are accounting for any substantial fraction of the price differential.

The total supplies of Bitcoins and of Bitcoin Cash are currently about equal (because of the way that Bitcoin Cash originated). In each case, the supply will gradually grow to 21 million and then stop.

Question 1: Given the near identical properties of these two currencies, how can one sell for ten times the price of the other? Perhaps the answer involves the word “bubble”, but I’d be more interested in answers that assume (at least for the sake of argument) that the price of Bitcoin fairly reflects its properties as a store of value. Given that assumption, is the price differential entirely driven by the fact that Bitcoin came first? Is there that much of a first-mover advantage in this kind of game?

Question 2: Given the existence of other precious metals (e.g. platinum) what accounts for the dominance of gold as a physical store of value? (I note, for example, that when people buy gold as a store of value, they don’t often hesitate out of fear that gold will be displaced by platinum in the foreseeable future.) Is this entirely driven by the fact that gold happened to come first?

Question 3: Are Questions 1 and 2 the same question? Are the dominance of Bitcoin in the digital store-of-value market and the dominance of gold in the physical store-of-value market two sides of the same coin, so to speak? Or do they require fundamentally different explanations?

https://twitter.com/GarettJones/status/944582032780382208
https://archive.is/kqTXg
Champ/Freeman in 2001 explain why the dollar-bitcoin exchange rate is inherently unstable, and why the price of cryptocurrencies is indeterminate:

https://twitter.com/GarettJones/status/945046058073071617
https://archive.is/Y0OQB
Lay down a marker:
And remember that the modern macro dogma is that monetary systems matter little for prosperity, once bare competence is achieved.
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december 2017 by nhaliday
What era are our intuitions about elites and business adapted to? – Gene Expression
Above natural states are open-access orders, which characterize societies that have market economies and competitive politics. Here access to the elite is open to anyone who can prove themselves worthy — it is not artificially restricted in order to preserve large rents for the incumbents. The pie can be made bigger with more people at the top, since you only get to the top in such societies by making and selling things that people want. Elite members compete against each other based on the quality and price of the goods and services they sell — it’s a mercantile elite — rather than based on who is better at violence than the others. If the elites are flabby, upstarts can readily form their own organizations — as opposed to not having the freedom to do so — that, if better, will dethrone the incumbents. Since violence is no longer part of elite competition, homicide rates are the lowest of all types of societies.

OK, now let’s take a look at just two innate views that most people have about how the business world works or what economic elites are like, and see how these are adaptations to natural states rather than to the very new open-access orders (which have only existed in Western Europe since about 1850 or so). One is the conviction, common even among many businessmen, that market share matters more than making profits — that being more popular trumps being more profitable. The other is most people’s mistrust of companies that dominate their entire industry, like Microsoft in computers.
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december 2017 by nhaliday
microeconomics - Partial vs. general equilibrium - Economics Stack Exchange
The main difference between partial and general equilibrium models is, that partial equilibrium models assume that what happens on the market one wants to analyze has no effect on other markets.
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november 2017 by nhaliday
Friedrich von Hayek, “The Use of Knowledge in Society” (1945)
“The price system is just one of those formations which man has learned to use ... Through it not only a division of labor but also a coördinated utilization of resources based on an equally divided knowledge has become possible.”

“there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made”
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november 2017 by nhaliday
Health Services as Credence Goods: A Field Experiment by Felix Gottschalk, Wanda Mimra, Christian Waibel :: SSRN
A test patient who does not need treatment is sent to 180 dentists to receive treatment recommendations. In the experiment, we vary two factors: First, the information that the patient signals to the dentist. Second, we vary the perceived socioeconomic status (SES) of the test patient. Furthermore, we collected data to construct several measures of short- and long-term demand and competition as well as dentist and practice characteristics. We find that the patient receives an overtreatment recommendation in _more than every fourth visit_. A low short-term demand, indicating excess capacities, leads to significantly more overtreatment recommendations. Physician density and their price level, however, do not have a significant effect on overtreatment. Furthermore, we observe significantly less overtreatment recommendations for the patient with higher SES compared to lower SES under standard information. More signalled information however does not significantly reduce overtreatment.

How much dentists are ethically concerned about overtreatment; a vignette-based survey in Switzerland: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4474445/
Are Dentists Overtreating Your Teeth?: https://well.blogs.nytimes.com/2011/11/28/are-dentists-overtreating-your-teeth/
Have you had a rash of fillings after years of healthy teeth? The culprit may be “microcavities,” and not every dentist thinks they need to be treated, reports today’s Science Times.
How Dentists Rip Us Off: https://www.dentistat.com/ReaderDigestArticle.pdf

https://www.npr.org/templates/story/story.php?storyId=130356647
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october 2017 by nhaliday
Definite optimism as human capital | Dan Wang
I’ve come to the view that creativity and innovative capacity aren’t a fixed stock, coiled and waiting to be released by policy. Now, I know that a country will not do well if it has poor infrastructure, interest rate management, tax and regulation levels, and a whole host of other issues. But getting them right isn’t sufficient to promote innovation; past a certain margin, when they’re all at rational levels, we ought to focus on promoting creativity and drive as a means to propel growth.

...

When I say “positive” vision, I don’t mean that people must see the future as a cheerful one. Instead, I’m saying that people ought to have a vision at all: A clear sense of how the technological future will be different from today. To have a positive vision, people must first expand their imaginations. And I submit that an interest in science fiction, the material world, and proximity to industry all help to refine that optimism. I mean to promote imagination by direct injection.

...

If a state has lost most of its jobs for electrical engineers, or nuclear engineers, or mechanical engineers, then fewer young people in that state will study those practices, and technological development in related fields slow down a little further. When I bring up these thoughts on resisting industrial decline to economists, I’m unsatisfied with their responses. They tend to respond by tautology (“By definition, outsourcing improves on the status quo”) or arithmetic (see: gains from comparative advantage, Ricardo). These kinds of logical exercises are not enough. I would like for more economists to consider a human capital perspective for preserving manufacturing expertise (to some degree).

I wonder if the so-called developed countries should be careful of their own premature deindustrialization. The US industrial base has faltered, but there is still so much left to build. Until we’ve perfected asteroid mining and super-skyscrapers and fusion rockets and Jupiter colonies and matter compilers, we can’t be satisfied with innovation confined mostly to the digital world.

Those who don’t mind the decline of manufacturing employment like to say that people have moved on to higher-value work. But I’m not sure that this is usually the case. Even if there’s an endlessly capacious service sector to absorb job losses in manufacturing, it’s often the case that these new jobs feature lower productivity growth and involve greater rent-seeking. Not everyone is becoming hedge fund managers and machine learning engineers. According to BLS, the bulk of service jobs are in 1. government (22 million), 2. professional services (19m), 3. healthcare (18m), 4. retail (15m), and 5. leisure and hospitality (15m). In addition to being often low-paying but still competitive, a great deal of service sector jobs tend to stress capacity for emotional labor over capacity for manual labor. And it’s the latter that tends to be more present in fields involving technological upgrading.

...

Here’s a bit more skepticism of service jobs. In an excellent essay on declining productivity growth, Adair Turner makes the point that many service jobs are essentially zero-sum. I’d like to emphasize and elaborate on that idea here.

...

Call me a romantic, but I’d like everyone to think more about industrial lubricants, gas turbines, thorium reactors, wire production, ball bearings, underwater cables, and all the things that power our material world. I abide by a strict rule never to post or tweet about current political stuff; instead I try to draw more attention to the world of materials. And I’d like to remind people that there are many things more edifying than following White House scandals.

...

First, we can all try to engage more actively with the material world, not merely the digital or natural world. Go ahead and pick an industrial phenomenon and learn more about it. Learn more about the history of aviation, and what it took to break the sound barrier; gaze at the container ships as they sail into port, and keep in mind that they carry 90 percent of the goods you see around you; read about what we mold plastics to do; meditate on the importance of steel in civilization; figure out what’s driving the decline in the cost of solar energy production, or how we draw electricity from nuclear fission, or what it takes to extract petroleum or natural gas from the ground.

...

Here’s one more point that I’d like to add on Girard at college: I wonder if to some extent current dynamics are the result of the liberal arts approach of “college teaches you how to think, not what to think.” I’ve never seen much data to support this wonderful claim that college is good at teaching critical thinking skills. Instead, students spend most of their energies focused on raising or lowering the status of the works they study or the people around them, giving rise to the Girardian terror that has gripped so many campuses.

College as an incubator of Girardian terror: http://danwang.co/college-girardian-terror/
It’s hard to construct a more perfect incubator for mimetic contagion than the American college campus. Most 18-year-olds are not super differentiated from each other. By construction, whatever distinctions any does have are usually earned through brutal, zero-sum competitions. These tournament-type distinctions include: SAT scores at or near perfection; being a top player on a sports team; gaining master status from chess matches; playing first instrument in state orchestra; earning high rankings in Math Olympiad; and so on, culminating in gaining admission to a particular college.

Once people enter college, they get socialized into group environments that usually continue to operate in zero-sum competitive dynamics. These include orchestras and sport teams; fraternities and sororities; and many types of clubs. The biggest source of mimetic pressures are the classes. Everyone starts out by taking the same intro classes; those seeking distinction throw themselves into the hardest classes, or seek tutelage from star professors, and try to earn the highest grades.

Mimesis Machines and Millennials: http://quillette.com/2017/11/02/mimesis-machines-millennials/
In 1956, a young Liverpudlian named John Winston Lennon heard the mournful notes of Elvis Presley’s Heartbreak Hotel, and was transformed. He would later recall, “nothing really affected me until I heard Elvis. If there hadn’t been an Elvis, there wouldn’t have been the Beatles.” It is an ancient human story. An inspiring model, an inspired imitator, and a changed world.

Mimesis is the phenomenon of human mimicry. Humans see, and they strive to become what they see. The prolific Franco-Californian philosopher René Girard described the human hunger for imitation as mimetic desire. According to Girard, mimetic desire is a mighty psychosocial force that drives human behavior. When attempted imitation fails, (i.e. I want, but fail, to imitate my colleague’s promotion to VP of Business Development), mimetic rivalry arises. According to mimetic theory, periodic scapegoating—the ritualistic expelling of a member of the community—evolved as a way for archaic societies to diffuse rivalries and maintain the general peace.

