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kaleberg
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Efficiency is not China's problem. Political stability is. Political stability requires a lot of job creation and at least a modest rise in living standards. Efficient enterprises almost by definition cannot create jobs the way inefficient ones do, Their need to produce returns for their owners minimize their impact on living standards. Xi clearly recognized this problem at least ten years ago and prepared for it. The increased repression and expulsion of foreigners were in place some time ago. The Uighur work camps are in their way a prototype for the future of China, at least outside of the protected home areas and certain others deemed critical.
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We should eliminate the estate tax and just treat what people receive as simple earned income. This would work best if we bring in a pro-growth 90% marginal tax rate. I've never understood why different types of income are treated so differently by the tax code.
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Back in the 1970s there was a physicist joke. The experimental physicist returns from the lab and remarks that measurement A was greater than measurement B, and the theoretical physicist replies that this was just what the theory predicted. The experimental physicist catches his error, and explains that actually B was greater than A. The theoretical physicist nods and says that this was just what the theory predicted. Of course, now the theoretical physicists are running the show and high energy particle physics has become completely unmoored and increasingly irrelevant.
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This marginal product reasoning doesn't make any sense from an accounting point of view. No company is going to pay a worker 100% of the expected increase in marginal revenue resulting from the hire. That would imply no profit whatever for the company. Why should they even bother? Whenever I hear someone reasoning like this, I know that they have no knowledge of business and economics, and they probably make bad chili. Trying to assign a value to an employee's or capital's production is not a rational exercise. Which is more important in water, the oxygen atom or the two hydrogen atoms? Do they each get 1/3 credit or does oxygen get 1/2 and each hydrogen 1/4? What kind of water do you have if you don't have any hydrogen? Ask a chemist or hydrologist. The usual solution is to base such estimates on economic power and social prejudices. If the hydrogen union is powerful, each hydrogen atom might get 40% leaving 20% for the oxygen atom. Hydrogen comes out to vote and it lobbies everywhere. If oxygen is considered high value by society, such as a man's work in comparison with the same work done by a woman, then the oxygen atom might clear 90% and the two hydrogen atoms would have to eke out a living with 5% each. Do economists like this ever even talk to people who run businesses? Do they ever listen or observe? It's like the anatomy lecturers who'd read the classic text aloud while some flunky did the actual dissection and found a totally different body layout. The students who did well parroted the lecture. The ones who made modern medicine kept their eye on the corpse.
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Genetics doesn't explain why men fare so poorly in language skills when compared with women. It's hard to believe that men lost languistic ability during some Bronze Age genetic bottleneck, and there is definitely no evidence for it. (*) Higher female linguistic ability has been so pronounced that the ETS has had to redo the SAT to even things up. In fact, they've had to make repeated adjustments to raise male scores, especially now that women are more than half of all undergraduates. It is perfectly possible that the high male variance is an artifact of how they structure the tests to improve male scores as against female scores. According to ETS publications, these adjustments generally involve changing only a handful of questions to increase the male mean. I haven't found a discussion of what this process does to the variance, but I'd be surprised if replacing a question with a cross-sex normal distribution with one skewed towards male performance decreases the male variance. They are searching for higher male scores as opposed to female scores, so they are looking for extremes. (*) I suppose one could argue that reduced male linguistic ability was reflected in the loss of language memory skills and that this gave rise to writing, but that sounds pretty bogus.
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This is a very good piece of analysis. If nothing else, it really points out how primary production jobs, like being a farmer, factory worker, miner and so on were once very important but have since been vanishing. When I read Hunger Games, the districts dedicated to primary production presented a jarring note. Granted, districts of accountants or home health aides, while more realistic, would not have offered the same dramatic backdrop. Our archetypes have not caught up with our civilization's reality.