As civilization matured, social institutions evolved to prevent conflict. To Girard, sacrificial religious ceremonies first arose as imitations of earlier scapegoating rituals. From the mimetic worldview healthy social institutions perform two primary functions,

They satisfy mimetic desire and reduce mimetic rivalry by allowing imitation to take place.
They thereby reduce the need to diffuse mimetic rivalry through scapegoating.
Tranquil societies possess and value institutions that are mimesis tolerant. These institutions, such as religion and family, are Mimesis Machines. They enable millions to see, imitate, and become new versions of themselves. Mimesis Machines, satiate the primal desire for imitation, and produce happy, contented people. Through Mimesis Machines, Elvis fans can become Beatles.

Volatile societies, on the other hand, possess and value mimesis resistant institutions that frustrate attempts at mimicry, and mass produce frustrated, resentful people. These institutions, such as capitalism and beauty hierarchies, are Mimesis Shredders. They stratify humanity, and block the ‘nots’ from imitating the ‘haves’.
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october 2017 by nhaliday
Individualistic values, institutional trust, and interventionist attitudes | Journal of Institutional Economics | Cambridge Core
A popular explanation for economic development is that ‘individualistic values’ provide a mind-set that is favorable to the creation of growth-promoting institutions. The present paper investigates the relationship between individualistic values and personal attitudes toward government intervention. We consider two key components of an individualistic culture to be particularly relevant for attitude formation: self-direction (‘social’ individualism) and self-determination (‘economic’ individualism). Results indicate that both are negatively associated with interventionist attitudes. Effects of self-direction are much weaker though, than self-determination. Moreover, the effects of self-direction are mitigated through higher trust in the state and lower confidence in companies, while that is not the case for self-determination values. We conclude that especially economic individualism supports attitudes conducive to the formation of formal market-friendly institutions.
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september 2017 by nhaliday
Medicine as a pseudoscience | West Hunter
The idea that venesection was a good thing, or at least not so bad, on the grounds that one in a few hundred people have hemochromatosis (in Northern Europe) reminds me of the people who don’t wear a seatbelt, since it would keep them from being thrown out of their convertible into a waiting haystack, complete with nubile farmer’s daughter. Daughters. It could happen. But it’s not the way to bet.

Back in the good old days, Charles II, age 53, had a fit one Sunday evening, while fondling two of his mistresses.

Monday they bled him (cupping and scarifying) of eight ounces of blood. Followed by an antimony emetic, vitriol in peony water, purgative pills, and a clyster. Followed by another clyster after two hours. Then syrup of blackthorn, more antimony, and rock salt. Next, more laxatives, white hellebore root up the nostrils. Powdered cowslip flowers. More purgatives. Then Spanish Fly. They shaved his head and stuck blistering plasters all over it, plastered the soles of his feet with tar and pigeon-dung, then said good-night.

...

Friday. The king was worse. He tells them not to let poor Nelly starve. They try the Oriental Bezoar Stone, and more bleeding. Dies at noon.

Most people didn’t suffer this kind of problem with doctors, since they never saw one. Charles had six. Now Bach and Handel saw the same eye surgeon, John Taylor – who blinded both of them. Not everyone can put that on his resume!

You may wonder how medicine continued to exist, if it had a negative effect, on the whole. There’s always the placebo effect – at least there would be, if it existed. Any real placebo effect is very small: I’d guess exactly zero. But there is regression to the mean. You see the doctor when you’re feeling worse than average – and afterwards, if he doesn’t kill you outright, you’re likely to feel better. Which would have happened whether you’d seen him or not, but they didn’t often do RCTs back in the day – I think James Lind was the first (1747).

Back in the late 19th century, Christian Scientists did better than others when sick, because they didn’t believe in medicine. For reasons I think mistaken, because Mary Baker Eddy rejected the reality of the entire material world, but hey, it worked. Parenthetically, what triggered all that New Age nonsense in 19th century New England? Hash?

This did not change until fairly recently. Sometime in the early 20th medicine, clinical medicine, what doctors do, hit break-even. Now we can’t do without it. I wonder if there are, or will be, other examples of such a pile of crap turning (mostly) into a real science.

good tweet: https://twitter.com/bowmanthebard/status/897146294191390720
The brilliant GP I've had for 35+ years has retired. How can I find another one who meets my requirements?

1 is overweight
2 drinks more than officially recommended amounts
3 has an amused, tolerant atitude to human failings
4 is well aware that we're all going to die anyway, & there are better or worse ways to die
5 has a healthy skeptical attitude to mainstream medical science
6 is wholly dismissive of "a|ternative” medicine
7 believes in evolution
8 thinks most diseases get better without intervention, & knows the dangers of false positives
9 understands the base rate fallacy

EconPapers: Was Civil War Surgery Effective?: http://econpapers.repec.org/paper/htrhcecon/444.htm
contra Greg Cochran:
To shed light on the subject, I analyze a data set created by Dr. Edmund Andrews, a Civil war surgeon with the 1st Illinois Light Artillery. Dr. Andrews’s data can be rendered into an observational data set on surgical intervention and recovery, with controls for wound location and severity. The data also admits instruments for the surgical decision. My analysis suggests that Civil War surgery was effective, and increased the probability of survival of the typical wounded soldier, with average treatment effect of 0.25-0.28.

Medical Prehistory: https://westhunt.wordpress.com/2016/03/14/medical-prehistory/
What ancient medical treatments worked?

https://westhunt.wordpress.com/2016/03/14/medical-prehistory/#comment-76878
In some very, very limited conditions, bleeding?
--
Bad for you 99% of the time.

https://westhunt.wordpress.com/2016/03/14/medical-prehistory/#comment-76947
Colchicine – used to treat gout – discovered by the Ancient Greeks.

https://westhunt.wordpress.com/2016/03/14/medical-prehistory/#comment-76973
Dracunculiasis (Guinea worm)
Wrap the emerging end of the worm around a stick and slowly pull it out.
(3,500 years later, this remains the standard treatment.)
https://en.wikipedia.org/wiki/Ebers_Papyrus

https://westhunt.wordpress.com/2016/03/14/medical-prehistory/#comment-76971
Some of the progress is from formal medicine, most is from civil engineering, better nutrition ( ag science and physical chemistry), less crowded housing.

Nurses vs doctors: https://westhunt.wordpress.com/2014/10/01/nurses-vs-doctors/
Medicine, the things that doctors do, was an ineffective pseudoscience until fairly recently. Until 1800 or so, they were wrong about almost everything. Bleeding, cupping, purging, the four humors – useless. In the 1800s, some began to realize that they were wrong, and became medical nihilists that improved outcomes by doing less. Some patients themselves came to this realization, as when Civil War casualties hid from the surgeons and had better outcomes. Sometime in the early 20th century, MDs reached break-even, and became an increasingly positive influence on human health. As Lewis Thomas said, medicine is the youngest science.

Nursing, on the other hand, has always been useful. Just making sure that a patient is warm and nourished when too sick to take care of himself has helped many survive. In fact, some of the truly crushing epidemics have been greatly exacerbated when there were too few healthy people to take care of the sick.

Nursing must be old, but it can’t have existed forever. Whenever it came into existence, it must have changed the selective forces acting on the human immune system. Before nursing, being sufficiently incapacitated would have been uniformly fatal – afterwards, immune responses that involved a period of incapacitation (with eventual recovery) could have been selectively favored.

when MDs broke even: https://westhunt.wordpress.com/2014/10/01/nurses-vs-doctors/#comment-58981
I’d guess the 1930s. Lewis Thomas thought that he was living through big changes. They had a working serum therapy for lobar pneumonia ( antibody-based). They had many new vaccines ( diphtheria in 1923, whopping cough in 1926, BCG and tetanus in 1927, yellow fever in 1935, typhus in 1937.) Vitamins had been mostly worked out. Insulin was discovered in 1929. Blood transfusions. The sulfa drugs, first broad-spectrum antibiotics, showed up in 1935.

DALYs per doctor: https://westhunt.wordpress.com/2018/01/22/dalys-per-doctor/
The disability-adjusted life year (DALY) is a measure of overall disease burden – the number of years lost. I’m wondering just much harm premodern medicine did, per doctor. How many healthy years of life did a typical doctor destroy (net) in past times?

...

It looks as if the average doctor (in Western medicine) killed a bunch of people over his career ( when contrasted with doing nothing). In the Charles Manson class.

Eventually the market saw through this illusion. Only took a couple of thousand years.

https://westhunt.wordpress.com/2018/01/22/dalys-per-doctor/#comment-100741
That a very large part of healthcare spending is done for non-health reasons. He has a chapter on this in his new book, also check out his paper “Showing That You Care: The Evolution of Health Altruism” http://mason.gmu.edu/~rhanson/showcare.pdf
--
I ran into too much stupidity to finish the article. Hanson’s a loon. For example when he talks about the paradox of blacks being more sentenced on drug offenses than whites although they use drugs at similar rate. No paradox: guys go to the big house for dealing, not for using. Where does he live – Mars?

I had the same reaction when Hanson parroted some dipshit anthropologist arguing that the stupid things people do while drunk are due to social expectations, not really the alcohol.
Horseshit.

I don’t think that being totally unable to understand everybody around you necessarily leads to deep insights.

https://westhunt.wordpress.com/2018/01/22/dalys-per-doctor/#comment-100744
What I’ve wondered is if there was anything that doctors did that actually was helpful and if perhaps that little bit of success helped them fool people into thinking the rest of it helped.
--
Setting bones. extracting arrows: spoon of Diocles. Colchicine for gout. Extracting the Guinea worm. Sometimes they got away with removing the stone. There must be others.
--
Quinine is relatively recent: post-1500. Obstetrical forceps also. Caesarean deliveries were almost always fatal to the mother until fairly recently.

Opium has been around for a long while : it works.

https://westhunt.wordpress.com/2018/01/22/dalys-per-doctor/#comment-100839
If pre-modern medicine was indeed worse than useless – how do you explain no one noticing that patients who get expensive treatments are worse off than those who didn’t?
--
were worse off. People are kinda dumb – you’ve noticed?
--
My impression is that while people may be “kinda dumb”, ancient customs typically aren’t.
Even if we assume that all people who lived prior to the 19th century were too dumb to make the rational observation, wouldn’t you expect this ancient practice to be subject to selective pressure?
--
Your impression is wrong. Do you think that there some slick reason for Carthaginians incinerating their first-born?

Theodoric of York, bloodletting: https://www.youtube.com/watch?v=yvff3TViXmY

details on blood-letting and hemochromatosis: https://westhunt.wordpress.com/2018/01/22/dalys-per-doctor/#comment-100746

Starting Over: https://westhunt.wordpress.com/2018/01/23/starting-over/
Looking back on it, human health would have … [more]
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august 2017 by nhaliday
The Long-Run Weight of Communism or the Weight of LongRun History?
This study provides evidence that culture understood as values and beliefs moves very slowly. Despite massive institutional change, values and beliefs in transition countries have not changed much over the last 20 years. Evidence suggests that culture is affected by the long run historical past, in particular the participation in empires for over 100 years. Current institutional evolutions in transition countries might be more affected by their long run past than by the communist experience of the twentieth century
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august 2017 by nhaliday
Reckonings; A Rent Affair - The New York Times
Economists who have ventured into the alleged real world often quote Princeton's Alan Blinder, who has formulated what he calls ''Murphy's Law of economic policy'': ''Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently.'' It's flip and cynical, but it's true.
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august 2017 by nhaliday
The Conservation of Coercion - American Affairs Journal
The two faces of the Kapauku Papuans, and the way their anarchist-friendly political order rested on a deeply illiberal social order, neatly express how Technology and the End of Authority, by the Cato Institute scholar Jason Kuznicki, is both an interesting and a maddening book. Kuznicki states that he was inspired to write the book when he wondered why so many classical political philosophers, despite their disagreements over a vast number of topics, nevertheless all believed the nature and proper role of the state was the most important question concerning the proper organization of human affairs. Even libertarian and anarchist political theorists obsess about states, filling books with discussions of when and why we ought to reject them as illegitimate. The nature of their opposition implicitly concedes that the state, its value and purpose, is the central question for us to grapple with.

In contrast, Kuznicki invites us, if not to ignore the state, then at least to banish it from the forefront of our thinking. He asks us to consider states as just one tool among many that human societies have deployed to solve various sorts of problems. The state is neither God nor the Devil, but something pragmatic and unromantic—like a sewage system, or a town dump. Yes, we want it to function smoothly lest the place start to stink, but good taste demands that we not focus obsessively on its operation. Statecraft, like sanitation engineering, is a dirty job that somebody has to do, but unlike sanitation engineering it should also be a mildly embarrassing one. The notion that political means are a locus of the good, or that the state is imbued with the highest purposes of society, is as ridiculous as the notion that a city exists for its sewers rather than vice versa. So, Kuznicki suggests, we should treat anybody attempting to derive the correct or legitimate purposes of the state with the same skepticism with which we would view somebody waxing philosophical about a trash compactor. The real center of society, the topics worth debating and pondering, are all the other institutions—like markets, churches, sports teams, scientific schools, and families—whose existence the correct operation of the state supports.

...

The second implication of Kuznicki’s statecraft-as-engineering is that any determination about the proper role and behavior of government must remain unsettled not only by historical and cultural context, but also by the ambient level of technology. Kuznicki explores this at some length. He does not mean to make the common argument that the particular set of technologies deployed within a society can be more or less conducive to particular forms of government—as mass democracy might be encouraged by technologies of communication and travel, or as centralized autocracy might tend to arise in societies relying on large-scale irrigation for intensive agriculture. Rather, if the state is a tool for solving an array of otherwise intractable social problems, Kuznicki surmises, a newly discovered technological solution to such a problem could remove it from the state’s set of concerns—perhaps permanently.

...

What are the qualities of a society which make it more or less likely to be able to solve these dilemmas as they come up? Social scientists call societies that support commitment and enforcement mechanisms sufficient to overcome such dilemmas “high trust.” Some sources of social trust are mundane: for instance, it seems to make a big difference for a society to simply have a high enough median wealth that someone isn’t liable to be ruined if he or she takes a gamble on trusting a stranger and ends up getting cheated. Others are fuzzier: shared participation in churches, clubs, and social organizations can also significantly increase the degree of solidarity and trust in a community. Thinkers from Tocqueville to Robert Nisbet have pointed out the ways in which the ascendant state makes war upon and seeks to displace the “little platoons” of civil society. It is not well appreciated today that the reverse is also true: a “thick” culture rooted in shared norms and shared history can make the state less necessary by helping to raise the ambient level of social trust above whatever threshold makes it possible for citizens to organize and discipline themselves without state compulsion.

...

The story of the diamontaires ends with the whole system, private courts and all, falling apart following an influx of non-Hasidic actors into the New York diamond industry. But lack of trust and solidarity aren’t just problems if we want private courts. Yes, a very high degree of social trust can help to replace or displace state institutions, but any amount of trust tends to make governments more efficient and less corrupt. It isn’t a coincidence that many of the most successful governments on earth, whether efficient and well-run welfare states on the Scandinavian model or free-market havens boasting low taxes and few regulations, have been small, tight-knit, often culturally and linguistically homogeneous. Conversely, history’s most successful multiethnic polities have tended to be empires or confederations with a very high degree of provincial or local autonomy. Government is not a problem that scales gracefully: certainly not with number of citizens, but perhaps also not with number of constituent cultures. Those who love cosmopolitanism (among whom I count myself) talk a great deal about the incidental benefits it brings, and a great deal less about its drawbacks. I and other cosmopolitans love to exalt the dynamism that comes from diversity and the way it can help a society avoid falling into complacency. We are less willing to discuss the tiny invisible tax on everything and everybody that reduced social trust imposes, and the ways in which that will tend to make a nation more sclerotic.

In the absence of trust, every private commercial or social interaction becomes just a little bit more expensive, a little bit less efficient, and a little bit less likely to happen at all. Individuals are more cautious in their dealings with strangers, businesses are less likely to extend credit, everybody is a little more uncertain about the future, and people adjust their investment decisions accordingly. Individuals and businesses spend more money on bike locks, security systems, and real estate they perceive to be “safe,” rather than on the consumption or investment they would otherwise prefer. Critics of capitalism frequently observe that a liberal economic order depends upon, and sometimes cannibalizes, precapitalist sources of loyalty and affection. What if the same is true of political freedom more generally?

Some might object that even to consider such a thing is to give in to the forces of bigotry. But the whole point of taking a flinty-eyed engineer’s approach to state-building is that we don’t have to like the constraints we are working with, we just have to deal with them. The human preference for “people like us”—whether that means coreligionists or people who share our musical tastes, and whether we choose to frame it as bigotry or as game-theoretic rationality—is a stubborn, resilient reality. Perhaps in the future some advanced genetic engineering or psychological conditioning will change that. For now we need to recognize and deal with the fact that if we wish to have cosmopolitanism, we need to justify it on robust philosophical grounds, with full awareness of the costs as well as the benefits that it brings to bear on every member of society.
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august 2017 by nhaliday
Is the economy illegible? | askblog
In the model of the economy as a GDP factory, the most fundamental equation is the production function, Y = f(K,L).

This says that total output (Y) is determined by the total amount of capital (K) and the total amount of labor (L).

Let me stipulate that the economy is legible to the extent that this model can be applied usefully to explain economic developments. I want to point out that the economy, while never as legible as economists might have thought, is rapidly becoming less legible.
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august 2017 by nhaliday
From Soviets to Oligarchs: Inequality and Property in Russia 1905-2016
We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.

Figure 1a, 8abc, 9b

The Role of Oligarchs in Russian Capitalism: https://www.aeaweb.org/articles?id=10.1257/0895330053147994
2005

Using a unique dataset, we describe the degree of ownership concentration in Russian economy and its role in shaping economic and political institutions in Russia. In particular, we find that Russian "oligarchs" do control a substantial part of the economy. While the relative weight of their firms in Russian economy is huge, they do not seem to be excessively large by the standards of the global economy where most of them are operating. The oligarchs seem to run their firms more efficiently than other Russian owners controlling for industry, region and size.

Russia's Billionaires: https://www.aeaweb.org/articles?id=10.1257/aer.p20161068
2016

Using data collected by Forbes since the 1990s, I examine the emergence and survival of the super-wealthy in Russia over the past two decades and compare Russia's record to those of other countries. The major surge in the number of Russian billionaires came in the mid-2000s, mirroring the dynamic worldwide. While early billionaires were predominantly found in the oil, gas, metals, and banking sectors, the distribution has become more diverse, now including some in trade, real estate, chemicals, and information technology. Only a minority of today's Russian billionaires acquired significant assets in the privatization of the 1990s.

Popular Attitudes towards Markets and Democracy: Russia and United States Compared 25 Years Later: http://www.nber.org/papers/w22027

While we find some differences in attitudes towards markets across countries and through time, we do not find most of the differences large or significant. Our evidence does not support a common view that the Russian personality is fundamentally illiberal or non-democratic.

The Political Economy of Transition: https://www.aeaweb.org/articles?id=10.1257/0895330027102
- Gérard Roland, 2002

The overriding importance of political constraints in the transition process has led to developments of the theory of the political economy of reform. What are the main insights from that theory? How does it reflect the transition reality? What have we learned, and what do we still need to learn? The present article will attempt to answer those questions.

https://themoscowtimes.com/articles/centrifugal-forces-why-russian-oligarchs-remain-loyal-to-the-putin-government-op-ed-59760
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august 2017 by nhaliday
The Determinants of Trust
Both individual experiences and community characteristics influence how much people trust each other. Using data drawn from US localities we find that the strongest factors that reduce trust are: i) a recent history of traumatic experiences, even though the passage of time reduces this effect fairly rapidly; ii) belonging to a group that historically felt discriminated against, such as minorities (black in particular) and, to a lesser extent, women; iii) being economically unsuccessful in terms of income and education; iv) living in a racially mixed community and/or in one with a high degree of income disparity. Religious beliefs and ethnic origins do not significantly affect trust. The latter result may be an indication that the American melting pot at least up to a point works, in terms of homogenizing attitudes of different cultures, even though racial cleavages leading to low trust are still quite high.

Understanding Trust: http://www.nber.org/papers/w13387
In this paper we resolve this puzzle by recognizing that trust has two components: a belief-based one and a preference based one. While the sender's behavior reflects both, we show that WVS-like measures capture mostly the belief-based component, while questions on past trusting behavior are better at capturing the preference component of trust.

MEASURING TRUST: http://scholar.harvard.edu/files/laibson/files/measuring_trust.pdf
We combine two experiments and a survey to measure trust and trustworthiness— two key components of social capital. Standard attitudinal survey questions about trust predict trustworthy behavior in our experiments much better than they predict trusting behavior. Trusting behavior in the experiments is predicted by past trusting behavior outside of the experiments. When individuals are closer socially, both trust and trustworthiness rise. Trustworthiness declines when partners are of different races or nationalities. High status individuals are able to elicit more trustworthiness in others.