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Bitcoin was like those Swiss numbered bank accounts except the numbers are IP addresses. Everyone could see the transactions, but it was all numbers. If you are hard to link with your IP address and deal with others who are hard to link with their IP addresses, then you have privacy. Otherwise, you are out in the open. I was surprised by bitcoin and what success it had. In the 1970s and 1980s, the idea was to develop a completely decentralized untraceable currency using only cryptography and mathematics. I remember going through a number of papers on digital currency and digital wallets back then. Money has to be hard to create, but relatively easy to verify, so the idea was to do things with big numbers and primality, for example, multiply two big primes to get an even bigger number that is hard to factor then do arithmetic with that number. The problem was, as one colleague pointed out at the time, where one got one's prime numbers. I'm guessing that the original digital currency schemes have proven unworkable. Even in the 1970s there was talk of the NSA or some such building arrays of VLSI chips to crack cryptographic problems. I also gather that there has also been a lot of new mathematics. There is nothing quite like throwing money at a problem as every economist knows.
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The big technological changes that drove increased centralization were the telegraph and the railroad. There really hasn't been all that much change since then. Sure, computerization has lowered the overhead, but the structural forces are the same as in the 19th century. It might make sense to consider the restructuring of the banking business in the 1980s starting with the Depository Institutions Deregulation and Monetary Control Act which allowed banks to open branches in multiple states. This dramatically changed economic decision making. When banks had to choose a state and likely a city, they became major drivers of capital for their region. They had a lot of local knowledge. Of course, a lot of them were jackasses, but there were a lot more of them. Now we have a handful of big banks and other financial institutions making decisions with no local knowledge whatever. They are just as susceptible to the same kinds of fads and bubbles and collapses as the smaller banks, but the results of these collapses are writ large. If your city or region does not have a bank big enough to be rescued by the government, you are left out of the recovery. Repeat this for a few cycles, and you find an immense concentration of control. It has nothing to do with the number of transistors on a chip. Talent laden clusters don't just happen. They are created by local institutions. When those institutions are subsumed by outside institutions, the area is weakened. A good paper on this is NBER Working Paper 14278, Long Term Persistence, which compares the development of local institutions in northern and southern Italy. Basically, if a city had a bishop in AD 1000, odds are it is in much better economic shape today.
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The OED offers four definitions: 1) The science of ideas; that department of philosophy or psychology which deals with the origin and nature of ideas. 2) Ideal or abstract speculation; in a depreciatory sense, unpractical or visionary theorizing or speculation. 3) = idealism 4) A systematic scheme of ideas, usu. relating to politics or society, or to the conduct of a class or group, and regarded as justifying actions, esp. one that is held implicitly or adopted as a whole and maintained regardless of the course of events. I don't think the first three definitions are relevant to this discussion.
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The only real advantage of cryptocurrencies is that they are hard - not impossible, but hard - to trace. This makes them useful for criminal activities, particularly illegal money transfers. Cryptocurrency is easier to transfer than something like gold or printed money. Cryptocurrencies aren't particularly useful in more ordinary transactions. There is no government to insist that one accept them. Their value varies dramatically in response to speculation since the supply is artificially limited. They can't handle all that many transactions in a given time period. Their computational requirements require one yield privacy to cryptocurrency brokers. If cryptocurrencies were more useful, they would be even less useful. If online vendors, like Amazon, accepted them, how much privacy would one have after shipping? They'd have to have a shipping address. If one used it at a local store, how would one avoid security cameras or the bemused gaze of the folks at checkout? They'd surely remember the weird guy who paid with that weird new cryptocurrency. Odds are the manager would too. We aren't all Sandra Bullock in The Net, ordering pizza to be slipped under the door and cutting our own hair.
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This does not speak well of Ezra Klein. It was rather obvious to anyone not in a proverbial Seconal stupor for the last 30 years that Paul Ryan was spouting pretty standard Republican party nonsense. No journalist or analyst should have taken him seriously. Modern journalists cannot deal with the Republican party which is worse than they can imagine, even when they take that very fact into account. They are forever looking for the tiniest deviations from the overall party line and magnifying them into something of significance. Ezra Klein, among others, had a long full draft of the Kool-Aid.
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The first four seem to be the same but with different terminology. It's sort of like arguing whether one has a glass containing a cup or eight fluid ounces of water. At room temperature there isn't much of a difference. The last two seem to be amalgams of the first four. The only one that seems much different is Vulgar Keysnianism, mainly because it looks at things from the demand side rather than the supply side.