What is Social Capital? The Determinants of Trust and Trustworthiness: http://www.nber.org/papers/w7216
Using a sample of Harvard undergraduates, we analyze trust and social capital in two experiments. Trusting behavior and trustworthiness rise with social connection; differences in race and nationality reduce the level of trustworthiness. Certain individuals appear to be persistently more trusting, but these people do not say they are more trusting in surveys. Survey questions about trust predict trustworthiness not trust. Only children are less trustworthy. People behave in a more trustworthy manner towards higher status individuals, and therefore status increases earnings in the experiment. As such, high status persons can be said to have more social capital.

Trust and Cheating: http://www.nber.org/papers/w18509
We find that: i) both parties to a trust exchange have implicit notions of what constitutes cheating even in a context without promises or messages; ii) these notions are not unique - the vast majority of senders would feel cheated by a negative return on their trust/investment, whereas a sizable minority defines cheating according to an equal split rule; iii) these implicit notions affect the behavior of both sides to the exchange in terms of whether to trust or cheat and to what extent. Finally, we show that individual's notions of what constitutes cheating can be traced back to two classes of values instilled by parents: cooperative and competitive. The first class of values tends to soften the notion while the other tightens it.

Nationalism and Ethnic-Based Trust: Evidence from an African Border Region: https://u.osu.edu/robinson.1012/files/2015/12/Robinson_NationalismTrust-1q3q9u1.pdf
These results offer microlevel evidence that a strong and salient national identity can diminish ethnic barriers to trust in diverse societies.

One Team, One Nation: Football, Ethnic Identity, and Conflict in Africa: http://conference.nber.org/confer//2017/SI2017/DEV/Durante_Depetris-Chauvin.pdf
Do collective experiences that prime sentiments of national unity reduce interethnic tensions and conflict? We examine this question by looking at the impact of national football teams’ victories in sub-Saharan Africa. Combining individual survey data with information on over 70 official matches played between 2000 and 2015, we find that individuals interviewed in the days after a victory of their country’s national team are less likely to report a strong sense of ethnic identity and more likely to trust people of other ethnicities than those interviewed just before. The effect is sizable and robust and is not explained by generic euphoria or optimism. Crucially, national victories do not only affect attitudes but also reduce violence. Indeed, using plausibly exogenous variation from close qualifications to the Africa Cup of Nations, we find that countries that (barely) qualified experience significantly less conflict in the following six months than countries that (barely) did not. Our findings indicate that, even where ethnic tensions have deep historical roots, patriotic shocks can reduce inter-ethnic tensions and have a tangible impact on conflict.

Why Does Ethnic Diversity Undermine Public Goods Provision?: http://www.columbia.edu/~mh2245/papers1/HHPW.pdf
We identify three families of mechanisms that link diversity to public goods provision—–what we term “preferences,” “technology,” and “strategy selection” mechanisms—–and run a series of experimental games that permit us to compare the explanatory power of distinct mechanisms within each of these three families. Results from games conducted with a random sample of 300 subjects from a slum neighborhood of Kampala, Uganda, suggest that successful public goods provision in homogenous ethnic communities can be attributed to a strategy selection mechanism: in similar settings, co-ethnics play cooperative equilibria, whereas non-co-ethnics do not. In addition, we find evidence for a technology mechanism: co-ethnics are more closely linked on social networks and thus plausibly better able to support cooperation through the threat of social sanction. We find no evidence for prominent preference mechanisms that emphasize the commonality of tastes within ethnic groups or a greater degree of altruism toward co-ethnics, and only weak evidence for technology mechanisms that focus on the impact of shared ethnicity on the productivity of teams.

does it generalize to first world?

Higher Intelligence Groups Have Higher Cooperation Rates in the Repeated Prisoner's Dilemma: https://ideas.repec.org/p/iza/izadps/dp8499.html
The initial cooperation rates are similar, it increases in the groups with higher intelligence to reach almost full cooperation, while declining in the groups with lower intelligence. The difference is produced by the cumulation of small but persistent differences in the response to past cooperation of the partner. In higher intelligence subjects, cooperation after the initial stages is immediate and becomes the default mode, defection instead requires more time. For lower intelligence groups this difference is absent. Cooperation of higher intelligence subjects is payoff sensitive, thus not automatic: in a treatment with lower continuation probability there is no difference between different intelligence groups

Why societies cooperate: https://voxeu.org/article/why-societies-cooperate
Three attributes are often suggested to generate cooperative behaviour – a good heart, good norms, and intelligence. This column reports the results of a laboratory experiment in which groups of players benefited from learning to cooperate. It finds overwhelming support for the idea that intelligence is the primary condition for a socially cohesive, cooperative society. Warm feelings towards others and good norms have only a small and transitory effect.

individual payoff, etc.:

Trust, Values and False Consensus: http://www.nber.org/papers/w18460
Trust beliefs are heterogeneous across individuals and, at the same time, persistent across generations. We investigate one mechanism yielding these dual patterns: false consensus. In the context of a trust game experiment, we show that individuals extrapolate from their own type when forming trust beliefs about the same pool of potential partners - i.e., more (less) trustworthy individuals form more optimistic (pessimistic) trust beliefs - and that this tendency continues to color trust beliefs after several rounds of game-play. Moreover, we show that one's own type/trustworthiness can be traced back to the values parents transmit to their children during their upbringing. In a second closely-related experiment, we show the economic impact of mis-calibrated trust beliefs stemming from false consensus. Miscalibrated beliefs lower participants' experimental trust game earnings by about 20 percent on average.

The Right Amount of Trust: http://www.nber.org/papers/w15344
We investigate the relationship between individual trust and individual economic performance. We find that individual income is hump-shaped in a measure of intensity of trust beliefs. Our interpretation is that highly trusting individuals tend to assume too much social risk and to be cheated more often, ultimately performing less well than those with a belief close to the mean trustworthiness of the population. On the other hand, individuals with overly pessimistic beliefs avoid being cheated, but give up profitable opportunities, therefore underperforming. The cost of either too much or too little trust is comparable to the income lost by forgoing college.

...

This framework allows us to show that income-maximizing trust typically exceeds the trust level of the average person as well as to estimate the distribution of income lost to trust mistakes. We find that although a majority of individuals has well calibrated beliefs, a non-trivial proportion of the population (10%) has trust beliefs sufficiently poorly calibrated to lower income by more than 13%.

Do Trust and … [more]
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august 2017 by nhaliday
The Myth of the Barter Economy - The Atlantic
When barter has appeared, it wasn’t as part of a purely barter economy, and money didn’t emerge from it—rather, it emerged from money. After Rome fell, for instance, Europeans used barter as a substitute for the Roman currency people had gotten used to. “In most of the cases we know about, [barter] takes place between people who are familiar with the use of money, but for one reason or another, don’t have a lot of it around,” explains David Graeber, an anthropology professor at the London School of Economics.

So if barter never existed, what did? Anthropologists describe a wide variety of methods of exchange—none of which are of the “two-cows-for-10-bushels-of-wheat” variety.

Communities of Iroquois Native Americans, for instance, stockpiled their goods in longhouses. Female councils then allocated the goods, explains Graeber. Other indigenous communities relied on “gift economies,” which went something like this: If you were a baker who needed meat, you didn’t offer your bagels for the butcher’s steaks. Instead, you got your wife to hint to the butcher’s wife that you two were low on iron, and she’d say something like “Oh really? Have a hamburger, we’ve got plenty!” Down the line, the butcher might want a birthday cake, or help moving to a new apartment, and you’d help him out.
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july 2017 by nhaliday
My Simplistic Theory of Left and Right, Bryan Caplan | EconLog | Library of Economics and Liberty
1. Leftists are anti-market. On an emotional level, they're critical of market outcomes. No matter how good market outcomes are, they can't bear to say, "Markets have done a great job, who could ask for more?"

2. Rightists are anti-leftist. On an emotional level, they're critical of leftists. No matter how much they agree with leftists on an issue, they can't bear to say, "The left is totally right, it would be churlish to criticize them."

http://econlog.econlib.org/archives/2017/06/yudkowsky_on_my.html
http://www.arnoldkling.com/blog/the-left-the-market-and-economists/
http://econlog.econlib.org/archives/2017/06/reply_to_yudkow.html
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june 2017 by nhaliday
In Defense of Individualist Culture | Otium
The salient feature of an individualist environment is that nobody directly tries to make you do anything.

...

I see a lot of writers these days raising problems with modern individualist culture, and it may be an especially timely topic. The Internet is a novel superstimulus, and it changes more rapidly, and affords people more options, than ever before. We need to think about the actual consequences of a world where many people are in practice being left alone to do what they want, and clearly not all the consequences are positive.

But I do want to suggest some considerations in favor of individualist culture — that often-derided “atomized modern world” that most of us live in.

We Aren’t Clay

interesting: https://slatestarscratchpad.tumblr.com/post/162329749236/httpssrconstantinwordpresscom20170627in-de

bleck:
Patriarchy is the Problem: https://srconstantin.wordpress.com/2017/09/12/patriarchy-is-the-problem/
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june 2017 by nhaliday
Nancy MacLean Owes Tyler Cowen an Apology – Russ Roberts – Medium
https://notesonliberty.com/2017/06/26/james-buchanan-on-racism/
http://econlog.econlib.org/archives/2017/06/nancy_macleans.html
http://www.nationalreview.com/corner/448958/nancy-maclean-vs-tyler-cowen
https://www.washingtonpost.com/news/volokh-conspiracy/wp/2017/06/28/some-dubious-claims-in-nancy-macleans-democracy-in-chains/
http://www.independent.org/issues/article.asp?id=9115
http://www.arnoldkling.com/blog/wither-academic-ethics/
lol: https://twitter.com/tcjfs/status/879717516184080384
hmm: https://twitter.com/razibkhan/status/891134709924868096
https://www.washingtonpost.com/news/monkey-cage/wp/2017/08/04/james-buchanan-was-committed-to-basic-democratic-values/
http://policytrajectories.asa-comparative-historical.org/2017/08/book-symposium-democracy-in-chains/
http://bostonreview.net/class-inequality/henry-farrell-steven-m-teles-when-politics-drives-scholarship
http://bostonreview.net/class-inequality/marshall-steinbaum-book-explains-charlottesville
https://twitter.com/Econ_Marshall/status/903289946357858306
https://archive.is/LalIc
So any political regime premised on defending property rights is race-biased. If you want to call that racist, I think it's justified.

lmao wut
https://www.washingtonpost.com/news/volokh-conspiracy/wp/2017/09/01/georg-vanberg-democracy-in-chains-and-james-m-buchanan-on-school-integration/

https://www.wsj.com/articles/historical-fiction-at-duke-1508449507

The Bizarre Conspiracy Theory Nominated for a National Book Award: http://www.nationalreview.com/article/453408/nancy-macleans-democracy-chains-will-conspiracy-theory-win-national-book-award

https://thebaffler.com/salvos/master-class-on-the-make-hartman
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june 2017 by nhaliday
Caste system in India - Wikipedia
A recent series of research papers, by Reich et al. (2009), Metspalu et al. (2011), and Moorjani et al. (2013), make clear that India was peopled by two distinct groups who split genetically ca. 50,000 years ago,[81][82] which they called "Ancestral North Indians" (ANI) and "Ancestral South Indians" (ASI) respectively.[note 1] They found that the ANI genes are close to those of Middle Easterners, Central Asians and Europeans whereas the ASI genes are dissimilar to all other known populations outside India.[note 2][note 3] These two distinct groups, which had split ca. 50,000 years ago, formed the basis for the present population of India.[83]

According to Moorjani et al. these two groups mixed between 4,200 and 1,900 years ago (2200 BCE-100 CE), whereafter a shift to endogamy took place.[84] David Reich stated, "Prior to 4,200 years ago, there were unmixed groups in India. Sometime between 1,900 to 4,200 years ago, profound, pervasive convulsive mixture occurred, affecting every Indo-European and Dravidian group in India without exception.".[85] Following this mixture,

Strong endogamy must have applied since then (average gene flow less than 1 in 30 per generation) to prevent the genetic signatures of founder events from being erased by gene flow. Some historians have argued that "caste" in modern India is an "invention" of colonialism in the sense that it became more rigid under colonial rule. However, our results suggest that many current distinctions among groups are ancient and that strong endogamy must have shaped marriage patterns in India for thousands of years.[81]

Moorjani et al. discerned two waves of admixture in this period, with northern India showing later dates of admixture.[86] GaneshPrasad et al. (2013) studied "12 tribal and 19 non-tribal (caste) endogamous populations from the predominantly Dravidian-speaking Tamil Nadu state in the southernmost part of India." According to this study, southern India was already socially stratified 4,000 to 6,000 years ago, which is best explained by "the emergence of agricultural technology in South Asia." The study concludes that "The social stratification (in Tamil Nadu) was established 4,000 to 6,000 years ago and there was little admixture during the last 3,000 years, implying a minimal genetic impact of the Varna (caste) system from the historically-documented Brahmin migrations into the area."[87]

https://en.wikipedia.org/wiki/Wikipedia:Genetic_research_on_the_origins_of_India%27s_population

http://www.nytimes.com/2010/09/11/world/asia/11caste.html
A crucial factor is the collapse of the caste system over the last half century, a factor that undergirds many of the other reasons that the south has prospered — more stable governments, better infrastructure and a geographic position that gives it closer connections to the global economy.

“The breakdown of caste hierarchy has broken the traditional links between caste and profession, and released enormous entrepreneurial energies in the south,” said Ashutosh Varshney, a professor at Brown University who has studied the role of caste in southern India’s development. This breakdown, he said, goes a long way to explaining “why the south has taken such a lead over the north in the last three decades.”

http://www.livemint.com/Opinion/FLn6TiQPArdQZUN9LE2ZsM/The-impact-of-caste-on-economic-mobility-in-India.html
Caste Is Stunting All of India’s Children: http://foreignpolicy.com/2017/09/15/caste-is-stunting-all-of-indias-children/
Fears of impurity continue to steer Indians away from toilets — and towards deadly fecal germs.

https://twitter.com/MWStory/status/895580461879107584
https://archive.is/AsTwB
These Indian govt funded ads to encourage the wealthy but declining Parsi population to reproduce are quite extraordinary

http://marginalrevolution.com/marginalrevolution/2017/12/india-marriage-markets-everything.html
India’s government has expanded a scheme offering payment incentives to Hindus who marry members of the country’s poorest and most oppressed caste, the Dalits.
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june 2017 by nhaliday
Yale Law Journal - Amazon's Antitrust Paradox
This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

https://www.theatlantic.com/business/archive/2017/06/why-amazon-bought-whole-foods/530652/
https://gnxp.nofe.me/2017/06/17/the-distribution-channel-comes-to-you/
https://www.forbes.com/sites/panosmourdoukoutas/2017/06/18/amazon-whole-foods-deal-is-bad-news-for-store-cashiers-and-the-fight-for-15-minimum-wage/
Amazon Must Be Stopped: https://newrepublic.com/article/119769/amazons-monopoly-must-be-broken-radical-plan-tech-giant

Amazon Will Go To Denver: https://gnxp.nofe.me/2017/09/10/amazon-will-go-to-denver/
https://www.nytimes.com/interactive/2017/09/09/upshot/where-should-amazon-new-headquarters-be.html
http://www.paddypower.com/bet?action=go_event&category=SPECIALS&ev_class_id=45&ev_type_id=22711&ev_id=13023353&force_racing_css=&ev_desc=Where%20will%20Amazon%20build%20their%20Second%20Headquarters?
https://www.seattletimes.com/business/amazon/this-city-hall-brought-to-you-by-amazon/
Real things cities are offering to get Amazon HQ2
*Chicago: Let Amazon keep employees' income tax
*SoCal: Give away $100M in land
*Boston: City employees working just for Amazon
*Fresno: Let Amazon decide how to spend tax dollars

https://www.wsj.com/articles/rules-of-engagement-how-cities-are-courting-amazons-new-headquarters-1522661401
Washington, D.C., might have a leg up, having already hosted Amazon Chief Executive Jeff Bezos for visits when he considered acquiring the Washington Post, which he now owns. Mr. Bezos also purchased the former Textile Museum in Washington’s Kalorama neighborhood for $23 million in 2016 and is currently turning it into a private residence.

28-year-old makes millions buying from Walmart, selling on Amazon: https://www.msn.com/en-us/money/companies/28-year-old-makes-millions-buying-from-walmart-selling-on-amazon/ar-AAupB8i

https://twitter.com/DKThomp/status/954028684788273153
https://twitter.com/hyperplanes/status/954020562262781952
https://archive.is/uNk1p
https://archive.is/phiTA
Thread: Why Amazon’s HQ2 is going to Fairfax County

https://www.bloomberg.com/view/articles/2018-01-19/amazon-is-sure-acting-like-it-s-going-to-pick-the-d-c-area

https://twitter.com/NeonPeonage/status/955436146183561216
https://archive.is/lJeaz
walmart is the only entity that has even a slim chance at preventing jeff bezos from intermediating every commodity exchange in the world, u must respect

https://twitter.com/holerepairer/status/955469951833436160
https://archive.is/ig58T
"I tried to save you, but you didn't listen. Now you'll have to face Him alone..."

What Amazon does to wages: https://www.economist.com/news/united-states/21735020-worlds-largest-retailer-underpaying-its-employees-what-amazon-does-wages
Is the world’s largest retailer underpaying its employees?

Flat or falling industry wages are common in the cities and towns where Amazon opens distribution centres, according to an analysis by The Economist. Government figures show that after Amazon opens a storage depot, local wages for warehouse workers fall by an average of 3%. In places where Amazon operates, such workers earn about 10% less than similar workers employed elsewhere.

What Amazon Does to Poor Cities: https://www.theatlantic.com/business/archive/2018/02/amazon-warehouses-poor-cities/552020/
The debate over Amazon’s HQ2 obscures the company’s rapid expansion of warehouses in low-income areas.

The Facts Behind Trump’s Tweets on Amazon, Taxes and the Postal Service: https://www.nytimes.com/2018/03/29/us/politics/trump-amazon-post-office-fact-check.html

If Workers Slack Off, the Wristband Will Know. (And Amazon Has a Patent for It.): https://www.nytimes.com/2018/02/01/technology/amazon-wristband-tracking-privacy.html
https://www.npr.org/sections/thetwo-way/2018/02/01/582370715/wrist-watching-amazon-patents-system-to-track-guide-employees-hands
https://boingboing.net/2018/02/02/amazon-patent-could-lead-to-do.html
https://www.jwz.org/blog/2018/02/amazon-patents-wristbands-shock-collars-designed-to-steer-employees-movements/

auto-management -> automation dystopia: http://marshallbrain.com/manna.htm

Amazon’s vision for the future: delivery drone beehives in every city: https://www.theverge.com/2017/6/23/15860668/amazon-drone-delivery-patent-city-centers
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june 2017 by nhaliday
Links 6/17: Silinks Is Golden | Slate Star Codex
Vox tries its hand at an explainer about the Sam Harris / Charles Murray interview. Some criticism from Gene Expression, The Misrepresentation Of Genetic Science In The Vox Piece On Race And IQ. From Elan, The Cherry-Picked Science In Vox’s Charles Murray Article. From Sam Harris, an accusation that the article just blatantly lies about the contents of the publicly available podcast (one of the authors later apologizes for this, but Vox hasn’t changed the article). From Professor Emeritus Richard Haier, who called it a “junk science piece” and tried to write a counterpiece for Vox (they refused to publish it, but it’s now up on Quillette). And even from other Vox reporters who thought it was journalistically shoddy. As for me, I think the article was as good as it could be under the circumstances – while it does get some things wrong and is personally unfair to Murray, from a scientific point of view I’m just really glad that the piece admits that IQ is real, meaningful, and mostly hereditary. This was the main flashpoint of the original debate twenty-five years ago, it’s more important than the stuff on the achievement gap, and the piece gets it entirely right. I think this sort of shift from debating the very existence of intelligence to debating the details is important, very productive, and worth praising even when the details are kind of dubious. This should be read in the context of similar recent articles like NYMag’s Yes, There Is A Genetic Component To Intelligence and Nature’s Intelligence Research Should Not Be Held Back By Its Past.

interesting comment thread on media treatment of HBD and effect on alt-right: http://slatestarcodex.com/2017/06/14/links-617-silinks-is-golden/#comment-510641

AskHistorians: Did Roman legionnaires get PTSD? “For the Romans, people experiencing intrusive memories were said to be haunted by ghosts…those haunted by ghosts are constantly depicted showing many symptoms which would be familiar to the modern PTSD sufferer.”