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The Old Testament was no friend of capitalism. It wasn't just about having been slaves. A distrust of wealth and power shows up early. Look at the arguments against having a king which would turn citizens into "hewers of wood and drawers of water" then followed by several sections on the corruption of kings, even the best of them. There might be proscriptions against theft, but there are also limits on ownership. In theory, land could not be alienated from its ancestral owners, though it sure could be seized by conquest. Debts had to be cancelled at regular intervals. One could not harvest the crops one planted from one edge of one's field to another nor could one take a second pass to pick up anything you missed the first time. The edges and what was missed or dropped belonged to the poor. By the time one gets the Nehemiah and Jeremiah, the whole book has turned into a socialist screed. The sequel is even worse. I sometimes find it helpful to think of the Old Testament as a Bronze Age critique of the incoming Iron Age.
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Back in the late 1960s Wall Street Week, one of the few financial television shows, had an annual pre-New Year session where all the pundits would sheepishly go over their poor predictions for the previous year before making new predictions, of varying quality, for the year to come. It was great television. Everyone in the audience could sympathize having made a good share of bad predictions as well.
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We have cooperative predator brains. Such brains benefit from being able to model prey and partner intent as a means of determining action. Anyone following modern neuroscience can get a glimpse of how this could work with neural models with recall and search mechanisms. Our understanding is almost certainly incomplete, but we know that brains, our own and those of our partners prey use similar mechanisms. We know that our brains deal with narrative trajectories within meaning grids. In other words, there is too much physical evidence to counter Rosenberg's argument. Was the Kaiser not thinking when he issued that blank check? No, the Kaiser was definitely thinking. He was not in a coma.
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Arabic and Swedish are both gendered, so one would expect women in, let's say Riyadh and Oslo to have similar status. Right. Mandarin lacks gender, so we'd never see female foot binding or female subordination in a place like China. Oh. Bantu nouns don't have gender; they have a grammatical class that determines their affixes. Does that make them more egalitarian, less egalitarian, or just muddled? When a French pornographer has a character insert la verge into another character, does this reflect sexual or gender confusion? What kind of sex is it if he's inserting a feminine noun into a female body part? Oh, those Frenchies. Women must have low status. La victime is always feminine, though not always female. Different versions of Spanish have sugar as masculine and feminine. Does this reflect a fundamental disagreement about which is the sweeter sex? Sex and gender are two different things. Sex and linguistic gender are even more different. The color argument is about naming colors, not being able to sense them. Fans of particular foods and beverages develop whole vocabularies to describe things like beef or beer. That doesn't mean that the hoi polloi cannot taste the subtle flavors. It just means that they've never learned the words for them. It's about ease of expression, not cognitive or reasoning ability. It's about vocabulary. Japanese, for example, has long had a word for a range of blue-green colors, but no single word for either blue or green. That doesn't mean that no one in Japan could tell that leaves and the sky were different colors until modern Japanese adopted the English word for green. The general consensus among linguists is that just about every language can express just about everything. The only exceptions are certain pidgins, limited secondary languages used in trade. There's no reason to believe that linguistic structure limits one's ability to think. When words and expressions are needed, people add them to their language just fine. Even if you know only three words, "I", "am" and "Groot" and can only recite them in that order, it is quite possible for you to have an extensive internal life and ability to interact with others.
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"All of us from Lawrence Summers to John Taylor were expecting a very different financial crisis." This continues to puzzle me. Everyone else watching the economy was waiting for the housing collapse. It was rather obvious that lending standards had dropped to the floor even as housing prices were clearly unsustainable based on stagnant incomes. What exactly were economists thinking? If the Asian bubble collapse of the late 90s taught anything it was that the US and the Asian economies were not tightly coupled. Ten years later, the economies were no more interdependent. The relationship was one way: Asian economies produced things that the US economy bought. Even now we are probably more dependent on Canada than on China. I'm trying to remember what economists were saying about the housing bubble and the use of derivatives to maximize leverage and hide the fundamentally flawed lending. Were they saying anything? More importantly, what are economists saying now? What were the lessons learned?