The best new blog I’ve come across recently is Sam[]zdat, which among other things has been reviewing various great books. Their Seeing Like A State review is admittedly better than mine, but I most appreciated The Meridian Of Her Greatness, based on a review of Karl Polanyi’s The Great Transformation. Go for the really incisive look at important ideas and social trends, stay for the writing style.

What lesson should we draw about Democrats’ prospects from the Republicans’ 7 point win in the Montana special election? (point, counterpoint).

An analysis showing Donald Trump’s speech patterns getting less fluent and more bizarre over the past few years – might he be suffering from mild age-related cognitive impairment? Also, given that this can be pretty subtle (cue joke about Trump) and affect emotional stability in complicated ways, should we be more worried about electing seventy-plus year old people to the presidency?

PNAS has a good (albeit kind of silly) article on claims that scientific progress has slowed.

New study finds that growth mindset is not associated with scholastic aptitude in a large sample of university applicants. Particularly excited about this one because an author said that my blog posts about growth mindset inspired the study. I’m honored to have been able to help the progress of science!
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june 2017 by nhaliday
Double world GDP | Open Borders: The Case
Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?: https://www.aeaweb.org/articles?id=10.1257/jep.25.3.83
https://openborders.info/innovation-case/
https://www.economist.com/news/world-if/21724907-yes-it-would-be-disruptive-potential-gains-are-so-vast-objectors-could-be-bribed
The Openness-Equality Trade-Off in Global Redistribution: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2509305
https://www.wsj.com/articles/opening-our-borders-would-overwhelm-america-1492366053
Immigration, Justice, and Prosperity: http://quillette.com/2017/07/29/immigration-justice-prosperity/

Some Countries Are Much Richer Than Others. Is That Unjust?: http://quillette.com/2017/07/23/countries-much-richer-others-unjust/
But we shouldn’t automatically assume that wealth disparities across the world are unjust and that the developed world owes aid as a matter of justice. This is because the best way to make sense of the Great Divergence is that certain economic and political institutions, namely those that facilitated economic growth, arose in some countries and not others. Thus perhaps the benevolent among us should also try to encourage – by example rather than force – the development of such institutions in places where they do not exist.

An Argument Against Open Borders and Liberal Hubris: http://quillette.com/2017/08/27/argument-open-borders-liberal-hubris/
We do not have open borders but we are experiencing unprecedented demographic change. What progressives should remember is that civilisation is not a science laboratory. The consequences of failed experiments endure. That is the main virtue of gradual change; we can test new waters and not leap into their depths.

A Radical Solution to Global Income Inequality: Make the U.S. More Like Qatar: https://newrepublic.com/article/120179/how-reduce-global-income-inequality-open-immigration-policies

Why nation-states are good: https://aeon.co/essays/capitalists-need-the-nation-state-more-than-it-needs-them
The nation-state remains the best foundation for capitalism, and hyper-globalisation risks destroying it
- Dani Rodrik
Given the non-uniqueness of practices and institutions enabling capitalism, it’s not surprising that nation-states also resolve key social trade-offs differently. The world does not agree on how to balance equality against opportunity, economic security against innovation, health and environmental risks against technological innovation, stability against dynamism, economic outcomes against social and cultural values, and many other consequences of institutional choice. Developing nations have different institutional requirements than rich nations. There are, in short, strong arguments against global institutional harmonisation.
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june 2017 by nhaliday
Enclosure - Wikipedia
Enclosure (sometimes inclosure) was the legal process in England during the 18th century of enclosing a number of small landholdings to create one larger farm.[1] Once enclosed, use of the land became restricted to the owner, and it ceased to be common land for communal use. In England and Wales the term is also used for the process that ended the ancient system of arable farming in open fields. Under enclosure, such land is fenced (enclosed) and deeded or entitled to one or more owners. The process of enclosure began to be a widespread feature of the English agricultural landscape during the 16th century. By the 19th century, unenclosed commons had become largely restricted to rough pasture in mountainous areas and to relatively small parts of the lowlands.

Enclosure could be accomplished by buying the ground rights and all common rights to accomplish exclusive rights of use, which increased the value of the land. The other method was by passing laws causing or forcing enclosure, such as Parliamentary enclosure. The latter process of enclosure was sometimes accompanied by force, resistance, and bloodshed, and remains among the most controversial areas of agricultural and economic history in England. Marxist and neo-Marxist historians argue that rich landowners used their control of state processes to appropriate public land for their private benefit.[2] The process of enclosure created a landless working class that provided the labour required in the new industries developing in the north of England. For example: "In agriculture the years between 1760 and 1820 are the years of wholesale enclosure in which, in village after village, common rights are lost".[3] Thompson argues that "Enclosure (when all the sophistications are allowed for) was a plain enough case of class robbery."[4][5]

Community and Market in England:
Open Fields and Enclosures Revisited: https://www.nuffield.ox.ac.uk/users/allen/community.pdf
Commons Sense: Common Property Rights, Efficiency, and Institutional Change: http://faculty.econ.ucdavis.edu/faculty/gclark/210a/readings/commons1.pdf
Allen’s Enclosure and the Yeoman: the View from Tory Fundamentalism: http://www.deirdremccloskey.com/docs/pdf/Article_52.pdf
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june 2017 by nhaliday
An Economic Analysis of the Protestant Reformation
- Ekelund, Hébert, Tollison

This paper seeks to explain the initial successes and failures of Protestantism on economic grounds. It argues that the medieval Roman Catholic Church, through doctrinal manipulation, the exclusion of rivals, and various forms of price discrimination, ultimately placed members seeking the Z good "spiritual services" on the margin of defection. These monopolistic practices encouraged entry by rival firms, some of which were aligned with civil governments. The paper hypothesizes that Protestant entry was facilitated in emergent entrepreneurial societies characterized by the decline of feudalism and relatively unstable distribution of wealth and repressed in more homogeneous, rent-seeking societies that were mostly dissipating rather than creating wealth. In these societies the Roman Church was more able to continue the practice of price discrimination. Informal tests of this proposition are conducted by considering primogeniture and urban growth as proxies for wealth stability.

Causes and Consequences of the Protestant Reformation: https://pseudoerasmus.files.wordpress.com/2017/01/becker-pfaff-rubin-2016.pdf
- Sascha O. Becker, Steven Pfaff, Jared Rubin

The Protestant Reformation is one of the defining events of the last millennium. Nearly 500 years after the Reformation, its causes and consequences have seen a renewed interest in the social sciences. Research in economics, sociology, and political science increasingly uses detailed individual-level, city-level, and regional-level data to identify drivers of the adoption of the Reformation, its diffusion pattern, and its socioeconomic consequences. We take stock of this research, pointing out what we know and what we do not know and suggesting the most promising areas for future research.

Table 1: Studies of the Supply and Demand-Side Factors of the Reformation
Table 2: Studies on the Consequences of the Reformation: Human Capital
Table 3: Studies on the Consequences of the Reformation: Work and Work Ethic
Table 4: Studies on the Consequences of the Reformation: Economic Development
Table 5: Studies on the Consequences of the Reformation: Governance
Table 6: Studies on the “Dark” Consequences of the Reformation

LUTHER AND SULEYMAN: http://www.jstor.org.sci-hub.tw/stable/40506214
- Murat Iyigun

Various historical accounts have suggested that the Ottomans' rise helped the Protestant Reformation as well as its offshoots, such as Zwinglianism, Anabaptism, and Calvinism, survive their infancy and mature. Utilizing a comprehensive data set on violent confrontations for the interval between 1401 and 1700 CE, I show that the incidence of military engagements between the Protestant Reformers and the Counter-Reformation forces between the 1520s and 1650s depended negatively on the Ottomans' military activities in Europe. Furthermore, I document that the impact of the Ottomans on Europe went beyond suppressing ecclesiastical conflicts only: at the turn of the sixteenth century, Ottoman conquests lowered the number of all newly initiated conflicts among the Europeans roughly by 25 percent, while they dampened all longer-running feuds by more than 15 percent. The Ottomans' military activities influenced the length of intra-European feuds too, with each Ottoman-European military engagement shortening the duration of intra-European conflicts by more than 50 percent. Thus, while the Protestant Reformation might have benefited from - and perhaps even capitalized on - the Ottoman advances in Europe, the latter seems to have played some role in reducing conflicts within Europe more generally.

Religious Competition and Reallocation: The Political Economy of Secularization in the Protestant Reformation: http://www.jeremiahdittmar.com/files/RRR_20170919.pdf
- Davide Cantoni, Jeremiah Dittmar, Noam Yuchtman*

Using novel microdata, we document an unintended, first-order consequence of the Protestant Reformation: a massive reallocation of resources from religious to secular purposes. To understand this process, we propose a conceptual framework in which the introduction of religious competition shifts political markets where religious authorities provide legitimacy to rulers in exchange for control over resources. Consistent with our framework, religious competition changed the balance of power between secular and religious elites: secular authorities acquired enormous amounts of wealth from monasteries closed during the Reformation, particularly in Protestant regions. This transfer of resources had important consequences. First, it shifted the allocation of upper-tail human capital. Graduates of Protestant universities increasingly took secular, especially administrative, occupations. Protestant university students increasingly studied secular subjects, especially degrees that prepared students for public sector jobs, rather than church sector-specific theology. Second, it affected the sectoral composition of fixed investment. Particularly in Protestant regions, new construction from religious toward secular purposes, especially the building of palaces and administrative buildings, which reflected the increased wealth and power of secular lords. Reallocation was not driven by pre-existing economic or cultural differences. Our findings indicate that the Reformation played an important causal role in the secularization of the West.

look at Figure 4, holy shit

History: Science and the Reformation: http://www.nature.com/nature/journal/v550/n7677/full/550454a.html?WT.mc_id=TWT_NatureNews&sf126429621=1
The scientific and religious revolutions that began 500 years ago were not causally related, but were both stimulated by printing, argues David Wootton.
https://twitter.com/whyvert/status/923940525673103360
https://archive.is/JElPv
No, the Reformation did not cause the scientific revolution. Nice brief article. 👍

No RCT = No causal claims, for or against ;)
Though I'm open to a regression discontinuity design! cc: @pseudoerasmus
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may 2017 by nhaliday
Assortive mating and income inequality | West Hunter
More than in the past, we have doctors marrying other doctors, rather than nurses, basically because of an increase in assortative mating for education. Ceteris paribus, this would tend to cause greater income equality among families. Is it the main driver of increasing income inequality?

Not at all. Most of the increase over the last 30 years has been among business executives and people working in finance. Since 1979, 58% of the expansion of income of the top 1% of households has this origin. For the top 0.1% of households, it’s been 67%.

...

Now I’m about to say something a little dangerous – so get your nitroglycerin pills ready.

Maybe those finance guys and CEOs are delivering enormously more value than they did in the 1950s!

For those remaining readers that haven’t died laughing, increased assortative mating probably has contributed to income inequality. Just not very much. Changes in the tax code, outsourcing, automation, smothering the board of directors in cream, and inattentive stockholders all matter more.

capital gains: https://westhunt.wordpress.com/2014/03/21/assortive-mating-and-income-inequality/#comment-24318
http://www.theamericanconservative.com/millman/assortative-mating-and-income-inequality/
Educational Homogamy and Assortative Mating Have Not Increased: http://sci-hub.tw/http://www.nber.org/papers/w22927.pdf
1960-2010, so all post WW2
https://twitter.com/whyvert/status/840379325908049920
Highly educated women partner more often “downwards” and medium educated women partner less often “upwards”
The new assortative mating (phenotypical, perhaps no change in genotypical assortative mating) due to women outnumbering men at university
If this means less genotypic assortative mating, then BAD NEWS: the smart fraction will shrink, and #decline will accelerate
Counterrevolutionary and reactionary elements warned it was a mistake to debauch higher education by over-expansion. Maybe they were right?
https://link.springer.com/article/10.1007/s10680-016-9407-z
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may 2017 by nhaliday
Readings: The Gods of the Copybook Headings
When the Cambrian measures were forming, They promised perpetual peace.
They swore, if we gave them our weapons, that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said: "Stick to the Devil you know."

On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbour and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said: "The Wages of Sin is Death."

In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."

Then the Gods of the Market tumbled, and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled and began to believe it was true
That All is not Gold that Glitters, and Two and Two make Four —
And the Gods of the Copybook Headings limped up to explain it once more.

. . . . . . . . . . . . . . . . . .

As it will be in the future, it was at the birth of Man —
There are only four things certain since Social Progress began: —
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
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april 2017 by nhaliday
'Capital in the Twenty-First Century' by Thomas Piketty, reviewed | New Republic
by Robert Solow (positive)

The data then exhibit a clear pattern. In France and Great Britain, national capital stood fairly steadily at about seven times national income from 1700 to 1910, then fell sharply from 1910 to 1950, presumably as a result of wars and depression, reaching a low of 2.5 in Britain and a bit less than 3 in France. The capital-income ratio then began to climb in both countries, and reached slightly more than 5 in Britain and slightly less than 6 in France by 2010. The trajectory in the United States was slightly different: it started at just above 3 in 1770, climbed to 5 in 1910, fell slightly in 1920, recovered to a high between 5 and 5.5 in 1930, fell to below 4 in 1950, and was back to 4.5 in 2010.

The wealth-income ratio in the United States has always been lower than in Europe. The main reason in the early years was that land values bulked less in the wide open spaces of North America. There was of course much more land, but it was very cheap. Into the twentieth century and onward, however, the lower capital-income ratio in the United States probably reflects the higher level of productivity: a given amount of capital could support a larger production of output than in Europe. It is no surprise that the two world wars caused much less destruction and dissipation of capital in the United States than in Britain and France. The important observation for Piketty’s argument is that, in all three countries, and elsewhere as well, the wealth-income ratio has been increasing since 1950, and is almost back to nineteenth-century levels. He projects this increase to continue into the current century, with weighty consequences that will be discussed as we go on.

...

Now if you multiply the rate of return on capital by the capital-income ratio, you get the share of capital in the national income. For example, if the rate of return is 5 percent a year and the stock of capital is six years worth of national income, income from capital will be 30 percent of national income, and so income from work will be the remaining 70 percent. At last, after all this preparation, we are beginning to talk about inequality, and in two distinct senses. First, we have arrived at the functional distribution of income—the split between income from work and income from wealth. Second, it is always the case that wealth is more highly concentrated among the rich than income from labor (although recent American history looks rather odd in this respect); and this being so, the larger the share of income from wealth, the more unequal the distribution of income among persons is likely to be. It is this inequality across persons that matters most for good or ill in a society.

...

The data are complicated and not easily comparable across time and space, but here is the flavor of Piketty’s summary picture. Capital is indeed very unequally distributed. Currently in the United States, the top 10 percent own about 70 percent of all the capital, half of that belonging to the top 1 percent; the next 40 percent—who compose the “middle class”—own about a quarter of the total (much of that in the form of housing), and the remaining half of the population owns next to nothing, about 5 percent of total wealth. Even that amount of middle-class property ownership is a new phenomenon in history. The typical European country is a little more egalitarian: the top 1 percent own 25 percent of the total capital, and the middle class 35 percent. (A century ago the European middle class owned essentially no wealth at all.) If the ownership of wealth in fact becomes even more concentrated during the rest of the twenty-first century, the outlook is pretty bleak unless you have a taste for oligarchy.

Income from wealth is probably even more concentrated than wealth itself because, as Piketty notes, large blocks of wealth tend to earn a higher return than small ones. Some of this advantage comes from economies of scale, but more may come from the fact that very big investors have access to a wider range of investment opportunities than smaller investors. Income from work is naturally less concentrated than income from wealth. In Piketty’s stylized picture of the United States today, the top 1 percent earns about 12 percent of all labor income, the next 9 percent earn 23 percent, the middle class gets about 40 percent, and the bottom half about a quarter of income from work. Europe is not very different: the top 10 percent collect somewhat less and the other two groups a little more.

You get the picture: modern capitalism is an unequal society, and the rich-get-richer dynamic strongly suggest that it will get more so. But there is one more loose end to tie up, already hinted at, and it has to do with the advent of very high wage incomes. First, here are some facts about the composition of top incomes. About 60 percent of the income of the top 1 percent in the United States today is labor income. Only when you get to the top tenth of 1 percent does income from capital start to predominate. The income of the top hundredth of 1 percent is 70 percent from capital. The story for France is not very different, though the proportion of labor income is a bit higher at every level. Evidently there are some very high wage incomes, as if you didn’t know.

This is a fairly recent development. In the 1960s, the top 1 percent of wage earners collected a little more than 5 percent of all wage incomes. This fraction has risen pretty steadily until nowadays, when the top 1 percent of wage earners receive 10–12 percent of all wages. This time the story is rather different in France. There the share of total wages going to the top percentile was steady at 6 percent until very recently, when it climbed to 7 percent. The recent surge of extreme inequality at the top of the wage distribution may be primarily an American development. Piketty, who with Emmanuel Saez has made a careful study of high-income tax returns in the United States, attributes this to the rise of what he calls “supermanagers.” The very highest income class consists to a substantial extent of top executives of large corporations, with very rich compensation packages. (A disproportionate number of these, but by no means all of them, come from the financial services industry.) With or without stock options, these large pay packages get converted to wealth and future income from wealth. But the fact remains that much of the increased income (and wealth) inequality in the United States is driven by the rise of these supermanagers.

and Deirdre McCloskey (p critical): https://ejpe.org/journal/article/view/170
nice discussion of empirical economics, economic history, market failures and statism, etc., with several bon mots

Piketty’s great splash will undoubtedly bring many young economically interested scholars to devote their lives to the study of the past. That is good, because economic history is one of the few scientifically quantitative branches of economics. In economic history, as in experimental economics and a few other fields, the economists confront the evidence (as they do not for example in most macroeconomics or industrial organization or international trade theory nowadays).

...

Piketty gives a fine example of how to do it. He does not get entangled as so many economists do in the sole empirical tool they are taught, namely, regression analysis on someone else’s “data” (one of the problems is the word data, meaning “things given”: scientists should deal in capta, “things seized”). Therefore he does not commit one of the two sins of modern economics, the use of meaningless “tests” of statistical significance (he occasionally refers to “statistically insignificant” relations between, say, tax rates and growth rates, but I am hoping he does not suppose that a large coefficient is “insignificant” because R. A. Fisher in 1925 said it was). Piketty constructs or uses statistics of aggregate capital and of inequality and then plots them out for inspection, which is what physicists, for example, also do in dealing with their experiments and observations. Nor does he commit the other sin, which is to waste scientific time on existence theorems. Physicists, again, don’t. If we economists are going to persist in physics envy let us at least learn what physicists actually do. Piketty stays close to the facts, and does not, for example, wander into the pointless worlds of non-cooperative game theory, long demolished by experimental economics. He also does not have recourse to non-computable general equilibrium, which never was of use for quantitative economic science, being a branch of philosophy, and a futile one at that. On both points, bravissimo.

...

Since those founding geniuses of classical economics, a market-tested betterment (a locution to be preferred to “capitalism”, with its erroneous implication that capital accumulation, not innovation, is what made us better off) has enormously enriched large parts of a humanity now seven times larger in population than in 1800, and bids fair in the next fifty years or so to enrich everyone on the planet. [Not SSA or MENA...]

...

Then economists, many on the left but some on the right, in quick succession from 1880 to the present—at the same time that market-tested betterment was driving real wages up and up and up—commenced worrying about, to name a few of the pessimisms concerning “capitalism” they discerned: greed, alienation, racial impurity, workers’ lack of bargaining strength, workers’ bad taste in consumption, immigration of lesser breeds, monopoly, unemployment, business cycles, increasing returns, externalities, under-consumption, monopolistic competition, separation of ownership from control, lack of planning, post-War stagnation, investment spillovers, unbalanced growth, dual labor markets, capital insufficiency (William Easterly calls it “capital fundamentalism”), peasant irrationality, capital-market imperfections, public … [more]
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april 2017 by nhaliday
Kaldor–Hicks efficiency - Wikipedia
A Kaldor–Hicks improvement, named for Nicholas Kaldor and John Hicks, also known as the Kaldor–Hicks criterion, is a way of judging economic re-allocations of resources among people that captures some of the intuitive appeal of Pareto efficiencies, but has less stringent criteria and is hence applicable to more circumstances. A re-allocation is a Kaldor–Hicks improvement if those that are made better off could hypothetically compensate those that are made worse off and lead to a Pareto-improving outcome. The compensation does not actually have to occur (there is no presumption in favor of status-quo) and thus, a Kaldor–Hicks improvement can in fact leave some people worse off.