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For the last 30 years or so, the US has excelled at creating "shit" jobs, that is, jobs paying minimum wage or a bit more, offering a limited number of hours usually less than 40, with a high variance of income, frequently lacking benefits like medical insurance or a pension and offering no path for advancement. Exactly how these jobs would encourage an attachment to the work force, especially as they provided approximately zero in the way of job or hours security, is hard to imagine. More seriously, these jobs first started replacing jobs at the low end, but slowly moved upward, and now all but a handful of high end jobs are on these terms, take it or leave it. Why would any rational economic actor go careerist in this environment?
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I think Ives' analogy is rather naive. Very few people can make glass from scratch. The glass blowers I've known rely on others to process silicon dioxide and various additives for them. The transparent glass that wine glasses are made from took generations of experimentation and analysis to develop. Glass may have been known to the ancients, but transparent glass, glass with minimal color distortion, glass thin enough to serve, glass of uniform thickness, glass without bubbles, glass that can be formed by blowing - and let's not ignore the machines that actually make wine glasses nowadays - may not have involved the raw development effort of the iPhone, but took the effort of a lot more than one person. Clear glass had a lot of spin offs. Most of modern chemistry and a big chunk of modern physics would have been impossible without clear glass vessels. Try telling if a reaction has gone to completion or a vacuum has formed without clear glass. Clear glass also enabled things like telescopes, microscopes and eyeglasses. New technologies are often unpredictable. I agree that the Apple Watch is a pretty impressive piece of gear, but I wouldn't deprecate the challenges of earlier technologies just because we take them for granted.
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Maynard Handley makes an interesting argument that our society provides good things for well off married men with wives who work only part time while depriving professional women with relatively low incomes e.g. doctors and lawyers making less than $100,000 a year. It's an interesting argument, and one that lines up with a lot of feminist thinking. Women are expected to sacrifice their personal lives for their careers, but are not as likely as men to be rewarded for their professional efforts. Fixing this, he argues, involves taking global warming to an extreme well beyond the rather gloomy 2100 predictions. I wonder what kind of CO2 emissions would be necessary?
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dilbert dogbert: I'm always amazed at how many people get wrap their minds around the idea that poor people don't have a lot of money. That includes a lot of economists. The problem is relying on the private sector for housing. The government really has to step in and provide cheap land, cheap credit and infrastructure or just build the housing itself. Whether it's the 1950s US suburban model or the Singapore model, it doesn't work to try and get the private sector to do government's job.
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If slavery had ended in 1783, it would have made little difference with regards to US industrialization. Cotton would still have been planted and grown. In fact, it is more likely that the South would have invested in cotton processing sooner and more intensely to keep more of the profits local. Why export cotton when you can export cloth or garments and get a higher margin while exploiting a local advantage? I doubt slave owners would have invested all that much in manufacturing. It would have been more profitable to invest in more slaves. Why buy a share in factory when you could buy a share in a slave raiding expedition? Why buy a share in a railroad when you could buy slaves, an asset that compounded each generation? If there had been a more profitable place to invest, then slave owners would have invested in it. They might have been evil, but they were also greedy. You would think a factory full of slaves would have been a good bet. As for other slave owner spending, most of it was for prestige goods, often European imports. Poor whites made a lousy market and slaves weren't a market at all. While the North was creating hell-hole jobs in the factories, it was also creating a working class and middle class market for its own goods. The South was just creating a hell-hole.
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The big change was television. If you look at the time use studies, it was television that massively sopped up hours spent socializing starting in the 1960s. Social media has just taken time away from television viewing. Whether this is a good thing or not is another issue.
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It's also difficult because there are benefits and certainties of being able to farm even a small plot of land. The goal may be more efficient agriculture, but the displaced small farmers are the ones expected to bear the burden. The usual practice, as history shows, is that the politically connected simply take the land for a token payment and create a marginalized population of refugees. Some would be hired to work as peons, possibly on their own land, but obviously not all of them. A more just approach would be for the displaced to become shareholders in the new agricultural firm. They could get dividends in cash and perhaps a farm-share box. Of course, the capitalist will take the farm into bankruptcy and pauperize everyone shortly thereafter, but it's an idea. I wouldn't be surprised if Haiti does modernize its farms. There used to be very large and efficient plantations there before the revolution, so there is precedent. Whether this leads to the same result as in the 18th century remains to be seen.
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