A situation is said to be Kaldor–Hicks efficient if no potential Kaldor–Hicks improvement from that situation exists.
concept  atoms  economics  micro  GT-101  pareto  redistribution  policy  government  wiki  reference  jargon  methodology  efficiency  welfare-state  equilibrium  trade  markets 
april 2017 by nhaliday
O Canada! | West Hunter
Imagine a country with an average IQ of 100, some average amount of education (with some distribution), some average amount of capital per head (with some distribution of ownership of capital). Now add immigrants – 10% of the population – that are the same in every way. Same average IQ, same distribution of IQ, same average amount of capital and same distribution. They speak the same language. They have similar political traditions. In other words, it is as if the US had just peacefully annexed an imaginary country that’s a lot like Canada.

Would the original inhabitants gain economically from this merger? Strikes me that this could only happen from economies of scale – since nothing has changed other than a 10% increase in overall size. There might be some diseconomies of scale as well. I wouldn’t expect a big payoff. Except for Nawapa, of course.

Contrast this with a situation in which the extra 10% is fairly different – lower average IQ, much less education on average, don’t speak English. They don’t bring along a lot of capital. They have and bring along their native political traditions, like everyone, but theirs stink. I can easily see how those immigrants might have improved their economic lot but it’s kindof hard to see how bringing in people with low human capital benefits the original citizens more than bringing in people with considerably higher human capital. Yet it must, because adding more of the same clearly has a small effect, while adding in lower-skilled must have a big positive effect. Practically all the economists say so.

https://westhunt.wordpress.com/2017/04/18/o-canada/#comment-90631
place of birth for the foreign-born population of the US, 2013:
all of Latin America, ~25 million China, ~2.5 million

https://westhunt.wordpress.com/2017/04/18/o-canada/#comment-90632
Caplan’s full of shit. Prosperity through favelas? Hasn’t worked anywhere else.

https://westhunt.wordpress.com/2017/04/18/o-canada/#comment-90800
The countries that look somewhat like our likely demographic destination ( considering recent trends) do worse economically than the United States, including the subgroups with high human capital. Brazil, say.

On the other hand, if you’re talking positional wealth, bringing in people with low human capital definitely works. Servants.

Sponsor An Immigrant Yourself: https://www.politico.com/magazine/story/2018/02/13/immigration-visas-economics-216968
No, really: A new kind of visa would let individual Americans—instead of corporations—reap the economic benefits of migration.

https://twitter.com/NoTrueScotist/status/963566542049832960
https://archive.is/FGQrp
I’ve always wanted my own sla—immigrant.......
I feel like people are neglecting the fact that this was written by Eric Posner....
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april 2017 by nhaliday
Educational Romanticism & Economic Development | pseudoerasmus
https://twitter.com/GarettJones/status/852339296358940672
deleeted

https://twitter.com/GarettJones/status/943238170312929280
https://archive.is/p5hRA

Did Nations that Boosted Education Grow Faster?: http://econlog.econlib.org/archives/2012/10/did_nations_tha.html
On average, no relationship. The trendline points down slightly, but for the time being let's just call it a draw. It's a well-known fact that countries that started the 1960's with high education levels grew faster (example), but this graph is about something different. This graph shows that countries that increased their education levels did not grow faster.

Where has all the education gone?: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1016.2704&rep=rep1&type=pdf

https://twitter.com/GarettJones/status/948052794681966593
https://archive.is/kjxqp

https://twitter.com/GarettJones/status/950952412503822337
https://archive.is/3YPic

https://twitter.com/pseudoerasmus/status/862961420065001472
http://hanushek.stanford.edu/publications/schooling-educational-achievement-and-latin-american-growth-puzzle

The Case Against Education: What's Taking So Long, Bryan Caplan: http://econlog.econlib.org/archives/2015/03/the_case_agains_9.html

The World Might Be Better Off Without College for Everyone: https://www.theatlantic.com/magazine/archive/2018/01/whats-college-good-for/546590/
Students don't seem to be getting much out of higher education.
- Bryan Caplan

College: Capital or Signal?: http://www.economicmanblog.com/2017/02/25/college-capital-or-signal/
After his review of the literature, Caplan concludes that roughly 80% of the earnings effect from college comes from signalling, with only 20% the result of skill building. Put this together with his earlier observations about the private returns to college education, along with its exploding cost, and Caplan thinks that the social returns are negative. The policy implications of this will come as very bitter medicine for friends of Bernie Sanders.

Doubting the Null Hypothesis: http://www.arnoldkling.com/blog/doubting-the-null-hypothesis/

Is higher education/college in the US more about skill-building or about signaling?: https://www.quora.com/Is-higher-education-college-in-the-US-more-about-skill-building-or-about-signaling
ballpark: 50% signaling, 30% selection, 20% addition to human capital
more signaling in art history, more human capital in engineering, more selection in philosophy

Econ Duel! Is Education Signaling or Skill Building?: http://marginalrevolution.com/marginalrevolution/2016/03/econ-duel-is-education-signaling-or-skill-building.html
Marginal Revolution University has a brand new feature, Econ Duel! Our first Econ Duel features Tyler and me debating the question, Is education more about signaling or skill building?

Against Tulip Subsidies: https://slatestarcodex.com/2015/06/06/against-tulip-subsidies/

https://www.overcomingbias.com/2018/01/read-the-case-against-education.html

https://nintil.com/2018/02/05/notes-on-the-case-against-education/

https://www.nationalreview.com/magazine/2018-02-19-0000/bryan-caplan-case-against-education-review

https://spottedtoad.wordpress.com/2018/02/12/the-case-against-education/
Most American public school kids are low-income; about half are non-white; most are fairly low skilled academically. For most American kids, the majority of the waking hours they spend not engaged with electronic media are at school; the majority of their in-person relationships are at school; the most important relationships they have with an adult who is not their parent is with their teacher. For their parents, the most important in-person source of community is also their kids’ school. Young people need adult mirrors, models, mentors, and in an earlier era these might have been provided by extended families, but in our own era this all falls upon schools.

Caplan gestures towards work and earlier labor force participation as alternatives to school for many if not all kids. And I empathize: the years that I would point to as making me who I am were ones where I was working, not studying. But they were years spent working in schools, as a teacher or assistant. If schools did not exist, is there an alternative that we genuinely believe would arise to draw young people into the life of their community?

...

It is not an accident that the state that spends the least on education is Utah, where the LDS church can take up some of the slack for schools, while next door Wyoming spends almost the most of any state at $16,000 per student. Education is now the one surviving binding principle of the society as a whole, the one black box everyone will agree to, and so while you can press for less subsidization of education by government, and for privatization of costs, as Caplan does, there’s really nothing people can substitute for it. This is partially about signaling, sure, but it’s also because outside of schools and a few religious enclaves our society is but a darkling plain beset by winds.

This doesn’t mean that we should leave Caplan’s critique on the shelf. Much of education is focused on an insane, zero-sum race for finite rewards. Much of schooling does push kids, parents, schools, and school systems towards a solution ad absurdum, where anything less than 100 percent of kids headed to a doctorate and the big coding job in the sky is a sign of failure of everyone concerned.

But let’s approach this with an eye towards the limits of the possible and the reality of diminishing returns.

https://westhunt.wordpress.com/2018/01/27/poison-ivy-halls/
https://westhunt.wordpress.com/2018/01/27/poison-ivy-halls/#comment-101293
The real reason the left would support Moander: the usual reason. because he’s an enemy.

https://westhunt.wordpress.com/2018/02/01/bright-college-days-part-i/
I have a problem in thinking about education, since my preferences and personal educational experience are atypical, so I can’t just gut it out. On the other hand, knowing that puts me ahead of a lot of people that seem convinced that all real people, including all Arab cabdrivers, think and feel just as they do.

One important fact, relevant to this review. I don’t like Caplan. I think he doesn’t understand – can’t understand – human nature, and although that sometimes confers a different and interesting perspective, it’s not a royal road to truth. Nor would I want to share a foxhole with him: I don’t trust him. So if I say that I agree with some parts of this book, you should believe me.

...

Caplan doesn’t talk about possible ways of improving knowledge acquisition and retention. Maybe he thinks that’s impossible, and he may be right, at least within a conventional universe of possibilities. That’s a bit outside of his thesis, anyhow. Me it interests.

He dismisses objections from educational psychologists who claim that studying a subject improves you in subtle ways even after you forget all of it. I too find that hard to believe. On the other hand, it looks to me as if poorly-digested fragments of information picked up in college have some effect on public policy later in life: it is no coincidence that most prominent people in public life (at a given moment) share a lot of the same ideas. People are vaguely remembering the same crap from the same sources, or related sources. It’s correlated crap, which has a much stronger effect than random crap.

These widespread new ideas are usually wrong. They come from somewhere – in part, from higher education. Along this line, Caplan thinks that college has only a weak ideological effect on students. I don’t believe he is correct. In part, this is because most people use a shifting standard: what’s liberal or conservative gets redefined over time. At any given time a population is roughly half left and half right – but the content of those labels changes a lot. There’s a shift.

https://westhunt.wordpress.com/2018/02/01/bright-college-days-part-i/#comment-101492
I put it this way, a while ago: “When you think about it, falsehoods, stupid crap, make the best group identifiers, because anyone might agree with you when you’re obviously right. Signing up to clear nonsense is a better test of group loyalty. A true friend is with you when you’re wrong. Ideally, not just wrong, but barking mad, rolling around in your own vomit wrong.”
--
You just explained the Credo quia absurdum doctrine. I always wondered if it was nonsense. It is not.
--
Someone on twitter caught it first – got all the way to “sliding down the razor blade of life”. Which I explained is now called “transitioning”

What Catholics believe: https://theweek.com/articles/781925/what-catholics-believe
We believe all of these things, fantastical as they may sound, and we believe them for what we consider good reasons, well attested by history, consistent with the most exacting standards of logic. We will profess them in this place of wrath and tears until the extraordinary event referenced above, for which men and women have hoped and prayed for nearly 2,000 years, comes to pass.

https://westhunt.wordpress.com/2018/02/05/bright-college-days-part-ii/
According to Caplan, employers are looking for conformity, conscientiousness, and intelligence. They use completion of high school, or completion of college as a sign of conformity and conscientiousness. College certainly looks as if it’s mostly signaling, and it’s hugely expensive signaling, in terms of college costs and foregone earnings.

But inserting conformity into the merit function is tricky: things become important signals… because they’re important signals. Otherwise useful actions are contraindicated because they’re “not done”. For example, test scores convey useful information. They could help show that an applicant is smart even though he attended a mediocre school – the same role they play in college admissions. But employers seldom request test scores, and although applicants may provide them, few do. Caplan says ” The word on the street… [more]
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april 2017 by nhaliday
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